THIRD DIVISION

G.R. No. 209843, March 25, 2015

TAIWAN KOLIN CORPORATION, LTD., Petitioner, v. KOLIN ELECTRONICS CO., INC., Respondent.
DECISION
VELASCO JR., J.:
Nature of the Case
Before the Court is a petition for review under Rule 45 of the Rules of Court interposed by petitioner
Taiwan Kolin Corporation, Ltd. (Taiwan Kolin), assailing the April 30, 2013 Decision 1 of the Court of
Appeals (CA) in CA-G.R. SP No. 122565 and its subsequent November 6, 2013 Resolution. 2 The assailed
issuances effectively denied petitioners trademark application for the use of KOLIN on its television
and DVD players.
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The Facts
On February 29, 1996, Taiwan Kolin filed with the Intellectual Property Office (IPO), then Bureau of
Patents, Trademarks, and Technology Transfer, a trademark application, docketed as Application No. 41996-106310, for the use of KOLIN on a combination of goods, including colored televisions,
refrigerators, window-type and split-type air conditioners, electric fans and water dispensers. Said goods
allegedly fall under Classes 9, 11, and 21 of the Nice Classification (NCL).
Application No. 4-1996-106310 would eventually be considered abandoned for Taiwan Kolins failure to
respond to IPOs Paper No. 5 requiring it to elect one class of good for its coverage. However, the same
application was subsequently revived through Application Serial No. 4-2002-011002, 3 with petitioner
electing Class 9 as the subject of its application, particularly: television sets, cassette recorder, VCD
Amplifiers, camcorders and other audio/video electronic equipment, flat iron, vacuum cleaners, cordless
handsets, videophones, facsimile machines, teleprinters, cellular phones and automatic goods vending
machine. The application would in time be duly published. 4
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On July 13, 2006, respondent Kolin Electronics Co., Inc. (Kolin Electronics) opposed petitioners revived
application, docketed as Inter Partes Case No. 14-2006-00096. As argued, the mark Taiwan Kolin seeks
to register is identical, if not confusingly similar, with its KOLIN mark registered on November 23,
2003, covering the following products under Class 9 of the NCL: automatic voltage regulator, converter,
recharger, stereo booster, AC-DC regulated power supply, step-down transformer, and PA amplified ACDC.5
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To digress a bit, Kolin Electronics KOLIN registration was, as it turns out, the subject of a prior legal
dispute between the parties in Inter Partes Case No. 14-1998-00050 before the IPO. In the said case,
Kolin Electronics own application was opposed by Taiwan Kolin, being, as Taiwan Kolin claimed, the prior
registrant and user of the KOLIN trademark, having registered the same in Taipei, Taiwan on December
1, 1988. The Bureau of Legal Affairs of the IPO (BLA-IPO), however, did not accord priority right to
Taiwan Kolins Taipei registration absent evidence to prove that it has already used the said mark in the
Philippines as early as 1988. On appeal, the IPO Director General affirmed the BLA-IPOs Decision.
Taiwan Kolin elevated the case to the CA, but without injunctive relief, Kolin Electronics was able to
register the KOLIN trademark on November 23, 2003 for its products. 6 Subsequently, the CA, on July
31, 2006, affirmed7 the Decision of the Director General.
In answer to respondents opposition in Inter Partes Case No. 14-2006-00096, petitioner argued that it
should be accorded the benefits of a foreign-registered mark under Secs. 3 and 131.1 of Republic Act
No. 8293, otherwise known as the Intellectual Property Code of the Philippines (IP Code); 8 that it has
already registered the KOLIN mark in the Peoples Republic of China, Malaysia and Vietnam, all of
which are parties to the Paris Convention for the Protection of Industrial Property (Paris Convention) and
the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS);and that benefits
accorded to a well-known mark should be accorded to petitioner.9
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Ruling of the BLA-IPO

By Decision10 dated August 16, 2007, the BLA-IPO denied petitioners application disposing as
follows:
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In view of all the foregoing, the instant Opposition is as, it is hereby SUSTAINED. Accordingly,
application bearing Serial No. 4-1996-106310 for the mark KOLIN filed in the name of TAIWAN
KOLIN., LTD. on February 29, 1996 for goods falling under Class 09 of the International Classification of
Goods such as cassette recorder, VCD, woofer, amplifiers, camcorders and other audio/video electronic
equipment, flat iron, vacuum cleaners, cordless handsets, videophones, facsimile machines, teleprinters,
cellular phones, automatic goods vending machines and other electronic equipment is herebyREJECTED.
Let the file wrapper of KOLIN, subject of this case be forwarded to the Bureau of Trademarks (BOT)
for appropriate action in accordance with this Decision.
SO ORDERED.

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Citing Sec. 123(d) of the IP Code,11 the BLA-IPO held that a mark cannot be registered if it is identical
with a registered mark belonging to a different proprietor in respect of the same or closely-related
goods. Accordingly, respondent, as the registered owner of the mark KOLIN for goods falling under
Class 9 of the NCL, should then be protected against anyone who impinges on its right, including
petitioner who seeks to register an identical mark to be used on goods also belonging to Class 9 of the
NCL.12 The BLA-IPO also noted that there was proof of actual confusion in the form of consumers writing
numerous e-mails to respondent asking for information, service, and complaints about petitioners
products.13
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Petitioner moved for reconsideration but the same was denied on January 26, 2009 for lack of
merit.14 Thus, petitioner appealed the above Decision to the Office of the Director General of the IPO.

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Ruling of the IPO Director General

On November 23, 2011, the IPO Director General rendered a Decision 15 reversing that of the BLA-IPO in
the following wise:
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Wherefore, premises considered, the appeal is hereby GRANTED. The Appellants Trademark Application
No. 4-1996-106310 is hereby GIVEN DUE COURSE subject to the use limitation or restriction for the
goods television and DVD player. Let a copy of this Decision as well as the trademark application and
records be furnished and returned to the Director of the Bureau of Legal Affairs for appropriate action.
Further, let the Director of the Bureau of Trademarks and the library of the Documentation, Information
and Technology Transfer Bureau be furnished a copy of this Decision for information, guidance, and
records purposes.
SO ORDERED.

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In so ruling, the IPO Director General ratiocinated that product classification alone cannot serve as the
decisive factor in the resolution of whether or not the goods are related and that emphasis should be on
the similarity of the products involved and not on the arbitrary classification or general description of
their properties or characteristics. As held, the mere fact that one person has adopted and used a
particular trademark for his goods does not prevent the adoption and use of the same trademark by
others on articles of a different description.16
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Aggrieved, respondent elevated the case to the CA.

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Ruling of the Court of Appeals

In its assailed Decision, the CA found for Kolin Electronics, on the strength of the following premises: (a)
the mark sought to be registered by Taiwan Kolin is confusingly similar to the one already registered in
favor of Kolin Electronics; (b) there are no other designs, special shape or easily identifiable earmarks
that would differentiate the products of both competing companies; 17 and (c) the intertwined use of
television sets with amplifier, booster and voltage regulator bolstered the fact that televisions can be
considered as within the normal expansion of Kolin Electronics, 18 and is thereby deemed covered by its
trademark as explicitly protected under Sec. 13819 of the IP Code.20Resultantly, the CA granted
respondents appeal thusly:
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WHEREFORE, the appeal is GRANTED. The November 23, 2011 Decision of the Director General of the
Intellectual Property Office in Inter Partes Case No. 14-2006-0096 is REVERSED and SET ASIDE. The
September 17, 2007 Decision of the Bureau of Legal Affairs of the same office is REINSTATED.

SO ORDERED.

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Petitioner moved for reconsideration only to be denied by the CA through its equally assailed November
6, 2013 Resolution. Hence, the instant recourse.
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The Issue
The primordial issue to be resolved boils down to whether or not petitioner is entitled to its trademark
registration of KOLIN over its specific goods of television sets and DVD players. Petitioner postulates,
in the main, that its goods are not closely related to those of Kolin Electronics. On the other hand,
respondent hinges its case on the CAs findings that its and petitioners products are closely-related.
Thus, granting petitioners application for trademark registration, according to respondent, would cause
confusion as to the public.
The Courts Ruling
The petition is impressed with merit.
Identical marks may be registered for
products from the same classification
To bolster its opposition against petitioners application to register trademark KOLIN, respondent
maintains that the element of mark identity argues against approval of such application,quoting the BLA
IPOs ruling in this regard:21
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Indubitably, Respondent-Applicants [herein petitioner] mark is identical to the registered mark of herein
Opposer [herein respondent] and the identical mark is used on goods belonging to Class 9 to which
Opposers goods are also classified. On this point alone, Respondent-Applicants application should
already be denied.
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The argument is specious.

The parties admit that their respective sets of goods belong to Class 9 of the NCL, which includes the
following:22
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Class 9
Scientific, nautical, surveying, photographic, cinematographic, optical, weighing, measuring, signalling,
checking (supervision), life-saving and teaching apparatus and instruments; apparatus and instruments
for conducting, switching, transforming, accumulating, regulating or controlling electricity; apparatus for
recording, transmission or reproduction of sound or images; magnetic data carriers, recording discs;
compact discs, DVDs and other digital recording media; mechanisms for coin-operated apparatus; cash
registers, calculating machines, data processing equipment, computers; computer software; fireextinguishing apparatus.
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But mere uniformity in categorization, by itself, does not automatically preclude the registration of what
appears to be an identical mark, if that be the case. In fact, this Court, in a long line of cases,has held
that such circumstance does not necessarily result in any trademark infringement. The survey of
jurisprudence cited in Mighty Corporation v. E. & J Gallo Winery 23 is enlightening on this point:
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(a) in Acoje Mining Co., Inc. vs. Director of Patents,24 we ordered the
approval of Acoje Minings application for registration of the trademark
LOTUS for its soy sauce even though Philippine Refining Company had
prior registration and use of such identical mark for its edible oil
which, like soy sauce, also belonged to Class 47;
(b)
in Philippine Refining Co., Inc. vs. Ng Sam and Director of
Patents,25 we upheld the Patent Directors registration of the same
trademark CAMIA for Ng Sams ham under Class 47, despite Philippine
Refining Companys prior trademark registration and actual use of
such mark on its lard, butter, cooking oil (all of which belonged to

Class 47), abrasive detergents, polishing materials and soaps;

(c) in Hickok Manufacturing Co., Inc. vs. Court of Appeals and Santos Lim
Bun Liong,26we dismissed Hickoks petition to cancel private
respondents HICKOK trademark registration for its Marikina shoes as
against petitioners earlier registration of the same trademark for
handkerchiefs, briefs, belts and wallets.
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Verily, whether or not the products covered by the trademark sought to be registered by Taiwan Kolin,
on the one hand, and those covered by the prior issued certificate of registration in favor of Kolin
Electronics, on the other, fall under the same categories in the NCL is not the sole and decisive factor in
determining a possible violation of Kolin Electronics intellectual property right should petitioners
application be granted. It is hornbook doctrine, as held in the above-cited cases, that emphasis should
be on the similarity of the products involved and not on the arbitrary classification or general description
of their properties or characteristics. The mere fact that one person has adopted and used a trademark
on his goods would not, without more, prevent the adoption and use of the same trademark by others
on unrelated articles of a different kind.27
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The CA erred in denying petitioners

registration application
Respondent next parlays the idea of relation between products as a factor militating against petitioners
application. Citing Esso Standard Eastern, Inc. v. Court of Appeals,28 respondent argues that the goods
covered by petitioners application and those covered by its registration are actually related belonging as
they do to the same class or have the same physical characteristics with reference to their form,
composition, texture, or quality, or if they serve the same purpose. Respondent likewise draws
parallelisms between the present controversy and the following cases: 29
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(a) In Arce & Sons, Inc. vs. Selecta Biscuit Company,30 biscuits were held
related to milk because they were both food products;
(b)
In Chua Che vs. Phil. Patents Office,31 soap and perfume, lipstick and
nail polish are held to be similarly related because they are common
household items;
(c) In Ang vs. Teodoro,32 the trademark Ang Tibay for shoes and
slippers was disallowed to be used for shirts and pants because they
belong to the same general class of goods; and
(d) In Khe vs. Lever Bros. Co.,33 soap and pomade, although noncompetitive, were held to be similar or belong to the same class, since
both are toilet articles.
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Respondent avers that Kolin Electronics and Taiwan Kolins products are closely-related not only because
both fall under Class 9 of the NCL, but mainly because they both relate to electronic products,
instruments, apparatus, or appliances.34 Pushing the point, respondent would argue that Taiwan Kolin
and Kolin Electronics goods are inherently similar in that they are all plugged into electric sockets and
perform a useful function.35 Furthermore, respondent echoes the appellate courts ratiocination in
denying petitioners application, viz:36
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Significantly, Kolin Electronics goods (automatic voltage regulator; converter; recharger; stereo booster;
AC-DC regulated power supply; step-down transformer; and PA amplified AC-DC) and Taiwan Kolins
television sets and DVD players are both classified under class 9 of the NICE agreement. At first glance,
it is also evident that all these goods are generally described as electrical devices.x x x [T]he goods of
both Kolin Electronics and Taiwan Kolin will inevitably be introduced to the public as KOLIN products
and will be offered for sale in the same channels of trade. Contrary to Taiwan Kolins claim, power supply
as well as audio and stereo equipment like booster and amplifier are not only sold in hardware and
electrical shops. These products are commonly found in appliance stores alongside television sets and

DVD players. With the present trend in todays entertainment of having a home theater system, it is not
unlikely to see a stereo booster, amplifier and automatic voltage regulator displayed together with the
television sets and DVD players. With the intertwined use of these products bearing the identical
KOLIN mark, the ordinary intelligent consumer would likely assume that they are produced by the
same manufacturer.
In sum, the intertwined use, the same classification of the products as class 9 under the NICE
Agreement, and the fact that they generally flow through the same channel of trade clearly
establish that Taiwan Kolins television sets and DVD players are closely related to Kolin
Electronics goods. As correctly pointed out by the BLA-IPO, allowing Taiwan Kolins registration
would only confuse consumers as to the origin of the products they intend to purchase. Accordingly,
protection should be afforded to Kolin Electronics, as the registered owner of the KOLIN
trademark.37 (emphasis added)
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The CAs approach and reasoning to arrive at the assailed holding that the approval of petitioners
application is likely to cause confusion or deceive fail to persuade.
The products covered by petitioners
application and respondents
registration are unrelated
A certificate of trademark registration confers upon the trademark owner the exclusive right to sue those
who have adopted a similar mark not only in connection with the goods or services specified in the
certificate, but also with those that are related thereto.38
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In resolving one of the pivotal issues in this casewhether or not the products of the parties involved
are relatedthe doctrine in Mighty Corporation is authoritative. There, the Court held that the goods
should be tested against several factors before arriving at a sound conclusion on the question of
relatedness. Among these are:
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(a) the business (and its location) to which the goods belong;
(b) the class of product to which the goods belong;
(c) the products quality, quantity, or size, including the nature of the package, wrapper or container;
(d) the nature and cost of the articles;
(e) the descriptive properties, physical attributes or essential characteristics with reference to their
form, composition, texture or quality;
(f) the purpose of the goods;
(g) whether the article is bought for immediate consumption, that is, day-to-day household items;
(h) the fields of manufacture;
(i) the conditions under which the article is usually purchased; and
(j) the channels of trade through which the goods flow, how they are distributed, marketed, displayed
and sold.39
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As mentioned, the classification of the products under the NCL is merely part and parcel of the factors to
be considered in ascertaining whether the goods are related. It is not sufficient to state that the goods
involved herein are electronic products under Class 9 in order to establish relatedness between the
goods, for this only accounts for one of many considerations enumerated in Mighty Corporation.In this
case, credence is accorded to petitioners assertions that:40
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a.

Taiwan Kolins goods are classified as home appliances as opposed to Kolin Electronics goods
which are power supply and audio equipment accessories;
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b.

Taiwan Kolins television sets and DVD players perform distinct function and purpose from Kolin
Electronics power supply and audio equipment; and

c.

Taiwan Kolin sells and distributes its various home appliance products on wholesale and to
accredited dealers, whereas Kolin Electronics goods are sold and flow through electrical and
hardware stores.

Clearly then, it was erroneous for respondent to assume over the CA to conclude that all electronic
products are related and that the coverage of one electronic product necessarily precludes the
registration of a similar mark over another. In this digital age wherein electronic products have not only
diversified by leaps and bounds, and are geared towards interoperability, it is difficult to assert readily,
as respondent simplistically did, that all devices that require plugging into sockets are necessarily related
goods.

It bears to stress at this point that the list of products included in Class 9 41 can be sub-categorized into
five (5) classifications, namely: (1) apparatus and instruments for scientific or research purposes, (2)
information technology and audiovisual equipment, (3) apparatus and devices for controlling the
distribution and use of electricity, (4) optical apparatus and instruments, and (5) safety
equipment.42 From this sub-classification, it becomes apparent that petitioners products, i.e., televisions
and DVD players, belong to audiovisiual equipment, while that of respondent, consisting of automatic
voltage regulator, converter, recharger, stereo booster, AC-DC regulated power supply, step-down
transformer, and PA amplified AC-DC, generally fall under devices for controlling the distribution and use
of electricity.
The ordinarily intelligent buyer
is not likely to be confused
In trademark cases, particularly in ascertaining whether one trademark is confusingly similar to another,
no rigid set rules can plausible be formulated. Each case must be decided on its merits, with due regard
to the goods or services involved, the usual purchasers character and attitude, among others. In such
cases, even more than in any other litigation, precedent must be studied in the light of the facts of a
particular case. That is the reason why in trademark cases, jurisprudential precedents should be applied
only to a case if they are specifically in point.43
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For a clearer perspective and as matter of record, the following image on the left 44 is the trademark
applied for by petitioner, while the image juxtaposed to its right 45 is the trademark registered by
respondent:
(please see image in G.R. No. 209843 page 10)
While both competing marks refer to the word KOLIN written in upper case letters and in bold font, the
Court at once notes the distinct visual and aural differences between them: Kolin Electronics mark is
italicized and colored black while that of Taiwan Kolin is white in pantone red color background. The
differing features between the two, though they may appear minimal, are sufficient to distinguish one
brand from the other.
It cannot be stressed enough that the products involved in the case at bar are, generally speaking,
various kinds of electronic products. These are not ordinary consumable household items, like catsup,
soy sauce or soap which are of minimal cost.46 The products of the contending parties are relatively
luxury items not easily considered affordable. Accordingly, the casual buyer is predisposed to be more
cautious and discriminating in and would prefer to mull over his purchase. Confusion and deception,
then, is less likely.47 As further elucidated in Del Monte Corporation v. Court of Appeals:48
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x x x Among these, what essentially determines the attitudes of the purchaser, specifically his inclination
to be cautious, is the cost of the goods. To be sure, a person who buys a box of candies will not exercise
as much care as one who buys an expensive watch. As a general rule, an ordinary buyer does not
exercise as much prudence in buying an article for which he pays a few centavos as he does in
purchasing a more valuable thing. Expensive and valuable items are normally bought only after
deliberate, comparative and analytical investigation. But mass products, low priced articles in
wide use, and matters of everyday purchase requiring frequent replacement are bought by
the casual consumer without great care x x x.(emphasis added)
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Respondent has made much reliance on Arce & Sons, Chua Che, Ang, and Khe, oblivious that they
involved common household itemsi.e., biscuits and milk, cosmetics, clothes, and toilet articles,
respectivelywhereas the extant case involves luxury items not regularly and inexpensively purchased
by the consuming public. In accord with common empirical experience, the useful lives of televisions and
DVD players last for about five (5) years, minimum, making replacement purchases very infrequent. The
same goes true with converters and regulators that are seldom replaced despite the acquisition of new
equipment to be plugged onto it. In addition, the amount the buyer would be parting with cannot be
deemed minimal considering that the price of televisions or DVD players can exceed todays monthly
minimum wage.In light of these circumstances, it is then expected that the ordinary intelligent buyer
would be more discerning when it comes to deciding which electronic product they are going to
purchase, and it is this standard which this Court applies here in in determining the likelihood of
confusion should petitioners application be granted.
To be sure, the extant case is reminiscent of Emerald Garment Manufacturing Corporation v. Court of
Appeals,49 wherein the opposing trademarks are that of Emerald Garment Manufacturing Corporations
Stylistic Mr. Lee and H.D. Lees LEE. In the said case, the appellate court affirmed the decision of the
Director of Patents denying Emerald Garments application for registration due to confusing similarity
with H.D. Lees trademark. This Court, however, was of a different beat and ruled that there is no
confusing similarity between the marks, given that the products covered by the trademark, i.e., jeans,

were,at that time, considered pricey, typically purchased by intelligent buyers familiar with the products
and are more circumspect, and, therefore, would not easily be deceived. As held:
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Finally, in line with the foregoing discussions, more credit should be given to the ordinary purchaser.
Cast in this particular controversy, the ordinary purchaser is not the completely unwary consumer but
is the ordinarily intelligent buyer considering the type of product involved.
The definition laid down in Dy Buncio v. Tan Tiao Bok50is better suited to the present case. There, the
ordinary purchaser was defined as one accustomed to buy, and therefore to some extent
familiar with, the goods in question. The test of fraudulent simulation is to be found in the likelihood
of the deception of some persons in some measure acquainted with an established design and desirous
of purchasing the commodity with which that design has been associated. The test is not found in the
deception, or the possibility of deception, of the person who knows nothing about the design which has
been counterfeited, and who must be indifferent between that and the other. The simulation, in order
to be objectionable, must be such as appears likely to mislead the ordinary intelligent buyer
who has a need to supply and is familiar with the article that he seeks to
purchase.51 (emphasis added)
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Consistent with the above ruling, this Court finds that the differences between the two marks, subtle as
they may be, are sufficient to prevent any confusion that may ensue should petitioners trademark
application be granted.As held in Esso Standard Eastern, Inc.:52
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Respondent court correctly ruled that considering the general appearances of each mark as a whole, the
possibility of any confusion is unlikely. A comparison of the labels of the samples of the goods submitted
by the parties shows a great many differences on the trademarks used. As pointed out by respondent
court in its appealed decision, (A) witness for the plaintiff, Mr. Buhay, admitted that the color of the
ESSO used by the plaintiff for the oval design where the blue word ESSO is contained is the distinct and
unique kind of blue. In his answer to the trial courts question, Mr. Buhay informed the court that the
plaintiff never used its trademark on any product where the combination of colors is similar to the label
of the Esso cigarettes, and Another witness for the plaintiff, Mr. Tengco, testified that generally, the
plaintiffs trademark comes all in either red, white, blue or any combination of the three colors. It is to
be pointed out that not even a shade of these colors appears on the trademark of the appellants
cigarette. The only color that the appellant uses in its trademark is green.
Even the lower court, which ruled initially for petitioner, found that a noticeable difference between the
brand ESSO being used by the defendants and the trademark ESSO of the plaintiff is that the former has
a rectangular background, while in that of the plaintiff the word ESSO is enclosed in an oval
background.
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All told, We are convinced that petitioners trademark registration not only covers unrelated good, but is
also incapable of deceiving the ordinary intelligent buyer. The ordinary purchaser must be thought of as
having, and credited with, at least a modicum of intelligence to be able to see the differences between
the two trademarks in question.53
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Questions of fact may still be entertained

On a final note, the policy according factual findings of courts a quo great respect, if not finality, is not
binding where they have overlooked, misapprehended, or misapplied any fact or circumstance of weight
and substance.54 So it must be here; the nature of the products involved materially affects the outcome
of the instant case. A reversal of the appellate courts Decision is then in order.
WHEREFORE, in view of the foregoing, the petition is hereby GRANTED. The Decision and the
Resolution of the Court of Appeals in CA-G.R. SP No. 122565, dated April 30, 2013 and November 6,
2013, respectively, are hereby REVERSED and SET ASIDE. Accordingly, the Decision of the Intellectual
Property Office Director General in Inter Partes Case No. 14-2006-00096, dated November 23, 2011, is
hereby REINSTATED.
SO ORDERED.

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Peralta, Villarama, Jr., Reyes, and Jardeleza, JJ., concur.

Endnotes:

[G.R. No. 114508. November 19, 1999]

PRIBHDAS J. MIRPURI, petitioner, vs. COURT OF APPEALS,
DIRECTOR
OF
PATENTS
and
the
BARBIZON
CORPORATION, respondents.
DECISION
PUNO, J.:

The Convention of Paris for the Protection of Industrial Property is a multilateral treaty which the Philippines bound itself to honor and enforce in this
country. As to whether or not the treaty affords protection to a foreign corporation
against a Philippine applicant for the registration of a similar trademark is the
principal issue in this case.
On June 15, 1970, one Lolita Escobar, the predecessor-in-interest of petitioner
Pribhdas J. Mirpuri, filed an application with the Bureau of Patents for the
registration of the trademark "Barbizon" for use in brassieres and ladies
undergarments. Escobar alleged that she had been manufacturing and selling these
products under the firm name "L & BM Commercial" since March 3, 1970.
Private respondent Barbizon Corporation, a corporation organized and doing
business under the laws of New York, U.S.A., opposed the application. It claimed
that:
"The mark BARBIZON of respondent-applicant is confusingly similar to the
trademark BARBIZON which opposer owns and has not abandoned.
That opposer will be damaged by the registration of the mark BARBIZON and its
business reputation and goodwill will suffer great and irreparable injury.
That the respondent-applicant's use of the said mark BARBIZON which resembles the
trademark used and owned by opposer, constitutes an unlawful appropriation of a mark
previously used in the Philippines and not abandoned and therefore a statutory violation of
Section 4 (d) of Republic Act No. 166, as amended."[1]

This was docketed as Inter Partes Case No. 686 (IPC No. 686). After filing
of the pleadings, the parties submitted the case for decision.

On June 18, 1974, the Director of Patents rendered judgment dismissing the
opposition and giving due course to Escobar's application, thus:
"WHEREFORE, the opposition should be, as it is hereby,
DISMISSED. Accordingly, Application Serial No. 19010 for the registration of the
trademark BARBIZON, of respondent Lolita R. Escobar, is given due course.
IT IS SO ORDERED."[2]

This decision became final and on September 11, 1974, Lolita Escobar was
issued a certificate of registration for the trademark "Barbizon." The trademark was
"for use in "brassieres and lady's underwear garments like panties." [3]
Escobar later assigned all her rights and interest over the trademark to
petitioner Pribhdas J. Mirpuri who, under his firm name then, the "Bonito
Enterprises," was the sole and exclusive distributor of Escobar's "Barbizon"
products.
In 1979, however, Escobar failed to file with the Bureau of Patents the
Affidavit of Use of the trademark required under Section 12 of Republic Act (R.A.)
No. 166, the Philippine Trademark Law. Due to this failure, the Bureau of Patents
cancelled Escobar's certificate of registration.
On May 27, 1981, Escobar reapplied for registration of the cancelled
trademark. Mirpuri filed his own application for registration of Escobar's
trademark. Escobar later assigned her application to herein petitioner and this
application was opposed by private respondent. The case was docketed asInter
Partes Case No. 2049 (IPC No. 2049).
In its opposition, private respondent alleged that:
"(a) The Opposer has adopted the trademark BARBIZON (word), sometime in
June 1933 and has then used it on various kinds of wearing apparel. On August 14,
1934, Opposer obtained from the United States Patent Office a more recent
registration of the said mark under Certificate of Registration No. 316,161. On
March 1, 1949, Opposer obtained from the United States Patent Office a more
recent registration for the said trademark under Certificate of Registration No.
507,214, a copy of which is herewith attached as Annex `A.' Said Certificate of
Registration covers the following goods-- wearing apparel: robes, pajamas,
lingerie, nightgowns and slips;

(b) Sometime in March 1976, Opposer further adopted the trademark BARBIZON
and Bee design and used the said mark in various kinds of wearing apparel. On
March 15, 1977, Opposer secured from the United States Patent Office a
registration of the said mark under Certificate of Registration No. 1,061,277, a
copy of which is herein enclosed as Annex `B.' The said Certificate of Registration
covers the following goods: robes, pajamas, lingerie, nightgowns and slips;
(c) Still further, sometime in 1961, Opposer adopted the trademark BARBIZON
and a Representation of a Woman and thereafter used the said trademark on various
kinds of wearing apparel. Opposer obtained from the United States Patent Office
registration of the said mark on April 5, 1983 under Certificate of Registration No.
1,233,666 for the following goods: wearing apparel: robes, pajamas, nightgowns
and lingerie. A copy of the said certificate of registration is herewith enclosed as
Annex `C.'
(d) All the above registrations are subsisting and in force and Opposer has not
abandoned the use of the said trademarks. In fact, Opposer, through a whollyowned Philippine subsidiary, the Philippine Lingerie Corporation, has been
manufacturing the goods covered by said registrations and selling them to various
countries, thereby earning valuable foreign exchange for the country. As a result of
respondent-applicant's misappropriation of Opposer's BARBIZON trademark,
Philippine Lingerie Corporation is prevented from selling its goods in the local
market, to the damage and prejudice of Opposer and its wholly-owned subsidiary.
(e) The Opposer's goods bearing the trademark BARBIZON have been used in
many countries, including the Philippines, for at least 40 years and has enjoyed
international reputation and good will for their quality. To protect its registrations
in countries where the goods covered by the registrations are being sold, Opposer
has procured the registration of the trademark BARBIZON in the following
countries: Australia, Austria, Abu Dhabi, Argentina, Belgium, Bolivia, Bahrain,
Canada, Chile, Colombia, Denmark, Ecuador, France, West Germany, Greece,
Guatemala, Hongkong, Honduras, Italy, Japan, Jordan, Lebanon, Mexico,
Morocco, Panama, New Zealand, Norway, Sweden, Switzerland, Syria, El
Salvador, South Africa, Zambia, Egypt, and Iran, among others;
(f) To enhance its international reputation for quality goods and to further promote
goodwill over its name, marks and products, Opposer has extensively advertised its
products, trademarks and name in various publications which are circulated in the
United States and many countries around the world, including the Philippines;

(g) The trademark BARBIZON was fraudulently registered in the Philippines by

one Lolita R. Escobar under Registration No. 21920, issued on September 11,
1974, in violation of Article 189 (3) of the Revised Penal Code and Section 4 (d) of
the Trademark Law. Herein respondent applicant acquired by assignment the
`rights' to the said mark previously registered by Lolita Escobar, hence respondentapplicant's title is vitiated by the same fraud and criminal act. Besides, Certificate
of Registration No. 21920 has been cancelled for failure of either Lolita Escobar or
herein respondent-applicant, to seasonably file the statutory affidavit of use. By
applying for a re-registration of the mark BARBIZON subject of this opposition,
respondent-applicant seeks to perpetuate the fraud and criminal act committed by
Lolita Escobar.
(h) Opposer's BARBIZON as well as its BARBIZON and Bee Design and BARBIZON and
Representation of a Woman trademarks qualify as well-known trademarks entitled to
protection under Article 6bis of the Convention of Paris for the Protection of Industrial
Property and further amplified by the Memorandum of the Minister of Trade to the Honorable
Director of Patents dated October 25, 1983 [sic],[4] Executive Order No. 913 dated October 7,
1963 and the Memorandum of the Minister of Trade and Industry to the Honorable Director
of Patents dated October 25, 1983.
(i) The trademark applied for by respondent applicant is identical to Opposer's BARBIZON
trademark and constitutes the dominant part of Opposer's two other marks namely,
BARBIZON and Bee design and BARBIZON and a Representation of a Woman. The
continued use by respondent-applicant of Opposer's trademark BARBIZON on goods
belonging to Class 25 constitutes a clear case of commercial and criminal piracy and if
allowed registration will violate not only the Trademark Law but also Article 189 of the
Revised Penal Code and the commitment of the Philippines to an international treaty."[5]

Replying to private respondent's opposition, petitioner raised the defense of res

judicata.
On March 2, 1982, Escobar assigned to petitioner the use of the business name
"Barbizon International." Petitioner registered the name with the Department of
Trade and Industry (DTI) for which a certificate of registration was issued in 1987.
Forthwith, private respondent filed before the Office of Legal Affairs of the
DTI a petition for cancellation of petitioner's business name.
On November 26, 1991, the DTI, Office of Legal Affairs, cancelled petitioner's
certificate of registration, and declared private respondent the owner and prior user
of the business name "Barbizon International." Thus:

"WHEREFORE, the petition is hereby GRANTED and petitioner is declared the owner and
prior user of the business name "BARBIZON INTERNATIONAL" under Certificate of
Registration No. 87-09000 dated March 10, 1987 and issued in the name of respondent, is
[sic] hereby ordered revoked and cancelled. x x x."[6]

Meanwhile, in IPC No. 2049, the evidence of both parties were received by the
Director of Patents. On June 18, 1992, the Director rendered a decision declaring
private respondent's opposition barred by res judicata and giving due course to
petitioner's application for registration, to wit:
"WHEREFORE, the present Opposition in Inter Partes Case No. 2049 is hereby
DECLARED BARRED by res judicata and is hereby DISMISSED. Accordingly,
Application Serial No. 45011 for trademark BARBIZON filed by Pribhdas J.
Mirpuri is GIVEN DUE COURSE.
SO ORDERED."[7]

Private respondent questioned this decision before the Court of Appeals in CAG.R. SP No. 28415. On April 30, 1993, the Court of Appeals reversed the Director
of Patents finding that IPC No. 686 was not barred by judgment in IPC No. 2049
and ordered that the case be remanded to the Bureau of Patents for further
proceedings, viz:
"WHEREFORE, the appealed Decision No. 92-13 dated June 18, 1992 of the Director of
Patents in Inter Partes Case No. 2049 is hereby SET ASIDE; and the case is hereby remanded
to the Bureau of Patents for further proceedings, in accordance with this pronouncement. No
costs."[8]

In a Resolution dated March 16, 1994, the Court of Appeals denied

reconsideration of its decision.[9] Hence, this recourse.
Before us, petitioner raises the following issues:
"1. WHETHER OR NOT THE DECISION OF THE DIRECTOR OF PATENTS
IN INTER PARTES CASE NO. 686 RENDERED ON JUNE 18, 1974, ANNEX C
HEREOF, CONSTITUTED RES JUDICATA IN SO FAR AS THE CASE
BEFORE THE DIRECTOR OF PATENTS IS CONCERNED;
2. WHETHER OR NOT THE DIRECTOR OF PATENTS CORRECTLY
APPLIED THE PRINCIPLE OF RES JUDICATA IN DISMISSING PRIVATE
RESPONDENT BARBIZON'S OPPOSITION TO PETITIONER'S
APPLICATION FOR REGISTRATION FOR THE TRADEMARK BARBIZON,

WHICH HAS SINCE RIPENED TO CERTIFICATE OF REGISTRATION NO.

53920 ON NOVEMBER 16, 1992;
3. WHETHER OR NOT THE REQUISITE THAT A 'JUDGMENT ON THE
MERITS' REQUIRED A 'HEARING WHERE BOTH PARTIES ARE SUPPOSED
TO ADDUCE EVIDENCE' AND WHETHER THE JOINT SUBMISSION OF
THE PARTIES TO A CASE ON THE BASIS OF THEIR RESPECTIVE
PLEADINGS WITHOUT PRESENTING TESTIMONIAL OR DOCUMENTARY
EVIDENCE FALLS WITHIN THE MEANING OF 'JUDGMENT ON THE
MERITS' AS ONE OF THE REQUISITES TO CONSTITUTE RES JUDICATA;
4. WHETHER A DECISION OF THE DEPARTMENT OF TRADE AND
INDUSTRY CANCELLING PETITIONER'S FIRM NAME 'BARBIZON
INTERNATIONAL' AND WHICH DECISION IS STILL PENDING
RECONSIDERATION NEVER OFFERED IN EVIDENCE BEFORE THE
DIRECTOR OF PATENTS IN INTER PARTES CASE NO. 2049 HAS THE
RIGHT TO DECIDE SUCH CANCELLATION NOT ON THE BASIS OF THE
BUSINESS NAME LAW (AS IMPLEMENTED BY THE BUREAU OF
DOMESTIC TRADE) BUT ON THE BASIS OF THE PARIS CONVENTION
AND THE TRADEMARK LAW (R.A. 166) WHICH IS WITHIN THE
ORIGINAL AND EXCLUSIVE JURISDICTION OF THE DIRECTOR OF
PATENTS."[10]
Before ruling on the issues of the case, there is need for a brief background on
the function and historical development of trademarks and trademark law.
A "trademark" is defined under R.A. 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 from those manufactured, sold or dealt in by others." [11] This
definition has been simplified in R.A. No. 8293, the Intellectual Property Code of
the Philippines, which defines a "trademark" as "any visible sign capable of
distinguishing goods."[12] In Philippine jurisprudence, the function of a trademark is
to point out distinctly the origin or ownership of the goods to which it is affixed; to
secure to him, who has been instrumental in bringing into the market a superior
article of merchandise, the fruit of his industry and skill; to assure the public that
they are procuring the genuine article; to prevent fraud and imposition; and to
protect the manufacturer against substitution and sale of an inferior and different
article as his product.[13]

Modern authorities on trademark law view trademarks as performing three

distinct functions:(1) they indicate origin or ownership of the articles to which they
are attached; (2) they guarantee that those articles come up to a certain standard of
quality; and (3) they advertise the articles they symbolize. [14]
Symbols have been used to identify the ownership or origin of articles for
several centuries.[15]As early as 5,000 B.C., markings on pottery have been found by
archaeologists. Cave drawings in southwestern Europe show bison with symbols
on their flanks.[16] Archaeological discoveries of ancient Greek and Roman
inscriptions on sculptural works, paintings, vases, precious stones, glassworks,
bricks, etc. reveal some features which are thought to be marks or symbols. These
marks were affixed by the creator or maker of the article, or by public authorities
as indicators for the payment of tax, for disclosing state monopoly, or devices for
the settlement of accounts between an entrepreneur and his workmen. [17]
In the Middle Ages, the use of many kinds of marks on a variety of goods was
commonplace.Fifteenth century England saw the compulsory use of identifying
marks in certain trades. There were the baker's mark on bread, bottlemaker's marks,
smith's marks, tanner's marks, watermarks on paper, etc. [18] Every guild had its own
mark and every master belonging to it had a special mark of his own. The marks
were not trademarks but police marks compulsorily imposed by the sovereign to let
the public know that the goods were not "foreign" goods smuggled into an area
where the guild had a monopoly, as well as to aid in tracing defective work or poor
craftsmanship to the artisan.[19] For a similar reason, merchants also used merchants'
marks. Merchants dealt in goods acquired from many sources and the marks
enabled them to identify and reclaim their goods upon recovery after shipwreck or
piracy.[20]
With constant use, the mark acquired popularity and became voluntarily
adopted. It was not intended to create or continue monopoly but to give the
customer an index or guarantee of quality.[21] It was in the late 18th century when
the industrial revolution gave rise to mass production and distribution of consumer
goods that the mark became an important instrumentality of trade and commerce.
[22]
By this time, trademarks did not merely identify the goods; they also indicated
the goods to be of satisfactory quality, and thereby stimulated further purchases by
the consuming public.[23] Eventually, they came to symbolize the goodwill and
business reputation of the owner of the product and became a property right
protected by law.[24] The common law developed the doctrine of trademarks and
tradenames "to prevent a person from palming off his goods as another's, from

getting another's business or injuring his reputation by unfair means, and, from
defrauding the public."[25] Subsequently, England and the United States enacted
national legislation on trademarks as part of the law regulating unfair trade. [26] It
became the right of the trademark owner to exclude others from the use of his
mark, or of a confusingly similar mark where confusion resulted in diversion of
trade or financial injury. At the same time, the trademark served as a warning
against the imitation or faking of products to prevent the imposition of fraud upon
the public.[27]
Today, the trademark is not merely a symbol of origin and goodwill; it is often
the most effective agent for the actual creation and protection of goodwill. It
imprints upon the public mind an anonymous and impersonal guaranty of
satisfaction, creating a desire for further satisfaction. In other words, the mark
actually sells the goods.[28] The mark has become the "silent salesman," the conduit
through which direct contact between the trademark owner and the consumer is
assured. It has invaded popular culture in ways never anticipated that it has become
a more convincing selling point than even the quality of the article to which it
refers.[29] In the last half century, the unparalleled growth of industry and the rapid
development of communications technology have enabled trademarks, tradenames
and other distinctive signs of a product to penetrate regions where the owner does
not actually manufacture or sell the product itself. Goodwill is no longer confined
to the territory of actual market penetration; it extends to zones where the marked
article has been fixed in the public mind through advertising. [30] Whether in the
print, broadcast or electronic communications medium, particularly on the Internet,
[31]
advertising has paved the way for growth and expansion of the product by
creating and earning a reputation that crosses over borders, virtually turning the
whole world into one vast marketplace.
This is the mise-en-scene of the present controversy. Petitioner brings this
action claiming that "Barbizon" products have been sold in the Philippines since
1970. Petitioner developed this market by working long hours and spending
considerable sums of money on advertisements and promotion of the trademark
and its products. Now, almost thirty years later, private respondent, a foreign
corporation, "swaggers into the country like a conquering hero," usurps the
trademark and invades petitioner's market. [32] Justice and fairness dictate that private
respondent be prevented from appropriating what is not its own. Legally, at the
same time, private respondent is barred from questioning petitioner's ownership of
the trademark because of res judicata.[33]

Literally, res judicata means a matter adjudged, a thing judicially acted upon or
decided; a thing or matter settled by judgment. [34] In res judicata, the judgment in
the first action is considered conclusive as to every matter offered and received
therein, as to any other admissible matter which might have been offered for that
purpose, and all other matters that could have been adjudged therein. [35] Res
judicata is an absolute bar to a subsequent action for the same cause; and its
requisites are: (a) the former judgment or order must be final; (b) the judgment or
order must be one on the merits; (c) it must have been rendered by a court having
jurisdiction over the subject matter and parties; (d) there must be between the first
and second actions, identity of parties, of subject matter and of causes of action. [36]
The Solicitor General, on behalf of respondent Director of Patents, has joined
cause with petitioner. Both claim that all the four elements of res judicata have
been complied with: that the judgment in IPC No. 686 was final and was rendered
by the Director of Patents who had jurisdiction over the subject matter and parties;
that the judgment in IPC No. 686 was on the merits; and that the lack of a hearing
was immaterial because substantial issues were raised by the parties and passed
upon by the Director of Patents.[37]
The decision in IPC No. 686 reads as follows:
"x x x.
Neither party took testimony nor adduced documentary evidence. They submitted
the case for decision based on the pleadings which, together with the pertinent
records, have all been carefully considered.
Accordingly, the only issue for my disposition is whether or not the herein opposer
would probably be damaged by the registration of the trademark BARBIZON
sought by the respondent-applicant on the ground that it so resembles the
trademark BARBIZON allegedly used and owned by the former to be `likely to
cause confusion, mistake or to deceive purchasers.'
On record, there can be no doubt that respondent-applicant's sought-to-beregistered trademark BARBIZON is similar, in fact obviously identical, to
opposer's alleged trademark BARBIZON, in spelling and pronunciation. The only
appreciable but very negligible difference lies in their respective appearances or
manner of presentation. Respondent-applicant's trademark is in bold letters (set
against a black background), while that of the opposer is offered in stylish script
letters.

It is opposer's assertion that its trademark BARBIZON has been used in trade or
commerce in the Philippines prior to the date of application for the registration of
the identical mark BARBIZON by the respondent-applicant. However, the
allegation of facts in opposer's verified notice of opposition is devoid of such
material information. In fact, a reading of the text of said verified opposition
reveals an apparent, if not deliberate, omission of the date (or year) when opposer's
alleged trademark BARBIZON was first used in trade in the Philippines (see par.
No. 1, p. 2, Verified Notice of Opposition, Rec.). Thus, it cannot here and now be
ascertained whether opposer's alleged use of the trademark BARBIZON could be
prior to the use of the identical mark by the herein respondent-applicant, since the
opposer attempted neither to substantiate its claim of use in local commerce with
any proof or evidence. Instead, the opposer submitted the case for decision based
merely on the pleadings.
On the other hand, respondent-applicant asserted in her amended application for
registration that she first used the trademark BARBIZON for brassiere (or
'brasseire') and ladies underwear garments and panties as early as March 3,
1970. Be that as it may, there being no testimony taken as to said date of first use,
respondent-applicant will be limited to the filing date, June 15, 1970, of her
application as the date of first use (Rule 173, Rules of Practice in Trademark
Cases).
From the foregoing, I conclude that the opposer has not made out a case of
probable damage by the registration of the respondent-applicant's mark
BARBIZON.
WHEREFORE, the opposition should be, as it is hereby, DISMISSED. Accordingly,
Application Serial No. 19010, for the registration of the trademark BARBIZON of
respondent Lolita R. Escobar, is given due course."[38]

The decision in IPC No. 686 was a judgment on the merits and it was error for
the Court of Appeals to rule that it was not. A judgment is on the merits when it
determines the rights and liabilities of the parties based on the disclosed facts,
irrespective of formal, technical or dilatory objections. [39] It is not necessary that a
trial should have been conducted. If the court's judgment is general, and not based
on any technical defect or objection, and the parties had a full legal opportunity to
be heard on their respective claims and contentions, it is on the merits although
there was no actual hearing or arguments on the facts of the case. [40] In the case at
bar, the Director of Patents did not dismiss private respondent's opposition on a
sheer technicality. Although no hearing was conducted, both parties filed their

respective pleadings and were given opportunity to present evidence. They,

however, waived their right to do so and submitted the case for decision based on
their pleadings. The lack of evidence did not deter the Director of Patents from
ruling on the case, particularly on the issue of prior use, which goes into the very
substance of the relief sought by the parties. Since private respondent failed to
prove prior use of its trademark, Escobar's claim of first use was upheld.
The judgment in IPC No. 686 being on the merits, petitioner and the Solicitor
General allege that IPC No. 686 and IPC No. 2049 also comply with the fourth
requisite of res judicata, i.e., they involve the same parties and the same subject
matter, and have identical causes of action.
Undisputedly, IPC No. 686 and IPC No. 2049 involve the same parties and the
same subject matter. Petitioner herein is the assignee of Escobar while private
respondent is the same American corporation in the first case. The subject matter
of both cases is the trademark "Barbizon." Private respondent counter-argues,
however, that the two cases do not have identical causes of action. New causes of
action were allegedly introduced in IPC No. 2049, such as the prior use and
registration of the trademark in the United States and other countries worldwide,
prior use in the Philippines, and the fraudulent registration of the mark in violation
of Article 189 of the Revised Penal Code. Private respondent also cited protection
of the trademark under the Convention of Paris for the Protection of Industrial
Property, specifically Article 6bis thereof, and the implementation of Article
6bis by two Memoranda dated November 20, 1980 and October 25, 1983 of the
Minister of Trade and Industry to the Director of Patents, as well as Executive
Order (E.O.) No. 913.
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. [41] 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. [42] 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. [43] Nationals of the various member nations are

thus assured of a certain minimum of international protection of their industrial

property.[44]
The Convention was first signed by eleven countries in Paris on March 20,
1883.[45] It underwent several revisions-- at Brussels in 1900, at Washington in
1911, at The Hague in 1925, at London in 1934, at Lisbon in 1958, [46] and at
Stockholm in 1967. Both the Philippines and the United States of America, herein
private respondent's country, are signatories to the Convention.The United States
acceded on May 30, 1887 while the Philippines, through its Senate, concurred on
May 10, 1965.[47] The Philippines' adhesion became effective on September 27,
1965,[48] and from this date, the country obligated itself to honor and enforce the
provisions of the Convention.[49]
In the case at bar, private respondent anchors its cause of action on the first
paragraph of Article 6bis of the Paris Convention which reads as follows:
"Article 6bis
(1) The countries of the Union undertake, either administratively if their
legislation so permits, or at the request of an interested party, to refuse or to
cancel the registration and to prohibit the use, of a trademark which
constitutes a reproduction, an imitation, or a translation, liable to create
confusion, of a mark considered by the competent authority of the country of
registration or use to be well-known in that country as being already the mark
of a person entitled to the benefits of this Convention and used for identical or
similar goods.These provisions shall also apply when the essential part of the
mark constitutes a reproduction of any such well-known mark or an imitation
liable to create confusion therewith.
(2) A period of at least five years from the date of registration shall be allowed for
seeking the cancellation of such a mark. The countries of the Union may provide
for a period within which the prohibition of use must be sought.
(3) No time limit shall be fixed for seeking the cancellation or the prohibition
of the use of marks registered or used in bad faith." [50]
This Article governs protection of well-known trademarks. Under the first
paragraph, each country of the Union bound itself to undertake to refuse or cancel
the registration, and prohibit the use of a trademark which is a reproduction,
imitation or translation, or any essential part of which trademark constitutes a

reproduction, liable to create confusion, of a mark considered by the competent

authority of the country where protection is sought, to be well-known in the
country as being already the mark of a person entitled to the benefits of the
Convention, and used for identical or similar goods.
Article 6bis was first introduced at The Hague in 1925 and amended in Lisbon
in 1952.[51] It is a self-executing provision and does not require legislative
enactment to give it effect in the member country.[52] 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. [53]
The essential requirement under Article 6bis is that the trademark to be
protected must be "well-known" in the country where protection is sought. The
power to determine whether a trademark is well-known lies in the "competent
authority of the country of registration or use." This competent authority would be
either the registering authority if it has the power to decide this, or the courts of the
country in question if the issue comes before a court. [54]
Pursuant to Article 6bis, on November 20, 1980, then Minister Luis Villafuerte
of the Ministry of Trade issued a Memorandum to the Director of Patents. The
Minister ordered the Director that:
"Pursuant to the Paris Convention for the Protection of Industrial Property to which
the Philippines is a signatory, you are hereby directed to reject all pending
applications for Philippine registration of signature and other world-famous
trademarks by applicants other than its original owners or users.
The conflicting claims over internationally known trademarks involve such name
brands as Lacoste, Jordache, Vanderbilt, Sasson, Fila, Pierre Cardin, Gucci,
Christian Dior, Oscar de la Renta, Calvin Klein, Givenchy, Ralph Lauren, Geoffrey
Beene, Lanvin and Ted Lapidus.
It is further directed that, in cases where warranted, Philippine registrants of such
trademarks should be asked to surrender their certificates of registration, if any, to
avoid suits for damages and other legal action by the trademarks' foreign or local
owners or original users.
You are also required to submit to the undersigned a progress report on the matter.
For immediate compliance."[55]

Three years later, on October 25, 1983, then Minister Roberto Ongpin issued
another Memorandum to the Director of Patents, viz:
"Pursuant to Executive Order No. 913 dated 7 October 1983 which strengthens the rulemaking and adjudicatory powers of the Minister of Trade and Industry and provides inter alia,
that `such rule-making and adjudicatory powers should be revitalized in order that the
Minister of Trade and Industry can x x x apply more swift and effective solutions and
remedies to old and new problems x x x such as infringement of internationally-known
tradenames and trademarks x x x' and in view of the decision of the Intermediate Appellate
Court in the case of LA CHEMISE LACOSTE, S.A., versus RAM SADWHANI [AC-G.R.
SP NO. 13359 (17) June 1983][56] which affirms the validity of the MEMORANDUM of then
Minister Luis R. Villafuerte dated 20 November 1980 confirming our obligations under the
PARIS CONVENTION FOR THE PROTECTION OF INDUSTRIAL PROPERTY to which
the Republic of the Philippines is a signatory, you are hereby directed to implement measures
necessary to effect compliance with our obligations under said Convention in general,
and, more specifically, to honor our commitment under Section 6bis[57] thereof, as follows:

1. Whether the trademark under consideration is well-known in the Philippines or

is a mark already belonging to a person entitled to the benefits of the
CONVENTION, this should be established, pursuant to Philippine Patent Office
procedures in inter partes and ex parte cases, according to any of the following
criteria or any combination thereof:
(a) a declaration by the Minister of Trade and Industry that the trademark being
considered is already well-known in the Philippines such that permission for its use
by other than its original owner will constitute a reproduction, imitation, translation
or other infringement;
(b) that the trademark is used in commerce internationally, supported by proof that
goods bearing the trademark are sold on an international scale, advertisements, the
establishment of factories, sales offices, distributorships, and the like, in different
countries, including volume or other measure of international trade and commerce;
(c) that the trademark is duly registered in the industrial property office(s) of
another country or countries, taking into consideration the date of such registration;
(d) that the trademark has long been established and obtained goodwill and
international consumer recognition as belonging to one owner or source;
(e) that the trademark actually belongs to a party claiming ownership and has the
right to registration under the provisions of the aforestated PARIS CONVENTION.

2. The word trademark, as used in this MEMORANDUM, shall include

tradenames, service marks, logos, signs, emblems, insignia or other similar devices
used for identification and recognition by consumers.
3. The Philippine Patent Office shall refuse all applications for, or cancel the
registration of, trademarks which constitute a reproduction, translation or imitation
of a trademark owned by a person, natural or corporate, who is a citizen of a
country signatory to the PARIS CONVENTION FOR THE PROTECTION OF
INDUSTRIAL PROPERTY.
4. The Philippine Patent Office shall give due course to the Opposition in cases
already or hereafter filed against the registration of trademarks entitled to
protection of Section 6 bis of said PARIS CONVENTION as outlined above, by
remanding applications filed by one not entitled to such protection for final
disallowance by the Examination Division.
5. All pending applications for Philippine registration of signature and other worldfamous trademarks filed by applicants other than their original owners or users
shall be rejected forthwith.Where such applicants have already obtained
registration contrary to the abovementioned PARIS CONVENTION and/or
Philippine Law, they shall be directed to surrender their Certificates of Registration
to the Philippine Patent Office for immediate cancellation proceedings.
x x x."[58]

In the Villafuerte Memorandum, the Minister of Trade instructed the Director

of Patents to reject all pending applications for Philippine registration of signature
and other world-famous trademarks by applicants other than their original owners
or users. The Minister enumerated several internationally-known trademarks and
ordered the Director of Patents to require Philippine registrants of such marks to
surrender their certificates of registration.
In the Ongpin Memorandum, the Minister of Trade and Industry did not
enumerate well-known trademarks but laid down guidelines for the Director of
Patents to observe in determining whether a trademark is entitled to protection as a
well-known mark in the Philippines under Article 6bis of the Paris
Convention. This was to be established through Philippine Patent Office
procedures in inter partes and ex parte cases pursuant to the criteria enumerated
therein. The Philippine Patent Office was ordered to refuse applications for, or
cancel the registration of, trademarks which constitute a reproduction, translation

or imitation of a trademark owned by a person who is a citizen of a member of the

Union. All pending applications for registration of world-famous trademarks by
persons other than their original owners were to be rejected forthwith. The Ongpin
Memorandum was issued pursuant to Executive Order No. 913 dated October 7,
1983 of then President Marcos which strengthened the rule-making and
adjudicatory powers of the Minister of Trade and Industry for the effective
protection of consumers and the application of swift solutions to problems in trade
and industry.[59]
Both the Villafuerte and Ongpin Memoranda were sustained by the Supreme
Court in the 1984 landmark case of La Chemise Lacoste, S.A. v. Fernandez.[60] This
court ruled therein that under the provisions of Article 6bis of the Paris
Convention, the Minister of Trade and Industry was the "competent authority" to
determine whether a trademark is well-known in this country.[61]
The Villafuerte Memorandum was issued in 1980, i.e., fifteen (15) years after
the adoption of the Paris Convention in 1965. In the case at bar, the first inter
partes case, IPC No. 686, was filed in 1970, before the Villafuerte Memorandum
but five (5) years after the effectivity of the Paris Convention. Article 6bis was
already in effect five years before the first case was instituted. Private respondent,
however, did not cite the protection of Article 6bis, neither did it mention the Paris
Convention at all. It was only in 1981 when IPC No. 2049 was instituted that the
Paris Convention and the Villafuerte Memorandum, and, during the pendency of
the case, the 1983 Ongpin Memorandum were invoked by private respondent.
The Solicitor General argues that the issue of whether the protection of Article
6bis of the Convention and the two Memoranda is barred by res judicata has
already been answered inWolverine Worldwide, Inc. v. Court of Appeals.[62] In this
case, petitioner Wolverine, a foreign corporation, filed with the Philippine Patent
Office a petition for cancellation of the registration certificate of private
respondent, a Filipino citizen, for the trademark "Hush Puppies" and "Dog
Device." Petitioner alleged that it was the registrant of the internationally-known
trademark in the United States and other countries, and cited protection under the
Paris Convention and the Ongpin Memorandum. The petition was dismissed by the
Patent Office on the ground of res judicata. It was found that in 1973 petitioner's
predecessor-in-interest filed two petitions for cancellation of the same trademark
against respondent's predecessor-in-interest. The Patent Office dismissed the
petitions, ordered the cancellation of registration of petitioner's trademark, and
gave due course to respondent's application for registration. This decision was

sustained by the Court of Appeals, which decision was not elevated to us and
became final and executory.[63]
Wolverine claimed that while its previous petitions were filed under R.A. No.
166, the Trademark Law, its subsequent petition was based on a new cause of
action, i.e., the Ongpin Memorandum and E.O. No. 913 issued in 1983, after
finality of the previous decision. We held that the said Memorandum and E.O. did
not grant a new cause of action because it did "not amend the Trademark Law," x x
x "nor did it indicate a new policy with respect to the registration in the Philippines
of world-famous trademarks."[64] This conclusion was based on the finding that
Wolverine's two previous petitions and subsequent petition dealt with the same
issue of ownership of the trademark.[65] In other words, since the first and second
cases involved the same issue of ownership, then the first case was a bar to the
second case.
In the instant case, the issue of ownership of the trademark "Barbizon" was not
raised in IPC No. 686. Private respondent's opposition therein was merely
anchored on:
(a) "confusing similarity" of its trademark with that of Escobar's;
(b) that the registration of Escobar's similar trademark will cause damage to private
respondent's business reputation and goodwill; and
(c) that Escobar's use of the trademark amounts to an unlawful appropriation of a
mark previously used in the Philippines which act is penalized under Section 4 (d)
of the Trademark Law.
In IPC No. 2049, private respondent's opposition set forth several issues
summarized as follows:
(a) as early as 1933, it adopted the word "BARBIZON" as trademark on its
products such as robes, pajamas, lingerie, nightgowns and slips;
(b) that the trademark "BARBIZON" was registered with the United States Patent
Office in 1934 and 1949; and that variations of the same trademark, i.e.,
"BARBIZON" with Bee design and "BARBIZON" with the representation of a
woman were also registered with the U.S. Patent Office in 1961 and 1976;

(c) that these marks have been in use in the Philippines and in many countries all
over the world for over forty years. "Barbizon" products have been advertised in
international publications and the marks registered in 36 countries worldwide;
(d) Escobar's registration of the similar trademark "BARBIZON" in 1974 was
based on fraud; and this fraudulent registration was cancelled in 1979, stripping
Escobar of whatsoever right she had to the said mark;
(e) Private respondent's trademark is entitled to protection as a well-known mark
under Article 6bisof the Paris Convention, Executive Order No. 913, and the two
Memoranda dated November 20, 1980 and October 25, 1983 of the Minister of
Trade and Industry to the Director of Patents;
(f) Escobar's trademark is identical to private respondent's and its use on the same
class of goods as the latter's amounts to a violation of the Trademark Law and
Article 189 of the Revised Penal Code.
IPC No. 2049 raised the issue of ownership of the trademark, the first registration
and use of the trademark in the United States and other countries, and the
international recognition and reputation of the trademark established by extensive
use and advertisement of private respondent's products for over forty years here
and abroad. These are different from the issues of confusing similarity and damage
in IPC No. 686. The issue of prior use may have been raised in IPC No. 686 but
this claim was limited to prior use in the Philippines only. Prior use in IPC No.
2049 stems from private respondent's claim as originator of the word and symbol
"Barbizon,"[66] as the first and registered user of the mark attached to its products
which have been sold and advertised worldwide for a considerable number of years
prior to petitioner's first application for registration of her trademark in the
Philippines. Indeed, these are substantial allegations that raised new issues and
necessarily gave private respondent a new cause of action. Res judicata does not
apply to rights, claims or demands, although growing out of the same subject
matter, which constitute separate or distinct causes of action and were not put in
issue in the former action.[67]
Respondent corporation also introduced in the second case a fact that did not
exist at the time the first case was filed and terminated. The cancellation of
petitioner's certificate of registration for failure to file the affidavit of use arose
only after IPC No. 686. It did not and could not have occurred in the first case, and
this gave respondent another cause to oppose the second application.Res
judicata extends only to facts and conditions as they existed at the time judgment

was rendered and to the legal rights and relations of the parties fixed by the facts so
determined.[68] When new facts or conditions intervene before the second suit,
furnishing a new basis for the claims and defenses of the parties, the issues are no
longer the same, and the former judgment cannot be pleaded as a bar to the
subsequent action.[69]
It is also noted that the oppositions in the first and second cases are based on
different laws. The opposition in IPC No. 686 was based on specific provisions of
the Trademark Law, i.e., Section 4 (d) [70] on confusing similarity of trademarks and
Section 8[71] on the requisite damage to file an opposition to a petition for
registration. The opposition in IPC No. 2049 invoked the Paris Convention,
particularly Article 6bis thereof, E.O. No. 913 and the two Memoranda of the
Minister of Trade and Industry. This opposition also invoked Article 189 of the
Revised Penal Code which is a statute totally different from the Trademark Law.
[72]
Causes of action which are distinct and independent from each other, although
arising 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. [73] The
mere fact that the same relief is sought in the subsequent action will not render the
judgment in the prior action operative as res judicata, such as where the two
actions are based on different statutes. [74] Res judicata therefore does not apply to
the instant case and respondent Court of Appeals did not err in so ruling.
Intellectual and industrial property rights cases are not simple property
cases. Trademarks deal with the psychological function of symbols and the effect
of these symbols on the public at large. [75]Trademarks play a significant role in
communication, commerce and trade, and serve valuable and interrelated business
functions, both nationally and internationally. For this reason, all agreements
concerning industrial property, like those on trademarks and tradenames, are
intimately connected with economic development. [76] Industrial property encourages
investments in new ideas and inventions and stimulates creative efforts for the
satisfaction of human needs. They speed up transfer of technology and
industrialization, and thereby bring about social and economic progress. [77] These
advantages have been acknowledged by the Philippine government itself. The
Intellectual Property Code of the Philippines declares that "an effective intellectual
and industrial property system is vital to the development of domestic and creative
activity, facilitates transfer of technology, it attracts foreign investments, and
ensures market access for our products."[78] The Intellectual Property Code took
effect on January 1, 1998 and by its express provision, [79] repealed the Trademark
Law,[80] the Patent Law,[81] Articles 188 and 189 of the Revised Penal Code, the

Decree on Intellectual Property,[82] and the Decree on Compulsory Reprinting of

Foreign Textbooks.[83] The Code was enacted to strengthen the intellectual and
industrial property system in the Philippines as mandated by the country's
accession to the Agreement Establishing the World Trade Organization (WTO). [84]
The WTO is a common institutional framework for the conduct of trade
relations among its members in matters related to the multilateral and plurilateral
trade agreements annexed to the WTO Agreement. [85] The WTO framework ensures
a "single undertaking approach" to the administration and operation of all
agreements and arrangements attached to the WTO Agreement. Among those
annexed is the Agreement on Trade-Related Aspects of Intellectual Property Rights
or TRIPs.[86]Members to this Agreement "desire to reduce distortions and
impediments to international trade, taking into account the need to promote
effective and adequate protection of intellectual property rights, and to ensure that
measures and procedures to enforce intellectual property rights do not themselves
become barriers to legitimate trade." To fulfill these objectives, the members have
agreed to adhere to minimum standards of protection set by several Conventions.
[87]
These Conventions are: the Berne Convention for the Protection of Literary and
Artistic Works (1971), the Rome Convention or the International Convention for
the Protection of Performers, Producers of Phonograms and Broadcasting
Organisations, the Treaty on Intellectual Property in Respect of Integrated
Circuits, and the Paris Convention (1967), as revised in Stockholm on July 14,
1967.[88]
A major proportion of international trade depends on the protection of
intellectual property rights.[89] Since the late 1970's, the unauthorized counterfeiting
of industrial property and trademarked products has had a considerable adverse
impact on domestic and international trade revenues. [90] The TRIPs Agreement
seeks to grant adequate protection of intellectual property rights by creating a
favorable economic environment to encourage the inflow of foreign investments,
and strengthening the multi-lateral trading system to bring about economic,
cultural and technological independence. [91] The Philippines and the United States
of America have acceded to the WTO Agreement. This Agreement has
revolutionized international business and economic relations among states, and has
propelled the world towards trade liberalization and economic globalization.
[92]
Protectionism and isolationism belong to the past. Trade is no longer confined to
a bilateral system. There is now "a new era of global economic cooperation,
reflecting the widespread desire to operate in a fairer and more open multilateral
trading system."[93] 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 millenium.
IN VIEW WHEREOF, the petition is denied and the Decision and Resolution
of the Court of Appeals in CA-G.R. SP No. 28415 are affirmed.
SO ORDERED.

[G.R. No. 115758. March 19, 2002]

ELIDAD C. KHO, doing business under the name and style of KEC
COSMETICS LABORATORY, petitioner, vs. HON. COURT OF
APPEALS, SUMMERVILLE GENERAL MERCHANDISING and
COMPANY, and ANG TIAM CHAY, respondents.
DECISION
DE LEON, JR., J.:

Before us is a petition for review on certiorari of the Decision[1] dated May 24,
1993 of the Court of Appeals setting aside and declaring as null and void the
Orders[2] dated February 10, 1992 and March 19, 1992 of the Regional Trial Court,
Branch 90, of Quezon City granting the issuance of a writ of preliminary
injunction.
The facts of the case are as follows:
On December 20, 1991, petitioner Elidad C. Kho filed a complaint for
injunction and damages with a prayer for the issuance of a writ of preliminary
injunction, docketed as Civil Case No. Q-91-10926, against the respondents
Summerville General Merchandising and Company (Summerville, for brevity) and
Ang Tiam Chay.
The petitioners complaint alleges that petitioner, doing business under the
name and style of KEC Cosmetics Laboratory, is the registered owner of the
copyrights Chin Chun Su and Oval Facial Cream Container/Case, as shown by
Certificates of Copyright Registration No. 0-1358 and No. 0-3678; that she also
has patent rights on Chin Chun Su & Device and Chin Chun Su for medicated
cream after purchasing the same from Quintin Cheng, the registered owner thereof
in the Supplemental Register of the Philippine Patent Office on February 7, 1980
under Registration Certificate No. 4529; that respondent Summerville advertised
and sold petitioners cream products under the brand name Chin Chun Su, in similar
containers that petitioner uses, thereby misleading the public, and resulting in the
decline in the petitioners business sales and income; and, that the respondents
should be enjoined from allegedly infringing on the copyrights and patents of the
petitioner.

The respondents, on the other hand, alleged as their defense that Summerville
is the exclusive and authorized importer, re-packer and distributor of Chin Chun
Su products manufactured by Shun Yi Factory of Taiwan; that the said Taiwanese
manufacturing company authorized Summerville to register its trade name Chin
Chun Su Medicated Cream with the Philippine Patent Office and other appropriate
governmental agencies; that KEC Cosmetics Laboratory of the petitioner obtained
the copyrights through misrepresentation and falsification; and, that the authority
of Quintin Cheng, assignee of the patent registration certificate, to distribute and
market Chin Chun Su products in the Philippines had already been terminated by
the said Taiwanese Manufacturing Company.
After due hearing on the application for preliminary injunction, the trial court
granted the same in an Order dated February 10, 1992, the dispositive portion of
which reads:
ACCORDINGLY, the application of plaintiff Elidad C. Kho, doing business under
the style of KEC Cosmetic Laboratory, for preliminary injunction, is hereby
granted. Consequentially, plaintiff is required to file with the Court a bond
executed to defendants in the amount of five hundred thousand pesos
(P500,000.00) to the effect that plaintiff will pay to defendants all damages which
defendants may sustain by reason of the injunction if the Court should finally
decide that plaintiff is not entitled thereto.
SO ORDERED.[3]
The respondents moved for reconsideration but their motion for reconsideration
was denied by the trial court in an Order dated March 19, 1992. [4]
On April 24, 1992, the respondents filed a petition for certiorari with the Court
of Appeals, docketed as CA-G.R. SP No. 27803, praying for the nullification of the
said writ of preliminary injunction issued by the trial court. After the respondents
filed their reply and almost a month after petitioner submitted her comment, or on
August 14 1992, the latter moved to dismiss the petition for violation of Supreme
Court Circular No. 28-91, a circular prohibiting forum shopping. According to the
petitioner, the respondents did not state the docket number of the civil case in the
caption of their petition and, more significantly, they did not include therein a
certificate of non-forum shopping. The respondents opposed the petition and
submitted to the appellate court a certificate of non-forum shopping for their
petition.

On May 24, 1993, the appellate court rendered a Decision in CA-G.R. SP No.
27803 ruling in favor of the respondents, the dispositive portion of which reads:
WHEREFORE, the petition is hereby given due course and the orders of
respondent court dated February 10, 1992 and March 19, 1992 granting the writ of
preliminary injunction and denying petitioners motion for reconsideration are
hereby set aside and declared null and void. Respondent court is directed to
forthwith proceed with the trial of Civil Case No. Q-91-10926 and resolve the
issue raised by the parties on the merits.
SO ORDERED.[5]
In granting the petition, the appellate court ruled that:
The registration of the trademark or brandname Chin Chun Su by KEC with the
supplemental register of the Bureau of Patents, Trademarks and Technology
Transfer cannot be equated with registration in the principal register, which is duly
protected by the Trademark Law.
xxx xxx xxx
As ratiocinated in La Chemise Lacoste, S.S. vs. Fernandez, 129 SCRA 373, 393:
Registration in the Supplemental Register, therefore, serves as notice that the
registrant is using or has appropriated the trademark. By the very fact that the
trademark cannot as yet be on guard and there are certain defects, some obstacles
which the use must still overcome before he can claim legal ownership of the mark
or ask the courts to vindicate his claims of an exclusive right to the use of the
same. It would be deceptive for a party with nothing more than a registration in the
Supplemental Register to posture before courts of justice as if the registration is in
the Principal Register.
The reliance of the private respondent on the last sentence of the Patent office
action on application Serial No. 30954 that registrants is presumed to be the owner
of the mark until after the registration is declared cancelled is, therefore, misplaced
and grounded on shaky foundation. The supposed presumption not only runs
counter to the precept embodied in Rule 124 of the Revised Rules of Practice
before the Philippine Patent Office in Trademark Cases but considering all the facts
ventilated before us in the four interrelated petitions involving the petitioner and
the respondent, it is devoid of factual basis. As even in cases where presumption
and precept may factually be reconciled, we have held that the presumption is

rebuttable, not conclusive, (People v. Lim Hoa, G.R. No. L-10612, May 30, 1958,
Unreported). One may be declared an unfair competitor even if his competing
trademark is registered (Parke, Davis & Co. v. Kiu Foo & Co., et al., 60 Phil 928;
La Yebana Co. v. chua Seco & Co., 14 Phil 534).[6]
The petitioner filed a motion for reconsideration. This she followed with
several motions to declare respondents in contempt of court for publishing
advertisements notifying the public of the promulgation of the assailed decision of
the appellate court and stating that genuine Chin Chun Suproducts could be
obtained only from Summerville General Merchandising and Co.
In the meantime, the trial court went on to hear petitioners complaint for final
injunction and damages. On October 22, 1993, the trial court rendered a
Decision[7] barring the petitioner from using the trademark Chin Chun Su and
upholding the right of the respondents to use the same, but recognizing the
copyright of the petitioner over the oval shaped container of her beauty cream. The
trial court did not award damages and costs to any of the parties but to their
respective counsels were awarded Seventy-Five Thousand Pesos (P75,000.00) each
as attorneys fees. The petitioner duly appealed the said decision to the Court of
Appeals.
On June 3, 1994, the Court of Appeals promulgated a Resolution [8] denying the
petitioners motions for reconsideration and for contempt of court in CA-G.R. SP
No. 27803.
Hence, this petition anchored on the following assignment of errors:
I

RESPONDENT HONORABLE COURT OF APPEALS COMMITTED

GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF
JURISDICTION IN FAILING TO RULE ON PETITIONERS MOTION
TO DISMISS.
II

RESPONDENT HONORABLE COURT OF APPEALS COMMITTED

GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF
JURISDICTION IN REFUSING TO PROMPTLY RESOLVE
PETITIONERS MOTION FOR RECONSIDERATION.
III

IN DELAYING THE RESOLUTION OF PETITIONERS MOTION FOR

RECONSIDERATION, THE HONORABLE COURT OF APPEALS
DENIED PETITIONERS RIGHT TO SEEK TIMELY APPELLATE
RELIEF AND VIOLATED PETITIONERS RIGHT TO DUE PROCESS.
IV

RESPONDENT HONORABLE COURT OF APPEALS COMMITTED

GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF
JURISDICTION IN FAILING TO CITE THE PRIVATE RESPONDENTS
IN CONTEMPT.[9]
The petitioner faults the appellate court for not dismissing the petition on the
ground of violation of Supreme Court Circular No. 28-91. Also, the petitioner
contends that the appellate court violated Section 6, Rule 9 of the Revised Internal
Rules of the Court of Appeals when it failed to rule on her motion for
reconsideration within ninety (90) days from the time it is submitted for resolution.
The appellate court ruled only after the lapse of three hundred fifty-four (354)
days, or on June 3, 1994. In delaying the resolution thereof, the appellate court
denied the petitioners right to seek the timely appellate relief. Finally, petitioner
describes as arbitrary the denial of her motions for contempt of court against the
respondents.
We rule in favor of the respondents.
Pursuant to Section 1, Rule 58 of the Revised Rules of Civil Procedure, one of
the grounds for the issuance of a writ of preliminary injunction is a proof that the
applicant is entitled to the relief demanded, and the whole or part of such relief
consists in restraining the commission or continuance of the act or acts complained
of, either for a limited period or perpetually. Thus, a preliminary injunction order
may be granted only when the application for the issuance of the same shows facts
entitling the applicant to the relief demanded. [10] This is the reason why we have
ruled that it must be shown that the invasion of the right sought to be protected is
material and substantial, that the right of complainant is clear and unmistakable,
and, that there is an urgent and paramount necessity for the writ to prevent serious
damage.[11]
In the case at bar, the petitioner applied for the issuance of a preliminary
injunctive order on the ground that she is entitled to the use of the trademark
on Chin Chun Su and its container based on her copyright and patent over the

same. We first find it appropriate to rule on whether the copyright and patent over
the name and container of a beauty cream product would entitle the registrant to
the use and ownership over the same to the exclusion of others.
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. [12] In relation thereto, a
trade name means the name or designation identifying or distinguishing an
enterprise.[13] 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. [14] 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. [15]
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 petitioners 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.
We cannot likewise overlook the decision of the trial court in the case for final
injunction and damages. The dispositive portion of said decision held that the
petitioner does not have trademark rights on the name and container of the beauty
cream product. The said decision on the merits of the trial court rendered the
issuance of the writ of a preliminary injunction moot and academic
notwithstanding the fact that the same has been appealed in the Court of Appeals.
This is supported by our ruling in La Vista Association, Inc. v. Court of Appeals [16],
to wit:
Considering that preliminary injunction is a provisional remedy which may be
granted at any time after the commencement of the action and before judgment
when it is established that the plaintiff is entitled to the relief demanded and only

when his complaint shows facts entitling such reliefs xxx and it appearing that the
trial court had already granted the issuance of a final injunction in favor of
petitioner in its decision rendered after trial on the merits xxx the Court resolved to
Dismiss the instant petition having been rendered moot and academic. An
injunction issued by the trial court after it has already made a clear
pronouncement as to the plaintiffs right thereto, that is, after the same issue has
been decided on the merits, the trial court having appreciated the evidence
presented, is proper, notwithstanding the fact that the decision rendered is not yet
final xxx. Being an ancillary remedy, the proceedings for preliminary injunction
cannot stand separately or proceed independently of the decision rendered on the
merit of the main case for injunction. The merit of the main case having been
already determined in favor of the applicant, the preliminary determination of its
non-existence ceases to have any force and effect. (italics supplied)
La Vista categorically pronounced that the issuance of a final injunction renders
any question on the preliminary injunctive order moot and academic despite the
fact that the decision granting a final injunction is pending appeal. Conversely, a
decision denying the applicant-plaintiffs right to a final injunction, although
appealed, renders moot and academic any objection to the prior dissolution of a
writ of preliminary injunction.
The petitioner argues that the appellate court erred in not dismissing the
petition for certiorari for non-compliance with the rule on forum shopping. We
disagree. First, the petitioner improperly raised the technical objection of noncompliance with Supreme Court Circular No. 28-91 by filing a motion to dismiss
the petition for certiorari filed in the appellate court. This is prohibited by Section
6, Rule 66 of the Revised Rules of Civil Procedure which provides that (I)n
petitions for certioraribefore the Supreme Court and the Court of Appeals, the
provisions of Section 2, Rule 56, shall be observed. Before giving due course
thereto, the court may require the respondents to file their comment to, and not a
motion to dismiss, the petition xxx (italics supplied). Secondly, the issue was raised
one month after petitioner had filed her answer/comment and after private
respondent had replied thereto. Under Section 1, Rule 16 of the Revised Rules of
Civil Procedure, a motion to dismiss shall be filed within the time for but before
filing the answer to the complaint or pleading asserting a claim. She therefore
could no longer submit a motion to dismiss nor raise defenses and objections not
included in the answer/comment she had earlier tendered. Thirdly, substantial
justice and equity require this Court not to revive a dissolved writ of injunction in
favor of a party without any legal right thereto merely on a technical infirmity. The

granting of an injunctive writ based on a technical ground rather than compliance

with the requisites for the issuance of the same is contrary to the primary objective
of legal procedure which is to serve as a means to dispense justice to the deserving
party.
The petitioner likewise contends that the appellate court unduly delayed the
resolution of her motion for reconsideration. But we find that petitioner contributed
to this delay when she filed successive contentious motions in the same
proceeding, the last of which was on October 27, 1993, necessitating countermanifestations from private respondents with the last one being filed on November
9, 1993. Nonetheless, it is well-settled that non-observance of the period for
deciding cases or their incidents does not render such judgments ineffective or
void.[17] With respect to the purported damages she suffered due to the alleged delay
in resolving her motion for reconsideration, we find that the said issue has likewise
been rendered moot and academic by our ruling that she has no right over the
trademark and, consequently, to the issuance of a writ of preliminary injunction.
Finally, we rule that the Court of Appeals correctly denied the petitioners
several motions for contempt of court. There is nothing contemptuous about the
advertisements complained of which, as regards the proceedings in CA-G.R. SP
No. 27803 merely announced in plain and straightforward language the
promulgation of the assailed Decision of the appellate court. Moreover, pursuant to
Section 4 of Rule 39 of the Revised Rules of Civil Procedure, the said decision
nullifying the injunctive writ was immediately executory.
WHEREFORE, the petition is DENIED. The Decision and Resolution of the
Court of Appeals dated May 24, 1993 and June 3, 1994, respectively, are hereby
AFFIRMED. With costs against the petitioner.
SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

E.Y. INDUSTRIAL SALES, INC. G.R. No. 184850

and ENGRACIO YAP,
Petitioners, Present:
CORONA, C.J., Chairperson,
VELASCO, JR.,
- versus - LEONARDO - DE CASTRO,
DEL CASTILLO, and
PEREZ, JJ.
SHEN DAR ELECTRICITY AND Promulgated:
MACHINERY CO., LTD.,
Respondent. October 20, 2010
x-----------------------------------------------------------------------------------------x
DECISION
VELASCO, JR., J.:
The Case
This Petition for Review on Certiorari under Rule 45 seeks to nullify and
reverse the February 21, 2008 Decision[1] and the October 6, 2008
Resolution[2] rendered by the Court of Appeals (CA) in CA-G.R. SP No. 99356
entitled Shen Dar Electricity and Machinery Co., Ltd. v. E.Y. Industrial Sales,
Inc. and Engracio Yap.
The assailed decision reversed the Decision dated May 25, 2007 [3] issued by the
Director General of the Intellectual Property Office (IPO) in Inter Partes Case
No. 14-2004-00084. The IPO Director General upheld Certificate of
Registration (COR) No. 4-1999-005393 issued by the IPO for the trademark
VESPA in favor of petitioner E.Y. Industrial Sales, Inc. (EYIS), but ordered the
cancellation of COR No. 4-1997-121492, also for the trademark VESPA, issued

in favor of respondent Shen Dar Electricity and Machinery Co., Ltd. (Shen
Dar). The Decision of the IPO Director General, in effect, affirmed the Decision
dated May 29, 2006[4] issued by the Director of the Bureau of Legal Affairs
(BLA) of the IPO.
The Facts
EYIS is a domestic corporation engaged in the production, distribution
and sale of air compressors and other industrial tools and equipment.
[5]
Petitioner Engracio Yap is the Chairman of the Board of Directors of EYIS.[6]
Respondent Shen Dar is a Taiwan-based foreign corporation engaged in
the manufacture of air compressors.[7]
Both companies claimed to have the right to register the trademark
VESPA for air compressors.
From 1997 to 2004, EYIS imported air compressors from Shen Dar
through sales contracts. In the Sales Contract dated April 20, 2002, [8] for
example, Shen Dar would supply EYIS in one (1) year with 24 to 30 units of
40-ft. containers worth of air compressors identified in the Packing/Weight Lists
simply as SD-23, SD-29, SD-31, SD-32, SD-39, SD-67 and SD-68. In the
corresponding Bill of Ladings, the items were described merely as air
compressors.[9] There is no documentary evidence to show that such air
compressors were marked VESPA.
On June 9, 1997, Shen Dar filed Trademark Application Serial No. 41997-121492 with the IPO for the mark VESPA, Chinese Characters and Device
for use on air compressors and welding machines.[10]
On July 28, 1999, EYIS filed Trademark Application Serial No. 4-1999005393, also for the mark VESPA, for use on air compressors.[11] On January 18,
2004, the IPO issued COR No. 4-1999-005393 in favor of EYIS.[12] Thereafter,
on February 8, 2007, Shen Dar was also issued COR No. 4-1997-121492.[13]
In the meantime, on June 21, 2004, Shen Dar filed a Petition for
Cancellation of EYIS COR with the BLA. [14] In the Petition, Shen Dar primarily
argued that the issuance of the COR in favor of EYIS violated Section 123.1

paragraphs (d), (e) and (f) of Republic Act No. (RA) 8293, otherwise known as
the Intellectual Property Code (IP Code), having first filed an application for the
mark. Shen Dar further alleged that EYIS was a mere distributor of air
compressors bearing the mark VESPA which it imported from Shen Dar. Shen
Dar also argued that it had prior and exclusive right to the use and registration
of the mark VESPA in the Philippines under the provisions of the Paris
Convention.[15]
In its Answer, EYIS and Yap denied the claim of Shen Dar to be the true
owners of the mark VESPA being the sole assembler and fabricator of air
compressors since the early 1990s. They further alleged that the air compressors
that Shen Dar allegedly supplied them bore the mark SD for Shen Dar and not
VESPA.Moreover, EYIS argued that Shen Dar, not being the owner of the mark,
could not seek protection from the provisions of the Paris Convention or the IP
Code.[16]
Thereafter, the Director of the BLA issued its Decision dated May 29,
2006 in favor of EYIS and against Shen Dar, the dispositive portion of which
reads:
WHEREFORE, premises considered, the Petition for
Cancellation is, as it is hereby, DENIED. Consequently, Certificate of
Registration No. 4-1999-[005393] for the mark VESPA granted in the
name of E.Y. Industrial Sales, Inc. on 9 January 2007is hereby
upheld.
Let the filewrapper of VESPA subject matter of this case be
forwarded to the Administrative, Financial and Human Resource
Development Services Bureau for issuance and appropriate action in
accordance with this DECISION and a copy thereof furnished to the
Bureau of Trademarks for information and update of its records.
SO ORDERED.[17]

Shen Dar appealed the decision of the BLA Director to the Director
General of the IPO. In the appeal, Shen Dar raised the following issues:
1. Whether the BLA Director erred in ruling that Shen Dar failed to
present evidence;

2. Whether the registration of EYIS application was proper

considering that Shen Dar was the first to file an application for the
mark; and
3. Whether the BLA Director correctly ruled that EYIS is the true
owner of the mark.[18]
Later, the IPO Director General issued a Decision dated May 25, 2007
upholding the COR issued in favor of EYIS while cancelling the COR of Shen
Dar, the dispositive portion of which reads:
WHEREFORE, premises considered, the appeal is DENIED.
Certificate of Registration No. 4-1999-005393 for the mark VESPA
for air compressor issued in favor of Appellee is hereby upheld.
Consequently, Certificate of Registration No. 4-1997-121492 for the
mark VESPA, Chinese Characters & Device for goods air compressor
and spot welding machine issued in favor of Appellant is hereby
ordered cancelled.
Let a copy of this Decision as well as the records of this case
be furnished and returned to the Director of Bureau of Legal Affairs
for appropriate action. Further, let also the Directors of the Bureau of
Trademarks, the Administrative, Financial and Human Resources
Development Services Bureau, and the Documentation, Information
and Technology Transfer Bureau be furnished a copy of this Decision
for information, guidance, and records purposes. [19]

Shen Dar appealed the above decision of the IPO Director General to the
CA where Shen Dar raised the following issues:
1.
2.
3.
4.
5.

Whether Shen Dar is guilty of forum shopping;

Whether the first-to-file rule applies to the instant case;
Whether Shen Dar presented evidence of actual use;
Whether EYIS is the true owner of the mark VESPA;
Whether the IPO Director General erred in cancelling Shen Dars COR
No. 4-1997-121492 without a petition for cancellation; and
6. Whether Shen Dar sustained damages.[20]

In the assailed decision, the CA reversed the IPO Director General and
ruled in favor of Shen Dar. The dispositive portion states:
WHEREFORE, premises considered, the petition is
GRANTED. Consequently, the assailed decision of the Director
General of the Intellectual Property Office dated May 25, 2007 is
hereby REVERSED and SET ASIDE. In lieu thereof, a new one is
entered: a) ordering the cancellation of Certificate of Registration No.
4-1999-005393 issued on January 19, 2004 for the trademark VESPA
in favor of E.Y. Industrial Sales, Inc.; b) ordering the restoration of
the validity of Certificate of Registration No. 4-1997-121492 for the
trademark VESPA in favor of Shen Dar Electricity and Machinery
Co., Ltd. No pronouncement as to costs.
SO ORDERED.[21]

In ruling for Shen Dar, the CA ruled that, despite the fact that Shen Dar
did not formally offer its evidence before the BLA, such evidence was properly
attached to the Petition for Cancellation. As such, Shen Dars evidence may be
properly considered. The CA also enunciated that the IPO failed to properly
apply the provisions of Sec. 123.1(d) of RA 8293, which prohibits the
registration of a trademark in favor of a party when there is an earlier filed
application for the same mark. The CA further ruled that Shen Dar should be
considered to have prior use of the mark based on the statements made by the
parties in their respective Declarations of Actual Use. The CA added that EYIS
is a mere importer of the air compressors with the mark VESPA as may be
gleaned from its receipts which indicated that EYIS is an importer, wholesaler
and retailer, and therefore, cannot be considered an owner of the mark.[22]
EYIS filed a motion for reconsideration of the assailed decision which the
CA denied in the assailed resolution.
Hence, the instant appeal.
Issues
EYIS and Yap raise the following issues in their petition:

A.

Whether the Director General of the IPO correctly upheld the

rights of Petitioners over the trademark VESPA.

B.

Whether the Director General of the IPO can, under the

circumstances, order the cancellation of Respondents
certificate of registration for VESPA, which has been
fraudulently obtained and erroneously issued.

C.

Whether the Honorable Court of Appeals was justified in

reversing the findings of fact of the IPO, which affirm the
rights of Petitioner EYIS over the trademark VESPA and when
such findings are supported by the evidence on record.

D.

Whether this Honorable Court may review questions of fact

considering that the findings of the Court of Appeals and the
IPO are in conflict and the conclusions of the appellee court
are contradicted by the evidence on record. [23]

The Ruling of the Court

The appeal is meritorious.
First Issue:
Whether this Court may review the questions of fact presented
Petitioners raise the factual issue of who the true owner of the mark is. As
a general rule, this Court is not a trier of facts. However, such rule is subject to
exceptions.

[24]

In New City Builders, Inc. v. National Labor Relations Commission,

the Court ruled that:
We are very much aware that the rule to the effect that this
Court is not a trier of facts admits of exceptions. As we have stated
in Insular Life Assurance Company, Ltd. vs. CA:
[i]t is a settled rule that in the exercise of the Supreme Courts
power of review, the Court is not a trier of facts and does not
normally undertake the re-examination of the evidence
presented by the contending parties during the trial of the case
considering that the findings of facts of the CA are conclusive

and binding on the Court. However, the Court had recognized

several exceptions to this rule, to wit: (1) when the findings are
grounded entirely on speculation, surmises or conjectures; (2)
when the inference made is manifestly mistaken, absurd or
impossible; (3) when there is grave abuse of discretion; (4)
when the judgment is based on a misapprehension of facts; (5)
when the findings of facts are conflicting; (6) when in making
its findings the Court of Appeals went beyond the issues of the
case, or its findings are contrary to the admissions of both the
appellant and the appellee; (7) when the findings are
contrary to the trial court; (8) when the findings are
conclusions without citation of specific evidence on which
they are based; (9) when the facts set forth in the petition as
well as in the petitioners main and reply briefs are not disputed
by the respondent; (10) when the findings of fact are premised
on the supposed absence of evidence and contradicted by the
evidence on record; and (11) when the Court of Appeals
manifestly overlooked certain relevant facts not disputed by
the parties, which, if properly considered, would justify a
different conclusion. (Emphasis supplied.)

In the instant case, the records will show that the IPO and the CA made
differing conclusions on the issue of ownership based on the evidence presented
by the parties. Hence, this issue may be the subject of this Courts review.
Second Issue:
Whether evidence presented before the BLA must be formally offered
Preliminarily, it must be noted that the BLA ruled that Shen Dar failed to
adduce evidence in support of its allegations as required under Office Order No.
79, Series of 2005, Amendments to the Regulations on Inter
Partes Proceedings, having failed to formally offer its evidence during the
proceedings before it. The BLA ruled:
At the outset, we note petitioners failure to adduce any
evidence in support of its allegations in the Petition for Cancellation.
Petitioner did not file nor submit its marked evidence as required in
this Bureaus Order No. 2006-157 dated 25 January 2006 in
compliance with Office Order No. 79, Series of 2005, Amendments to
the Regulations on Inter Partes Proceedings.[25] x x x

In reversing such finding, the CA cited Sec. 2.4 of BLA Memorandum

Circular No. 03, Series of 2005, which states:
Section 2.4. In all cases, failure to file the documentary
evidences in accordance with Sections 7 and 8 of the rules on
summary proceedings shall be construed as a waiver on the part of
the parties. In such a case, the original petition, opposition, answer
and the supporting documents therein shall constitute the entire
evidence for the parties subject to applicable rules.

The CA concluded that Shen Dar needed not formally offer its evidence
but merely needed to attach its evidence to its position paper with the proper
markings,[26] which it did in this case.
The IP Code provides under its Sec. 10.3 that the Director General of the
IPO shall establish the procedure for the application for the registration of a
trademark, as well as the opposition to it:
Section 10. The Bureau of Legal Affairs.The Bureau of Legal
Affairs shall have the following functions:
xxxx
10.3. The Director General may by Regulations establish the
procedure to govern the implementation of this Section.

Thus, the Director General issued Office Order No. 79, Series of 2005
amending the regulations on Inter Partes Proceedings, Sec. 12.1 of which
provides:
Section 12. Evidence for the Parties
12.1. The verified petition or opposition, reply if any, duly
marked affidavits of the witnesses, and the documents submitted,
shall constitute the entire evidence for the petitioner or opposer. The
verified answer, rejoinder if any, and the duly marked affidavits and
documents submitted shall constitute the evidence for the respondent.
Affidavits, documents and other evidence not submitted and duly
marked in accordance with the preceding sections shall not be
admitted as evidence.

The preceding sections referred to in the above provision refer to Secs.

7.1, 8.1 and 9 which, in turn, provide:
Section 7. Filing of Petition or Opposition
7.1. The petition or opposition, together with the affidavits of
witnesses and originals of the documents and other requirements,
shall be filed with the Bureau, provided, that in case of public
documents, certified copies shall be allowed in lieu of the originals.
The Bureau shall check if the petition or opposition is in due form as
provided in the Regulations particularly Rule 3, Section 3; Rule 4,
Section 2; Rule 5, Section 3; Rule 6, Section 9; Rule 7, Sections 3 and
5; Rule 8, Sections 3 and 4. For petition for cancellation of layout
design (topography) of integrated circuits, Rule 3, Section 3 applies
as to the form and requirements. The affidavits, documents and other
evidence shall be marked consecutively as Exhibits beginning with
the letter A.
Section 8. Answer
8.1. Within three (3) working days from receipt of the petition
or opposition, the Bureau shall issue an order for the respondent to
file an answer together with the affidavits of witnesses and originals
of documents, and at the same time shall notify all parties required to
be notified in the IP Code and these Regulations, provided, that in
case of public documents, certified true copies may be submitted in
lieu of the originals. The affidavits and documents shall be marked
consecutively as Exhibits beginning with the number 1.
Section 9. Petition or Opposition and Answer must be
verified Subject to Rules 7 and 8 of these regulations, the petition or
opposition and the answer must be verified. Otherwise, the same shall
not be considered as having been filed.

In other words, as long as the petition is verified and the pieces of

evidence consisting of the affidavits of the witnesses and the original of other
documentary evidence are attached to the petition and properly marked in
accordance with Secs. 7.1 and 8.1 abovementioned, these shall be considered as
the evidence of the petitioner. There is no requirement under the
abovementioned rules that the evidence of the parties must be formally offered
to the BLA.

In any case, as a quasi-judicial agency and as stated in Rule 2, Sec. 5 of

the Regulations on Inter Partes Proceedings, the BLA is not bound by technical
rules of procedure. The evidence attached to the petition may, therefore, be
properly considered in the resolution of the case.

Third Issue:
Whether the IPO Director General can
validly cancel Shen Dars Certificate of Registration

In his Decision, 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 Director General explained:
Accordingly, while the instant case involves a petition to
cancel the registration of the Appellees trademark VESPA, the
interest of justice requires that Certificate of Registration No. 4-1997121492 be cancelled. While the normal course of proceedings should
have been the filing of a petition for cancellation of Certificate of
Registration No. 4-1997-121492, that would involve critical facts and
issues that have already been resolved in this case. To allow the
Applicant to still maintain in the Trademark Registry Certificate of
Registration No. 4-1997-121492 would nullify the exclusive rights of
Appellee as the true and registered owner of the mark VESPA and
defeat the purpose of the trademark registration system. [27]

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.
Office Order No. 79, Series of 2005, provides under its Sec. 5 that:
Section 5. Rules of Procedure to be followed in the conduct of
hearing of Inter Partes cases.The rules of procedure herein contained
primarily apply in the conduct of hearing of Inter Partes cases. The
Rules of Court may be applied suppletorily. 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 give the Bureau the greatest
possibility to focus on the contentious issues before it. (Emphasis
supplied.)

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. Thus, we ruled in Aya-ay, Sr. v. Arpaphil Shipping Corp.:[28]
That administrative quasi-judicial bodies like the NLRC are
not bound by technical rules of procedure in the adjudication of cases
does not mean that the basic rules on proving allegations should be
entirely dispensed with. A party alleging a critical fact must still
support his allegation with substantial evidence. Any decision based
on unsubstantiated allegation cannot stand as it will offend due
process.
x x x The liberality of procedure in administrative actions is
subject to limitations imposed by basic requirements of due
process. As this Court said in Ang Tibay v. CIR, the provision for
flexibility in administrative procedure does not go so far as to justify
orders without a basis in evidence having rational probative
value.More specifically, as held in Uichico v. NLRC:
It is true that administrative and quasi-judicial bodies like
the NLRC are not bound by the technical rules of procedure in
the adjudication of cases.However, this procedural rule should
not be construed as a license to disregard certain fundamental
evidentiary rules.

This was later reiterated in Lepanto Consolidated Mining Company v.

Dumapis:[29]
While it is true that administrative or quasi-judicial bodies like
the NLRC are not bound by the technical rules of procedure in the
adjudication of cases, this procedural rule should not be construed as
a license to disregard certain fundamental evidentiary rules. The
evidence presented must at least have a modicum of admissibility for
it to have probative value. Not only must there be some evidence to
support a finding or conclusion, but the evidence must be

substantial. Substantial evidence is more than a mere scintilla. It

means such relevant evidence as a reasonable mind might accept as
adequate to support a conclusion. Thus, even though technical rules
of evidence are not strictly complied with before the LA and the
NLRC, their decision must be based on evidence that must, at the
very least, be substantial.

The fact that no petition for cancellation was filed against the COR issued
to Shen Dar does not preclude the cancellation of Shen Dars 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 Generals disregard of the procedure for the cancellation of a registered
mark was a valid exercise of his discretion.
Fourth Issue:
Whether the factual findings of the IPO are binding on the CA
Next, petitioners challenge the CAs reversal of the factual findings of the
BLA that Shen Dar and not EYIS is the prior user and, therefore, true owner of
the mark. In arguing its position, petitioners cite numerous rulings of this Court
where it was enunciated that the factual findings of administrative bodies are
given great weight if not conclusive upon the courts when supported by
substantial evidence.
We agree with petitioners that the general rule in this jurisdiction is that
the factual findings of administrative bodies deserve utmost respect when
supported by evidence. However, such general rule is subject to exceptions.
In Fuentes v. Court of Appeals,[30] the Court established the rule of
conclusiveness of factual findings of the CA as follows:
Jurisprudence teaches us that (a)s a rule, the jurisdiction of this
Court in cases brought to it from the Court of Appeals x x x is limited
to the review and revision of errors of law allegedly committed by the
appellate court, as its findings of fact are deemed conclusive. As such

this Court is not duty-bound to analyze and weigh all over again the
evidence already considered in the proceedings below. This rule,
however, is not without exceptions. The findings of fact of the Court
of Appeals, which are as a general rule deemed conclusive, may
admit of review by this Court:
(1) when the factual findings of the Court of Appeals and the
trial court are contradictory;
(2) when the findings are grounded entirely on speculation,
surmises, or conjectures;
(3) when the inference made by the Court of Appeals from its
findings of fact is manifestly mistaken, absurd, or impossible;
(4) when there is grave abuse of discretion in the appreciation
of facts;
(5) when the appellate court, in making its findings, goes
beyond the issues of the case, and such findings are contrary to the
admissions of both appellant and appellee;
(6) when the judgment of the Court of Appeals is premised on
a misapprehension of facts;
(7) when the Court of Appeals fails to notice certain
relevant facts which, if properly considered, will justify a
different conclusion;
(8) when the findings of fact are themselves conflicting;
(9) when the findings of fact are conclusions without citation
of the specific evidence on which they are based; and
(10) when the findings of fact of the Court of Appeals are
premised on the absence of evidence but such findings are
contradicted by the evidence on record.(Emphasis supplied.)

Thereafter, in Villaflor v. Court of Appeals,[31] this Court applied the above

principle to factual findings of quasi-judicial bodies, to wit:
Proceeding by analogy, the exceptions to the rule on
conclusiveness of factual findings of the Court of Appeals,

enumerated in Fuentes vs. Court of Appeals, can also be applied to

those of quasi-judicial bodies x x x. (Emphasis supplied.)

Here, the CA identified certain material facts that were allegedly

overlooked by the BLA and the IPO Director General which it opined, when
correctly appreciated, would alter the result of the case. An examination of the
IPO Decisions, however, would show that no such evidence was overlooked.
First, as to the date of first use of the mark by the parties, the CA stated:
To begin with, when respondents-appellees filed its application
for registration of the VESPA trademark on July 28, 1999, they stated
under oath, as found in their DECLARATION OF ACTUAL USE,
that their first use of the mark was on December 22, 1998. On the
other hand, [Shen Dar] in its application dated June 09, 1997 stated,
likewise under oath in their DECLARATION OF ACTUAL USE, that
its first use of the mark was in June 1996. This cannot be made any
clearer. [Shen Dar] was not only the first to file an application for
registration but likewise first to use said registrable mark. [32]

Evidently, the CA anchors its finding that Shen Dar was the first to use
the mark on the statements of the parties in their respective Declarations of
Actual Use.Such conclusion is premature at best. While a Declaration of Actual
Use is a notarized document, hence, a public document, it is not conclusive as to
the fact of first use of a mark. The declaration must be accompanied by proof of
actual use as of the date claimed. In a declaration of actual use, the applicant
must, therefore, present evidence of such actual use.
The BLA ruled on the same issue, as follows:
More importantly, the private respondents prior adoption and
continuous use of the mark VESPA on air compressors is bolstered by
numerous documentary evidence consisting of sales invoices issued
in the name of E.Y. Industrial and Bill of Lading (Exhibits 4 to 375).
Sales Invoice No. 12075 dated March 27, 1995 antedates petitioners
date of first use on January 1, 1997 indicated in its trademark
application filed on June 9, 1997 as well as the date of first use in
June of 1996 as indicated in the Declaration of Actual Use submitted
on December 3, 2001 (Exhibit 385). The use by respondent registrant
in the concept of owner is shown by commercial documents, sales

invoices unambiguously describing the goods as VESPA air

compressors. Private respondents have sold the air compressors
bearing the VESPA to various locations in the Philippines, as far
as Mindanao and the Visayas since the early 1990s. We carefully
inspected the evidence consisting of three hundred seventy-one (371)
invoices and shipment documents which show that VESPA air
compressors were sold not only in Manila, but to locations such as
Iloilo City, Cebu City, Dumaguete City, Zamboanga City, Cagayan de
Oro City, Davao City, to name a few. There is no doubt that it is
through private respondents efforts that the mark VESPA used on air
compressors has gained business goodwill and reputation in the
Philippines for which it has validly acquired trademark rights.
Respondent E.Y. Industrials right has been preserved until the passage
of RA 8293 which entitles it to register the same. [33]

Comparatively, the BLAs findings were founded upon the evidence

presented by the parties. An example of such evidence is Invoice No. 12075
dated March 29, 1995[34] where EYIS sold four units of VESPA air compressors
to Veteran PaintTrade Center. Shen Dar failed to rebut such evidence. The truth,
as supported by the evidence on record, is that EYIS was first to use the mark.
Moreover, the discrepancy in the date provided in the Declaration of
Actual Use filed by EYIS and the proof submitted was appropriately considered
by the BLA, ruling as follows:
On the contrary, respondent EY Industrial was able to prove
the use of the mark VESPA on the concept of an owner as early as
1991. Although Respondent E.Y. indicated in its trademark
application that its first use was in December 22, 1998, it was able to
prove by clear and positive evidence of use prior to such date.
In Chuang Te v. Ng Kian-Guiab and Director of Patents, L23791, 23 November 1966, the High Court clarified: Where an
applicant for registration of a trademark states under oath the date of
his earliest use, and later on he wishes to carry back his first date of
use to an earlier date, he then takes on the greater burden of
presenting clear and convincing evidence of adoption and use as of
that earlier date. (B.R. Baker Co. vs. Lebrow Bros., 150 F. 2d 580.) [35]

The CA further found that EYIS is not a manufacturer of air compressors

but merely imports and sells them as a wholesaler and retailer. The CA
reasoned:
Conversely, a careful perusal of appellees own submitted
receipts shows that it is not manufacturer but an importer,
wholesaler and retailer. This fact is corroborated by the testimony
of a former employee of appellees. Admittedly too, appellees are
importing air compressors from [Shen Dar] from 1997 to 2004.These
matters, lend credence to [Shen Dars] claim that the letters SD
followed by a number inscribed in the air compressor is only to
describe its type, manufacturer business name and capacity. The
VESPA mark is in the sticker which is attached to the air
compressors. The ruling of the Supreme Court, in the case of UNNO
Commercial Enterprises, Inc. vs. General Milling Corporation et al.,
is quite enlightening, thus We quote:
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 applicants 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. [36]

This is a non sequitur. It does not follow. The fact that EYIS described
itself in its sales invoice as an importer, wholesaler and retailer does not
preclude its being a manufacturer. Sec. 237 of the National Internal Revenue
Code states:
Section 237. Issuance of Receipts or Sales or Commercial
Invoices.All persons subject to an internal revenue tax shall, for each
sale and transfer of merchandise or for services rendered valued at
Twenty-five pesos (P25.00) or more, issue duly registered receipts or
sale or commercial invoices, prepared at least in duplicate, showing
the date of transaction, quantity, unit cost and description of
merchandise or nature of service: Provided, however, That where
the receipt is issued to cover payment made as rentals, commissions,
compensation or fees, receipts or invoices shall be issued which shall

show the name, business style, if any, and address of the purchaser,
customer or client.
The original of each receipt or invoice shall be issued to the
purchaser, customer or client at the time the transaction is effected,
who, if engaged in business or in the exercise of profession, shall
keep and preserve the same in his place of business for a period of
three (3) years from the close of the taxable year in which such
invoice or receipt was issued, while the duplicate shall be kept and
preserved by the issuer, also in his place of business, for a like period.
The Commissioner may, in meritorious cases, exempt any
person subject to an internal revenue tax from compliance with the
provisions of this Section.(Emphasis supplied.)

Correlatively, in Revenue Memorandum No. 16-2003 dated May 20,

2003, the Bureau of Internal Revenue defined a Sales Invoice and identified its
required information as follows:
Sales Invoices (SI)/Cash Invoice (CI) is written account of
goods sold or services rendered and the prices charged therefor used
in the ordinary course of business evidencing sale and transfer or
agreement to sell or transfer of goods and services. It contains the
same information found in the Official Receipt.
Official Receipt (OR) is a receipt issued for the payment of
services rendered or goods sold. It contains the following
information:
a. Business name and address;
b. Taxpayer Identification Number;
c. Name of printer (BIR Permit No.) with inclusive serial
number of booklets and date of issuance of receipts.

There is no requirement that a sales invoice should accurately state the

nature of all the businesses of the seller. There is no legal ground to state that
EYIS declaration in its sales invoices that it is an importer, wholesaler and
retailer is restrictive and would preclude its being a manufacturer.
From the above findings, there was no justifiable reason for the CA to
disregard the factual findings of the IPO. The rulings of the IPO Director

General and the BLA Director were supported by clear and convincing
evidence. The facts cited by the CA and Shen Dar do not justify a different
conclusion from that of the IPO.Hence, the findings of the BLA Director and
the IPO Director General must be deemed as conclusive on the CA.
Fifth Issue:
Whether EYIS is the true owner of the mark VESPA
In any event, given the length of time already invested by the parties in
the instant case, this Court must write finis to the instant controversy by
determining, once and for all, the true owner of the mark VESPA based on the
evidence presented.
RA 8293 espouses the first-to-file rule as stated under Sec. 123.1(d)
which states:
Section 123. Registrability. - 123.1. A mark cannot be
registered if it:
xxxx
(d) Is identical with a registered mark belonging to a different
proprietor or a mark with an earlier filing or priority date, in respect
of:
(i) The same goods or services, or
(ii) Closely related goods or services, or
(iii) If it nearly resembles such a mark as to be likely
to deceive or cause confusion. (Emphasis supplied.)

Under this 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 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.
Sec. 134 of the IP Code provides that any person who believes that he
would be damaged by the registration of a mark x x x may file an opposition to

the application. The term any person encompasses the true owner of the markthe
prior and continuous user.
Notably, the Court has ruled that the prior and continuous use of a mark
may even overcome the presumptive ownership of the registrant and be held as
the owner of the mark. As aptly stated by the Court in Shangri-la International
Hotel Management, Ltd. v. Developers Group of Companies, Inc.:[37]
Registration, without more, does not confer upon the registrant
an absolute right to the registered mark. The certificate of registration
is merely a prima facieproof that the registrant is the owner of the
registered mark or trade name. Evidence of prior and continuous
use of the mark or trade name by another can overcome the
presumptive ownership of the registrant and may very well
entitle the former to be declared owner in an appropriate case.
xxxx
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.
xxxx
By itself, registration is not a mode of acquiring
ownership. When the applicant is not the owner of the trademark
being applied for, he has no right to apply for registration of the
same. Registration merely creates a prima facie presumption of the
validity of the registration, of the registrants ownership of the
trademark and of the exclusive right to the use thereof. Such
presumption, just like the presumptive regularity in the performance
of official functions, is rebuttable and must give way to evidence to
the contrary.

Here, the incontrovertible truth, as established by the evidence submitted

by the parties, is that EYIS is the prior user of the mark. The exhaustive
discussion on the matter made by the BLA sufficiently addresses the issue:

Based on the evidence, Respondent E.Y. Industrial is a

legitimate corporation engaged in buying, importing, selling,
industrial machineries and tools, manufacturing, among others since
its incorporation in 1988. (Exhibit 1). Indeed private respondents
have submitted photographs (Exhibit 376, 377, 378, 379) showing an
assembly line of its manufacturing or assembly process.
More importantly, the private respondents prior adoption and
continuous use of the mark VESPA on air compressors is bolstered by
numerous documentary evidence consisting of sales invoices issued
in the name of respondent EY Industrial and Bills of Lading.
(Exhibits 4 to 375). Sales Invoice No. 12075 dated March 27, 1995
antedates petitioners date of first use in January 1, 1997 indicated in
its trademark application filed in June 9, 1997 as well as the date of
first use in June of 1996 as indicated in the Declaration of Actual Use
submitted on December 3, 2001 (Exhibit 385). The use by
respondent-registrant in the concept of owner is shown by
commercial documents, sales invoices unambiguously describing the
goods as VESPA air compressors. Private respondents have sold the
air compressors bearing the VESPA to various locations in
the Philippines, as far as Mindanao and the Visayas since the early
1990s. We carefully inspected the evidence consisting of three
hundred seventy one (371) invoices and shipment documents which
show that VESPA air compressors were sold not only in Manila, but
to locations such as Iloilo City, Cebu City, Dumaguete City,
Zamboanga City, Cagayan de Oro City, Davao City to name a few.
There is no doubt that it is through private respondents efforts that the
mark VESPA used on air compressors has gained business goodwill
and reputation in the Philippines for which it has validly acquired
trademark rights. Respondent EY Industrials right has been preserved
until the passage of RA 8293 which entitles it to register the same. x x
x[38]

On the other hand, Shen Dar failed to refute the evidence cited by the
BLA in its decision. More importantly, Shen Dar failed to present sufficient
evidence to prove its own prior use of the mark VESPA. We cite with approval
the ruling of the BLA:
[Shen Dar] avers that it is the true and rightful owner of the
trademark VESPA used on air compressors. The thrust of [Shen Dars]
argument is that respondent E.Y. Industrial Sales, Inc. is a mere
distributor of the VESPA air compressors. We disagree.

This conclusion is belied by the evidence. We have gone over

each and every document attached as Annexes A, A 1-48 which
consist of Bill of Lading and Packing Weight List. Not one of these
documents referred to a VESPA air compressor. Instead, it simply
describes the goods plainly as air compressors which is type SD and
not VESPA. More importantly, the earliest date reflected on the Bill
of Lading was on May 5, 1997. (Annex A-1). [Shen Dar] also
attached as Annex B a purported Sales Contract with respondent EY
Industrial Sales dated April 20, 2002. Surprisingly, nowhere in the
document does it state that respondent EY Industrial agreed to sell
VESPA air compressors. The document only mentions air
compressors which if genuine merely bolsters respondent Engracio
Yaps contention that [Shen Dar] approached them if it could sell the
Shen Dar or SD air compressor. (Exhibit 386) In its position paper,
[Shen Dar] merely mentions of Bill of Lading constituting respondent
as consignee in 1993 but never submitted the same for consideration
of this Bureau. The document is also not signed by [Shen Dar]. The
agreement was not even drafted in the letterhead of either [Shen Dar]
nor [sic] respondent registrant. Our only conclusion is that [Shen Dar]
was not able to prove to be the owner of the VESPA mark by
appropriation. Neither was it able to prove actual commercial use in
the Philippines of the mark VESPA prior to its filing of a trademark
application in 9 June 1997.[39]

As such, EYIS must be considered as the prior and continuous user of the
mark VESPA and its true owner. Hence, EYIS is entitled to the registration of
the mark in its name.
WHEREFORE, the petition is hereby GRANTED. The CAs February 21,
2008 Decision and October 6, 2008 Resolution in CA-G.R. SP No.
99356 are herebyREVERSED and SET ASIDE. The Decision dated May 25,
2007 issued by the IPO Director General in Inter Partes Case No. 14-200400084 and the Decision dated May 29, 2006 of the BLA Director of the IPO are
hereby REINSTATED.
No costs.
SO ORDERED.

Republic of the Philippines

Supreme Court
Baguio City
SECOND DIVISION
SUPERIOR COMMERCIAL
ENTERPRISES, INC.,
Petitioner,
-

G.R. No. 169974

Present:
CARPIO, J., Chairperson,
BRION,
DEL CASTILLO,
ABAD, and
PEREZ, JJ.

versus -

KUNNAN ENTERPRISES LTD.

AND SPORTS CONCEPT &
DISTRIBUTOR, INC.,
Respondents. -- -

Promulgated:
April 20, 2010

x-----------------------------------------------------------------------------------------x
DECISION
BRION, J.:
We review in this petition for review on certiorari[1] the (1) decision[2] of
the Court of Appeals (CA) in CA-G.R. CV No. 60777 that reversed the ruling of
the Regional Trial Court of Quezon City, Branch 85 (RTC),[3] and dismissed the
petitioner Superior Commercial Enterprises, Inc.s (SUPERIOR) complaint for
trademark infringement and unfair competition (with prayer for preliminary
injunction) against the respondents Kunnan Enterprises Ltd. (KUNNAN) and
Sports Concept and Distributor, Inc. (SPORTS CONCEPT); and (2) the CA
resolution[4] that
denied
SUPERIORs
subsequent
motion
for
reconsideration. The RTC decision that the CA reversed found the respondents
liable for trademark infringement and unfair competition, and ordered them to
pay SUPERIOR P2,000,000.00 in damages,P500,000.00 as attorneys fees, and
costs of the suit.

THE FACTUAL ANTECEDENTS

On February 23, 1993, SUPERIOR[5] filed a complaint for trademark
infringement and unfair competition with preliminary injunction against
KUNNAN[6] and SPORTS CONCEPT[7] with the RTC, docketed as Civil Case
No. Q-93014888.
In support of its complaint, SUPERIOR first claimed to be the owner of
the trademarks, trading styles, company names and business names [8] KENNEX,
[9]
KENNEX & DEVICE,[10] PRO KENNEX[11] and PRO-KENNEX (disputed
trademarks).[12] Second, it also asserted its prior use of these trademarks,
presenting as evidence of ownership the Principal and Supplemental
Registrations of these trademarks in its name. Third, SUPERIOR also alleged
that it extensively sold and advertised sporting goods and products covered by
its trademark registrations.Finally, SUPERIOR presented as evidence of its
ownership of the disputed trademarks the preambular clause of the
Distributorship Agreement dated October 1, 1982 (Distributorship Agreement)
it executed with KUNNAN, which states:
Whereas, KUNNAN intends to acquire the ownership of
KENNEX trademark registered by the [sic] Superior in
the Philippines. Whereas, the [sic]Superior is desirous of having
been appointed [sic] as the sole distributor by KUNNAN in the
territory of the Philippines. [Emphasis supplied.][13]

In its defense, KUNNAN disputed SUPERIORs claim of ownership and

maintained that SUPERIOR as mere distributor from October 6, 1982 until
December 31, 1991 fraudulently registered the trademarks in its
name. KUNNAN alleged that it was incorporated in 1972, under the name
KENNEX Sports Corporation for the purpose of manufacturing and selling
sportswear and sports equipment; it commercially marketed its products in
different countries, including thePhilippines since 1972.[14] It created and first
used PRO KENNEX, derived from its original corporate name, as a distinctive
trademark for its products in 1976. KUNNAN also alleged that it registered the
PRO KENNEX trademark not only in the Philippines but also in 31 other
countries, and widely promoted the KENNEX and PRO KENNEX trademarks
through worldwide advertisements in print media and sponsorships of known
tennis players.

On October 1, 1982, after the expiration of its initial distributorship

agreement with another company,[15] KUNNAN appointed SUPERIOR as its
exclusive distributor in the Philippines under a Distributorship Agreement
whose pertinent provisions state:[16]
Whereas, KUNNAN intends to acquire ownership of
KENNEX
trademark
registered
by
the Superior in
the Philippines. Whereas, the Superior is desirous of having been
appointed [sic] as the sole distributor by KUNNAN in the
territory of the Philippines.
Now, therefore, the parties hereto agree as follows:
1. KUNNAN in accordance with this Agreement, will appoint the
sole distributorship right to Superior in the Philippines, and
this Agreement could be renewed with the consent of both parties
upon the time of expiration.
2. The Superior, in accordance with this Agreement, shall assign
the ownership of KENNEX trademark, under the registration
of Patent Certificate No. 4730 dated 23 May 1980 to KUNNAN
on the effects [sic] of its ten (10) years contract of
distributorship, and it is required that the ownership of the said
trademark shall be genuine, complete as a whole and without any
defects.
3. KUNNAN will guarantee to the Superior that no other third
parties will be permitted to supply the KENNEX PRODUCTS in
the Philippines except only to the Superior. If KUNNAN violates
this stipulation, the transfer of the KENNEX trademark shall be
null and void.
4. If there is a necessity, the Superior will be appointed, for the
protection of interest of both parties, as the agent in the
Philippines with full power to exercise and granted the power of
attorney, to pursue any case of Pirating, Infringement and
Counterfeiting the [sic] KENNEX trade mark in the Philippine
territory.
5. The Superior will be granted from [sic] KUNNANs approval
before making and selling any KENNEX products made in
the Philippines and the other countries, and if this is the situation,
KUNNAN is entitled to have a royalty of 5%-8% of FOB as the
right.

6. Without KUNNANs permission, the Superior cannot procure

other goods supply under KENNEX brand of which are not
available to supply [sic] by KUNNAN.However, in connection
with the sporting goods, it is permitted that the Superiorcan
procure them under KENNEX brand of which are not available to
be supplied by KUNNAN. [Emphasis supplied.]

Even though this Agreement clearly stated that SUPERIOR was obligated
to assign the ownership of the KENNEX trademark to KUNNAN, the latter
claimed that the Certificate of Registration for the KENNEX trademark
remained with SUPERIOR because Mariano Tan Bon Diong (Mr. Tan Bon
Diong), SUPERIORs President and General Manager, misled KUNNANs
officers into believing that KUNNAN was not qualified to hold the same due to
the many requirements set by the Philippine Patent Office that KUNNAN could
not meet.[17] KUNNAN further asserted that SUPERIOR deceived it into
assigning its applications for registration of the PRO KENNEX trademark in
favor of SUPERIOR, through an Assignment Agreement dated June 14, 1983
whose pertinent provisions state:[18]
1.
In consideration of the distributorship relationship between
KUNNAN andSuperior, KUNNAN, who is the seller in the
distributorship relationship, agrees to assign the following
trademark
applications
owned
by
itself
in
the Philippines toSuperior who is the buyer in the distributorship
relationship.
Trademark Application Number Class
PROKENNEX 49999 28
PROKENNEX 49998 25
PROKENNEX 49997 18
2.
Superior shall acknowledge that KUNNAN is still the real
and truthful owner of the abovementioned trademarks, and shall
agree that it will not use the right of the abovementioned
trademarks to do anything which is unfavourable or harmful to
KUNNAN.
3.
Superior agrees that it will return back the
abovementioned trademarks to KUNNAN without hesitation at
the request of KUNNAN at any time.KUNNAN agrees that the cost

for the concerned assignment of the abovementioned trademarks shall

be compensated by KUNNAN.
4.
Superior agrees that the abovementioned trademarks when
requested by KUNNAN shall be clean and without any incumbency.
5.
Superior agrees that after the assignment of the
abovementioned trademarks, it shall have no right to reassign or
license the said trademarks to any other parties except KUNNAN.
[Emphasis supplied]

Prior to and during the pendency of the infringement and unfair

competition case before the RTC, KUNNAN filed with the now defunct
Bureau of Patents, Trademarks and Technology Transfer [19] separate
Petitions for the Cancellation of Registration Trademark Nos. 41032, SR
6663, 40326, 39254, 4730 and 49998, docketed as Inter Partes Cases Nos.
3709, 3710, 3811, 3812, 3813 and 3814, as well as Opposition to Application
Serial Nos. 84565 and 84566, docketed as Inter Partes Cases Nos. 4101 and
4102 (Consolidated Petitions for Cancellation) involving the KENNEX and
PRO KENNEX trademarks.[20] In essence, KUNNAN filed the Petition for
Cancellation and Opposition on the ground that SUPERIOR fraudulently
registered and appropriated the disputed trademarks; as mere distributor and not
as lawful owner, it obtained the registrations and assignments of the disputed
trademarks in violation of the terms of the Distributorship Agreement and
Sections 2-A and 17 of Republic Act No. 166, as amended.[21]
On December 3, 1991, upon the termination of its distributorship
agreement with SUPERIOR, KUNNAN appointed SPORTS CONCEPT as its
new distributor.Subsequently, KUNNAN also caused the publication of a Notice
and Warning in the Manila Bulletins January 29, 1993 issue, stating that (1) it is
the owner of the disputed trademarks; (2) it terminated its Distributorship
Agreement withSUPERIOR; and (3) it appointed SPORTS CONCEPT as its
exclusive distributor.This notice prompted SUPERIOR to file its Complaint for
Infringement of Trademark and Unfair Competition with Preliminary Injunction
against KUNNAN.[22]
The RTC Ruling
On March 31, 1998, the RTC issued its decision[23] holding KUNNAN liable for
trademark infringement and unfair competition. The RTC also issued a writ of

preliminary injunction enjoining KUNNAN and SPORTS CONCEPT from

using the disputed trademarks.
The RTC found that SUPERIOR sufficiently proved that it was the first
user and owner of the disputed trademarks in the Philippines, based on the
findings of the Director of Patents in Inter Partes Case No. 1709 and 1734 that
SUPERIOR was rightfully entitled to register the mark KENNEX as user and
owner thereof. It also considered the Whereas clause of the Distributorship
Agreement, which categorically stated that KUNNAN intends to acquire
ownership of [the] KENNEX trademark registered by SUPERIOR in
the Philippines. According to the RTC, this clause amounts to KUNNANs
express recognition of SUPERIORs ownership of the KENNEX trademarks.[24]
KUNNAN and SPORTS CONCEPT appealed the RTCs decision to the CA
where the appeal was docketed as CA-G.R. CV No. 60777. KUNNAN
maintained thatSUPERIOR was merely its distributor and could not be the
owner of the disputed trademarks. SUPERIOR, for its part, claimed ownership
based on its prior use and numerous valid registrations.

Intervening Developments:
The IPO and CA Rulings
In the course of its appeal to the CA, KUNNAN filed on December 19,
2003 a Manifestation and Motion praying that the decision of the Bureau of
Legal Affairs (BLA) of the Intellectual Property Office (IPO), dated
October 30, 2003, in the Consolidated Petitions for Cancellation be made of
record and be considered by the CA in resolving the case.[25] The BLA ruled
in this decision
In the case at bar, Petitioner-Opposer (Kunnan) has
overwhelmingly and convincingly established its rights to the mark
PRO KENNEX. It was proven that actual use by RespondentRegistrant is not in the concept of an owner but as a mere distributor
(Exhibits I, S to S-1, P and P-1 and Q and Q-2) and as enunciated in
the case of Crisanta Y. Gabriel vs. Dr. Jose R. Perez, 50 SCRA 406, a
mere distributor of a product bearing a trademark, even if permitted to
use said trademark has no right to and cannot register the said
trademark.

WHEREFORE, there being sufficient evidence to prove that the

Petitioner-Opposer (KUNNAN) is the prior user and owner of the
trademark PRO-KENNEX, the consolidated Petitions for
Cancellation
and
the
Notices
of
Opposition
are
herebyGRANTED. Consequently,
the
trademark PROKENNEX bearing Registration Nos. 41032, 40326, 39254, 4730,
49998 for the mark PRO-KENNEX issued in favor of Superior
Commercial Enterprises, Inc., herein Respondent-Registrant under
the
Principal
Register
and
SR
No.
6663
are
hereby CANCELLED. Accordingly, trademark application Nos.
84565 and 84566, likewise for the registration of the mark PROKENNEX are hereby REJECTED.
Let the file wrappers of PRO-KENNEX subject matter of these cases
be forwarded to the Administrative Finance and Human Resources
Development Services Bureau (AFHRDSB) for appropriate action in
accordance with this Decision and a copy thereof be furnished the
Bureau of Trademarks (BOT) for information and update of its
record.[26]

On February 4, 2005, KUNNAN again filed another Manifestation

requesting that the IPO Director Generals decision on appeal dated
December 8, 2004, denying SUPERIORs appeal, be given weight in the
disposition of the case.[27]The dispositive portion of the decision reads:[28]
WHEREFORE, premises considered, there is no cogent reason
to disturb Decision No. 2003-35 dated 30 October 2003 rendered by
the Director of the Bureau of Legal Affairs. Accordingly, the instant
appeal is DENIED and the appealed decision is hereby AFFIRMED.

We take judicial notice that SUPERIOR questioned the IPO Director Generals
ruling before the Court of Appeals on a petition for review under Rule 43 of the
Rules of Court, docketed as CAG.R. SP No. 87928 (Registration Cancellation
Case). On August 30, 2007, the CA rendered its decision
dismissing SUPERIORs petition.[29]On December 3, 2007, the CA decision was
declared final and executory and entry of judgment was accordingly
made. Hence, SUPERIORs registration of the disputed trademarks now
stands effectively cancelled.
The CA Ruling
On June 22, 2005, the CA issued its decision in CA-G.R. CV No. 60777,
reversing and setting aside the RTCs decision of March 31, 1998. [30] It

dismissedSUPERIORs Complaint for Infringement of Trademark and Unfair

Competition with Preliminary Injunction on the ground that SUPERIOR failed
to establish by preponderance of evidence its claim of ownership over the
KENNEX and PRO KENNEX trademarks. The CA found the Certificates of
Principal and Supplemental Registrations and the whereas clause of the
Distributorship Agreement insufficient to support SUPERIORs claim of
ownership over the disputed trademarks.
The CA stressed that SUPERIORs possession of the aforementioned
Certificates of Principal Registration does not conclusively establish its
ownership of the disputed trademarks as dominion over trademarks is not
acquired by the fact of registration alone;[31] at best, registration merely raises a
presumption of ownership that can be rebutted by contrary evidence. [32] The CA
further emphasized that the Certificates of Supplemental Registration issued in
SUPERIORs name do not even enjoy the presumption of ownership accorded to
registration in the principal register; it does not amount to a prima
facie evidence of the validity of registration or of the registrants exclusive right
to use the trademarks in connection with the goods, business, or services
specified in the certificate.[33]
In contrast with the failure of SUPERIORs evidence, the CA found that
KUNNAN presented sufficient evidence to rebut SUPERIORs presumption of
ownership over the trademarks. KUNNAN established that SUPERIOR, far
from being the rightful owner of the disputed trademarks, was merely
KUNNANs exclusive distributor. This conclusion was based on three pieces of
evidence that, to the CA, clearly established that SUPERIOR had no proprietary
interest over the disputed trademarks.
First, the CA found that the Distributorship Agreement, considered in its
entirety, positively confirmed that SUPERIOR sought to be the KUNNANs
exclusive distributor. The CA based this conclusion on the following provisions
of the Distributorship Agreement:
(1) that SUPERIOR was desirous of [being] appointed as the sole
distributor by KUNNAN in the territory of the Philippines;
(2) that KUNNAN will appoint the sole distributorship right
to Superior in thePhilippines; and

(3) that no third parties will be permitted to supply KENNEX

PRODUCTS in thePhilippines except only to Superior.

The CA thus emphasized that the RTC erred in unduly relying on the first
whereas clause, which states that KUNNAN intends to acquire ownership of
[the] KENNEX trademark registered by SUPERIOR in the Philippines without
considering the entirety of the Distributorship Agreement indicating that
SUPERIOR had been merely appointed by KUNNAN as its distributor.
Second, the CA also noted that SUPERIOR made the express undertaking
in the Assignment Agreement to acknowledge that KUNNAN is still the real and
truthful owner of the [PRO KENNEX] trademarks, and that it shall agree that it
will not use the right of the abovementioned trademarks to do anything which is
unfavourable or harmful to KUNNAN. To the CA, these provisions are clearly
inconsistent withSUPERIORs claim of ownership of the disputed trademarks.
The CA also observed that although the Assignment Agreement was a private
document, its authenticity and due execution was proven by the similarity of
Mr. Tan Bon Diongs signature in the Distributorship Agreement and the
Assignment Agreement.
Third, the CA also took note of SUPERIORs Letter dated November 12,
1986 addressed to Brig. Gen. Jose Almonte, identifying itself as the sole and
exclusive licensee and distributor in the Philippines of all its KENNEX and
PRO-KENNEX products. Attached to the letter was an agreement with
KUNNAN, identifying the latter as the foreign manufacturer of all KENNEX
products. The CA concluded that in this letter, SUPERIOR acknowledged its
status as a distributor in its dealings with KUNNAN, and even in its transactions
with third persons.
Based on these reasons, the CA ruled that SUPERIOR was a mere
distributor and had no right to the registration of the disputed trademarks since
the right to register a trademark is based on ownership. Citing Section 4 of
Republic Act No. 166[34] and established jurisprudence,[35] the CA held
that SUPERIOR as an exclusive distributor did not acquire any proprietary
interest in the principals (KUNNANs) trademark.
The CA denied SUPERIORs motion for reconsideration for lack of merit in its
Resolution dated October 4, 2005.
THE PETITION

In the present petition, SUPERIOR raises the following issues:

I.
WHETHER OR NOT THE COURT OF APPEALS ERRED IN
HOLDING THAT PETITIONER SUPERIOR IS NOT THE TRUE
AND RIGHTFUL OWNER OF THE TRADEMARKS KENNEX
AND PRO-KENNEX IN THE PHILIPPINES
II.
WHETHER OR NOT THE HONORABLE COURT OF APPEALS
ERRED IN HOLDING THAT PETITIONER SUPERIOR IS A
MERE DISTRIBUTOR OF RESPONDENT KUNNAN IN
THE PHILIPPINES
III.
WHETHER OR NOT THE HONORABLE COURT OF APPEALS
ERRED IN REVERSING AND SETTING ASIDE THE
DECISION OF THE REGIONAL TRIAL COURT OF QUEZON
CITY IN CIVIL CASE NO. Q-93-14888, LIFTING THE
PRELIMINARY
INJUNCTION
ISSUED
AGAINST
RESPONDENTS KUNNAN AND SPORTS CONCEPT AND
DISMISSING THE COMPLAINT FOR INFRINGEMENT OF
TRADEMARK AND UNFAIR COMPETITION WITH
PRELIMINARY INJUNCTION

THE COURTS RULING

We do not find the petition meritorious.
On the Issue of Trademark Infringement
We first consider the effect of the final and executory decision in the
Registration Cancellation Case on the present case. This decision rendered after the CA decision for trademark infringement and unfair
competition in CA-G.R. CV No. 60777 (root of the present case) - states:

As to whether respondent Kunnan was able to overcome the

presumption of ownership in favor of Superior, the former sufficiently
established the fraudulent registration of the questioned trademarks
by Superior. The Certificates of Registration No. SR-4730
(Supplemental Register) and 33487 (Principal Register) for the
KENNEX
trademark
were
fraudulently
obtained
by
petitioner Superior. Even before PROKENNEX products were
imported by Superior into the Philippines, the same already enjoyed
popularity in various countries and had been distributed worldwide,
particularly among the sports and tennis enthusiasts since
1976. Riding on the said popularity, Superior caused the registration
thereof in the Philippinesunder its name when it knew fully well that
it did not own nor did it manufacture the PROKENNEX
products. Superior claimed ownership of the subject marks and failed
to disclose in its application with the IPO that it was merely a
distributor of KENNEX and PROKENNEX products in
the Philippines.
While Superior accepted the obligation to assign Certificates of
Registration Nos. SR-4730 and 33487 to Kunnan in exchange for the
appointment
by
the
latter
as
its
exclusive
distributor, Superior however breached its obligation and failed to
assign the same to Kunnan. In a letter dated 13 February
1987, Superior, through Mr. Tan Bon Diong, misrepresented to
Kunnan that the latter cannot own trademarks in thePhilippines. Thus,
Kunnan was misled into assigning to Superior its (Kunnans) own
application for the disputed trademarks. In the same assignment
document, however.Superior was bound to ensure that the
PROKENNEX trademarks under Registration Nos. 40326, 39254,
and 49998 shall be returned to Kunnan clean and without any
incumbency when requested by the latter.
In fine, We see no error in the decision of the Director General of the
IPO which affirmed the decision of the Director of the Bureau of
Legal Affairs canceling the registration of the questioned marks in the
name of petitioner Superior and denying its new application for
registration, upon a finding that Superior is not the rightful owner of
the subject marks.
WHEREFORE, the foregoing considered, the petition is
DISMISSED.
The CA decided that the registration of the KENNEX and PRO
KENNEX trademarks should be cancelled because SUPERIOR was not the
owner of, and could not in the first place have validly registered these

trademarks. Thus, as of the finality of the CA decision on December 3, 2007,

these trademark registrations were effectively cancelled and SUPERIOR was no
longer the registrant of the disputed trademarks.
Section 22 of Republic Act No. 166, as amended (RA 166), [36] the law
applicable to this case, defines trademark infringement as follows:
Section 22. Infringement, what constitutes. Any person who
[1] shall use,
without
the
consent
of
the registrant, any reproduction, counterfeit, copy or colorable
imitation of any registered mark or trade-name in connection
with the sale, offering for sale, or advertising of any goods, business
or services on or in connection withwhich such use is likely to cause
confusion or mistake or to deceive purchasers or others as to the
source or origin of such goods or services, or identity of such
business; or [2] reproduce, counterfeit, copy, or colorably
imitate any such mark or trade-name and apply such reproduction,
counterfeit, copy, or colorable imitation to labels, signs, prints,
packages, wrappers, receptacles or advertisements intended to be
used upon or in connection with such goods, business or
services, shall be liable to a civil action by the registrant for any or all
of the remedies herein provided. [Emphasis supplied]

Essentially, Section 22 of RA 166 states that only a registrant of a mark can file
a case for infringement. Corollary to this, Section 19 of RA 166 provides that
any right conferred upon the registrant under the provisions of RA
166[37] terminates when the judgment or order of cancellation has become
final, viz:
Section 19. Cancellation of registration. - If the Director finds that a case for
cancellation has been made out he shall order the cancellation of the
registration. The order shall not become effective until the period for appeal
has elapsed, or if appeal is taken, until the judgment on appeal becomes
final. When the order or judgment becomes final, any right conferred by
such registration upon the registrant or any person in interest of record
shall terminate. Notice of cancellation shall be published in the Official
Gazette. [Emphasis supplied.]

Thus, we have previously held that the cancellation of registration of a

trademark has the effect of depriving the registrant of protection from
infringement from the moment judgment or order of cancellation has become
final.[38]

In the present case, by operation of law, specifically Section 19 of RA

166, the trademark infringement aspect of SUPERIORs case has been rendered
moot and academic in view of the finality of the decision in the Registration
Cancellation Case.In short, SUPERIOR is left without any cause of action for
trademark infringement since the cancellation of registration of a trademark
deprived it of protection from infringement from the moment judgment or order
of cancellation became final. To be sure, in a trademark infringement, title to the
trademark is indispensable to a valid cause of action and such title is shown by
its certificate of registration.[39] With its certificates of registration over the
disputed trademarks effectively cancelled with finality, SUPERIORs case for
trademark infringement lost its legal basis and no longer presented a valid cause
of action.
Even assuming that SUPERIORs case for trademark infringement had not been
rendered moot and academic, there can be no infringement committed by
KUNNAN who was adjudged with finality to be the rightful owner of the
disputed trademarks in the Registration Cancellation Case. Even prior to the
cancellation of the registration of the disputed trademarks, SUPERIOR as a
mere distributor and not the owner cannot assert any protection from trademark
infringement as it had no right in the first place to the registration of the
disputed trademarks. In fact, jurisprudence holds that in the absence of any
inequitable conduct on the part of the manufacturer, an exclusive distributor
who employs the trademark of the manufacturer does not acquire proprietary
rights of the manufacturer, and a registration of the trademark by the
distributor as such belongs to the manufacturer, provided the fiduciary
relationship does not terminate before application for registration is filed.
[40]
Thus, the CA in the Registration Cancellation Case correctly held:
As a mere distributor, petitioner Superior undoubtedly had no
right to register the questioned mark in its name. Well-entrenched in
our jurisdiction is the rule that the right to register a trademark should
be 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. An exclusive distributor does
not acquire any proprietary interest in the principals trademark and
cannot register it in his own name unless it is has been validly
assigned to him.

In
addition,
we
also
note
that
the
doctrine
of res
judicata bars SUPERIORs present case for trademark infringement. The
doctrine of res judicata embraces two (2) concepts: the first is "bar by prior
judgment" under paragraph (b) of Rule 39, Section 47, and the second is
"conclusiveness of judgment" under paragraph (c) thereof.
In the present case, the second concept conclusiveness of judgment
applies.Under the concept of res judicata by conclusiveness of judgment, a
final judgment or decree on the merits by a court of competent jurisdiction is
conclusive of the rights of the parties or their privies in all later suits on points
and matters determined in the former suit. [41] Stated differently, facts and
issues actually and directly resolved in a former suit cannot again be raised in
any future case between the same parties, even if the latter suit may involve a
different cause of action.[42] This second branch of the principle of res
judicata bars the re-litigation of particular facts or issues in another litigation
between the same parties on a different claim or cause of action.[43]
Because the Registration Cancellation Case and the present case involve
the same parties, litigating with respect to and disputing the same trademarks,
we are bound to examine how one case would affect the other. In the present
case, even if the causes of action of the Registration Cancellation Case (the
cancellation of trademark registration) differs from that of the present case (the
improper or unauthorized use of trademarks), the final judgment in the
Registration Cancellation Case is nevertheless conclusive on the particular facts
and issues that are determinative of the present case.
To establish trademark infringement, the following elements must be
proven: (1) the validity of plaintiffs mark; (2) the plaintiffs ownership of the
mark; and (3)the use of the mark or its colorable imitation by the alleged
infringer results in likelihood of confusion.[44]
Based on these elements, we find it immediately obvious that the second
element the plaintiffs ownership of the mark was what the Registration
Cancellation Case decided with finality. On this element depended the validity
of the registrations that, on their own, only gave rise to the presumption of, but
was not conclusive on, the issue of ownership.[45]

In no uncertain terms, the appellate court in the Registration

Cancellation Case ruled that SUPERIOR was a mere distributor and could
not have been the owner, and was thus an invalid registrant of the disputed
trademarks.Significantly, these are the exact terms of the ruling the CA arrived
at in the present petition now under our review. Thus, whether with one or the
other, the ruling on the issue of ownership of the trademarks is the same. Given,
however, the final and executory ruling in the Registration Cancellation Case on
the issue of ownership that binds us and the parties, any further discussion and
review of the issue of ownership although the current CA ruling is legally
correct and can stand on its own merits becomes a pointless academic
discussion.
On the Issue of Unfair Competition
Our review of the records shows that the neither the RTC nor the CA
made any factual findings with respect to the issue of unfair competition. In its
Complaint,SUPERIOR alleged that:[46]
17. In January 1993, the plaintiff learned that the defendant Kunnan
Enterprises, Ltd., is intending to appoint the defendant Sports
Concept and Distributors, Inc. as its alleged distributor for sportswear
and sporting goods bearing the trademark PRO-KENNEX. For this
reason, on January 20, 1993, the plaintiff, through counsel, wrote the
defendant Sports Concept and Distributors Inc. advising said
defendant that the trademark PRO-KENNEX was registered and
owned by the plaintiff herein.
18. The above information was affirmed by an announcement made
by the defendants in The Manila Bulletin issue of January 29, 1993,
informing the public that defendant Kunnan Enterprises, Ltd. has
appointed the defendant Sports Concept and Distributors, Inc. as its
alleged distributor of sportswear and sporting goods and equipment
bearing the trademarks KENNEX and PRO-KENNEX which
trademarks are owned by and registered in the name of plaintiff
herein as alleged hereinabove.
xxxx
27. The acts of defendants, as previously complained herein, were
designed to and are of the nature so as to create confusion with the
commercial activities of plaintiff in the Philippines and is liable to
mislead the public as to the nature and suitability for their purposes of

plaintiffs business and the defendants acts are likely to discredit the
commercial activities and future growth of plaintiffs business.

From jurisprudence, unfair competition has been defined as the passing

off (or palming off) or attempting to pass off upon the public of the goods or
business of one person as the goods or business of another with the end and
probable effect of deceiving the public. The essential elements of unfair
competition[47] are (1) confusing similarity in the general appearance of the
goods; and (2) intent to deceive the public and defraud a competitor.[48]
Jurisprudence also formulated the following true test of unfair
competition:whether the acts of the defendant have the intent of deceiving or are
calculated to deceive the ordinary buyer making his purchases under the
ordinary conditions of the particular trade to which the controversy relates. One
of the essential requisites in an action to restrain unfair competition is proof of
fraud; the intent to deceive, actual or probable must be shown before the right to
recover can exist.[49]
In the present case, no evidence exists showing that KUNNAN ever
attempted to pass off the goods it sold (i.e. sportswear, sporting goods and
equipment) as those of SUPERIOR. In addition, there is no evidence of bad
faith or fraud imputable to KUNNAN in using the disputed trademarks.
Specifically, SUPERIOR failed to adduce any evidence to show that KUNNAN
by the above-cited acts intended to deceive the public as to the identity of the
goods sold or of the manufacturer of the goods sold. In McDonalds Corporation
v. L.C. Big Mak Burger, Inc.,[50] we held that there can be trademark
infringement without unfair competition such as when the infringer discloses
on the labels containing the mark that he manufactures the goods, thus
preventing the public from being deceived that the goods originate from the
trademark owner. In this case, no issue of confusion arises because the same
manufactured products are sold; only the ownership of the trademarks is at
issue. Furthermore, KUNNANs January 29, 1993 notice by its terms prevents
the public from being deceived that the goods originated from SUPERIOR since
the notice clearly indicated that KUNNAN is the manufacturer of the goods
bearing the trademarks KENNEX and PRO KENNEX. This notice states in full:
[51]

NOTICE AND WARNING

Kunnan Enterprises Ltd. is the owner and first user of the

internationally-renowned trademarks KENNEX and PRO KENNEX
for sportswear and sporting goods and equipment. Kunnan
Enterprises Ltd. has registered the trademarks KENNEX and PRO
KENNEX in the industrial property offices of at least 31 countries
worldwide where KUNNAN Enterprises Ltd. has been selling its
sportswear and sporting goods and equipment bearing the KENNEX
and PRO KENNEX trademarks.
Kunnan Enterprises Ltd. further informs the public that it had
terminated its Distributorship Agreement with Superior Commercial
Enterprises, Inc. on December 31, 1991. As a result, Superior
Commercial Enterprises, Inc. is no longer authorized to sell
sportswear and sporting goods and equipment manufactured by
Kunnan Enterprises Ltd. and bearing the trademarks KENNEX
and PRO KENNEX.
xxxx
In its place, KUNNAN has appointed SPORTS CONCEPT
AND DISTRIBUTORS, INC. as its exclusive Philippine distributor
of sportswear and sporting goods and equipment bearing the
trademarks KENNEX and PRO KENNEX. The public is advised to
buy sporting goods and equipment bearing these trademarks only
from SPORTS CONCEPT AND DISTRIBUTORS, INC. to
ensure that the products they are buying are manufactured by
Kunnan Enterprises Ltd. [Emphasis supplied.]

Finally, with the established ruling that KUNNAN is the rightful owner of
the trademarks of the goods that SUPERIOR asserts are being unfairly sold by
KUNNAN under trademarks registered in SUPERIORs name, the latter is left
with no effective right to make a claim. In other words, with the CAs final
ruling in the Registration Cancellation Case, SUPERIORs case no longer
presents a valid cause of action. For this reason, the unfair competition aspect of
the SUPERIORs case likewise falls.
WHEREFORE, premises considered, we DENY Superior Commercial
Enterprises, Inc.s petition for review on certiorari for lack of merit. Cost against
petitioner Superior Commercial Enterprises, Inc.
SO ORDERED.

G.R. No. 194307

November 20, 2013

BIRKENSTOCK ORTHOPAEDIE GMBH AND CO. KG (formerly BIRKENSTOCK

ORTHOPAEDIE GMBH),Petitioner,
vs.
PHILIPPINE SHOE EXPO MARKETING CORPORATION, Respondent.
DECISION
PERLAS-BERNABE, J.:
Assailed in this Petition for Review on Certiorari are the Court of Appeals (CA) Decision dated
June 25, 2010 and Resolution dated October 27, 2010 in CA-G.R. SP No. 112278 which
reversed and set aside the Intellectual Property Office (IPO) Director Generals Decision dated
December 22, 2009 that allowed the registration of various trademarks in favor of petitioner
Birkenstock Orthopaedie GmbH & Co. KG.
1

The Facts
Petitioner, a corporation duly organized and existing under the laws of Germany, applied for
various trademark registrations before the IPO, namely: (a) "BIRKENSTOCK" under Trademark
Application Serial No. (TASN) 4-1994-091508 for goods falling under Class 25 of the
International Classification of Goods and Services (Nice Classification) with filing date of March
11, 1994; (b) "BIRKENSTOCK BAD HONNEF -RHEIN & DEVICE COMPRISING OF ROUND
COMPANY SEAL AND REPRESENTATION OF A FOOT, CROSS AND SUNBEA M" under TASN
4-1994-091509 for goods falling under Class 25 of the Nice Classification with filing date of
March 11, 1994; and (c) "BIRKENSTOCK BAD HONNEF-RHEIN & DEVICE COMPRISING OF
ROUND COMPANY SEAL AND REPRESENTATION OF A FOOT, CROSS AND SUNBEAM"
under TASN 4-1994-095043 for goods falling under Class 10 of the Nice Classification with filing
date of September 5, 1994 (subject applications).
5

However, registration proceedings of the subject applications were suspended in view of an

existing registration of the mark "BIRKENSTOCK AND DEVICE" under Registration No. 56334
dated October 21, 1993 (Registration No. 56334) in the name of Shoe Town International and
Industrial Corporation, the predecessor-in-interest of respondent Philippine Shoe Expo Marketing
Corporation. In this regard, on May 27, 1997 petitioner filed a petition for cancellation of
Registration No. 56334 on the ground that it is the lawful and rightful owner of the Birkenstock
marks (Cancellation Case). During its pendency, however, respondent and/or its predecessor-ininterest 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 in the cancellation of
such mark. Accordingly, the cancellation case was dismissed for being moot and academic.
6

10

The aforesaid cancellation of Registration No. 56334 paved the way for the publication of the
subject applications in the IPO e-Gazette on February 2, 2007. In response, respondent filed
three (3) separate verified notices of oppositions to the subject applications docketed as Inter
Partes Case Nos. 14-2007-00108, 14-2007-00115, and 14-2007-00116, claiming, inter alia, that:
(a) it, together with its predecessor-in-interest, has been using Birkenstock marks in the
Philippines for more than 16 years through the mark "BIRKENSTOCK AND DEVICE"; (b) the
marks covered by the subject applications are identical to the one covered by Registration No.
56334 and thus, petitioner has no right to the registration of such marks; (c) on November 15,
11

12

1991, respondents predecessor-in-interest likewise obtained a Certificate of Copyright

Registration No. 0-11193 for the word "BIRKENSTOCK" ; (d) while respondent and its
predecessor-in-interest failed to file the 10th Yea r DAU, it continued the use of "BIRKENSTOCK
AND DEVICE" in lawful commerce; and (e) to record its continued ownership and exclusive right
to use the "BIRKENSTOCK" marks, it has filed TASN 4-2006-010273 as a " re-application " of its
old registration, Registration No. 56334. On November 13, 2007, the Bureau of Legal Affairs
(BLA) of the IPO issued Order No. 2007-2051 consolidating the aforesaid inter partes cases
(Consolidated Opposition Cases).
13

14

The Ruling of the BLA

In its Decision dated May 28, 2008, the BLA of the IPO sustained respondents opposition, thus,
ordering the rejection of the subject applications. It ruled that the competing marks of the parties
are confusingly similar since they contained the word "BIRKENSTOCK" and are used on the
same and related goods. It found respondent and its predecessor-in-interest as the prior user
and adopter of "BIRKENSTOCK" in the Philippines, while on the other hand, petitioner failed to
present evidence of actual use in the trade and business in this country. It opined that while
Registration No. 56334 was cancelled, it does not follow that prior right over the mark was lost,
as proof of continuous and uninterrupted use in trade and business in the Philippines was
presented. The BLA likewise opined that petitioners marks are not well -known in the Philippines
and internationally and that the various certificates of registration submitted by petitioners were
all photocopies and, therefore, not admissible as evidence.
15

16

Aggrieved, petitioner appealed to the IPO Director General.

The Ruling of the IPO Director General
In his Decision dated December 22, 2009, the IPO Director General reversed and set aside the
ruling of the BLA, thus allowing the registration of the subject applications. He held that with the
cancellation of Registration No. 56334 for respondents failure to file the 10th Year DAU, there is
no more reason to reject the subject applications on the ground of prior registration by another
proprietor. More importantly, he found that the evidence presented proved that petitioner is the
true and lawful owner and prior user of "BIRKENSTOCK" marks and thus, entitled to the
registration of the marks covered by the subject applications. The IPO Director General further
held that respondents copyright for the word "BIRKENSTOCK" is of no moment since copyright
and trademark are different forms of intellectual property that cannot be interchanged.
17

18

19

20

Finding the IPO Director Generals reversal of the BLA unacceptable, respondent filed a petition
for review with the CA.
Ruling of the CA
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. It disallowed the registration of the subject applications
on the ground that the marks covered by such applications "are confusingly similar, if not outright
identical" with respondents mark. It equally held that respondents failure to file the 10th Year
DAU for Registration No. 56334 "did not deprive petitioner of its ownership of the
BIRKENSTOCK mark since it has submitted substantial evidence showing its continued use,
promotion and advertisement thereof up to the present." It opined that when respondents
predecessor-in-interest adopted and started its actual use of "BIRKENSTOCK," there is neither
21

22

23

an existing registration nor a pending application for the same and thus, it cannot be said that it
acted in bad faith in adopting and starting the use of such mark. Finally, the CA agreed with
respondent that petitioners documentary evidence, being mere photocopies, were submitted in
violation of Section 8.1 of Office Order No. 79, Series of 2005 (Rules on Inter Partes
Proceedings).
24

Dissatisfied, petitioner filed a Motion for Reconsideration dated July 20, 2010, which was,
however, denied in a Resolution dated October 27, 2010. Hence, this petition.
25

26

27

Issues Before the Court

The primordial issue raised for the Courts resolution is whether or not the subject marks should
be allowed registration in the name of petitioner.
The Courts Ruling
The petition is meritorious.
A. Admissibility of Petitioners Documentary Evidence.
In its Comment dated April 29, 2011, respondent asserts that the documentary evidence
submitted by petitioner in the Consolidated Opposition Cases, which are mere photocopies, are
violative of Section 8.1 of the Rules on Inter Partes Proceedings, which requires certified true
copies of documents and evidence presented by parties in lieu of originals. As such, they should
be deemed inadmissible.
28

29

The Court is not convinced.

It is well-settled 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. Technicalities should never be used to defeat the substantive rights of the
other party. Every party-litigant must be afforded the amplest opportunity for the proper and just
determination of his cause, free from the constraints of technicalities." "Indeed, the primordial
policy is a faithful observance of [procedural rules], and their relaxation or suspension should
only be for persuasive reasons and only in meritorious cases, to relieve a litigant of an injustice
not commensurate with the degree of his thoughtlessness in not complying with the procedure
prescribed." This is especially true with quasi-judicial and administrative bodies, such as the
IPO, which are not bound by technical rules of procedure. On this score, Section 5 of the Rules
on Inter Partes Proceedings provides:
30

31

32

Sec. 5. Rules of Procedure to be followed in the conduct of hearing of Inter Partes cases. The
rules of procedure herein contained primarily apply in the conduct of hearing of Inter Partes
cases. The Rules of Court may be applied suppletorily. 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 give the
Bureau the greatest possibility to focus on the contentious issues before it. (Emphasis and
underscoring supplied)

In the case at bar, while petitioner submitted mere photocopies as documentary evidence in the
Consolidated Opposition Cases, it should be noted that the IPO had already obtained the
originals of such documentary evidence in the related Cancellation Case earlier filed before it.
Under this circumstance and the merits of the instant case as will be subsequently discussed, the
Court holds that the IPO Director Generals relaxation of procedure was a valid exercise of his
discretion in the interest of substantial justice.
33

Having settled the foregoing procedural matter, the Court now proceeds to resolve the
substantive issues.
B. Registration and ownership of "BIRKENSTOCK."
Republic Act No. (RA) 166, the governing law for Registration No. 56334, requires the filing of a
DAU on specified periods, to wit:
34

35

Section 12. Duration. Each certificate of registration shall remain in force for twenty years:
Provided, That registrations under the provisions of this Act shall be cancelled by the Director,
unless within one year following the fifth, tenth and fifteenth anniversaries of the date of issue of
the certificate of registration, the registrant shall file 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 not due to any intention to abandon the same, and pay the
required fee.
The Director shall notify the registrant who files the above- prescribed affidavits of his
acceptance or refusal thereof and, if a refusal, the reasons therefor. (Emphasis and underscoring
supplied)
The aforementioned provision clearly reveals that failure to file the DAU within the requisite
period results in the automatic cancellation of registration of a trademark. In turn, such failure is
tantamount to the abandonment or withdrawal of any right or interest the registrant has over his
trademark.
36

In this case, 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 withdrawn any right or interest over the mark "BIRKENSTOCK."
Neither can it invoke Section 236 of the IP Code which pertains to intellectual property rights
obtained under previous intellectual property laws, e.g., RA 166, precisely because it already lost
any right or interest over the said mark.
37

Besides, petitioner has duly established its true and lawful ownership of the mark
"BIRKENSTOCK."
Under Section 2 of RA 166, which is also the law governing the subject applications, in order to
register a trademark, one must be the owner thereof and must have actually used the mark in
commerce in the Philippines for two (2) months prior to the application for registration. Section 2A of the same law sets out to define how one goes about acquiring ownership thereof. Under
the same section, it is clear that actual use in commerce is also the test of ownership but the
provision went further by saying that the mark must not have been so appropriated by another.
Significantly, to be an owner, Section 2-A does not require that the actual use of a trademark
must be within the Philippines. Thus, under RA 166, one may be an owner of a mark due to its
38

39

actual use but may not yet have the right to register such ownership here due to the owners
failure to use the same in the Philippines for two (2) months prior to registration.
40

It must be emphasized that registration of a trademark, by itself, is not a mode of acquiring

ownership. 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, of the registrants ownership of the trademark, and of the exclusive right to the use
thereof. Such presumption, just like the presumptive regularity in the performance of official
functions, is rebuttable and must give way to evidence to the contrary.
1wphi1

41

Clearly, it is not the application or registration of a trademark that vests ownership thereof, but it
is the ownership of a trademark that confers the right to register the same. A trademark is an
industrial property over which its owner is entitled to property rights which cannot be appropriated
by unscrupulous entities that, in one way or another, happen to register such trademark ahead of
its true and lawful owner. The presumption of ownership accorded to a registrant must then
necessarily yield to superior evidence of actual and real ownership of a trademark.
The Courts pronouncement in Berris Agricultural Co., Inc. v. Abyadang is instructive on this
point:
42

The ownership of a trademark is acquired by its registration and its actual use by the
manufacturer or distributor of the goods made available to the purchasing public. x x x A
certificate of registration of a mark, once issued, constitutes prima facie evidence of the validity of
the registration, of the registrants ownership of the mark, and of the registrants exclusive right to
use the same in connection with the goods or services and those that are related thereto
specified in the certificate. x x x In other words, the prima facie presumption brought about by the
registration of a mark may be challenged and overcome in an appropriate action, x x x by
evidence of prior use by another person, i.e. , it will controvert a claim of legal appropriation or of
ownership based on registration by a subsequent user. This is because a trademark is a creation
of use and belongs to one who first used it in trade or commerce. (Emphasis and underscoring
supplied)
43

In the instant case, petitioner was able to establish that it is the owner of the mark
"BIRKENSTOCK." It submitted evidence relating to the origin and history of "BIRKENSTOCK"
and its use in commerce long before respondent was able to register the same here in the
Philippines. It has sufficiently proven that "BIRKENSTOCK" was first adopted in Europe in 1774
by its inventor, Johann Birkenstock, a shoemaker, on his line of quality footwear and thereafter,
numerous generations of his kin continuously engaged in the manufacture and sale of shoes and
sandals bearing the mark "BIRKENSTOCK" until it became the entity now known as the
petitioner. Petitioner also submitted various certificates of registration of the mark
"BIRKENSTOCK" in various countries and that it has used such mark in different countries
worldwide, including the Philippines.
44

On the other hand, aside from Registration No. 56334 which had been cancelled, respondent
only presented copies of sales invoices and advertisements, which are not conclusive evidence
of its claim of ownership of the mark "BIRKENSTOCK" as these merely show the transactions
made by respondent involving the same.
45

In view of the foregoing circumstances, the Court finds the petitioner to be the true and lawful
owner of the mark "BIRKENSTOCK" and entitled to its registration, and that respondent was in

bad faith in having it registered in its name. In this regard, the Court quotes with approval the
words of the IPO Director General, viz.:
The facts and evidence fail to show that [respondent] was in good faith in using and in registering
the mark BIRKENSTOCK. BIRKENSTOCK, obviously of German origin, is a highly distinct and
arbitrary mark. It is very remote that two persons did coin the same or identical marks. To come
up with a highly distinct and uncommon mark previously appropriated by another, for use in the
same line of business, and without any plausible explanation, is incredible. The field from which a
person may select a trademark is practically unlimited. As in all other cases of colorable
imitations, the unanswered riddle is why, of the millions of terms and combinations of letters and
designs available, [respondent] had to come up with a mark identical or so closely similar to the
[petitioners] if there was no intent to take advantage of the goodwill generated by the
[petitioners] mark. Being on the same line of business, it is highly probable that the [respondent]
knew of the existence of BIRKENSTOCK and its use by the [petitioner], before [respondent]
appropriated the same mark and had it registered in its name.
46

WHEREFORE, the petition is GRANTED. The Decision dated June 25, 2010 and Resolution
dated October 27, 2010 of the Court of Appeals in CA-G.R. SP No. 112278 are REVERSED and
SET ASIDE. Accordingly, the Decision dated December 22, 2009 of the IPO Director General is
hereby REINSTATED.
SO ORDERED.

Republic of the Philippines

Supreme Court
Manila

SECOND DIVISION

BERRIS AGRICULTURAL

G.R. No. 183404

CO., INC.,
Petitioner,

Present:

VELASCO, JR., J.,*

NACHURA,**
Acting Chairperson,

- versus -

LEONARDO-DE CASTRO,***
BRION,**** and
MENDOZA, JJ.

NORVY ABYADANG,

Promulgated:

Respondent.
October 13, 2010

x------------------------------------------------------------------------------------x

DECISION

NACHURA, J.:

This petition for review[1] on certiorari under Rule 45 of the Rules of Court
seeks the reversal of the Decision dated April 14, 2008[2] and the Resolution
dated June 18, 2008[3] of the Court of Appeals (CA) in CA-G.R. SP No. 99928.

The antecedents

On January 16, 2004, respondent Norvy A. Abyadang (Abyadang), proprietor of

NS Northern Organic Fertilizer, with address at No. 43 Lower QM, Baguio City,
filed with the Intellectual Property Office (IPO) a trademark application for the
mark NS D-10 PLUS for use in connection with Fungicide (Class 5) with active
ingredient 80% Mancozeb. The application, under Application Serial No. 42004-00450, was given due course and was published in the IPO e-Gazette for
opposition on July 28, 2005.

On August 17, 2005, petitioner Berris Agricultural Co., Inc. (Berris), with
business address in Barangay Masiit, Calauan, Laguna, filed with the IPO
Bureau of Legal Affairs (IPO-BLA) a Verified Notice of Opposition [4] against
the mark under application allegedly because NS D-10 PLUS is similar and/or
confusingly similar to its registered trademark D-10 80 WP, also used for
Fungicide (Class 5) with active ingredient 80% Mancozeb. The opposition was
docketed as IPC No. 14-2005-00099.

After an exchange of pleadings, on April 28, 2006, Director Estrellita BeltranAbelardo (Director Abelardo) of the IPO-BLA issued Decision No. 200624[5] (BLA decision), the dispositive portion of which reads

WHEREFORE, viewed in the light of all the foregoing, this

Bureau finds and so holds that Respondent-Applicants mark NS D-10
PLUS is confusingly similar to the Opposers mark and as such, the
opposition
is
hereby SUSTAINED.Consequently, trademark
application bearing Serial No. 4-2004-00450 for the markNS D-10
PLUS filed on January 16, 2004 by Norvy A. Ab[yada]ng covering
the goods fungicide under Class 5 of the International Classification
of goods is, as it is hereby, REJECTED.

Let the filewrapper of the trademark NS D-10 PLUS subject

matter under consideration be forwarded to the Administrative,
Financial and Human Resources Development Services Bureau
(AFHRDSB) for appropriate action in accordance with this Order
with a copy to be furnished the Bureau of Trademark (BOT) for
information and to update its records.

SO ORDERED.[6]

Abyadang filed a motion for reconsideration, and Berris, in turn, filed its
opposition to the motion.

On August 2, 2006, Director Abelardo issued Resolution No. 2006-09(D)

[7]
(BLA resolution), denying the motion for reconsideration and disposing as
follows

IN VIEW OF THE FOREGOING, the Motion for

Reconsideration
filed
by
the
Respondent-Applicant
is
hereby DENIED FOR LACK OF MERIT.Consequently, Decision
No. 2006-24 dated April 28, 2006 STANDS.

Let the filewrapper of the trademark NS D-10 PLUS subject

matter under consideration be forwarded to the Bureau of Trademarks
for appropriate action in accordance with this Resolution.

SO ORDERED.[8]

Aggrieved, Abyadang filed an appeal on August 22, 2006 with the Office of the
Director General, Intellectual Property Philippines (IPPDG), docketed as
Appeal No. 14-06-13.

With the filing of the parties respective memoranda, Director General Adrian S.
Cristobal, Jr. of the IPPDG rendered a decision dated July 20, 2007, [9] ruling as
follows

Wherefore, premises considered[,] the appeal is hereby

DENIED.Accordingly, the appealed Decision of the Director is
hereby AFFIRMED.

Let a copy of this Decision as well as the trademark application

and records be furnished and returned to the Director of Bureau of
Legal Affairs for appropriate action. Further, let also the Directors of
the Bureau of Trademarks, the Administrative, Financial and Human
Resources Development Services Bureau, and the library of the
Documentation, Information and Technology Transfer Bureau be
furnished a copy of this Decision for information, guidance, and
records purposes.

SO ORDERED.[10]

Undeterred, Abyadang filed a petition for review[11] before the CA.

In its Decision dated April 14, 2008, the CA reversed the IPPDG decision. It
held

In sum, the petition should be granted due to the following

reasons: 1)petitioners mark NS D-10 PLUS is not confusingly similar
with respondents trademark D-10 80 WP; 2) respondent failed to
establish its ownership of the mark D-10 80 WP and 3) respondents
trademark registration for D-10 80 WP may be cancelled in the
present case to avoid multiplicity of suits.

WHEREFORE, the petition is GRANTED. The decision

dated July 20, 2007 of the IPO Director General in Appeal No. 14-0613 (IPC No. 14-2005-00099) is REVERSED and SET ASIDE, and a
new one is entered giving due course to petitioners application for
registration of the mark NS D-10 PLUS, and canceling respondents
trademark registration for D-10 80 WP.

SO ORDERED.[12]

Berris filed a Motion for Reconsideration, but in its June 18, 2008 Resolution,
the CA denied the motion for lack of merit. Hence, this petition anchored on the
following arguments

I.

The Honorable Court of Appeals finding that there exists no

confusing similarity between Petitioners and respondents
marks is based on misapprehension of facts, surmise and
conjecture and not in accord with the Intellectual Property
Code and applicable Decisions of this Honorable Court
[Supreme Court].

II.

The Honorable Court of Appeals Decision reversing and

setting aside the technical findings of the Intellectual Property
Office even without a finding or, at the very least, an allegation
of grave abuse of discretion on the part of said agency is not in
accord with law and earlier pronouncements of this Honorable
Court [Supreme Court].

III.

The Honorable Court of Appeals Decision ordering the

cancellation of herein Petitioners duly registered and validly
existing trademark in the absence of a properly filed Petition
for Cancellation before the Intellectual Property Office is not
in accord with the Intellectual Property Code and applicable
Decisions of this Honorable Court [Supreme Court]. [13]

The basic law on trademark, infringement, and unfair competition is

Republic Act (R.A.) No. 8293[14] (Intellectual Property Code of the Philippines),
specifically Sections 121 to 170 thereof. It took effect on January 1, 1998. Prior
to its effectivity, the applicable law was R.A. No. 166,[15] as amended.

Interestingly, R.A. No. 8293 did not expressly repeal in its entirety R.A.
No. 166, but merely provided in Section 239.1[16] that Acts and parts of Acts
inconsistent with it were repealed. In other words, only in the instances where a
substantial and irreconcilable conflict is found between the provisions of R.A.
No. 8293 and of R.A. No. 166 would the provisions of the latter be deemed
repealed.

R.A. No. 8293 defines a mark as 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. [17] It also defines a
collective mark as 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.[18]

On the other hand, R.A. No. 166 defines a trademark as 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 by another.[19] A
trademark, being a special property, is afforded protection by law. But for one to
enjoy this legal protection, legal protection ownership of the trademark should
rightly be established.

The ownership of a trademark is acquired by its registration and its actual

use by the manufacturer or distributor of the goods made available to the
purchasing public. Section 122[20] of R.A. No. 8293 provides that the rights in a
mark shall be acquired by means of its valid registration with the IPO. A
certificate of registration of a mark, once issued, constitutes prima
facie evidence of the validity of the registration, of the registrants ownership of
the mark, and of the registrants exclusive right to use the same in connection
with the goods or services and those that are related thereto specified in the
certificate.[21] R.A. No. 8293, however, requires the applicant for registration or
the registrant to file a declaration of actual use (DAU) of the mark, with
evidence to that effect, within three (3) years from the filing of the application
for registration; otherwise, the application shall be refused or the mark shall be
removed from the register.[22] In other words, the prima facie presumption
brought about by the registration of a mark may be challenged and overcome, in
an appropriate action, by proof of the nullity of the registration or of non-use of
the mark, except when excused.[23] Moreover, the presumption may likewise be
defeated by evidence of prior use by another person, i.e., it will controvert a
claim of legal appropriation or of ownership based on registration by a

subsequent user. This is because a trademark is a creation of use and belongs to

one who first used it in trade or commerce.[24]

The determination of priority of use of a mark is a question of

fact. Adoption of the mark alone does not suffice. One may make
advertisements, issue circulars, distribute price lists on certain goods, but these
alone will not inure to the claim of ownership of the mark until the goods
bearing the mark are sold to the public in the market. Accordingly, receipts,
sales invoices, and testimonies of witnesses as customers, or orders of buyers,
best prove the actual use of a mark in trade and commerce during a certain
period of time.[25]
In the instant case, both parties have submitted proof to support their
claim of ownership of their respective trademarks.

Culled from the records, Berris, as oppositor to Abyadangs application for

registration of his trademark, presented the following evidence: (1) its
trademark application dated November 29, 2002[26] with Application No. 42002-0010272; (2) its IPO certificate of registration dated October 25, 2004,
[27]
with Registration No. 4-2002-010272 and July 8, 2004 as the date of
registration; (3) a photocopy of its packaging [28] bearing the mark D-10 80
WP; (4) photocopies of its sales invoices and official receipts;[29] and (5) its
notarized DAU dated April 23, 2003,[30] stating that the mark was first used on
June 20, 2002, and indicating that, as proof of actual use, copies of official
receipts or sales invoices of goods using the mark were attached as Annex B.

On the other hand, Abyadangs proofs consisted of the following: (1) a

photocopy of the packaging[31] for his marketed fungicide bearing mark NS D10 PLUS; (2) Abyadangs Affidavit dated February 14, 2006, [32] stating among
others that the mark NS D-10 PLUS was his own creation derived from: N for
Norvy, his name; S for Soledad, his wifes name; D the first letter for December,
his birth month; 10 for October, the 10 th month of the year, the month of his
business name registration; and PLUS to connote superior quality; that when he
applied for registration, there was nobody applying for a mark similar to NS D10 PLUS; that he did not know of the existence of Berris or any of its products;

that D-10 could not have been associated with Berris because the latter never
engaged in any commercial activity to sell D-10 80 WP fungicide in the local
market; and that he could not have copied Berris mark because he registered his
packaging with the Fertilizer and Pesticide Authority (FPA) ahead of Berris; (3)
Certification dated December 19, 2005[33] issued by the FPA, stating that NS D10 PLUS is owned and distributed by NS Northern Organic Fertilizer, registered
with the FPA since May 26, 2003, and had been in the market since July 30,
2003; (4) Certification dated October 11, 2005[34]issued by the FPA, stating that,
per monitoring among dealers in Region I and in the Cordillera Administrative
Region registered with its office, the Regional Officer neither encountered the
fungicide with mark D-10 80 WP nor did the FPA provincial officers from the
same area receive any report as to the presence or sale of Berris product; (5)
Certification dated March 14, 2006[35] issued by the FPA, certifying that all
pesticides must be registered with the said office pursuant to Section 9 [36] of
Presidential Decree (P.D.) No. 1144[37] and Section 1, Article II of FPA Rules
and Regulations No. 1, Series of 1977; (6) Certification dated March 16,
2006[38] issued by the FPA, certifying that the pesticide D-10 80 WP was
registered by Berris on November 12, 2004; and (7) receipts from Sunrise Farm
Supply[39] in La Trinidad, Benguet of the sale of Abyadangs goods referred to as
D-10 and D-10+.

Based on their proffered pieces of evidence, both Berris and Abyadang

claim to be the prior user of their respective marks.

We rule in favor of Berris.

Berris was able to establish that it was using its mark D-10 80 WP since
June 20, 2002, even before it filed for its registration with the IPO on November
29, 2002, as shown by its DAU which was under oath and notarized, bearing the
stamp of the Bureau of Trademarks of the IPO on April 25, 2003, [40] and which
stated that it had an attachment as Annex B sales invoices and official receipts
of goods bearing the mark. Indeed, the DAU, being a notarized document,
especially when received in due course by the IPO, is evidence of the facts it

stated and has the presumption of regularity, entitled to full faith and credit upon
its face. Thus, the burden of proof to overcome the presumption of authenticity
and due execution lies on the party contesting it, and the rebutting evidence
should be clear, strong, and convincing as to preclude all controversy as to the
falsity of the certificate.[41] What is more, the DAU is buttressed by the
Certification dated April 21, 2006[42] issued by the Bureau of Trademarks that
Berris mark is still valid and existing.

Hence, we cannot subscribe to the contention of Abyadang that Berris

DAU is fraudulent based only on his assumption that Berris could not have
legally used the mark in the sale of its goods way back in June 2002 because it
registered the product with the FPA only on November 12, 2004. As correctly
held by the IPPDG in its decision on Abyadangs appeal, the question of whether
or not Berris violated P.D. No. 1144, because it sold its product without prior
registration with the FPA, is a distinct and separate matter from the jurisdiction
and concern of the IPO. Thus, even a determination of violation by Berris of
P.D. No. 1144 would not controvert the fact that it did submit evidence that it
had used the mark D-10 80 WP earlier than its FPA registration in 2004.

Furthermore, even the FPA Certification dated October 11, 2005, stating
that the office had neither encountered nor received reports about the sale of the
fungicide D-10 80 WP within Region I and the Cordillera Administrative
Region, could not negate the fact that Berris was selling its product using that
mark in 2002, especially considering that it first traded its goods in Calauan,
Laguna, where its business office is located, as stated in the DAU.

Therefore, Berris, as prior user and prior registrant, is the owner of the
mark D-10 80 WP. As such, Berris has in its favor the rights conferred by
Section 147 of R.A. No. 8293, which provides

Sec. 147. Rights Conferred.

147.1. The owner of a registered mark shall have the exclusive

right to prevent all third parties not having the owners consent from
using in the course of trade identical or similar signs or containers for
goods or services which are identical or similar to those in respect of
which the trademark is registered where such use would result in a
likelihood of confusion. In case of the use of an identical sign for
identical goods or services, a likelihood of confusion shall be
presumed.

147.2. The exclusive right of the owner of a well-known mark

defined in Subsection 123.1(e) which is registered in the Philippines,
shall extend to goods and services which are not similar to those in
respect of which the mark is registered:Provided, That use of that
mark in relation to those goods or services would indicate a
connection between those goods or services and the owner of the
registered mark:Provided, further, That the interests of the owner of
the registered mark are likely to be damaged by such use.

Now, we confront the question, Is Abyadangs mark NS D-10 PLUS

confusingly similar to that of Berris D-10 80 WP such that the latter can
rightfully prevent the IPO registration of the former?
We answer in the affirmative.

According to Section 123.1(d) of R.A. No. 8293, a mark cannot be

registered if it is identical with a registered mark belonging to a different
proprietor with an earlier filing or priority date, with respect to: (1) the same
goods or services; (2) closely related goods or services; or (3) near resemblance
of such mark as to likely deceive or cause confusion.

In determining similarity and likelihood of confusion, jurisprudence has

developed teststhe Dominancy Test and the Holistic or Totality Test. The
Dominancy Test focuses on the similarity of the prevalent or dominant features

of the competing trademarks that might cause confusion, mistake, and deception
in the mind of the purchasing public. Duplication or imitation is not necessary;
neither is it required that the mark sought to be registered suggests an effort to
imitate. Given more consideration are the aural and visual impressions created
by the marks on the buyers of goods, giving little weight to factors like prices,
quality, sales outlets, and market segments.[43]

In contrast, the Holistic or Totality Test necessitates a consideration of the

entirety of the marks as applied to the products, including the labels and
packaging, in determining confusing similarity. The discerning eye of the
observer must focus not only on the predominant words but also on the other
features appearing on both labels so that the observer may draw conclusion on
whether one is confusingly similar to the other.[44]

Comparing Berris mark D-10 80 WP with Abyadangs mark NS D-10

PLUS, as appearing on their respective packages, one cannot but notice that
both have a common component which is D-10. On Berris package, the D-10 is
written with a bigger font than the 80 WP. Admittedly, the D-10 is the dominant
feature of the mark.The D-10, being at the beginning of the mark, is what is
most remembered of it.Although, it appears in Berris certificate of registration
in the same font size as the 80 WP, its dominancy in the D-10 80 WP mark
stands since the difference in the form does not alter its distinctive character.[45]

Applying the Dominancy Test, it cannot be gainsaid that Abyadangs NS

D-10 PLUS is similar to Berris D-10 80 WP, that confusion or mistake is more
likely to occur. Undeniably, both marks pertain to the same type of goods
fungicide with 80% Mancozeb as an active ingredient and used for the same
group of fruits, crops, vegetables, and ornamental plants, using the same dosage
and manner of application.They also belong to the same classification of goods
under R.A. No. 8293. Both depictions of D-10, as found in both marks, are
similar in size, such that this portion is what catches the eye of the
purchaser. Undeniably, the likelihood of confusion is present.

This likelihood of confusion and mistake is made more manifest when the
Holistic Test is applied, taking into consideration the packaging, for both use the
same type of material (foil type) and have identical color schemes (red, green,
and white);and the marks are both predominantly red in color, with the same
phrase BROAD SPECTRUM FUNGICIDE written underneath.

Considering these striking similarities, predominantly the D-10, the

buyers of both products, mainly farmers, may be misled into thinking that NS
D-10 PLUS could be an upgraded formulation of the D-10 80 WP.

Moreover, notwithstanding the finding of the IPPDG that the D-10 is a

fanciful component of the trademark, created for the sole purpose of functioning
as a trademark, and does not give the name, quality, or description of the
product for which it is used, nor does it describe the place of origin, such that
the degree of exclusiveness given to the mark is closely restricted, [46] and
considering its challenge by Abyadang with respect to the meaning he has given
to it, what remains is the fact that Berris is the owner of the mark D-10 80 WP,
inclusive of its dominant feature D-10, as established by its prior use, and prior
registration with the IPO.Therefore, Berris properly opposed and the IPO
correctly rejected Abyadangs application for registration of the mark NS D-10
PLUS.

Verily, the protection of trademarks as intellectual property is intended

not only to preserve the goodwill and reputation of the business established on
the goods bearing the mark through actual use over a period of time, but also to
safeguard the public as consumers against confusion on these goods. [47] On this
matter of particular concern, administrative agencies, such as the IPO, by reason
of their special knowledge and expertise over matters falling under their
jurisdiction, are in a better position to pass judgment thereon. Thus, their
findings of fact in that regard are generally accorded great respect, if not finality
by the courts, as long as they are supported by substantial evidence, even if such
evidence might not be overwhelming or even preponderant. It is not the task of
the appellate court to weigh once more the evidence submitted before the
administrative body and to substitute its own judgment for that of the
administrative agency in respect to sufficiency of evidence.[48]

Inasmuch as the ownership of the mark D-10 80 WP fittingly belongs to

Berris, and because the same should not have been cancelled by the CA, we
consider it proper not to belabor anymore the issue of whether cancellation of a
registered mark may be done absent a petition for cancellation.

WHEREFORE, the petition is GRANTED. The assailed Decision dated

April 14, 2008 and Resolution dated June 18, 2008 of the Court of Appeals in
CA-G.R. SP No. 99928 are REVERSED and SET ASIDE. Accordingly, the
Decision No. 2006-24 dated April 28, 2006 and the Resolution No. 2006-09(D)
dated August 2, 2006 in IPC No. 14-2005-00099, and the Decision dated July
20, 2007 in Appeal No. 14-06-13 are REINSTATED. Costs against respondent.

SO ORDERED.

[G.R. No. 139300. March 14, 2001]

AMIGO MANUFACTURING, Inc., petitioner, vs. CLUETT PEABODY

CO., INC., respondent.
DECISION
PANGANIBAN, J.:

The findings of the Bureau of Patents that two trademarks are confusingly and
deceptively similar to each other are binding upon the courts, absent any sufficient
evidence to the contrary. In the present case, the Bureau considered the totality of
the similarities between the two sets of marks and found that they were of such
degree, number and quality as to give the overall impression that the two products
are confusingly if not deceptively the same.
Statement of the Case

Petitioner Amigo Manufacturing Inc. challenges, under Rule 45 of the Rules of

Court, the January 14, 1999 Resolution [1] of the Court of Appeals (CA) in CA-GR
SP No. 22792, which reversed, on reconsideration, its own September 29, 1998
Decision.[2] The dispositive portion of the assailed Resolution reads as follows:
WHEREFORE, the Motion for Reconsideration is GRANTED, and the Decision
dated September 29, 1998 REVERSED. Consequently, the decision rendered by
the Director of Patents dated September 3, 1990 is hereby AFFIRMED.
The Decision of the Director of Patents, referred to by the CA, disposed as
follows:
WHEREFORE, the Petition is GRANTED. Consequently, Certificate of
Registration No. SR-2206 issued to Respondent-Registrant [herein petitioner] is
hereby cancelled.
Let the records of this case be remanded to the Patent/Trademark Registry and
EDP Division for appropriate action in accordance with this Decision.
Petitioner also seeks the reversal of the June 30, 1999 CA Resolution [3] denying
its own Motion for Reconsideration.
The Facts

The facts, which are undisputed, are summarized by the Court of Appeals in its
original Decision, as follows:
The source of the controversy that precipitated the filing by [herein Respondent]
Cluett Peabody Co., Inc. (a New York corporation) of the present case against
[herein Petitioner] Amigo Manufacturing Inc. (a Philippine corporation) for
cancellation of trademark is [respondents] claim of exclusive ownership (as
successor in interest of Great American Knitting Mills, Inc.) of the following
trademark and devices, as used on mens socks:
a) GOLD TOE, under Certificate of Registration No. 6797 dated September 22, 1958;
b) DEVICE, representation of a sock and magnifying glass on the toe of a sock, under
Certificate of Registration No. 13465 dated January 25, 1968;
c) DEVICE, consisting of a plurality of gold colored lines arranged in parallel relation
within a triangular area of toe of the stocking and spread from each other by lines of
contrasting color of the major part of the stocking under Certificate of Registration No.
13887 dated May 9, 1968; and
d) LINENIZED, under Certificate of Registration No. 15440 dated April 13, 1970.

On the other hand, [petitioners] trademark and device GOLD TOP, Linenized for
Extra Wear has the dominant color white at the center and a blackish brown
background with a magnified design of the socks garter, and is labeled Amigo
Manufacturing Inc., Mandaluyong, Metro Manila, Made in the Philippines.
In the Patent Office, this case was heard by no less than six Hearing Officers:
Attys. Rodolfo Gilbang, Rustico Casia, M. Yadao, Fabian Rufina, Neptali Bulilan
and Pausi Sapak. The last named officer drafted the decision under appeal which
was in due court signed and issued by the Director of Patents (who never presided
over any hearing) adversely against the respondent Amigo Manufacturing, Inc. as
heretofore mentioned (supra, p.1).
The decision pivots on two point: the application of the rule of idem sonans and the
existence of a confusing similarity in appearance between two trademarks (Rollo,
p. 33).[4]
Ruling of the Court of Appeals

In its assailed Resolution, the CA held as follows:

After a careful consideration of [respondents] arguments and a re-appreciation of

the records of this case. [w]e find [respondents] motion for reconsideration
meritorious. As shown by the records, and as correctly held by the Director of
Patents, there is hardly any variance in the appearance of the marks GOLD TOP
and GOLD TOE since both show a representation of a mans foot wearing a sock,
and the marks are printed in identical lettering. Section 4(d) of R.A. No. 166
declares to be unregistrable, a mark which consists o[r] comprises a mark or
trademark which so resembles a mark or tradename registered in the Philippines of
tradename previously used in the Philippines by another and not abandoned, as to
be likely, when applied to or used in connection with the goods, business or
services of the applicant, to cause confusion or mistake or to deceive the
purchasers. [Petitioner]s mark is a combination of the different registered marks
owned by [respondent]. As held in Del Monte Corporation v. Court of Appeals, 181
SCRA 410 (1990), the question is not whether the two articles are distinguishable
by their label when set aside but whether the general confusion made by the article
upon the eye of the casual purchaser who is unsuspicious and off his guard, is such
as to likely result in confounding it with the original. As held by the Court in the
same decision[,] The most successful form of copying is to employ enough points
of similarity to confuse the public with enough points of difference to confuse the
courts. Furthermore, [petitioner]s mark is only registered with the Supplemental
Registry which gives no right of exclusivity to the owner and cannot overturn the
presumption of validity and exclusiv[ity] given to a registered mark.
Finally, the Philippines and the United States are parties to the Union Convention
for the Protection of Industrial Property adopted in Paris on March 20, 1883,
otherwise known as the Paris Convention. (Puma Sportschuhfabriken Rudolf
Dassler K.G. v. Intermediate Appellate Court, 158 SCRA 233). [Respondent] is
domiciled in the United States of America and is the lawful owner of several
trademark registrations in the United States for the mark GOLD TOE.
xxxxxxxxx
By virtue of the Philippines membership to the Paris Union, trademark rights in
favor of the [respondent] were created. The object of the Convention is to accord a
national of a member nation extensive protection against infringement and other
types of unfair competition. (Puma Sportschuhfabriken Rudolf Dassler K.G. v.
Intermediate Appellate Court, 158 SCRA 233; La Chemise Lacoste, S.A. v.
Fernandez, 129 SCRA 373)[5]
Hence, this Petition.[6]

Issues

In its Memorandum,[7] petitioner raises the following issues for the

consideration of this Court:
I

Whether or not the Court of Appeals overlooked that petitioners trademark was
used in commerce in the Philippines earlier than respondents actual use of its
trademarks, hence the Court of Appeals erred in affirming the Decision of the
Director of Patents dated September 3, 1990.
II

Since the petitioners actual use of its trademark was ahead of the respondent,
whether or not the Court of Appeals erred in canceling the registration of
petitioners trademark instead of canceling the trademark of the respondent.
III

Whether or not the Court of Appeals erred in affirming the findings of the Director
of Patents that petitioners trademark [was] confusingly similar to respondents
trademarks.
IV

Whether or not the Court of Appeals erred in applying the Paris Convention in
holding that respondent ha[d] an exclusive right to the trademark gold toe without
taking into consideration the absence of actual use in the Philippines. [8]
In the main, the Court will resolve three issues: (1) the date of actual use of the
two trademarks;(2) their confusing similarities, and (3) the applicability of the
Paris Convention.
The Courts Ruling

The Petition has no merit.

First Issue:

Dates of First Use of Trademark and Devices

Petitioner claims that it started the actual use of the trademark Gold Top and
Device in September 1956, while respondent began using the trademark Gold Toe
only on May 15, 1962. It contends that the claim of respondent that it had been
using the Gold Toe trademark at an earlier date was not substantiated. The latters
witnesses supposedly contradicted themselves as to the date of first actual use of
their trademark, coming up with different dates such as 1952, 1947 and 1938.
We do not agree. Based on the evidence presented, this Court concurs in the
findings of the Bureau of Patents that respondent had actually used the trademark
and the devices in question prior to petitioners use of its own. During the hearing at
the Bureau of Patents, respondent presented Bureau registrations indicating the
dates of first use in the Philippines of the trademark and the devices as follows: a)
March 16, 1954, Gold Toe; b) February 1, 1952, the Representation of a Sock and a
Magnifying Glass; c) January 30, 1932, the Gold Toe Representation; and d)
February 28, 1952, Linenized.
The registration of the above marks in favor of respondent constitutes prima
facie evidence, which petitioner failed to overturn satisfactorily, of respondents
ownership of those marks, the dates of appropriation and the validity of other
pertinent facts stated therein. Indeed, Section 20 of Republic Act 166 provides as
follows:
Sec. 20. Certificate of registration prima facie evidence of validity. - A certificate
of registration of a mark or trade-name shall be prima facie evidence of the validity
of the registration, the registrant's ownership of the mark or trade-name, and of the
registrant's exclusive right to use the same in connection with the goods, business
or services specified in the certificate, subject to any conditions and limitations
stated therein.[9]
Moreover, the validity of the Certificates of Registration was not
questioned. Neither did petitioner present any evidence to indicate that they were
fraudulently issued. Consequently, the claimed dates of respondents first use of the
marks are presumed valid. Clearly, they were ahead of petitioners claimed date of
first use of Gold Top and Device in 1958.
Section 5-A of Republic Act No. 166[10] states that an applicant for a trademark
or trade name shall, among others, state the date of first use. The fact that the
marks were indeed registered by respondent shows that it did use them on the date
indicated in the Certificate of Registration.

On the other hand, petitioner failed to present proof of the date of alleged first
use of the trademark Gold Top and Device. Thus, even assuming that respondent
started using it only on May 15, 1962, we can make no finding that petitioner had
started using it ahead of respondent.
Furthermore, petitioner registered its trademark only with the supplemental
register. In La Chemise Lacoste v. Fernandez,[11] the Court held that registration
with the supplemental register gives no presumption of ownership of the
trademark. Said the Court:
The registration of a mark upon the supplemental register is not, as in the case of
the principal register, prima facie evidence of (1) the validity of registration; (2)
registrants ownership of the mark; and (3) registrants exclusive right to use the
mark. It is not subject to opposition, although it may be cancelled after its issuance.
Neither may it be the subject of interference proceedings.Registration [i]n the
supplemental register is not constructive notice of registrants claim of
ownership. A supplemental register is provided for the registration because of
some defects (conversely, defects which make a mark unregistrable on the
principal register, yet do not bar them from the supplemental register.) (Agbayani,
II Commercial Laws of the Philippines, 1978, p. 514, citing Uy Hong Mo v. Titay
& Co., et al., Dec. No. 254 of Director of Patents, Apr. 30, 1968.
As to the actual date of first use by respondent of the four marks it registered,
the seeming confusion may have stemmed from the fact that the marks have
different dates of first use. Clearly, however, these dates are indicated in the
Certificates of Registration.
In any case, absent any clear showing to the contrary, this Court accepts the
finding of the Bureau of Patents that it was respondent which had prior use of its
trademark, as shown in the various Certificates of Registration issued in its
favor. Verily, administrative agencies findings of fact in matters falling under their
jurisdiction are generally accorded great respect, if not finality.Thus, the Court has
held:
x x x. By reason of the special knowledge and expertise of said administrative
agencies over matters falling under their jurisdiction, they are in a better position to
pass judgment thereon; thus, their findings of fact in that regard are generally
accorded great respect, if not finality, by the courts. The findings of fact of an
administrative agency must be respected as long as they are supported by
substantial evidence, even if such evidence might not be overwhelming or even

preponderant. It is not the task of an appellate court to weigh once more the
evidence submitted before the administrative body and to substitute its own
judgment for that of the administrative agency in respect of sufficiency of
evidence.[12]
Second Issue:

Similarity of Trademarks

Citing various differences between the two sets of marks, petitioner assails the
finding of the director of patents that its trademark is confusingly similar to that of
respondent. Petitioner points out that the director of patents erred in its application
of the idem sonans rule, claiming that the two trademarks Gold Toe and Gold Top
do not sound alike and are pronounced differently. It avers that since the
words gold and toe are generic, respondent has no right to their exclusive use.
The arguments of petitioner are incorrect. True, it would not be guilty of
infringement on the basis alone of the similarity in the sound of petitioners Gold
Top with that of respondents Gold Toe. Admittedly, the pronunciations of the two
do not, by themselves, create confusion.
The Bureau of Patents, however, did not rely on the idem sonans test alone in
arriving at its conclusion. This fact is shown in the following portion of its
Decision:
As shown by the drawings and labels on file, the mark registered by RespondentRegistrant under Registration No. SR-2206 is a combination of the
abovementioned trademarks registered separately by the petitioner in the
Philippines and the United States.
With respect to the issue of confusing similarity between the marks of the
petitioner and that of the respondent-registrant applying the tests of idem sonans,
the mark GOLD TOP & DEVICE is confusingly similar with the mark GOLD
TOE. The difference in sound occurs only in the final letter at the end of the
marks. For the same reason, hardly is there any variance in their appearance.GOLD
TOE and GOLD TOP are printed in identical lettering. Both show [a]
representation of a mans foot wearing a sock. GOLD TOP blatantly incorporates
petitioners LINENIZED which by itself is a registered mark. [13]
The Bureau considered the drawings and the labels, the appearance of the
labels, the lettering, and the representation of a mans foot wearing a

sock. Obviously, its conclusion is based on thetotality of the similarities between

the parties trademarks and not on their sounds alone.
In Emerald Garment Manufacturing Corporation v. Court of Appeals,[14] this
Court stated that in determining whether trademarks are confusingly similar,
jurisprudence has developed two kinds of tests, the Dominancy Test [15] and the
Holistic Test.[16] In its words:
In determining whether colorable imitation exists, jurisprudence has developed two
kinds of tests the Dominancy Test applied in Asia Brewery, Inc. v. Court of
Appeals and other cases and the Holistic Test developed in Del Monte Corporation
v. Court of Appeals and its proponent cases.
As its title implies, the test of dominancy focuses on the similarity of the prevalent
features of the competing trademarks which might cause confusion or deception
and thus constitutes infringement.
xxxxxxxxx
. . . . If the competing trademark contains the main or essential or dominant
features of another, and confusion and deception is likely to result, infringement
takes place. Duplication or imitation is not necessary; nor is it necessary that the
infringing label should suggest an effort to imitate. [C. Neilman Brewing Co. v.
Independent Brewing Co., 191 F., 489, 495, citing Eagle White Lead Co., vs.
Pflugh (CC) 180 Fed. 579]. The question at issue in cases of infringement of
trademarks is whether the use of the marks involved would be likely to cause
confusion or mistakes in the mind of the public or deceive purchasers. (Auburn
Rubber Corporation vs. Hanover Rubber Co., 107 F. 2d 588; x x x.)
xxxxxxxxx
On the other side of the spectrum, the holistic test mandates that the entirety of the
marks in question must be considered in determining confusing similarity.
In the present case, a resort to either the Dominancy Test or the Holistic Test
shows that colorable imitation exists between respondents Gold Toe and petitioners
Gold Top. A glance at petitioners mark shows that it definitely has a lot of
similarities and in fact looks like a combination of the trademark and devices that
respondent has already registered; namely, Gold Toe, the representation of a sock
with a magnifying glass, the Gold Toe representation and linenized.

Admittedly, there are some minor differences between the two sets of
marks. The similarities, however, are of such degree, number and quality that the
overall impression given is that the two brands of socks are deceptively the same,
or at least very similar to each another. An examination of the products in question
shows that their dominant features are gold checkered lines against a
predominantly black background and a representation of a sock with a magnifying
glass. In addition, both products use the same type of lettering. Both also include a
representation of a mans foot wearing a sock and the word linenized with arrows
printed on the label. Lastly, the names of the brands are similar -- Gold Top and
Gold Toe. Moreover, it must also be considered that petitioner and respondent are
engaged in the same line of business.
Petitioner cannot therefore ignore the fact that, when compared, most of the
features of its trademark are strikingly similar to those of respondent. In addition,
these representations are at the same location, either in the sock itself or on the
label. Petitioner presents no explanation why it chose those representations,
considering that these were the exact symbols used in respondents marks. Thus, the
overall impression created is that the two products are deceptively and confusingly
similar to each other. Clearly, petitioner violated the applicable trademark
provisions during that time.
Let it be remembered that duly registered trademarks are protected by law as
intellectual properties and cannot be appropriated by others without violating the
due process clause. An infringement of intellectual rights is no less vicious and
condemnable as theft of material property, whether personal or real.
Third Issue:

The Paris Convention

Petitioner claims that the Court of Appeals erred in applying the Paris
Convention. Although respondent registered its trademark ahead, petitioner argues
that the actual use of the said mark is necessary in order to be entitled to the
protection of the rights acquired through registration.
As already discussed, respondent registered its trademarks under the principal
register, which means that the requirement of prior use had already been
fulfilled. To emphasize, Section 5-A of Republic Act 166 requires the date of first
use to be specified in the application for registration.Since the trademark was
successfully registered, there exists a prima facie presumption of the correctness of

the contents thereof, including the date of first use. Petitioner has failed to rebut
this presumption.
Thus, applicable is the Union Convention for the Protection of Industrial
Property adopted in Paris on March 20, 1883, otherwise known as the Paris
Convention, of which the Philippines and the United States are
members. Respondent is domiciled in the United States and is the registered owner
of the Gold Toe trademark. Hence, it is entitled to the protection of the
Convention. A foreign-based trademark owner, whose country of domicile is a
party to an international convention relating to protection of trademarks, [17] is
accorded protection against infringement or any unfair competition as provided in
Section 37 of Republic Act 166, the Trademark Law which was the law in force at
the time this case was instituted.
In sum, petitioner has failed to show any reversible error on the part of the
Court of Appeals.Hence, its Petition must fail.
WHEREFORE, the Petition is hereby DENIED and
Resolution AFFIRMED.Costs against petitioner.
SO ORDERED.

the

assailed