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INTELLECTUAL PROPERTY LAW Case Digests

Submitted to: Atty. Marian Ivy F. Reyes Fajardo


Submitted by: DEL RIO, CHERIE M. (13-11202)
22 May 2016

TRADEMARKS
CODAL PROVISION/S
121.1. "Mark" means any visible sign capable of distinguishing the goods (trademark) or services (service
mark) of an enterprise and shall include a stamped or marked container of goods; (Sec. 38, R.A. No. 166a)
121.3. "Trade name" means the name or designation identifying or distinguishing an enterprise; (Sec. 38,
R.A. No. 166a)
SECTION 165. Trade Names or Business Names.
165.1. A name or designation may not be used as a trade name if by its nature or the use to which such
name or designation may be put, it is contrary to public order or morals and if, in particular, it is liable to
deceive trade circles or the public as to the nature of the enterprise identified by that name.
165.2. a. Notwithstanding any laws or regulations providing for any obligation to register trade names, such
names shall be protected, even prior to or without registration, against any unlawful act committed by third
parties. b. In particular, any subsequent use of the trade name by a third party, whether as a trade name or a
mark or collective mark, or any such use of a similar trade name or mark, likely to mislead the public, shall be
deemed unlawful.
165.3. The remedies provided for in Sections 153 to 156 and Sections 166 and 167 shall apply mutatis
mutandis.
165.4. Any change in the ownership of a trade name shall be made with the transfer of the enterprise or part
thereof identified by that name. The provisions of Subsections 149.2 to 149.4 shall apply mutatis mutandis.

CASE
PHILIPS EXPORT B.V., PHILIPS ELECTRICAL LAMPS, INC. and PHILIPS INDUSTRIAL DEVELOPMENT,
INC. , vs. COURT OF APPEALS, SECURITIES & EXCHANGE COMMISSION and STANDARD PHILIPS
CORPORATION.
FACTS: Petitioner Philips Export B.V. (PEBV), a foreign corporation organized under the laws of the
Netherlands, although not engaged in business here, is the registered owner of the trademarks PHILIPS
and PHILIPS SHIELD EMBLEM. Respondent Standard Philips Corporation (Standard Philips), on the other
hand, was issued a Certificate of Registration by respondent Commission on 19 May 1982. On 24
September 1984, Petitioners filed a letter complaint with the Securities & Exchange Commission (SEC)
asking for the cancellation of the word "PHILIPS" from Private Respondent's corporate name in view of the
prior registration with the Bureau of Patents of the trademark "PHILIPS" and the logo "PHILIPS SHIELD
EMBLEM" in the name of Petitioner, PEBV, and the previous registration of Petitioners Philips Electrical and
Philips Industrial with the SEC.

On 30 January 1990, Petitioners sought an extension of time to file a Petition for Review on Certiorari before
this Court, which Petition was later referred to the Court of Appeals in a Resolution dated 12 February 1990.
In deciding to dismiss the petition on 31 July 1990, the Court of Appeals 1 swept aside Petitioners' claim that
following the ruling in Converse Rubber Corporation v. Universal Converse Rubber Products, Inc., et al, (G.
R. No. L-27906, January 8, 1987, 147 SCRA 154), the word PHILIPS cannot be used as part of Private
Respondent's corporate name as the same constitutes a dominant part of Petitioners' corporate names. In
so holding, the Appellate Court observed that the Converse case is not four-square with the present case
inasmuch as the contending parties in Converse are engaged in a similar business, that is, the manufacture
of rubber shoes. Upholding the SEC, the Appellate Court concluded that "private respondents' products
consisting of chain rollers, belts, bearings and cutting saw are unrelated and non-competing with
petitioners' products i.e. electrical lamps such that consumers would not in any probability mistake one as
the source or origin of the product of the other."
ISSUE: Whether or not Standard Philips can be enjoined from using Philips in its corporate name;
RULING: YES. A corporation acquires its name by choice and need not select a name identical with or
similar to one already appropriated by a senior corporation while an individual's name is thrust upon him
(See Standard Oil Co. of New Mexico, Inc. v. Standard Oil Co. of California, 56 F 2d 973, 977). A corporation
can no more use a corporate name in violation of the rights of others than an individual can use his name
legally acquired so as to mislead the public and injure another (Armington vs. Palmer, 21 RI 109. 42 A 308).
STANDARD deliberately used the name PHILIPS to ride on the popularity and good will of the more
established brand which was registered since 1922. Its registration also with SEC included in its primary
purpose the possibility of venturing into electrical goods, thus creating a possible confusion in the
businesses of STANDARD and PHILIPS. As such, STANDARD was enjoined from using the name PHILIPS and
its Articles of Incorporation was ordered amended.

CODAL PROVISION/S
124.2. The applicant or the registrant shall file a declaration of actual use of the mark with evidence to that
effect, as prescribed by the Regulations within three (3) years from the filing date of the application.
Otherwise, the application shall be refused or the mark shall be removed from the Register by the Director.
SECTION 145. Duration. A certificate of registration shall remain in force for ten (10) years: Provided, That
the registrant shall file a declaration of actual use and evidence to that effect, or shall show valid reasons
based on the existence of obstacles to such use, as prescribed by the Regulations, within one (1) year from
the fifth anniversary of the date of the registration of the mark. Otherwise, the mark shall be removed from
the Register by the Office. (Sec. 12, R.A. No. 166a)

CASE
SHANGRI-LA INTERNATIONAL HOTEL MANAGEMENT, LTD., SHANGRI-LA PROPERTIES, INC., MAKATI
SHANGRI-LA HOTEL & RESORT, INC., AND KUOK PHILIPPINES PROPERTIES, INC., V. DEVELOPERS
GROUP OF COMPANIES, INC.

FACTS: At the core of the controversy are the Shangri-La mark and S logo. Respondent DGCI claims
ownership of said mark and logo in the Philippines on the strength of its prior use thereof within the country.

As DGCI stresses at every turn, it filed on October 18, 1982 with the Bureau of Patents, Trademarks and
Technology Transfer (BPTTT) pursuant to Sections 2 and 4 of Republic Act (RA) No. 166,[3] as amended, an
application for registration covering the subject mark and logo. On May 31, 1983, the BPTTT issued in favor
of DGCI the corresponding certificate of registration therefor, i.e., Registration No. 31904. Since then, DGCI
started using the Shangri-La mark and S logo in its restaurant business.
On the other hand, the Kuok family owns and operates a chain of hotels with interest in hotels and hotelrelated transactions since 1969. As far back as 1962, it adopted the name Shangri-La as part of the
corporate names of all companies organized under the aegis of the Kuok Group of Companies (the Kuok
Group). The Kuok Group has used the name Shangri-La in all Shangri-La hotels and hotel-related
establishments around the world which the Kuok Family owned. Their logo was launched in 1975. The hotel
chain began to operate in the Philippines in 1987.
On June 21, 1988, the petitioners filed with the BPTTT a petition, docketed as Inter Partes Case No. 3145,
praying for the cancellation of the registration of theShangri-La mark and S logo issued to respondent DGCI
on the ground that the same were illegally and fraudulently obtained and appropriated for the latter's
restaurant business. They also filed in the same office Inter Partes Case No. 3529, praying for the registration
of the same mark and logo in their own names.

ISSUES:
1.
Whether the CA erred in finding that respondent had the right to file an application for registration of
the Shangri-La mark and S logo although respondent never had any prior actual commercial use thereof;
2.
Whether the CA erred in finding that respondent's supposed use of the identical Shangri-La mark and
S logo of the petitioners was not evident bad faith and can actually ripen into ownership, much less
registration;
3.
Whether the CA erred in overlooking petitioners' widespread prior use of the Shangri-La mark and S
logo in their operations;
4.
Whether the CA erred in refusing to consider that petitioners are entitled to protection under both
R.A. No. 166, the old trademark law, and the Paris Convention for the Protection of Industrial Property;
5.
Whether the CA erred in holding that SLIHM did not have the right to legally own the Shangri-La mark
and S logo by virtue of and despite their ownership by the Kuok Group;
6.
Whether the CA erred in ruling that petitioners' use of the mark and logo constitutes actionable
infringement;
7. Whether petitioners should be prohibited from continuing their use of the mark and logo in question.

RULING: (RA No. 166 must be applied 1997)


1.
First off, all that the RTC found was that respondent was the prior user and registrant of the subject
mark and logo in the Philippines. Taken in proper context, the trial courts finding on prior use can only be
interpreted to mean that respondent used the subject mark and logo in the country before the petitioners

did. It cannot be construed as being a factual finding that there was prior use of the mark and logo before
registration.
Is prior actual use is required before there may be a valid registration of a mark? Yes, under the provisions of
the former trademark law, R.A. No. 166, as amended, which was in effect up to December 31, 1997, hence,
the law in force at the time of respondent's application for registration of trademark: the root of ownership
of a trademark is actual use in commerce. Section 2 of said law requires that before a trademark can be
registered, it must have been actually used in commerce and service for not less than two months in
the Philippines prior to the filing of an application for its registration.
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.
Respondent cannot now claim before the Court that the certificate of registration itself is proof that the twomonth prior use requirement was complied with, what with the fact that its very own witness testified
otherwise in the trial court. And because at the time (October 18, 1982) the respondent filed its application
for trademark registration of the Shangri-La mark and S logo, respondent was not using these in
the Philippines commercially, the registration is void.
2.
Petitioners also argue that the respondent's use of the Shangri-La mark and S logo was in evident
bad faith and cannot therefore ripen into ownership, much less registration. YES. He stayed at the hotel
abroad and that is where he saw the name and logo. One who has imitated the trademark of another cannot
bring an action for infringement, particularly against the true owner of the mark, because he would be
coming to court with unclean hands.[33] Priority is of no avail to the bad faith plaintiff. Good faith is required
in order to ensure that a second user may not merely take advantage of the goodwill established by the true
owner.
3.
YES. There has been widespread prior use of the mark and logo abroad. Section 2 of RA 166
provides for what is registrable while Section 2-A ses out how ownership is acquired. Under Section 2, 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 2 months prior to the application for registration. Since ownership of the
trademark is required for registration, Section 2-A of the same law sets out to define how one goes about
acquiring ownership thereof. Under Section 2-A, 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. Additionally, it is significant to note that Section 2-A does not require that the
actual use of a trademark must be within the Philippines. Hence, under R.A. No. 166, as amended, one may
be an owner of a mark due to actual use thereof but not yet have the right to register such ownership here
due to failure to use it within the Philippines for two months.
While the petitioners may not have qualified under Section 2 of R.A. No. 166 as a registrant, neither
did respondent DGCI, since the latter also failed to fulfill the 2-month actual use requirement. What is
worse, DGCI was not even the owner of the mark. For it to have been the owner, the mark must not have
been already appropriated (i.e., used) by someone else. At the time of respondent DGCI's registration of
the mark, the same was already being used by the petitioners, albeit abroad, of which DGCIs president was
fully aware.

4.
While the Philippines was already a signatory to the Paris Convention, the IPC only took effect on
January 1, 1988, and in the absence of a retroactivity clause, R.A. No. 166 still applies. Under the prevailing
law and jurisprudence at the time, the CA had not erred in ruling that:
The Paris Convention mandates that protection should be afforded to internationally known marks as
signatory to the Paris Convention, without regard as to whether the foreign corporation is registered,
licensed or doing business in the Philippines. It goes without saying that the same runs afoul to Republic Act
No. 166, which requires the actual use in commerce in the Philippines of the subject mark or devise. Foreign
law must yield to municipal law.
Consequently, SHANGRI-LA Group cannot claim protection under the Paris Convention. Nevertheless, with
the double infirmity of lack of two-month prior use, as well as bad faith in DGCIs registration of the mark, it
is evident that the petitioners cannot be guilty of infringement. It would be a great injustice to
adjudge the petitioners guilty of infringing a mark when they are actually the originator and creator thereof.
5.
NO. The petitioners' separate personalities from their mother corporation be an obstacle in the
enforcement of their rights as part of the Kuok Group of Companies and as official repository, manager and
operator of the subject mark and logo. Besides, R.A. No. 166 did not require the party seeking relief to
be the owner of the mark but any person who believes that he is or will be damaged by the registration of a
mark or trade name.
6.
NO. With the double infirmity of lack of two-month prior use, as well as bad faith in DGCIs
registration of the mark, it is evident that the petitioners cannot be guilty of infringement. It would be a great
injustice to adjudge the petitioners guilty of infringing a mark when they are actually the originator and
creator thereof.
7.
NO. SHANGRI-LA must be allowed to use its name and logo. Their petition is GRANTED. The
assailed Decision and Resolution of the Court of Appeals dated May 15, 2003 and September 15, 2003,
respectively, and the Decision of the Regional Trial Court of Quezon City dated March 8, 1996 are
hereby SET ASIDE. Accordingly, the complaint for infringement in Civil Case No. Q-91-8476 is
ordered DISMISSED.