INTELLECTUAL PROPERTY LAW B.
CIVIL CODE
COURSE OUTLINE
INTRODUCTION
A. CONSTITUTION
ARTICLE XII
Section 6. The use of property bears a social function, and all
economic agents shall contribute to the common good. Individuals and
private groups, including corporations, cooperatives, and similar
collective organizations, shall have the right to own, establish, and
operate economic enterprises, subject to the duty of the State to
promote distributive justice and to intervene when the common good
so demands.
Section 14. The sustained development of a reservoir of national
talents consisting of Filipino scientists, entrepreneurs, professionals,
managers, high-level technical manpower and skilled workers and
craftsmen in all fields shall be promoted by the State. The State shall
encourage appropriate technology and regulate its transfer for the
national benefit.
ARTICLE XIV
Science and Technology
SECTION 10. Science and technology are essential for national
development and progress. The State shall give priority to research
and development, invention, innovation, and their utilization; and to
science and technology education, training, and services. It shall
support indigenous, appropriate, and self-reliant scientific and
technological capabilities, and their application to the country’s
productive systems and national life.
SECTION 11. The Congress may provide for incentives, including tax
deductions, to encourage private participation in programs of basic and
applied scientific research. Scholarships, grants-in-aid, or other forms
of incentives shall be provided to deserving science students,
researchers, scientists, inventors, technologists, and specially gifted
citizens.
SECTION 12. The State shall regulate the transfer and promote the
adaptation of technology from all sources for the national benefit. It
shall encourage the widest participation of private groups, local
governments, and community-based organizations in the generation
and utilization of science and technology.
SECTION 13. The State shall protect and secure the exclusive rights of
scientists, inventors, artists, and other gifted citizens to their
intellectual property and creations, particularly when beneficial to the
people, for such period as may be provided by law.
Arts and Culture
SECTION 14. The State shall foster the preservation, enrichment, and
dynamic evolution of a Filipino national culture based on the principle
of unity in diversity in a climate of free artistic and intellectual
expression.
SECTION 15. Arts and letters shall enjoy the patronage of the State.
The State shall conserve, promote, and popularize the nation’s
historical and cultural heritage and resources, as well as artistic
creations.
SECTION 16. All the country’s artistic and historic wealth constitutes
the cultural treasure of the nation and shall be under the protection of
the State which may regulate its disposition.
SECTION 17. The State shall recognize, respect, and protect the rights
of indigenous cultural communities to preserve and develop their
cultures, traditions, and institutions. It shall consider these rights in the
formulation of national plans and policies.
SECTION 18. (1) The State shall ensure equal access to cultural
opportunities through the educational system, public or private cultural
entities, scholarships, grants and other incentives, and community
cultural centers, and other public venues.
(2) The State shall encourage and support researches and studies on
the arts and culture.
IPL Reviewer | R.J. B. Marquez | JD3
Art. 712. Ownership is acquired by occupation and by intellectual
creation.
Ownership and other real rights over property are acquired and
transmitted by law, by donation, by estate and intestate succession,
and in consequence of certain contracts, by tradition.
They may also be acquired by means of prescription. (609a)
Title II. - INTELLECTUAL CREATION
Art. 721. By intellectual creation, the following persons acquire
ownership:
(1) The author with regard to his literary, dramatic,
historical, legal, philosophical, scientific or other work;
(2) The composer; as to his musical composition;
(3) The painter, sculptor, or other artist, with respect to the
product of his art;
(4) The scientist or technologist or any other person with
regard to his discovery or invention. (n)
Art. 722. The author and the composer, mentioned in Nos. 1 and 2 of
the preceding article, shall have the ownership of their creations even
before the publication of the same. Once their works are published,
their rights are governed by the Copyright laws.
The painter, sculptor or other artist shall have dominion over the
product of his art even before it is copyrighted.
The scientist or technologist has the ownership of his discovery or
invention even before it is patented. (n)
Art. 723. Letters and other private communications in writing are
owned by the person to whom they are addressed and delivered, but
they cannot be published or disseminated without the consent of the
writer or his heirs. However, the court may authorize their publication
or dissemination if the public good or the interest of justice so
requires. (n)
Art. 724. Special laws govern copyright and patent. (429a)
CHAPTER 3
TRADE-MARKS AND TRADE-NAMES
Art. 520. A trade-mark or trade-name duly registered in the proper
government bureau or office is owned by and pertains to the person,
corporation, or firm registering the same, subject to the provisions of
special laws. (n)
Art. 521. The goodwill of a business is property, and may be
transferred together with the right to use the name under which the
business is conducted. (n)
Art. 522. Trade-marks and trade-names are governed by special
laws. (n)
Section 4. Definitions. - 4.1. The term "intellectual property rights"
consists of:
a) Copyright and Related Rights;
b) Trademarks and Service Marks;
c) Geographic Indications;
d) Industrial Designs;
e) Patents;
f) Layout-Designs (Topographies) of Integrated Circuits; and
g) Protection of Undisclosed Information (n, TRIPS).
DIFFERENCES : TRADEMARK, COPYRIGHT AND PATENT
Trademark: A trademark is any sign which can distinguish the goods
and services of one trader from those of another. A sign includes, for
example, words, logos, pictures, or a combination of these. As with
other IP rights, trademark laws may differ from country to country,
and a trademark will not be considered valid in a country that you
don’t trade in or have not registered the trademark.
Copyright: This is the right to copy an IP or rather the right to control
the copying of an IP. When a person produces a creative work such as
a book, painting, music, film or computer software, that item is
automatically protected by copyright law. They are the only person
allowed to copy that work or to grant permission to others to copy it.
Copyright law varies from country to country (so check with a lawyer)
but in general an IP is automatically protected by copyright as soon as
it is created.
Patents: A patent gives an inventor the right for a limited period to
stop others from making, using or selling an invention without their
permission. Patents are intended to cover processes or products that
include or contain new functional or technical aspects. Unless you
register your patent in another country a person or company may be
able to make use of your invention in that country.
1) Trademark
Who can seek a trademark and what does it protect?
Business and product owners file for a trademark. It protects a name,
word, slogan, symbol, design, and/or image identifying a business or
brand and distinguishing it from others in the same field.
What are the benefits of a trademark and what is the
duration?
Registering a trademark enhances the rights of a person by providing
legal evidence and public notice of ownership. It is proof enough of a
nationwide exclusive right to the mark and allows the holder to sue an
infringer if the case calls for it. Registered trademarks can use the ®
symbol. Though a trademark is valid for an unlimited period of time, it
must be renewed every 10 years.
2) Copyright
Who can seek a copyright and what does it protect?
Copyright can be sought for by authors, artists, choreographers,
architects, and other creative professionals. While an idea cannot be
copyrighted, the tangible form of an idea can be. This includes original
works of authorship, photographs, sculptures, choreography,
architectural works, sound recordings, motion pictures, and other
creative works.
What are the benefits of copyright and what is the duration?
Copyrighting provides a person with legal evidence and public notice
of ownership. A person can be sued in a court for infringement of
copyright provided one has the papers in place. A copyright is valid for
a lifetime.
3) Patent
Who can seek a patent and what does it protect?
Inventors and designers file for patents. A patent protects inventions
with a new or improved function. This includes machines, processes,
or chemical compositions, or the design for some product.
IPL Reviewer | R.J. B. Marquez | JD3
What are the benefits of a patent and what is the duration?
When a patent is filed, the owner gets an exclusive right to prevent
others from making, using, selling, or importing the protected
invention. A patent protects an invention for 20 years, but it cannot be
renewed. A provisional patent lasts for about a year.
Each of these is distinct. However, sometimes a product can come into
one or more of these categories. An example is a software. The code
of the software will be protected by a copyright, while the functional
expression of the idea will be protected by a patent. The name of the
company or the software will come under a trademark!
Protecting an intellectual property is a very complex process that keeps
evolving with each step during its life cycle, be it during its innovation,
research, or development. Thus, a single product can have a
patentable feature, a creative angle protected by copyright, and a
source of the product that is trademarked.
Patent
A patent refers to the exclusive rights to a product or process, as well
as its improvements—granted that the product or process offers
something new and useful.
The inventor or creator with the patent has the right to choose as to
who can use, sell, or even make something similar during its 2-year
validity period.
Throughout the entire duration, a patent’s information must be
available to the public, as the owner is given enough time to gain
ample commercial returns. Some examples of inventions or creations
that can be filed as patents include new and useful machines, products
and processes (non-biological and microbiological in nature);
improvements of machines, products and processes; and
microorganisms.
The basic requirements for a creation to be considered patentable are
that the creation would have a novel idea, inventive, and can be
applied in an industrial setting.
Trademark
A trademark is a tool used to differentiate services and goods from one
another. It can be in the form of a word or a group of words; a sign,
logo, or symbol. It could even be a combination of those above.
Essential in marketing your products or services, a trademark will help
consumers identify your brand among the many others in the market.
To protect your business’ trademark, it is advisable to have it
registered.
This way, the owner of the trademark would have exclusive rights to
make use of the mark. Furthermore, it will ensure that no one else can
use the same or even a similar mark for the products or services of a
similar nature.
Copyright
A copyright refers to the protection given to the owner of an original
work covering literary works, musical pieces, paintings, and computer
programs, among others.
Under the copyright laws, the owner of the original work is entitled to
economic rights and moral rights. Economic rights enable the creator
to receive profit gains should his works be distributed by third parties.
Moral rights, on the other hand, protect the connection between the
creator and his work.
Once the owner receives the rights to his work, unauthorized third
parties are prohibited from selling or distributing the works, especially
for trade purposes.
1. KHO V. CA (G.R. NO. 115758)
FACTS:

Facts:
Petitioner, doing business under the name and style KEC Cosmetics
Laboratory, alleges that it is the registered owner of copyright and
patent registration of the Chin Chun Su container and medicated
cream. Hence, petitioner filed a complaint to enjoin respondent
Summerville Company from advertising and selling cream products
under the same brand name Chin Chun Su as it will mislead the public
and damage petitioner’s business. The trial court granted the
injunction. On appeal, the writ was dissolved. The trial court ruled to
bar petitioner from using the mark Chin Chun Su.
Issue:
Whether or not petitioner is entitled to the exclusive use of the
trademark Chin Chun Su based on her copyright and patent
registration over the product.
The petitioner alleged that she is the registered owner of the
copyrights Chin Chun Su and Oval Facial Cream Container/Case
as evidenced by certificates of copyright registrations and patent rights
on Chun Chun Su & Device and Chin Chun Su (medicated cream) after
she purchased it from Quintin Cheng (previous registered owner in the
Philippine Patent Office [PPO]).
Meanwhile, there was a decline in the petitioner’s business income due
to the advertisement and sale made by Summerville on petitioner’s
products under the same brand name and in similar containers.
According to Summerville, they are the exclusive and authorized
importer, re-packer and distributor of Chin Chun Su products
manufactured by Shun Yi Factory of Taiwan and that said company
authorized them to register its trade name “Chin Chun Su Mediated
Cream” with the PPO.

Ruling: NO.
Trademark, copyright and patents are different intellectual property
rights that cannot be interchanged with one another. A trademark is
any visible sign capable of distinguishing the goods (trademark) or
services (service mark) of an enterprise and shall include a stamped or
marked container of goods. In relation thereto, a trade name means
the name or designation identifying or distinguishing an enterprise.
Meanwhile, the scope of a copyright is confined to literary and artistic
works which are original intellectual creations in the literary and artistic
domain protected from the moment of their creation. Patentable
inventions, on the other hand, refer to any technical solution of a
problem in any field of human activity which is new, involves an
inventive step and is industrially applicable. Petitioner has no right to
support her claim for the exclusive use of the subject trade name and
its container. The name and container of a beauty cream product are
proper subjects of a trademark inasmuch as the same falls squarely
within its definition.
In order to be entitled to exclusively use the same in the sale of the
beauty cream product, the user must sufficiently prove that she
registered or used it before anybody else did. The petitioner’s
copyright and patent registration of the name and container would not
guarantee her right to the exclusive use of the same for the reason
that they are not appropriate subjects of the said intellectual rights.
Consequently, a preliminary injunction order cannot be issued for the
reason that the petitioner has not proven that she has a clear right
over the said name and container to the exclusion of others, not
having proven that she has registered a trademark thereto or used the
same before anyone did.
The application for preliminary injunction filed by petitioner was
granted. Hence, respondents moved for reconsideration, which was
denied. The respondents then moved for nullification of said
preliminary injunction with the CA. The latter granted its petition.
ISSUE: WON the copyright and patent over the name and container
of the beauty cream product entitle the registrant to its EXCLUSIVE
use and ownership .
HELD:NO. The petitioner has no right for the EXCLUSIVE use of the
trade name and its container. In order to be entitled to its exclusive
use, the user must sufficiently prove that she registered or used it
before anybody else did. This, petitioner failed to do.
“Trademark, copyright and patents are different intellectual property
rights that cannot be interchanged with one another. A trademark is
any visible sign capable of distinguishing the goods (trademark) or
services (service mark) of an enterprise and shall include a stamped or
marked container of goods. In relation thereto, a trade name means
the name or designation identifying or distinguishing an enterprise.
Meanwhile, the scope of a copyright is confined to literary and artistic
works which are original intellectual creations in the literary and artistic
domain protected from the moment of their creation.Patentable
inventions, on the other hand, refer to any technical solution of a
problem in any field of human activity which is new, involves an
inventive step and is industrially applicable”.

Facts:
ElidadKho is the owner of KEC Cosmetics Laboratory and she was also
the holder of copyrights over Chin Chun Su and its Oval Facial Cream
Container/Case. She also bought the patent rights over the Chin Chun
Su & Device and Chin Chun Su for medicated cream from one Quintin
Cheng, who was the assignee of Shun Yi Factory – a Taiwanese
factory actually manufacturing Chin Chun Su products.
Kho filed a petition for injunction against Summerville General
Merchandising and Company to enjoin the latter from advertising and
selling Chin Chun Su products, in similar containers as that of Kho, for
this is misleading the public and causing Kho to lose income; the
petition is also to enjoin Summerville from infringing upon Kho’s
copyrights.
Summerville in their defense alleged that they are the exclusive and
authorized importer, re-packer and distributor of Chin Chun Su
products; that Shun Yi even authorized Summerville to register its
trade name Chin Chun Su Medicated Cream with the Philippine Patent
Office; that Quintin Cheng, from whom Kho acquired her patent rights,
had been terminated (her services) by Shun Yi.
ISSUE: Whether or not Kho has the exclusive right to use the trade
name and its container.
HELD: No. Kho has no right to support her claim for the exclusive use
of the subject trade name and its container. The name and container
of a beauty cream product are proper subjects of a trademark (not
copyrightlike what she registered for) inasmuch as the same falls
squarely within its definition. In order to be entitled to exclusively use
the same in the sale of the beauty cream product, the user must
sufficiently prove that she registered or used it before anybody else
did. Kho’s copyright and patent registration of the name and container
would not guarantee her the right to the exclusive use of the same for
the reason that they are not appropriate subjects of the said
intellectual rights. Consequently, a preliminary injunction order cannot
be issued for the reason that the petitioner has not proven that she
has a clear right over the said name and container to the exclusion of
others, not having proven that she has registered a trademark thereto
or used the same before anyone did.

IPL Reviewer | R.J. B. Marquez | JD3

II. THE LAW ON TRADEMARKS, TRADENAMES AND SERVICE
MARKS
A. DEFINITION
Sec. 121. Definitions. - As used in Part III, the following terms have
the following meanings:
121.1. "Mark" means any visible sign capable of distinguishing the
goods (trademark) or services (service mark) of an enterprise and shall
include a stamped or marked container of goods; (Sec. 38, R. A. No.
166a)
121.2. "Collective mark" means any visible sign designated as such in
the application for registration and capable of distinguishing the origin
or any other common characteristic, including the quality of goods or
services of different enterprises which use the sign under the control
of the registered owner of the collective mark; (Sec. 40, R. A. No.
166a)
121.3. "Trade name" means the name or designation identifying or
distinguishing an enterprise; (Sec. 38, R. A. No. 166a)
121.4. "Bureau" means the Bureau of Trademarks;
121.5. "Director" means the Director of Trademarks;
121.6. "Regulations" means the Rules of Practice in Trademarks and
Service Marks formulated by the Director of Trademarks and approved
by the Director General; and
121.7. "Examiner" means the trademark examiner. (Sec. 38, R. A. No.
166a)
DISTILLERY, INC.,petitioner
vs
LA TONDEÑA DISTILLERS, INC. and THE HONORABLE COURT
OF APPEALS,respondents.
Facts:
La Tondeña Distillers, Inc. filed before the Regional Trial Court for the
recovery, under its claim of ownership, of possession or replevin
against Distilleria Washington, Inc. or Washington Distillery, Inc. of
18,157 empty “350 c.c. white flint bottles” bearing the blown-in marks
of “La Tondeña Inc.” and “Ginebra San Miguel,” averring that Distilleria
Washington was using the bottles for its own “Gin Seven” products
without the consent of Distilleria Washington in violation of Republic
Act 623.
In the original decision, the court acknowledged that there was a valid
transfer of the bottles to Distilleria Washington, except that its
possession of the bottles without the written consent of La Tondeña
gives rise to a prima facie presumption of illegal use under R.A. 623.
In seeking reconsideration of the decision, petitioner raises the issue
that if petitioner became the owner over the bottles seized from it by
replevin, then it has the right to their possession and use as attributes
of ownership.
The instant case is one for replevin (manual delivery) where the
claimant must be able to show convincingly that he is either the owner
or clearly entitled to the possession of the object sought to be
recovered. Replevin is a possessory action. The gist of which focuses
on the right of possession that in turn, is dependent on a legal basis
that, not infrequently, looks to the ownership of the object sought to
be replevied.
Issue:
Since replevin as a possessory action is dependent upon ownership, it
is relevant to ask: Whether or not there was a transfer ownership of La
Tondeña Distillers’ marked bottles or containers when it sold its
products in the market? Were the marked bottles or containers part of
the products sold to the public?
Held:
The manufacturer sells the product in marked containers, through
dealers, to the public in supermarkets, grocery shops, retail stores and
other sales outlets. The buyer takes the item; he is neither required to
return the bottle nor required to make a deposit to assure its return to
the seller. He could return the bottle and get a refund. A number of
bottles at times find their way to commercial users. It cannot be
gainsaid that ownership of the containers does pass on the consumer
albeit subject to the statutory limitations on the use of the registered
containers and to the trademark rights of the registrant.
In plain terms, therefore, La Tondeña not only sold its gin products but
also the marked bottles or containers, as well. And when these
products were transferred by way of sale, then ownership over the
bottles and all its attributes (jus utendi, jus abutendi, just fruendi, jus
disponendi) passed to the buyer. It necessarily follows that the
transferee has the right to possession of the bottles unless he uses
IPL Reviewer | R.J. B. Marquez | JD3
them in violation of the original owner’s registered or incorporeal
rights.
Furthermore, Sec. 5 of R.A. 623 states that when the bottles have
been “transferred by way of sale,” there should not be any need of
institution of any action included in the same act (where there is a
need of the written consent of the manufacturer, bottler, or seller).
Since the Court has found that the bottles have been transferred by
way of sale then, La Tondeña has relinquished all its proprietary rights
over the bottles in favor of Distilleria Washington who has obtained
them in due course. Now as owner, it can exercise all attributes of
ownership over the bottles.
The general rule on ownership, therefore, must apply and petitioner be
allowed to enjoy all the rights of an owner in regard the bottles in
question, to wit: the jus utendi or the right to receive from the thing
what it produces; the jus abutendi or the right to consume the thing
by its use; the jus disponendi or the power of the owner to alienate,
encumber, transform and even destroy the thing owned; and the jus
vindicandi or the right to exclude from the possession of the thing
owned any other person to whom the owner has not transmitted such
thing. What is proscribed is the use of the bottles in infringement of
another’s trademark or incorporeal rights.
Distelleria Washington v. CA, 263 SCRA 303 RIKKI (sorry late)
[G.R. No. 120961. October 17, 1996]
DISTILLERIA WASHINGTON, INC. or WASHINGTON DISTILLERY, INC.,
petitioner, vs. THE HONORABLE COURT OF APPEALS and LA
TONDEÑA DISTILLERS, INC., respondents.
Doctrine: It is to be pointed out that a trademark refers to a word,
name, symbol, emblem, sign or device or any combination thereof
adopted and used by a merchant to identify, and distinguish from
others, his goods of commerce. It is basically an intellectual creation
that is susceptible to ownership and, consistently therewith, gives rise
to its own elements of jus posidendi, jus utendi, jus fruendi, jus
disponendi, and jus abutendi, along with the applicable jus lex,
comprising that ownership.
Facts:
·The initiatory suit was instituted on 02 November 1987 with the trial
court (docketed Civil Case No. 87-42639) for manual delivery with
damages instituted by La Tondeña Distillers, Inc. (“LTDI”), against
Distilleria Washington (“Washington”).
·LTDI, under a claim of ownership, sought to seize from Distilleria
Washington 18,157 empty “350 c.c. white flint bottles” bearing the
blown-in marks of “La Tondeña Inc.” and “Ginebra San Miguel.” The
court, on application of LTDI, issued an order of replevin on 05
November 1987 for the seizure of the empty gin bottles from
Washington. These bottles, it was averred, were being used by
Washington for its own “Gin Seven” products without the consent of
LTDI.
·LTDI asserted that, being the owner and registrant of the bottles, it
was entitled to the protection so extended by Republic Act (“R.A.”) No.
623, as amended, notwithstanding its sale of the Ginebra San Miguel
gin product contained in said bottles.
·Washington countered that R.A. No. 623, invoked by LTDI, should not
apply to gin, an alcoholic beverage which is unlike that of “soda water,
mineral or aerated water, ciders, milks, cream, or other lawful
beverages” mentioned in the law, and that, in any case, ownership of
the bottles should, considering the attendant facts and circumstances,
be held lawfully transferred to the buyers upon the sale of the gin and
containers at a single price.
·Trial court ruled: complaint is hereby DISMISSED and plaintiff is
ordered:
§“1.To return to defendant the 18,157 empty bottles seized by virtue
of the writ for the Seizure of Personal Property issued by this Court on
November 6, 1987;
§“2. In the event of failure to return said empty bottles, plaintiff is
ordered to indemnify defendant in the amount of P18,157.00
representing the value of the bottles.
·CA ruled in favor of LTDI: The appellant (LTDI), being the owner, is
authorized to retain in its possession the 18,157 bottles registered in
its name delivered to it by the sheriff following their seizure from the
appellee pursuant to the writ of replevin issued by the trial court on
November 6, 1987.
Issue: Whether or not ownership of the empty bottles was transferred
to Washington.
Held: NO.
·It is a fact that R.A. No. 623 extends trademark protection in the use
of containers duly registered with the Philippine Patent Office.
·PROVISIONS applied:
“SECTION 1. Persons engaged or licensed to engage in the
manufacture, bottling, or selling of soda water, mineral or aerated
waters, cider, milk, cream or other lawful beverages in bottles
xxx
may register with the Philippines Patent Office a description of the
names or marks, and the purpose for which the containers so marked
are used by them, under the same conditions, rules, and regulations,
made applicable by law or regulation to the issuance of trademarks.
“SEC. 2. It shall be unlawful for any person, without the written
consent of the manufacturer, bottler, or seller, who has successfully
registered the marks of ownership in accordance with the provisions of
the next preceding section, to fill such bottles
for the purpose of sale, or to sell, dispose of, buy or traffic in, or
wantonly destroy the same, whether filled or not to use the same for
drinking vessels or glasses or drain pipes, foundation pipes, for any
other purpose than that registered by the manufacturer, bottler or
seller...
SEC. 3. The use by any person other than the registered manufacturer,
bottler or seller, without written permission of the latter of any such
bottle xxxxx
shall give rise to a prima facie presumption that such use or
possession is unlawful.
·The mere use of registered bottles or containers without the written
consent of the manufacturer is prohibited, the only exceptions being
when they are used as containers for ‘sisi,’ ‘bagoong,’ ‘patis’ and
similar native products.
·Republic Act No. 623 which governs the registration of marked bottles
and containers merely requires that the bottles, in order to be eligible
for registration, must be stamped or marked with the names of the
manufacturers or the names of their principals or products, or other
marks of ownership. No drawings or labels are required but, instead,
two photographs of the container, duly signed by the applicant,
showing clearly and legibly the names and other marks of ownership
sought to be registered and a bottle showing the name or other mark
or ownership, irremovably stamped or marked, shall be submitted.
·WE RULE THAT LTDI has the right to the bottles. The case
before us, however, goes beyond just seeking to have such use
stopped but it so takes on even the ownership issue as well.
Parenthetically, petitioner is not here being charged with a
violation of Section 2 of R.A. No. 623 or of the Trademark Law.
The instant suit is one for replevin (manual delivery) where
the claimant must be able to show convincingly that he is
either the owner or clearly entitled to the possession of the
object sought to be recovered.
· It is to be pointed out that a trademark refers to a word, name,
symbol, emblem, sign or device or any combination thereof adopted
and used by a merchant to identify, and distinguish from others, his
goods of commerce. It is basically an intellectual creation that is
susceptible to ownership and, consistently therewith, gives rise to its
own elements of jus posidendi, jus utendi, jus fruendi, jus disponendi,
and jus abutendi, along with the applicable jus lex, comprising that
ownership.
·The incorporeal right, however, is distinct from the property in the
material object subject to it. Ownership in one does not necessarily
vest ownership in the other. Thus, the transfer or assignment of the
intellectual property will not necessarily constitute a conveyance of the
thing it covers, nor would a conveyance of the latter imply the transfer
or assignment of the intellectual right.
·WHAT HAPPENS IN THE INDUSTRY: industry practices in the sale of
gin: The manufacturer sells the product in marked containers, through
dealers, to the public in supermarkets, grocery shops, retail stores and
other sales outlets. The buyer takes the item; he is neither required to
return the bottle nor required to make a deposit to assure its return to
the seller. He could return the bottle and get a refund. A number of
bottles at times find their way to commercial users.
·It cannot be gainsaid that ownership of the containers does pass on
to the consumer albeit subject to the statutory limitations on the use
of the registered containers and to the trademark rights of the
registrant. The statement in Section 5 of R.A. 623 to the effect that
the “sale of beverage contained in the said containers shall not include
the sale of the containers unless specifically so provided” is not a rule
of proscription. It is a rule of construction that, in keeping with the
spirit and intent of the law, establishes at best a presumption (of non-
conveyance of the container) and which by no means can be taken to
be either interdictive or conclusive in character. Upon the other hand,
LTDI’s sales invoice, stipulating that the “sale does not include the
bottles with the blow-in marks of ownership of La Tondeña Distillers,”
cannot affect those who are not privies thereto.
Dispositive: WHEREFORE, the decision of the appellate court is
MODIFIED by ordering LTDI to pay petitioner just compensation for
the seized bottles. Instead, however, of remanding the case to the
Court of Appeals to receive evidence on, and thereafter resolve, the
assessment thereof, this Court accepts and accordingly adopts the
quantification of P18,157.00 made by the trial court. No costs.
IPL Reviewer | R.J. B. Marquez | JD3
B. SOURCES OF RIGHTS
1. INTELLECTUAL PROPERTY CODE
2. PARIS CONVENTION FOR THE PROTECTION OF
INTELLECTUAL PROPERTY
a. NATIONAL TREATMENT PRINCIPLE
National treatment is a principle in international law.[1] Utilized in
many treaty regimes involving trade and intellectual property,[2][3] it
requires equal treatment of foreigners and locals. Under national
treatment, a state that grants particular rights, benefits or privileges to
its own citizens must also grant those advantages to the citizens of
other states while they are in that country. In the context
of international agreements, a state must provide equal treatment to
citizens of the other states participating in the agreement. Imported
and locally produced goods should be treated equally — at least after
the foreign goods have entered the market.[2]
While this is generally viewed as a desirable principle, in custom it
conversely means that a state can deprive foreigners of anything of
which it deprives its own citizens. An opposing principle calls for an
international minimum standard of justice (a sort of basic due process)
that would provide a base floor for the protection of rights and of
access to judicial process. The conflict between national treatment and
minimum standards has mainly played out
between industrialized and developing nations, in the context
of expropriations. Many developing nations, having the power to take
control over the property of their own citizens, wished to exercise it
over the property of aliens as well.
Though support for national treatment was expressed in several
controversial (and legally non-binding) United Nations General
Assembly resolutions, the issue of expropriations is almost universally
handled through treaties with other states and contracts with private
entities, rather than through reliance upon international custom.
National treatment only applies once a product, service or item of
intellectual property has entered the market. Therefore, charging
customs duty on an import is not a violation of national treatment even
if locally produced products are not charged an equivalent tax.[2]
b. RIGHT OF PRIORITY
Section 131. Priority Right. - 131.1. An application for registration of
a mark filed in the Philippines by a person referred to in Section 3, and
who previously duly filed an application for registration of the same
mark in one of those countries, shall be considered as filed as of the
day the application was first filed in the foreign country.
131.2. No registration of a mark in the Philippines by a person
described in this section shall be granted until such mark has been
registered in the country of origin of the applicant.
131.3. Nothing in this section shall entitle the owner of a registration
granted under this section to sue for acts committed prior to the date
on which his mark was registered in this country: Provided, That,
notwithstanding the foregoing, the owner of a well-known mark as
defined in Section 123.1(e) of this Act, that is not registered in the
Philippines, may, against an identical or confusingly similar mark,
oppose its registration, or petition the cancellation of its registration or
sue for unfair competition, without prejudice to availing himself of
other remedies provided for under the law.
131.4. In like manner and subject to the same conditions and
requirements, the right provided in this section may be based upon a
subsequent regularly filed application in the same foreign country:
Provided, That any foreign application filed prior to such subsequent
application has been withdrawn, abandoned, or otherwise disposed of,
without having been laid open to public inspection and without leaving
any rights outstanding, and has not served, nor thereafter shall serve,
as a basis for claiming a right of priority. (Sec. 37, R.A. No. 166a)
C. FUNCTIONS OF TRADEMARKS
3. ANG V. TEODORO (G.R. NO. L-48226)
Facts:
Respondent Teodoro has long been using ‘AngTibay’ both as
trademark and tradename in the manufacture and sale of its slippers,
shoes and indoor baseballs when he formally registered it. Meanwhile,
petitioner Ang registered the same trademark ‘AngTibay’ for its
products of pants and shirts. Respondent moved to cancel the
registration of petitioner’s mark. The trial court found for petitioner
Ang. CA reversed the judgment. Petitioner argues the validity of the
mark being descriptive; that it had not acquired secondary meaning in
favor of respondent; and that there can be no infringement/unfair
competition because the goods are not similar.
Issues:
(1) Whether or not ‘ANG TIBAY’ is a descriptive term not registrable.
(2) Whether or not the trademark ‘ANG TIBAY’ has acquired a
secondary meaning.
(3) Whether or not there is trademark infringement and/or unfair
competition between unrelated goods.
Ruling:
(1) NO. The phrase “AngTibay” is an exclamation denoting
administration of strength or durability. For instance, one who tries
hard but fails to break an object exclaims, “Angtibay!” (How strong!”)
The phrase “angtibay” is never used adjectively to define or describe
an object. One does not say, “angtibaysapatos” or “sapatosangtibay” is
never used adjectively to define or describe an object. One does not
say, “angtibaysapatos” or “sapatosangtibay” to mean “durable shoes,”
but “matibaynasapatos” or “sapatosnamatibay.” From all of this we
deduce that “AngTibay” is not a descriptive term within the meaning of
the Trade-Mark Law but rather a fanciful or coined phrase which may
properly and legally be appropriated as a trademark or tradename. In
this connection we do not fail to note that when the petitioner herself
took the trouble and expense of securing the registration of these
same words as a trademark of her products she or her attorney as well
as the Director of Commerce was undoubtedly convinced that said
words (AngTibay) were not a descriptive term and hence could be
legally used and validly registered as a trademark.
(2) NO. In view of the conclusion we have reached upon the first
assignment of error, it is unnecessary to apply here the doctrine of
“secondary meaning” in trade-mark parlance. This doctrine is to the
effect that a word or phrase originally incapable of exclusive
appropriation with reference to an article of the market, because
geographically or otherwise descriptive, might nevertheless have been
used so long and so exclusively by one producer with reference to his
article that, in that trade and to that branch of the purchasing public,
the word or phrase has come to mean that the article was his product.
We have said that the phrase “AngTibay,” being neither geographic
nor descriptive, was originally capable of exclusive appropriation as a
trade-mark. But were it not so, the application of the doctrine of
secondary meaning made by the Court of Appeals could nevertheless
be fully sustained because, in any event, by respondent’s long and
exclusive use of said phrase with reference to his products and his
business, it has acquired a proprietary connotation.
(3) YES. In the present state of development of the law on Trade-
Marks, Unfair Competition, and Unfair Trading, the test employed by
the courts to determine whether noncompeting goods are or are not of
the same class is confusion as to the origin of the goods of the second
user. Although two noncompeting articles may be classified under two
different classes by the Patent Office because they are deemed not to
possess the same descriptive properties, they would, nevertheless, be
held by the courts to belong to the same class if the simultaneous use
on them of identical or closely similar trade-marks would be likely to
cause confusion as to the origin, or personal source, of the second
user’s goods. They would be considered as not falling under the same
class only if they are so dissimilar or so foreign to each other as to
make it unlikely that the purchaser would think the first user made the
second user’s goods. The Court of Appeals found in this case that by
uninterrupted and exclusive use since 1910 of respondent’s registered
trade-mark on slippers and shoes manufactured by him, it has come to
indicate the origin and ownership of said goods. It is certainly not
farfetched to surmise that the selection by petitioner of the same
trade-mark for pants and shirts was motivated by a desire to get a free
ride on the reputation and selling power it has acquired at the hands
of the respondent.
Facts:
Respondent ToribioTeodoro has continuously used "AngTibay," both as
a trade-mark and as a trade-name, in the manufacture and sale of
slippers, shoes, and indoor baseballs since 1910. On September 29,
1915, he formally registered it as trade-mark and as trade-name on
January 3, 1933.
Petitioner Ana Ang registered the same trade-mark "AngTibay" for
pants and shirts on April 11, 1932, and established a factory for the
manufacture of said articles in the year 1937.
The Court of First Instance of Manila absolved the defendant (Ms. Ang)
on the grounds that the two trademarks are dissimilar and are used on
different and non-competing goods; that there had been no exclusive
use of the trade-mark by the plaintiff; and that there had been no
fraud in the use of the said trade-mark by the defendant because the
goods on which it is used are essentially different from those of the
plaintiff.
The Court of Appeals reversed said judgment, directing the Director of
Commerce to cancel the registration of the trade-mark "AngTibay" in
IPL Reviewer | R.J. B. Marquez | JD3
favor of petitioner, and perpetually enjoining the latter from using said
trade-mark on goods manufactured and sold by her.
Thus, this case, a petition for certiorari.
Issue:
Are the goods or articles or which the two trademarks are used similar
or belong to the same class of merchandise?
Ruling:
Yes, pants and shirts are goods closely similar to shoes and slippers.
They belong to the same class of merchandise as shoes and slippers.
They are closely related goods.
The Supreme Court affirmed the judgment of the Court of Appeals and
added that “although two non-competing articles may be classified
under to different classes by the Patent Office because they are
deemed not to possess the same descriptive properties, they would,
nevertheless, be held by the courts to belong to the same class if the
simultaneous use on them of identical or closely similar trademarks
would be likely to cause confusion as to the origin, or personal source,
of the second user’s goods. They would be considered as not falling
under the same class only if they are so dissimilar or so foreign to each
other as to make it unlikely that the purchaser would think that the
first user made the second user’s goods”.
Ang vs. Teodoro
Facts:
ToribioTeodoro at first in partnership with Juan Katindig and
later as sole proprietor, has continuously used “AngTibay” both as a
trademark and as a trade-name, in the manufacture and sale of
slippers, shoes and indoor baseballs sine 1910. He formally registered
it as a trademark on September 29, 1915 and as a trade-name on
January 3, 1933. Starting in an obscure shop in 1910 with a modest
capital of 210php but with tireless industry and unlimited
perseverance, Teodoro, then an unknown young man making slippers
with his own hands but now a prominent business magnate and a
manufacturer with a large factory operated with modern machinery by
a great number of employees, has steadily grown with his business ton
which he has dedicated the best years of his life.
The petitioner, Ana Ang registered the same trademark
“AngTibay” for pants and shirts on April 11, 1932 and established a
factory for the manufacture of said articles in the year 1937. The RTC
ruled in favor of the petitioner, absolving Ana Ang from the complaint
on the ground that two trademarks are dissimilar and are used on
different and non-competing goods; that there had been no fraud on
the use of said trademarks. However, the CA reversed the ruling of the
RTC, holding that by uninterrupted and exclusive use since 1910 in
the manufacture of slippers, shoes, Teodoro’s trademark has acquired
secondary meaning; that the goods or articles on which the two
trademarks are used are similar or belong to the same class; and that
the use by Ana Ang (petitioner) of said trademark constitutes a
violation of Section 3 and 7 of Act # 666. Hence, the petition.
Issue:
1. Whether or not the words “AngTibay” is a descriptive term.
2. Whether or not the words “AngTibay” had acquired a secondary
meaning?
3. Whether or not the pants and shirts are goods similar to shoes and
slippers within the meaning of Sections 3 and 7 of Act # 666?
Ruling:
1. The words “AngTibay” is an exclamation denoting admiration of
strength or durability. It is never used adjectively to define or describe
an object. Hence, the term is NOT a descriptive word within the
meaning of the Trade-Mark Law but rather a fanciful or coined phrase
which may properly and legally be appropriated as a trademark or
tradename.
2. It is unnecessary to apply the Doctrine of Secondary Meaning in the
trademark parlance. Furthermore, this doctrine is to effect that a word
or phrase originally incapable of exclusive appropriation with reference
to an article on the market, because geographically or otherwise
descriptive, might nevertheless have been used so long and so
exclusively by one producer with reference to his article. The phrase
“AngTibay” being neither geographic nor descriptive, was originally
capable of exclusive appropriation as a trademark.
In any event, the CA’s ruling that the Doctrine of Secondary
Meaning be fully sustained is affirmed, because Teodoro’s long and
exclusive use of said phrase with relative to its products and his
business, has acquired a propriety connotation.
3. The test employed by the courts to determine whether non-
competing goods are or are not of the same class is confusion as to
the origin of the goods of the second user. Although two non-
competing goods may be classified under two different classes by the
Patent Office, because they are deemed not to possess the same
descriptive properties, they would nevertheless, be held to belong to
the same class if the simultaneous use on them of identical or closely
similar trademarks would be likely to cause confusion as to the origin,
or personal source of the second user’s goods.
The judgment of the Court of Appeals is affirmed, with costs against
the petitioner in the three instances.
4. ETEPHA VS DIRECTOR OF PATENTS
Facts:
Respondent Westmont Pharmaceuticals, an American corporation,
sought registration of trademark ‘Atussin’ placed on its medicinal
preparation for the treatment of coughs. Petitioner Etepha, owner of
the trademark ‘Pertussin’ placed also on preparation for cough
treatment, objected claiming that it will be damaged since the 2 marks
are confusingly similar. The Director of Patents gave due course to the
application.
Issue:
Whether or not petitioner’s trademark is registrable.
Ruling: YES.
That the word “tussin” figures as a component of both trademarks is
nothing to wonder at. The Director of Patents aptly observes that it is
“the common practice in the drug and pharmaceutical industries to
‘fabricate’ marks by using syllables or words suggestive of the ailments
for which they are intended and adding thereto distinctive prefixes or
suffixes”. And appropriately to be considered now is the fact that,
concededly, the “tussin” (in Pertussin and Atussin) was derived from
the Latin root-word “tussis” meaning cough.
“Tussin” is merely descriptive; it is generic; it furnishes to the buyer no
indication of the origin of the goods; it is open for appropriation by
anyone. It is accordingly barred from registration as trademark. With
jurisprudence holding the line, we feel safe in making the statement
that any other conclusion would result in “appellant having practically
a monopoly” of the word “tussin” in a trademark. While “tussin” by
itself cannot thus be used exclusively to identify one’s goods, it may
properly become the subject of a trademark “by combination with
another word or phrase”. And this union of words is reflected in
petitioner’s Pertussin and respondent’s Atussin, the first with prefix
“Per” and the second with Prefix “A.”
FACTS:
On April 23, 1959, private respondent Westmont
Pharmaceuticals, Inc. sought registration of trademark “Atussin” This
was objected to by petitioner Etepha, A.G. alleging that it will be
detrimental on their part as it is confusingly similar to its Pertussin.
Both products deal with the treatment of cough.
ISSUE:
Whether or not Attusin may be registered as a trademark.
HELD:
Yes. xxx The validity of a cause for infringment is predicated
upon colorable imitation. The phrase “colorable imitaion” denotes such
a “close or ingenious imitation as to be calculated to deceive ordinary
persons, or such a resemblance to the original as to deceive an
ordinary purchaser giving such attention as a purchaser usually gives,
and to cause him to purchase the one supposing it to be the other.”
While “tussin” by itself cannot thus be used exclusively to
identify one’s goods, it may properly become the subject of a
trademark “by combination with another word or phrase.”
The two labels are entirely different in colors, contents,
arrangement of words theeon, sizes, shapes and general appearance.
The contrasts in pictorial effects and appeals to the eye is so
pronounced that the label of one cannot be mistaken for that of the
other, not even by persons unfamiliar with the two trademarks.
We cannot escape notice of the fact that the two words do not
sound alike – when pronounced.
FACTS:
Respondent Westmont Pharmaceuticals, Inc., a New York corporation,
sought registration of trademark "Atussin" placed on its "medicinal
preparation of expectorant antihistaminic, bronchodilator sedative,
ascorbic acid (Vitamin C) used in the treatment of cough". The
IPL Reviewer | R.J. B. Marquez | JD3
trademark is used exclusively in the Philippines since January 21,
1959.
Petitioner, Etepha, A. G., a Liechtenstin (principality) corporation,
objected claiming that it will be damaged because Atussin is so
confusedly similar to its Pertussin used on a preparation for the
treatment of coughs, that the buying public will be misled into
believing that Westmont's product is that of petitioner's which
allegedly enjoys goodwill.
The Director of Patents ruled that the trademark ATUSSIN may be
registered even though PERTUSSIN had been previously registered
from the same office, hence, this appeal.
ISSUE: Whether or not ATUSSIN may be registered?
HELD:
We are to be guided by the rule that the validity of a cause for
infringement is predicated upon colorable imitation. The phrase
"colorable imitation" denotes such a "close or ingenious imitation as to
be calculated to deceive ordinary persons, or such a resemblance to
the original as to deceive an ordinary purchaser, giving such attention
as a purchaser usually gives, and to cause him to purchase the one
supposing it to be the other.
A practical approach to the problem of similarity or dissimilarity is to go
into the whole of the two trademarks pictured in their manner of
display. Inspection should be undertaken from the viewpoint of a
prospective buyer. Confusion is likely between trademarks, however,
only if their over-all presentations in any of the particulars of sound,
appearance, or meaning are such as would lead the purchasing public
into believing that the products to which the marks are applied
emanated from the same source.
We concede the possibility that buyers might be able to obtain
Pertussin or Attusin without prescription. When this happens, then the
buyer must be one thoroughly familiar with what he intends to get,
else he would not have the temerity to ask for a medicine —
specifically needed to cure a given ailment. In which case, the more
improbable it will be to palm off one for the other. For a person who
purchases with open eyes is hardly the man to be deceived.
For the reasons given, the appealed decision of the respondent
Director of Patents — giving due course to the application for the
registration of trademark ATTUSIN is hereby affirmed. Cost against
petitioner. So ordered.
MIRPURI V. CA (G.R. NO. 114508)
Facts:
Lolita Escobar applied for the registration of the trademark ‘Barbizon’
for her products such as brassieres and ladies undergarments.
Respondent Barbizon Corporation, an American corporation, opposed
alleging that petitioner’s mark is confusingly similar to its own
trademark ‘Barbizon.’ Escobar’s application was given due course and
her trademark was registered. Later, Escobar assigned all her rights to
petitioner Mirpuri who failed to file an Affidavit of Use resulting in the
cancellation of the trademark. Petitioner then applied for registration
of the trademark to which respondent Barbizon again opposed, now
invoking the protection under Article 6bis of the Paris Convention. The
Director of Patents declaring respondent’s opposition was already
barred, petitioner’s application was given due course. CA reversed the
judgment.
Issue:
Whether or not respondent may invoke the protection under Article
6bis of the Paris Convention.
Ruling: YES.
The Convention of Paris for the Protection of Industrial Property,
otherwise known as the Paris Convention, is a multilateral treaty that
seeks to protect industrial property consisting of patents, utility
models, industrial designs, trademarks, service marks, trade names
and indications of source or appellations of origin, and at the same
time aims to repress unfair competition. The Convention is essentially
a compact among various countries which, as members of the Union,
have pledged to accord to citizens of the other member countries
trademark and other rights comparable to those accorded their own
citizens by their domestic laws for an effective protection against unfair
competition. Art. 6bis is a self-executing provision and does not require
legislative enactment to give it effect in the member country. It may
be applied directly by the tribunals and officials of each member
country by the mere publication or proclamation of the Convention,
after its ratification according to the public law of each state and the
order for its execution.
The Philippines and the United States of America have acceded to the
WTO Agreement. Conformably, the State must reaffirm its
commitment to the global community and take part in evolving a new
international economic order at the dawn of the new millennium.
FACTS
Lolita Escobar applied with the Bureau of Patents for the
registration of the trademark “Barbizon”, alleging that she had been
manufacturing and selling these products since 1970. private
respondent Barbizon Corp opposed the application in IPC No. 686. The
Bureau granted the application and a certificate of registration was
issued for the trademark “Barbizon”. Escobar later assigned all her
rights and interest over the trademark to petitioner Mirpuri. In 1979,
Escobar failed to file with the Bureau the Affidavit of Use of the
trademark. Due to his failure, the Bureau cancelled the certificate of
registration. Escobar reapplied and Mirpuri also applied and this
application was also opposed by private respondent in IPC No. 2049,
claiming that it adopted said trademark in 1933 and has been using it.
It obtained a certificate from the US Patent Office in 1934. Then in
1991, DTI cancelled petitioner’s registration and declared private
respondent the owner and prior user of the business name “Barbizon
International”.
ISSUE
Whether or not the treaty (Paris Convention) affords protection
to a foreign corporation against a Philippine applicant for the
registration of a similar trademark.
HELD
The Court held in the affirmative. RA 8293 defines trademark as
any visible sign capable of distinguishing goods. The Paris Convention
is a multilateral treaty that seeks to protect industrial property
consisting of patents, utility models, industrial designs, trademarks,
service marks, trade names and indications of source or appellations of
origin, and at the same time aims to repress unfair competition. In
short, foreign nationals are to be given the same treatment in each of
the member countries as that country makes available to its own
citizens. Nationals of the various member nations are thus assured of a
certain minimum of international protection of their industrial property.
Facts: In 1970, Escobar filed an application with the Bureau of Patents
for the registration of the trademark “Barbizon” for use in horsiers and
ladies undergarments (IPC No. 686). Private respondent reported
Barbizon Corporation, a corporation organized and doing business
under the laws of New York, USA, opposed the application. It was
alleged that its trademark is confusingly similar with that of Escobar
and that the registration of the said trademark will cause damage to its
business reputation and goodwill. In 1974, the Director of Patents
gave due course to the application. Escobar later assigned all his rights
and interest over the trademark to petitioner. In 1979, Escobar failed
to file with the Bureauthe affidavit of use of the trademark required
under the Philippine Trademark Law. Due to this failure,
the Bureau cancelled Escobar’s certificate of registration. In 1981,
Escobar and petitioner separately filed this application for registration
of the same trademark. (IPC 2049). Private respondent opposed again.
This time it alleged (1) that the said trademark was registered with the
US Patent Office; (2) that it is entitled to protection as well-known
mark under Article 6 bis of the Paris Convention, EO 913 and the two
Memoranda of the Minister of Trade and Industry and (3) that its use
on the same class of goods amounts to a violation of the Trademark
Law and Art. 189 of the RPC. Petitioner raised the defense of Res
Judicata.
Issue: One of the requisites of res judicata is identical causes of
action. Do IPC No. 686 and IPC No. 2049 involve the same cause of
action?
Held: No. The issue of ownership of the trademark was not raised in
IPC 686. IPC 2049 raised the issue of ownership, the first registration
and use of the trademark in the US and other countries, and the
international recognition of the trademark established by extensive use
and advertisement of respondents products for over 40 years here and
abroad. These are different from the issues of confessing similarity and
damage in IPC 686. The issue of prior use may have been raised in
IPC 686 but this claim was limited to prior use in the Philippines only.
Prior use in IPC 2049 stems from the respondents claims originator of
the word and symbol “Barbizon”, as the first and registered user of the
IPL Reviewer | R.J. B. Marquez | JD3
mark attached to its products which have been sold and advertised
would arise for aconsiderable number of years prior to petitioner’s
first application. Indeed, these are substantial allegations that raised
new issues and necessarily gave respondents a new cause of action.
Moreover, the cancellation of petitioner’s certificate registration for
failure to file the affidavit of use arose after IPC 686. This gave
respondent another cause to oppose the second application.
It is also to be noted that the oppositions in the first and
second cases are based on different laws. Causes of action which are
distinct and independent from each other, although out of the same
contract, transaction, or state of facts, may be sued on separately,
recovery on one being no bar to subsequent actions on others. The
mere fact that the same relief is sought in the subsequent action will
not render the judgment in the prior action operating as res judicata,
such as where the actions are based on different statutes.
C. HOW ARE MARKS ACQUIRED
Section 122. How Marks are Acquired. - The rights in a mark shall be
acquired through registration made validly in accordance with the
provisions of this law. (Sec. 2-A, R A. No. 166a)
5. UNNO COMMERCIAL ENTERPRISE VS GENERAL MILLING
CORP
RULING:
The right to register trademark is based on ownership. When the
applicant is not the owner of the trademark being applied for, he has
no right to apply for the registration of the same. Under the
Trademark Law only the owner of the trademark, trade name or
service mark used to distinguish his goods, business or service from
the goods, business or service of others is entitled to register the
same.
F An importer, broker, indentor or distributor acquires no rights to
the trademark of the goods he is dealing with in the absence of a valid
transfer or assignment of the trade mark.
F SCOPE: The term owner does not include the importer of the
goods bearing the trademark, trade name, service mark, or other mark
of ownership, unless such importer is actually the owner thereof in the
country from which the goods are imported. Thus, this Court has on
several occasions ruled that where the applicant's alleged ownership is
not shown in any notarial document and the applicant appears to be
merely an importer or distributor of the merchandise covered by said
trademark, its application cannot be granted.
F DEED OF ASSIGNMENT; PROOF OF OWNERSHIP: The Director of
Patents correctly found that ample evidence was presented that
Centennial Mills, Inc. was the owner and prior user in the Philippines of
the trademark "All Montana" through a local importer and broker. The
Deed of Assignment itself constitutes sufficient proof of its ownership
of the trademark "All Montana, "showing that Centennial Mills was a
corporation duly organized and existing under and by virtue of the
laws of the State of Oregon, U.S.A. with principal place and business at
Portland, Oregon, U.S.A. and the absolute and registered owner of
several trademarks for wheat fl our, i.e. (I mperial, White Lily, Duck,
General, Swan, White Horse, Vinta, El Paro, Baker's J oy, Choice, Red
Bowl, All Montana and Dollar) all of which were assigned by it to
respondent General Milling Corporation.
F Ownership of a trademark is not acquired by the mere fact of
registration alone. Registration merely creates a prima facie
presumption of the validity of the registration, of the registrant's
ownership of the trademark and of the exclusive right to the use
thereof. Registration does not perfect a trademark right. As conceded
itself by petitioner, evidence may be presented to overcome the
presumption. Prior use by one will controvert a claim of legal
appropriation by subsequent users.
F Under Rule 178 of the Rules of the Patent Office in Trademark
Cases, the Director of Patents is expressly authorized to order the
cancellation of a registered mark or trade name or name or other mark
of ownership in an inter partes case, such as the interference
proceeding at bar.
FACTS : The Court affirms respondent Director of Patent's decision
declaring respondent General Milling Corporation as the prior user of
the trademark "All Montana" on wheat flour in the Philippines and
ordering the cancellation of the certificate of registration for the same
trademark previously issued in favor of petitioner Unno Commercial
Enterprises, Incorporated, it appearing that Unno Commercial
Enterprises, Inc. merely acted as exclusive distributor of All Montana
wheat flour in the Philippines. Only the owner of a trademark, trade
name or service mark may apply for its registration and an importer,
broker, indentor or distributor acquires no rights to the trademark of
the goods he is dealing with in the absence of a valid transfer or
assignment of the trade mark.
On December 11, 1962, respondent General Milling Corporation filed
an application for the registration of the trademark "All Montana" to be
used in the sale of wheat flour. In view of the fact that the same
trademark was previously, registered in favor of petitioner Unno
Commercial Enterprises, Inc.. Respondent General Milling Corporation,
in its application for registration, alleged that it started using the
trademark "All Montana" on August 31, 1955 and subsequently was
licensed to use the same by Centennial Mills, Inc. by virtue of a deed
of assignment executed on September 20, 1962. On the other hand
petitioner Unno Commercial Enterprises, Inc. argued that the same
trademark had been registered in its favor on March 8, 1962 asserting
that it started using the trademark on June 30, 1956, as indentor or
broker for S.H. Huang Bros. & Co., a local firm.
The Director of Patents, after hearing, ruled in favor of respondent
General Milling Corporation. and rendered its decision as follows:
ISSUE : Whether or not director of patents can issue cancellation of
the certification of registration?
HELD : The Court finds without merit petitioner's argument that the
Director of Patents could not order the cancellation of' its certificate of
registration in an interference proceeding and that the question of
whether or not a certificate of registration is to be cancelled should
have been brought in cancellation proceedings. Under Rule 178 of the
Rules of the Patent Office in Trademark Cases, 14 the Director of
Patents is expressly authorized to order the cancellation of a registered
mark or trade name or name or other mark of ownership in an inter
partes case, such as the interference proceeding at bar.
The right to register trademark is based on ownership. 4 When the
applicant is not the owner of the trademark being applied for, he has
no right to apply for the registration of the same. 5 Under the
Trademark Law only the owner of the trademark, trade name or
service mark used to distinguish his goods, business or service from
the goods, business or service of others is entitled to register the
same. 6
The term owner does not include the importer of the goods bearing
the trademark, trade name, service mark, or other mark of ownership,
unless such importer is actually the owner thereof in the country from
which the goods are imported. A local importer, however, may make
application for the registration of a foreign trademark, trade name or
service mark if he is duly authorized by the actual owner of the name
or other mark of ownership. 7
Thus, petitioner's contention that it is the owner of the mark "All
Montana" because of its certificate of registration issued by the
Director of Patents, must fail, since ownership of a trademark is not
acquired by the mere fact of registration alone. 9Registration merely
creates a prima facie presumption of the validity of the registration, of
the registrant's ownership of the trademark and of the exclusive right
to the use thereof. 10 Registration does not perfect a trademark right.
11
As conceded itself by petitioner, evidence may be presented to
overcome the presumption. Prior use by one will controvert a claim of
legal appropriation, by subsequent users. In the case at bar, the
Director of Patents found that "ample evidence was presented in the
record that Centennial Mills, Inc. was the owner and prior user in the
Philippines of the trademark 'All Montana' through a local importer and
broker. Use of a trademark by a mere importer, indentor or exporter
(the Senior Party herein) inures to the benefit of the foreign
manufacturer whose goods are Identified by the trademark. The Junior
Party has hereby established a continuous chain of title and,
consequently, prior adoption and use" and ruled that "based on the
facts established, it is safe to conclude that the Junior Party has
satisfactorily discharged the burden of proving priority of adoption and
use and is entitled to registration." It is well-settled that we are
precluded from making further inquiry, since the findings of fact of the
Director of Patents in the absence of any showing that there was grave
abuse of discretion is binding on us 12 and the findings of facts by the
Director of Patents are deemed conclusive in the Supreme Court
provided that they are supported by substantial evidence. 13 Petitioner
has failed to show that the findings of fact of the Director of Patents
are not substantially supported by evidence nor that any grave abuse
of discretion was committed.
6. CANON KABUSHIKI KAISHA V. CA (G.R. NO. 120900)
Facts:
Respondent NSR Rubber filed an application for registration of the
mark CANON for sandals. Petitioner Canon, a Japanese corporation,
opposed alleging it will be damaged by the registration. Petitioner
presented evidence that it was the owner of the mark CANON in
various countries and in the Philippines for goods such as paints,
IPL Reviewer | R.J. B. Marquez | JD3
chemical products, toner and dye stuff. BPTTT dismissed the
opposition and gave due course to respondent’s application. CA
affirmed. Petitioner invokes Article 8 of the Paris Convention which
affords protection to a tradename whether or not it forms part of a
trademark.
Issue:
Whether or not petitioner may be afforded protection of its trade
name.
Ruling: NO.
The term “trademark” is defined by RA 166, the Trademark Law, as
including “any word, name, symbol, emblem, sign or device or any
combination thereof adopted and used by a manufacturer or merchant
to identify his goods and distinguish them for those manufactured,
sold or dealt in by others.” Tradename is defined by the same law as
including “individual names and surnames, firm names, tradenames,
devices or words used by manufacturers, industrialists, merchants,
agriculturists, and others to identify their business, vocations, or
occupations; the names or titles lawfully adopted and used by natural
or juridical persons, unions, and any manufacturing, industrial,
commercial, agricultural or other organizations engaged in trade or
commerce.” Simply put, a trade name refers to the business and its
goodwill; a trademark refers to the goods.
The Convention of Paris for the Protection of Industrial Property,
otherwise known as the Paris Convention, of which both the
Philippines and Japan, the country of petitioner, are signatories, is a
multilateral treaty that seeks to protect industrial property consisting of
patents, utility models, industrial designs, trademarks, service marks,
trade names and indications of source or appellations of origin, and at
the same time aims to repress unfair competition. We agree with
public respondents that the controlling doctrine with respect to the
applicability of Article 8 of the Paris Convention is that established
in Kabushi Kaisha Isetan vs. IAC.As pointed out by the BPTTT:
“Regarding the applicability of Article 8 of the Paris Convention, this
Office believes that there is no automatic protection afforded an entity
whose tradename is alleged to have been infringed through the use of
that name as a trademark by a local entity. To illustrate – if a taxicab
or bus company in a town in the United Kingdom or India happens to
use the tradename “Rapid Transportation”, it does not necessarily
follow that “Rapid” can no longer be registered in Uganda, Fiji, or the
Philippines.”
7. PHILIP MORRIS V. CA (G.R. NO. 91332)
Facts:
Petitioners are foreign corporations organized under US laws not doing
business in the Philippines and registered owners of symbols ‘MARK
VII,’ ‘MARK TEN,’ and ‘LARK’ used in their cigarette products.
Petitioners moved to enjoin respondent Fortune Tobacco from
manufacturing and selling cigarettes bearing the symbol ‘MARK’
asserting that it is identical or confusingly similar with their
trademarks. Petitioners relied on Section 21-A of the Trademark Law
to bring their suit and the Paris Convention to protect their
trademarks. The court denied the prayer for injunction stating that
since petitioners are not doing business in the Philippines, respondent’s
cigarettes would not cause irreparable damage to petitioner. CA
granted the injunction but on a subsequent motion, dissolved the writ.
Issues:
(1) Whether or not petitioner’s mark may be afforded protection under
said laws;
(2) Whether or not petitioner may be granted injunctive relief.
Ruling:
(1) NO. Yet, insofar as this discourse is concerned, there is no
necessity to treat the matter with an extensive response because
adherence of the Philippines to the 1965 international covenant due
to pact suntservanda had been acknowledged in La Chemise. Given
these confluence of existing laws amidst the cases involving
trademarks, there can be no disagreement to the guiding principle in
commercial law that foreign corporations not engaged in business in
the Philippines may maintain a cause of action for infringement
primarily because of Section 21-A of the Trademark Law when the
legal standing to sue is alleged, which petitioners have done in the
case at hand.
Petitioners may have the capacity to sue for infringement irrespective
of lack of business activity in the Philippines on account of Section 21-
A of the Trademark Law but the question whether they have an
exclusive right over their symbol as to justify issuance of the
controversial writ will depend on actual use of their trademarks in the
Philippines in line with Sections 2 and 2-A of the same law. It is thus
incongruous for petitioners to claim that when a foreign corporation
not licensed to do business in Philippines files a complaint for
infringement, the entity need not be actually using its trademark in
commerce in the Philippines. Such a foreign corporation may have the
personality to file a suit for infringement but it may not necessarily be
entitled to protection due to absence of actual use of the emblem in
the local market.
(2) NO. More telling are the allegations of petitioners in their
complaint as well as in the very petition filed with this Court indicating
that they are not doing business in the Philippines, for these frank
representations are inconsistent and incongruent with any pretense of
a right which can breached. Indeed, to be entitled to an injunctive
writ, petitioner must show that there exists a right to be protected and
that the facts against which injunction is directed are violativeof said
right. On the economic repercussion of this case, we are extremely
bothered by the thought of having to participate in throwing into the
streets Filipino workers engaged in the manufacture and sale of private
respondent’s “MARK” cigarettes who might be retrenched and forced
to join the ranks of the many unemployed and unproductive as a result
of the issuance of a simple writ of preliminary injunction and this,
during the pendency of the case before the trial court, not to mention
the diminution of tax revenues represented to be close to a quarter
million pesos annually. On the other hand, if the status quo is
maintained, there will be no damage that would be suffered by
petitioners inasmuch as they are not doing business in the Philippines.
In view of the explicit representation of petitioners in the complaint
that they are not engaged in business in the Philippines, it inevitably
follows that no conceivable damage can be suffered by them not to
mention the foremost consideration heretofore discussed on the
absence of their “right” to be protected.
Facts:
This is a petition for review under Rule 45 of the Rules of Court, to
seek the reversal and setting aside of the following issuances of the
Court of Appeals (CA).
Philip Morris, Inc. and two other petitioners are ascribing whimsical
exercise of the faculty conferred upon magistrates by Section 6, Rule
58 of the Revised Rules of Court when respondent Court of Appeals
lifted the writ of preliminary injunction it earlier had issued against
Fortune Tobacco Corporation, from manufacturing and selling “MARK”
cigarettes in the local market. Banking on the thesis that petitioners’
respective symbols “MARK VII”, ‘MARK TEN”, and “MARK”, also for
cigarettes, must be protected against unauthorized appropriation.
All petitioners are not doing business in the Philippines but are suing
on an isolated transaction, They Invoked provisions of the Paris
Convention for the Protection of Industrial and Intellectual Property. As
corporate nationals of member-countries of the Paris Union, they can
sue before Philippine courts for infringement of trademarks, or for
unfair competition, without need of obtaining registration or a license
to do business in the Philippines, and without necessity of actually
doing business in the Philippines.
Philip Morris and its subsidiaries filed the complaint for infringement
and damages against Fortune Tobacco before the Pasig Regional Trial
Court (RTC) for manufacturing and selling cigarettes bearing the
trademark “Mark” which is identical and confusingly similar to Philip
Morris trademarks. The said act was dismissed. Hence, this petition at
bar.
Issue/s:
Whether or not there has been an invasion of plaintiffs’ right of
property to such trademark or trade name.
Discussions:
Following universal acquiescence and comity, our municipal law on
trademarks regarding the requirement of actual use in the Philippines
must subordinate an international agreement inasmuch as the
apparent clash is being decided by a municipal tribunal. Withal, the
fact that international law has been made part of the law of the land
does not by any means imply the primacy of international law over
national law in the municipal sphere. Under the doctrine of
incorporation as applied in most countries, rules of international law
are given a standing equal, not superior, to national legislative
enactments
Ruling/s:
IPL Reviewer | R.J. B. Marquez | JD3
No. There is no proof that any of petitioner’s products which they seek
to protect from any adverse effect of the trademark applied for by
defendant, is in actual use and available for commercial purposes
anywhere in the Philippines.
A fundamental principle of Philippine Trademark Law is that actual use
in commerce in the Philippines is a pre-requisite to the acquisition of
ownership over a trademark or a trade name.
In view of the explicit representation of petitioners in the complaint
that they are not engaged in business in the Philippines, it inevitably
follows that no conceivable damage can be suffered by them not to
mention the foremost consideration heretofore discussed on the
absence of their “right” to be protected.
8. PHILIP MORRIS, INC. VS. FORTUNE TOBACCO
CORPORATION (Equal Standing of International Law and
Municipal Law)
Penned by: GARCIA, J.:
Petition for review under Rule 45 of the Rules of Court,
petitioners Philip Morris, Inc., Benson & Hedges (Canada) Inc., and
Fabriques de TabacReunies, S.A. (now Philip Morris Products S.A.)
seek the reversal and setting aside of the following issuances
of the Court of Appeals (CA) in CA-G.R. CV No. 66619: PETITION
DENIED
1. Decision dated January 21, 20031 affirming an earlier decision of
the Regional Trial Court of Pasig City, Branch 166, in its Civil Case
No. 47374
 Dismissed the complaint for trademark infringement
and damages thereat commenced by the petitioners
against respondent Fortune Tobacco Corporation; and
2. Resolution dated May 30, 20032 denying petitioners’ motion for
reconsideration.
FACTS OF THE CASE:
 Petitioner Philip Morris, Inc., a corporation (State of
Virginia, U.S.A), is the registered owner of the
trademark “MARK VII” for cigarettes. (per Certificate of
Registration No. 18723 issued on April 26, 1973 by the
Philippine Patents Office (PPO)
 Similarly, petitioner Benson & Hedges (Canada), Inc., a
subsidiary of Philip Morris, Inc., is the registered owner of
the trademark “MARK TEN” for cigarettes (PPO Certificate
of Registration No. 11147)
 Fabriques de TabacReunies, S.A. (Swiss company),
another subsidiary of Philip Morris, Inc., is the assignee of
the trademark “LARK,” (Trademark Certificate of
Registration No. 19053) (originally registered in 1964 by
Ligget and Myers Tobacco Company)
 Respondent Fortune Tobacco Corporation, a company
organized in the Philippines, manufactures and sells
cigarettes using the trademark “MARK.”
 Petitioners, on the claim that an infringement of their
respective trademarks had been committed, filed, on August
18, 1982, a Complaint for Infringement of Trademark
and Damages against respondent Fortune Tobacco
Corporation, docketed as Civil Case No. 47374 of the
Regional Trial Court of Pasig, Branch 166.
The decision under review summarized what happened next,
as follows:
o Prayer for the issuance of a preliminary injunction,
[petitioners] alleged that they are foreign corporations not
doing business in the Philippines and are suing on an
isolated transaction.
o Countries in which they are domiciled grant to
corporate or juristic persons of the Philippines the
privilege to bring action for infringement, without
need of a license to do business in those
countries.
o [Petitioners] likewise manifested [being registered owners of
the trademark “MARK VII” and “MARK TEN”
o registered the trademarks in their respective
countries of origin
 by virtue of the long and extensive
usage of the same, these trademarks
have already gained international fame
and acceptance
 [respondent], without any previous
consent from any of the [petitioners],
 manufactured and sold cigarettes
bearing the identical and/or confusingly
similar trademark “MARK”
 have caused and is likely to cause
confusion or mistake, or would deceive
purchasers and the public in general
into buying these products under the
impression and mistaken belief that they
are buying [petitioners’] products.
o Invoked provisions of the Paris Convention for
the Protection of Industrial and Intellectual Property
(Paris Convention)
o Philippines is a signatory, [petitioners] pointed out
that upon the request of an interested party, a
country of the Union may prohibit the use of a
trademark which constitutes a reproduction,
imitation, or translation of a mark already
belonging to a person entitled to the benefits of
the said Convention. In accordance with Section
21-A in relation to Section 23 of Republic
Act 166, as amended, they are entitled to relief in
the form of damages [and] the issuance of a writ
of preliminary injunction which should be made
permanent.
o [Respondent] filed its Answer denying
[petitioners’] material allegations and averred [among other
things] that “MARK” is a common word, which cannot
particularly identify a product to be the product of
the [petitioners]
o After the termination of the trial on the merits trial court
rendered its Decision dated November 3, 1999 dismissing
the complaint and counterclaim after making a finding that
the [respondent] did not commit trademark infringement
against the [petitioners].
o The issue of whether or not there was
infringement of the [petitioners’] trademarks by the
[respondent] was likewise answered in the negative.
It expounded that “in order for a name, symbol or device to
constitute a trademark, it must, either by itself or by
association, point distinctly to the origin or ownership of the
article to which it is applied and be of such nature as to
permit an exclusive appropriation by one person”.
 Maintaining to have the standing to sue in the local
forum and that respondent has committed trademark
infringement, petitioners went on appeal to the CA.
(Appellate recourse docket CA-G.R. CV No. 66619)
o CA decision on January 21, 2003 (while ruling for
petitioners on the matter of their legal capacity to
sue in this country for trademark infringement)
affirmed the trial court’s decision on the
underlying issue of respondent’s liability for
infringement.
 Motion for reconsideration denied by the CA
(Resolution of May 30, 2003)
ISSUES
 Petitioners seek petition for review (Court of
Appeals):
o (1) whether or not petitioners, as Philippine
registrants of trademarks, are entitled to
enforce trademark rights in this country;
o (2) whether or not respondent has committed
trademark infringement against petitioners by its
use of the mark “MARK” for its cigarettes, hence
liable for damages.
 Respondent: issue the propriety of the petition as it
allegedly raises questions of fact.
 The petition is bereft of merit.
 Petition raises both questions of fact and law
o question of law exists when the doubt or
difference arises as to what the law is on a certain
state of facts
o question of fact when the doubt or difference
arises as to the truth or falsity of alleged facts
 Court is not the proper venue to
consider factual issues as it is not a trier
of facts
 Unless the factual findings of the
appellate court are mistaken, absurd,
speculative, conflicting, tainted with
grave abuse of discretion, or contrary to
the findings culled by the court of origin,
we will not disturb them
IPL Reviewer | R.J. B. Marquez | JD3
 Petitioners: contentions should be treated as purely legal
since they are assailing erroneous conclusions deduced
from a set of undisputed facts
 A “trademark” is any distinctive word, name, symbol,
emblem, sign, or device, or any combination thereof
adopted and used by a manufacturer or merchant on his
goods to identify and distinguish them from those
manufactured, sold, or dealt in by others.
o A trademark deserves protection.
PETITIONER:
 Petitioners assert that, as corporate nationals of
member-countries of the Paris Union, they can sue
before Philippine courts for infringement of trademarks, or
for unfair competition, without need of obtaining
registration or a license to do business in the
Philippines, and without necessity of actually doing
business in the Philippines.
o Right and mechanism are accorded by
 Section 21-A of Republic Act (R.A.)
No. 166 or the Trademark Law, as
amended
 Article 2 of the Paris Convention for
the Protection of Industrial
Property, aka Paris Convention.
 Not doing business in the Philippines does not mean that
cigarettes bearing their trademarks are not available and
sold locally. Citing Converse Rubber Corporation v.
Universal Rubber Products, Inc., such availability and
sale may be effected through the acts of importers and
distributors.
 Entitlement to protection even in the absence of
actual use of trademarks in the country
o Philippines’ adherence to the Trade Related
Aspects of Intellectual Property Rights or
the TRIPS Agreement
o enactment of R.A. No. 8293, or the
Intellectual Property Code (“IP Code”)
o fame of a trademark may be acquired through
promotion or advertising with no explicit
requirement of actual use in local trade or
commerce
 Before discussing petitioners’ claimed entitlement to enforce
trademark rights in the Philippines, it must be
emphasized that their standing to sue in Philippine
courts had been recognized, and rightly so, by the CA
o such right to sue does not necessarily mean
protection of their registered marks in the
absence of actual use in the Philippines.
Thus clarified, what petitioners now harp about is their entitlement
to protection on the strength of registration of their
trademarks in the Philippines.
HELD/RATIO:
As we ruled in G.R. No. 91332,18 :
1. RECIPROCITY REQUIREMENT
 Registration of a trademark gives the registrant
(petitioners) advantages denied non-registrants or
ordinary users (respondent)
o validity of the registration
o ownership and the exclusive right to use the
registered marks
 they may not successfully sue on the basis alone of
their respective certificates of registration of
trademarks.
o Petitioners: still foreign corporations
o condition to availment of the rights and
privileges& their trademarks in this country:
 On top of Philippine registration, their
country grants substantially similar
rights and privileges to Filipino
citizens pursuant to Section 21-A20 of
R.A. No. 166.
 In Leviton Industries v. Salvador
o Court: reciprocity requirement is a condition
sine qua non to filing a suit by a foreign
corporation
 Unless alleged in the complaint, would
justify dismissal
o complainant is a national of a Paris
Convention- adhering country, its allegation
that it is suing under said Section 21-A
would suffice, because the reciprocal
 agreement between the two countries is
embodied and supplied by the Paris
Convention
 being considered part of Philippine
municipal laws, can be taken
judicial notice of in infringement
suits.
2. REGISTRATION VERSUS ACUAL USE!!
 members of the ParisUnion does not automatically
entitle petitioners to the protection of their
trademarks in this country ABSENT ACTUAL USE OF
THE MARKS IN LOCAL COMMERCE AND TRADE.
 Philippines’ adherence to the Paris Convention
effectively obligates the country to honor and
enforce its provisions( as regards the protection of
industrial property of foreign nationals in this country)
o However, any protection accorded has to be
made subject to the limitations of Philippine
laws.
o Hence, despite Article 2 of the Paris
Convention which substantially provides that:
 (1) nationals of member-countries shall
have in this country rights specially
provided by the Convention as are
consistent with Philippine laws, and
enjoy the privileges that Philippine laws
now grant or may hereafter grant to its
national
 (2) while no domicile requirement in
the country where protection is claimed
shall be required of persons entitled to
the benefits of the Union for the
enjoyment of any industrial property
rights
 foreign nationals must still observe
and comply with the conditions
imposed by Philippine law on its
nationals.
 R.A. No. 166 (as amended, specifically Sections 228 and 2-
A29), mandates actual use of the marks and/or
emblems in local commerce and trade before they
may be registered and ownership thereof acquired
o the petitioners cannot, therefore, dispense
with the element of actual use.
o Their being nationals of member-countries of the
Paris Union does not alter the legal situation.
 In Emerald Garment Mfg. Corporation v. Court of Appeals,
the Court reiterated its rulings in Sterling Products
International, Inc. v. Farbenfabriken Bayer
Aktiengesellschaft, Kabushi Kaisha Isetan v. Intermediate
Appellate Court, and Philip Morris v. Court of Appeals and
Fortune Tobacco Corporation on the importance of
ACTUAL COMMERCIAL USE OF A TRADEMARK in the
Philippines notwithstanding the Paris Convention:
o The provisions of the 1965 Paris Convention …
relied upon by private respondent and Sec. 21-A
of the Trademark Law were sufficiently
expounded upon and qualified in the recent case
of Philip Morris, Inc., et. al. vs. Court of
Appeals:
 Following universal acquiescence and
comity, our municipal law on trademarks
regarding the requirements of actual
use in the Philippines must subordinate
an international agreement inasmuch as
the apparent clash is being decided by a
municipal tribunal.
 Withal, the fact that international law
has been made part of the law of the
land does NOT by any means imply
the primacy of international law
over national law in the municipal
sphere.
 Under the DOCTRINE OF
INCORPORATION as applied in
most countries, rules of
International Law are given a
standing EQUAL, not superior, to
national legislative enactments.
 A foreign corporation) may have the
capacity to sue for infringement … but
whether they have an exclusive right
over their symbol as to justify issuance
IPL Reviewer | R.J. B. Marquez | JD3
of the controversial writ will depend on
actual use of their trademarks in
the Philippines in line with Sections 2
and 2-A of the same law.
 It is thus incongruous for petitioners to
claim that when a foreign corporation
not licensed to do business in the
Philippines files a complaint for
infringement, the entity need not be
actually using its trademark in
commerce in the Philippines.
 Such a foreign corporation may
have the personality to file a suit
for infringement but it may not
necessarily be entitled to
protection due to absence of actual
use of the emblem in the local
market.
 Registration of trademark cannot be deemed conclusive as
to the actual use of such trademark in local commerce.
o registration does not confer upon the registrant
an absolute right to the registered mark.
o merely constitutes prima facie evidence that the
registrant is the owner of the registered mark.
o Evidence of non-usage of the mark rebuts
the presumption of trademark ownership
 We stress that registration in the Philippines of trademarks
does notipso facto convey an absolute right or exclusive
ownership thereof.
o Shangri-La International Hotel
Management, Ltd. v. Development Group of
Companies, Inc.
 Trademark is a creation of use
 Actual use is a pre-requisite to
exclusive ownership
 Registration is only an administrative
confirmation of the existence of the
right of ownership of the mark
 does not perfect such right;
actual use thereof is the
perfecting ingredient.
 Petitioners’ reliance on Converse Rubber Corporation
is quite misplaced
o different factual milieu
o foreign owner of a Philippine trademark, albeit not
licensed to do, and not so engaged in, business in
the Philippines, may actually earn reputation or
goodwill for its goods in the country.
o But unlike in the instant case, evidence of
actual sales of Converse rubber shoes, such
as sales invoices, receipts and the testimony
of a legitimate trader, was presented in
Converse.
 This Court also finds the IP Code and the TRIPS
Agreement to be inapplicable
o the infringement complaint filed in August 1982
and tried under the aegis of R.A. No. 166, as
amended.
o The IP Code (January 1, 1998) no provision on
retroactivity; TRIPS Agreement (December 16,
1994)
 registration of a trademark unaccompanied by actual
use thereof in the country accords the registrant only
the standing to sue for infringement in Philippine
courts. Entitlement to protection of such trademark
in the country is entirely a different matter.
PHILIP MORRIS VS FORTUNE TOBACCO
FACTS:
Respondent contends that petitioner was not in danger of sustaining
irreparable damage by the usage of the former of the product name
“MARK”, same as that of petitioner’s product, since petitioner was
not doing business in the Philippines.
RULING:
Court ruled that petitioner, although not doing business in the
Philippines, has the legal right to sue for infringement anyone who
uses their duly registered mark. Sec 2 of RA 166 provides that foreign
corporations and corporations domiciled in a foreign country are not
disabled from bringing suit in Philippine courts to protect their rights as
holders of trademarks registered in the Philippines. It was further
reinforced by the Paris convention which affords foreign signatories to
the said treaty the advantages and protections which Philippine law
grants to Philippine nationals. There is no legal requirement that the
foreign registrant itself manufacture and sell its products here. All the
statute requires is the use in trade and commerce in the Philippines.
The trademark infringement by a local company may, for one thing,
affect the volume of importation into the Philippines of cigarettes
bearing petitioners' trademarks by independent or third party
traders. The Court was led to believe there was a prima facie basis for
holding, as the Patent Office had held and as the Court of Appeals did
originally hold, that private respondent's "MARK" infringes upon
petitioners' registered trademarks in view of the fact that out of all the
words in the English language, respondents chose the word "mark" to
refer to its cigarettes.
9. SHANGRI-LA INTERNATIONAL HOTEL MANAGEMENT V.
DEVELOPERS GROUP OF COMPANIES (G.R. NO. 159938)
Facts:
Respondent DGCI applied for and was granted registration of the
‘Shangri-La’ mark and ‘S’ logo in its restaurant business. Petitioner
Shangri-La, chain of hotels and establishments owned by the Kuok
family worldwide, moved to cancel the registration of the mark on the
ground that it was illegally and fraudulently obtained and appropriated
by respondents. Petitioner also moved to register the mark and logo in
its own name. Later, respondent DGCI filed before the trial court a
complaint for infringement against petitioner alleging that DGCI had
been the prior exclusive user and the registered owner in the
Philippines of said mark and logo. Petitioner Shangri-La argued that
respondent had no right to apply for the registration because it did not
have prior actual commercial use thereof. The trial court found for
respondent. CA affirmed.
Issue:
Whether or not respondent’s prior use of the mark is a requirement for
its registration.
Ruling: YES.
While the present law on trademarks has dispensed with the
requirement of prior actual use at the time of registration, the law in
force at the time of registration must be applied. Under the provisions
of the former trademark law, R.A. No. 166, as amended, hence, the
law in force at the time of respondent’s application for registration of
trademark, the root of ownership of a trademark is actual use in
commerce. Section 2 of said law requires that before a trademark can
be registered, it must have been actually used in commerce and
service for not less than two months in the Philippines prior to the
filing of an application for its registration. Trademark is a creation of
use and therefore actual use is a pre-requisite to exclusive ownership
and its registration with the Philippine Patent Office is a mere
administrative confirmation of the existence of such right.
While the petitioners may not have qualified under Section 2 of R.A.
No. 166 as a registrant, neither did respondent DGCI, since the latter
also failed to fulfill the 2-month actual use requirement. What is worse,
DGCI was not even the owner of the mark. For it to have been the
owner, the mark must not have been already appropriated (i.e., used)
by someone else. At the time of respondent DGCI’s registration of the
mark, the same was already being used by the petitioners, albeit
abroad, of which DGCI’s president was fully aware.
Shangri-La International Hotel Management, Ltd. (SLIHM) Vs.
Developers Group of Companies, Inc. (DGCI)
NATURE:
petition for review on certiorari of the decision & resolution of the
Court of Appeals
FACTS:
petitioners (Shangri-La) assail to set & seek to set aside the decision
of the Court of Appeals & its resolution w/c affirmed w/ modification
an earlier decision of the RTC of QC, an action for infringement &
damages threat commenced by respondent (DCGI) against them.
core of this controversy: “Shangri-La” mark & “S” logo. Respondent
DGCI claims ownership of said mark & logo in the Philippines.
Bureau of Patents, Trademarks & Technology Transfer (BPTTT)
issued DGCI a certificate of registration (may 31, 2983) and since then,
DGCI started using the “Shangri-La” & “S” in its restaurant business.
on the other hand, Kuok family (owns & operates a chain of hotels &
hotel-related transactions since 1969) adopted the name “Shangri-La”
as part of corporate names of all companies under the Kuok Grp. Of
Companies as far back as 1962. Name “Shangri-La” has been used in
all their hotels & hotel-related establishments worldwide.
IPL Reviewer | R.J. B. Marquez | JD3
And for centralization purposes= they use “Shangri-La” & “S” logo in
their hotels in places such as Singapore and Hong Kong. They also
incorporated it in the Phils. In the beginning of 1987 in Edsa Shangri-
La (Mandaluyong) & Makati Shangri-La (Makati)
Ramon Syhunliong as DGCI’s witness (businessman; named his
restaurant business “Shangri-la”)
DGCI filed a complaint for Infringement &Damages, lower court’s
judgment was in favor of the respondent (DGCI)
1. Kuok Group’s bulk use of the tradename was abroad,
not in the Phils (until 1987)
2. The Paris Convention must yield to a municipal law
ISSUES:
1. Whether certification against forum-shopping submitted on
the behalf of the petitioners is efficient (NOT RELEVANT TO
CONSTI TOPIC)
2. Whether the issue posed by petitioners are purely factual in
nature hence improper for resolution in the instant petition
for review on certiorati
DECISION:
the instant petition is GRANTED
RATIO:
The new Intellectual Property Code (IPC), R.A. No. 8293,
undoubtedly shows the firm resolve of the Philippines to observe &
follow the Paris Convention by incorporating the relevant portions of
the Convention such that persons who may question a mark (that is,
oppose registration, petition for the cancellation thereof, sue for unfair
competition) include persons whose internationally well-known mark,
whether or not registered, is identical with or confusingly similar to or
constitutes a translation of a mark that is sought to be registered or is
actually registered.
Paris Convention mandates that protection should be afforded to
internationally known marks as signatory to the Paris Convention w/o
regard as to whether the foreign corporation registered, licensed or
doing business in the Phils.
our municipal law on trademarks regarding the requirement of actual
use in the Phils must subordinate a international agreement
the fact that international law has been made part of the law of the
land does not any means imply the primacy of international law over
national law in the municipal sphere. Under the doctrine of
incorporation as applied in most countries, rules of international law
are given equal footage
petitioners’ separate personalities from their mother corporation be
an obstacle in the enforcement of their rights as part of Kuok Grp of
Companies
10. SHANGRILA 2007
11. E.Y. INDUSTRIAL SALES INC VS SHEN DAR ELECTRICITY
AND MACHINERY CO. LTD
Facts:
 EY Industrial Sales is a domestic corporation engaged in the
production, distribution and sale of air compressors.
  Shen Dar is a Taiwan-based foreign corporation engaged in the
manufacture of compressors.
 From 1997-2004, EY Industrial imported air compressors from
Shen Dar.
 In 1997, Shen Dar filed a Trademark Application with the
Intellectual Property Office (IPO) for the mark “Vespa” for the
use of air compressors. It was approved in 2007.
 In 1999, EY Industrial filed a Trademark Application also for the
mark “VESPA” for the use of air compressors. It was approved
in 2004.
 Shen Dar filed a Petition for Cancellation of the Industrial’s
EYES COR with the Bureau of Legal Affairs contending that:
a. there was a violation of Section 123.1 (D) of the Intellectual
Property Code which provides that: A mark cannot be
registered if it is identical to a mark with an earlier filing or
priority date. b. EY Industrial is only a distributor of the air
compressors
 On the other hand, EY Industrial alleged that it is the sole
assembler and fabricator of VESPA air compressors since the
early 1990s and that Shen Dar supplied them air compressors
with the mark “SD” and not “VESPA”
Issues:
1. Who between EY Industrial and Shen Dar is entitled to the
trademark “VESPA”. EY INDUSTRIAL SALES
2. WON the Bureau of Legal Affairs has the power to cancel the
application of Shen Dar even if it is Shen Dar who filed the case? YES
Held:
1st: EY INDUSTRIAL has the right to the trademark.
Based on the evidence, EYIS owns the “VESPA” trademark; it has prior
use, as shown by various sales invoices.
Ownership of a mark or trade name may be acquired not necessarily
by registration but by adoption and use in trade or commerce. As
between actual use of a mark without registration, and registration of
the mark without actual use thereof, the former prevails over the
latter.
For a rule widely accepted and firmly entrenched, because it has come
down through the years, is that actual use in commerce or business is
a pre-requisite to the acquisition of the right of ownership. It is non
sequitur to hold that porque EYIS is a distributor, it is no longer the
owner.
FIRST-TO-FILE RULE
Under Section 123.1 of IPO provision, the registration of a mark is
prevented with the filing of an earlier application for registration.
This must not, however, be interpreted to mean that ownership should
be based upon an earlier filing date. While RA 8293 (IPC) removed
the previous requirement of proof of actual use prior to the filing of an
application for registration of a mark, proof of prior and continuous use
is necessary to establish ownership of a mark. Such ownership
constitutes sufficient evidence to oppose the registration of a mark.
When we talk about trademark, we are just talking about the mark. It
does not include the product. Shen Dar is the manufacturer of the
product, but they did not name the product as VESPA. It was EY that
named the VESPA, and used the VESPA, even though they were only
the distributors.
 It was EY that actually used the trademark through
the use of receipts, and other documents.
The first to file rule – According to the SC that Shen Dar filed under
the old IPC where prior use is the one applied.
 although photocopies, are admissible in court?
2nd: BLA has the power to cancel the application.
Shen Dar challenges the propriety of such cancellation on the ground
that there was no petition for cancellation as required under Sec. 151
of RA 8293.
The IPO Director General stated that, despite the fact that the instant
case was for the cancellation of the COR issued in favor of EYIS, the
interests of justice dictate, and in view of its findings, that the COR of
Shen Dar must be cancelled.
The above rule reflects the oft-repeated legal principle that quasi-
judicial and administrative bodies are not bound by technical rules of
procedure. Such principle, however, is tempered by fundamental
evidentiary rules, including due process.
IPL Reviewer | R.J. B. Marquez | JD3
The fact that no petition for cancellation was filed against the COR
issued to Shen Dar does not preclude the cancellation of Shen Dar’s
COR. It must be emphasized that, during the hearing for the
cancellation of EYIS’ COR before the BLA, Shen Dar tried to establish
that it, not EYIS, was the true owner of the mark “VESPA” and, thus,
entitled to have it registered. Shen Dar had more than sufficient
opportunity to present its evidence and argue its case, and it did. It
was given its day in court and its right to due process was
respected. The IPO Director General’s disregard of the procedure for
the cancellation of a registered mark was a valid exercise of his
discretion.
Remember, EY’s application was the one granted, and it is Shen Dar’s
application that was cancelled.
 It does not mean that even you were
the one who filed, it your application cannot be cancelled. The BLA,
who has jurisdiction over the case, were able to determine that it is
Shen Dar’s trademark that should not have been issued with
registration, even it is the plaintiff.
12.
Birkenstock Orthopaedie GMBH and Co. KG (formerly
Birkenstock Orthopaedie GMBH) vs. Philippine Stock Expo
Marketing Corporation
15 SCRA 469
FACTS:
Petitioner, a corporation duly organized and existing under
the laws of Germany applied for various trademark registrations before
the Intellectual Property Office (IPO). However, the applications were
suspended in view of the existing registration of the mark
“BIRKENSTOCK AND DEVICE” under Registration No. 56334 dated
October 21, 1993 in the name of Shoe Town International and
Industrial Corporation, the predecessor-in-interest of respondent
Philippine Shoe Expo Marketing Corporation.
On May 27, 1997, petitioner filed a petition (Cancellation
Case) for cancellation of Registration No. 564334 on the ground that it
is the lawful and rightful owner of the Birkenstock marks. During its
pendency, however, respondent and/or it predecessor-in-interest failed
to file the required 10th Year Declaration of Actual Use (10th Year DAU)
for Registration No. 56334 on or before October 21, 2004, thereby
resulting the cancellation of such mark. Accordingly, the cancellation
case was dismissed for being moot and academic thereby paving the
way for the publication of the subject applications.
In response, respondent filed with the Bureau of Legal
Affairs (BLA) of the IPO three separate verified notices of opposition to
the subject applications docketed as Inter Partes Cases claiming,
among others, it, together with its predecessor-in-interest, has been
using the Birkenstock marks in the Philippines for more than 16 years
through the mark “BIRKENSTOCK AND DEVICE”. In its Decision, the
BLA of the IPO sustained respondent’s opposition, thus ordering the
rejection of the subject applications. Aggrieved, petitioner appealed to
the IPO Director General whereby in its decision, the latter reversed
and set aside the ruling of the BLA thus allowing the registration of the
subject applications.
Finding the IPO Director General’s reversal of the BLA
unacceptable, respondent filed a petition for review with the Court of
Appeals. In its decision dated June 25, 2010, the CA reversed and set
aside the ruling of the IPO Director General and reinstated that of the
BLA. The petitioner filed a Motion for Reconsideration but was denied
by the CA. Hence , this petition to the Supreme Court.
ISSUE:
1. Whether or not the petitioner’s documentary evidence,
2. Whether or not the subject marks should be allowed
registration in the name of the petitioner?
HELD:
1. The court ruled yes. It is a well-settled principle that the
rules of procedure are mere tools aimed at facilitating the
attainment of justice, rather than its frustration. A strict and
rigid application of the rules must always be eschewed when
it would subvert the primary objective of the rules, that is, to
enhance fair trials and expedite justice. In the light of this,
Section 5 of the Rules on Inter Partes Proceedings provides
that, “The Bureau shall not be bound by strict technical rules
of procedure and evidence but may adopt, in the absence of
any applicable rule herein, such mode of proceedings which
is consistent with the requirements of fair play and
conducive to the just, speedy and inexpensive disposition of
 cases, and which will the Bureau the greatest possibility to (iv) Birkenstock submitted only photocopies of its certificates of
focus on the contentious issues before it. registrations from other countries which were not considered
admissible as evidence.
In the case at bar, it should be noted that the IPO had
already obtained the originals of such documentary evidence
in the related Cancellation Case earlier before it. Under the
circumstance and the merits of the instant case as will be
subsequently discussed, the Court holds that the IPO Action taken
Director General’s relaxation of procedure was a valid
exercise of his discretion in the interest of substantial justice.
Birkenstock appealed the BLA decision to the IPOPHL Director General
(DG) who reversed the BLA, and held that with the cancellation of
2. The court ruled in favour of the petitioner. Under Section 12
Shoe Expo’s registrations, the reason to reject Birkenstock’s
of Republic Act 166, it provides that, “Each certificate of
applications on the ground of prior registration no longer existed, and
registration shall remain in force for twenty years: Provided,
that the evidence presented showed that Birkenstock was the true and
that the registration under the provisions of this Act shall be
lawful owner and prior user of the mark ‘BIRKENSTOCK’. The DG
cancelled by the Director, unless within one year following
disregarded Shoe Expo’s copyright registration for the ‘Birkenstock’
the fifth, tenth and fifteenth anniversaries of the date of
word since copyright and trade marks are different forms of intellectual
issue of the certificate of registration, the registrant shall file
property rights and cannot be interchanged.
in the Patent Office an affidavit showing that the mark or
trade-name is still in use or showing that its non-use is due
to special circumstance which excuse such non-use and is Dissatisfied, Shoe Expo appealed the DG’s decision to the Court of
not due to any intention to abandon the same, and pay the Appeals (CA) which reinstated the BLA decision. Birkenstock then
required fee.” appealed the CA decision to the Supreme Court.

In the case at bar, respondent admitted that it failed to file

the 10th Year DAU for Registration No. 56334 within the
requisite period, or on or before October 21, 2004. As a
consequence, it was deemed to have abandoned or Outcome
withdrawn any right or interest over the mark
“BIRKENSTOCK”. It must be emphasized that registration of
The Supreme Court, in its decision issued on November 20, 2013 (G.R.
a trademark, by itself, is not a mode of acquiring ownership.
194307), reversed the CA decision and held the following:
If the applicant is not the owner of the trademark, he has no
right to apply for its registration. Registration merely creates
a prima facie presumption of the validity of the registration. (i) The photocopied documents submitted by Birkenstock were
Such presumption, just like the presumptive regularity in the admissible in evidence since the IPOPHL is not bound by strict rules of
performance of official functions, is rebuttable and must give evidence, and moreover, the IPOPHL already had the original
way to evidence to the contrary. Besides, petitioner has duly documents in the earlier cancellation case.
established its true and lawful ownership of the mark
“BIRKENSTOCK”. It submitted evidence relating to the origin
(ii) The failure of Shoe Expo to file the DAU is tantamount to
and history of “BIRKENSTOCK” and it use in commerce long
abandonment, hence, it had lost any right or interest over the said
before respondent was able to register the same here in the
mark.
Philippines. Petitioner also submitted various certificates of
registration of the mark “BIRKENSTOCK” in various countries
and that it has used such mark in different countries (iii) Birkenstock had proven by clear and convincing evidence that it
worldwide, including the Philippines. was the true owner of the mark, citing evidence relating to the origin
and history of the mark, and demonstrating that Shoe Expo registered
Birkenstock v Philippine Shoe Expo an identical mark in its name in bad-faith.
Background
The Supreme Court emphasised that it is not the registration of a mark
In 1994, the German company Birkenstock OrthopaedieGmbh& Co., by itself which is the mode of acquiring ownership since the applicant,
filed several trade mark applications for its mark ‘BIRKENSTOCK’ and if not the owner of the mark, has no right to apply for its registration;
its variants in the Philippines. To its surprise, Birkenstock learned that it is the ownership of a mark that confers the right to register it. The
its ‘BIRKENSTOCK’ trade mark was already registered to a Philippine Supreme Court also, quoting the IPOPHL DG, stated that
company called Philippine Shoe Expo Marketing Corporation (Shoe “BIRKENSTOCK is obviously of German origin and is a highly distinct
Expo). and arbitrary mark”, adding that “it is very remote and incredible that
two persons could coin the same or identical mark for use in the same
line of business without any plausible explanation from Shoe Expo”.
Birkenstock quickly filed actions for cancellation against the registered
mark. While the cancellation case was pending, Shoe Expo failed to file
the required 10th year Declaration of Actual Use (DAU). Failure to file It must be noted that this case went through four stages of
the DAU results in the trade mark registrations being deemed contentious litigation, from the BLA up to
withdrawn. Because of this, the cancellation action filed by Birkenstock
was dismissed for being moot and academic, paving the way for its
own trade mark applications to be allowed. Shoe Expo, not deterred by
the cancellation of its registration, filed oppositions to the trade mark
applications of Birkenstock, on the grounds that it had been using the
mark ‘BIRKENSTOCK’ for over 16 years in the Philippines and that it
had re-applied for said trade marks, and had also obtained copyright
registration for the word ‘BIRKENSTOCK’ in 1991.

The Bureau of Legal Affairs (BLA), adjudicating bureau of the

Intellectual Property Office in the Philippines (IPOPHL), consolidated
the opposition actions, and on May 28 2008 issued a decision
sustaining ShoeExpo’s oppositions and rejecting the applications of
Birkenstock based on the following:

(i) Shoe Expo was the prior user and adopter of the ‘BIRKENSTOCK’
trade mark in the Philippines.

(ii) Birkenstock did not present evidence of actual use of the mark in
the Philippines.

(iii) The marks of Birkenstock are not internationally well-known.

IPL Reviewer | R.J. B. Marquez | JD3