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SECOND DIVISION

[G.R. No. 161295. June 29, 2005]

JESSIE G. CHING,petitioner, vs. WILLIAM M. SALINAS, SR., WILLIAM M.SALINAS, JR., JOSEPHINE L. SALINAS, JENNIFER . SALINAS,ALON!O SOLAIMAN SALLE, JOHN ERIC I. SALINAS, NOEL M. A"#!$"o%&' o( )*&e+o&- %n' O((*+e&- o( WILAWARE PRO)#C!CORPORA!ION,respondents.

) E C I S I O N

CALLEJO, SR., J./

This petition for review on certiorariassails the Decision[1]and Resolution[]of theCourt of !ppeals "C!# in C!$%&R& S' No& ()*11 affir+in, the -anuar. /0 )) ande2ruar. 1*0 )) Orders[/]of the Re,ional Trial Court "RTC# of 3anila0 4ranch 10which 5uashed and set aside Search 6arrant Nos& )1$*)1 and )1$*) ,ranted infavor of petitioner -essie %& Chin,&

-essie %& Chin, is the owner and ,eneral +ana,er of -eshicris 3anufacturin,Co&0 the +a7er and +anufacturer of a 8tilit. 3odel0 descri2ed as 9:eaf Sprin, E.e4ushin, for !uto+o2ile; +ade up of plastic&

On Septe+2er *0 ))10 Chin, and -oseph

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e Evidences of sale which include deliver. receipts0 invoices and official receipts& []

The RTC ,ranted the application and issued Search 6arrant Nos& )1$*)1 and)1$*) for the sei?ure of the aforecited articles&[(]In the inventor. su2+itted 2. theN4I a,ent0 it appears that the followin, articles=ite+s were sei?ed 2ased on the

search warrantsB

Leaf Spring eye bushing

a# 'lastic 'ol.prop.lene$ C1A) ( F$ C*) rear *) F$ C*) front *1 F 4!% 1

2# 'ol.vin.l Chloride 'lastic$ C1A) 1/ F

c# Vehicle 2earin, cushion$ center 2earin, cushion 11 F

Budder for C190 mold 8 }Diesel Mold

a# 3old for sprin, e.e 2ushin, rear 1 set2# 3old for sprin, e.e 2ushin, front 1 setc# 3old for sprin, e.e 2ushin, for C1A) 1 setd# 3old for C*) rear 1 piece of the

sete# 3old for sprin, e.e 2ushin, for :/)) setsf# 3old for leaf sprin, e.e 2ushin, C1A)

with +etal 1 set,# 3old for vehicle 2earin, cushion 1 set[@]

The respondents filed a +otion to 5uash the search warrants on the followin,,roundsB

2. he !opyrigh" regis"ra"ions #ere issued in $iola"ion of "he %n"elle!"ual &roper"y Codeon "he ground "ha"'

a( "he sub)e!" ma""er of "he regis"ra"ions are no" ar"is"i! or li"erary*

b( "he sub)e!" ma""er of "he regis"ra"ions are spare par"s of au"omobiles meaning+ "here ,sic( are original par"s "ha" "hey are designed "o repla!e. -en!e "heyare no" original.[A]

The respondents averred that the wor7s covered 2. the certificates issued 2. theNational :i2rar. are not artistic in nature the. are considered auto+otive spare partsand pertain to technolo,.& The. aver that the +odels are not ori,inal0 and as suchare the proper su2ect of a patent0 not cop.ri,ht&[1)]

In opposin, the +otion0 the petitioner averred that the court which issued thesearch warrants was not the proper foru+ in which to articulate the issue of thevalidit. of the cop.ri,hts issued to hi+& Citin, the rulin, of the Court in Malaloan v.Court of Appeals0[11] the petitioner stated that a search warrant is +erel. a udicial

process desi,ned 2. the Rules of Court in anticipation of a cri+inal case& 8ntil hiscop.ri,ht was nullified in a proper proceedin,0 he eno.s ri,hts of a re,isteredowner=holder thereof&

On -anuar. /0 ))0 the trial court issued an Order[1],rantin, the +otion0 and5uashed the search warrant on its findin, that there was no pro2a2le cause for itsissuance& The court ruled that the wor7 covered 2. the certificates issued to thepetitioner pertained to solutions to technical pro2le+s0 not literar. and artistic asprovided in !rticle 1( of the Intellectual 'ropert. Code&

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Gis +otion for reconsideration of the order havin, 2een denied 2. the trial courtHsOrder of e2ruar. 1*0 ))0 the petitioner filed a petition for certiorari in the C!0contendin, that the RTC had no urisdiction to delve into and resolve the validit. ofthe cop.ri,ht certificates issued to hi+ 2. the National :i2rar.& Ge insisted that hiswor7s are covered 2. Sections 1(&1 and 1(& of the Intellectual 'ropert. Code&The petitioner averred that the cop.ri,ht certificates areprima facieevidence of itsvalidit.0 citin, the rulin, of the 8nited States Court of !ppeals inWildlife ExpressCorporation v. Carol Wright Sales, Inc&[1/]The petitioner asserted that the respondentsfailed to adduce evidence to support their +otion to 5uash the search warrants& Thepetitioner noted that respondent 6illia+ Salinas0 -r& was not 2ein, honest0 as he wasa2le to secure a si+ilar cop.ri,ht re,istration of a si+ilar product fro+ the National:i2rar. on -anuar. 1*0 ))&

On Septe+2er 0 ))/0 the C! rendered ud,+ent dis+issin, the petition on itsfindin, that the RTC did not co++it an. ,rave a2use of its discretion in issuin, theassailed order0 to witB

%" is se""led "ha" preliminarily "here mus" be a finding "ha" a spe!ifi! offense mus" ha$e been!ommi""ed "o )us"ify "he issuan!e of a sear!h #arran". %n a number of !ases de!ided by "heSupreme Cour" "he same is e/pli!i"ly pro$ided "hus'

he probable !ause mus" be in !onne!"ion #i"h one spe!ifi! offense and "he )udge mus"before issuing "he #arran" personally e/amine in "he form of sear!hing ues"ions andans#ers in #ri"ing and under oa"h "he !omplainan" and any #i"ness he may produ!e on fa!"s

personally no#n "o "hem and a""a!h "o "he re!ord "heir s#orn s"a"emen"s "oge"her #i"h any

affida$i" submi""ed.

%n "he de"ermina"ion of probable !ause "he !our" mus" ne!essarily resol$e #he"her or no" anoffense e/is"s "o )us"ify "he issuan!e or uashal of "he sear!h #arran".3

%n "he ins"an" !ase "he pe"i"ioner is praying for "he reins"a"emen" of "he sear!h #arran"s issuedbu" subseuen"ly uashed for "he offense of Violation of Class Designation of CopyrightableWorks under Section 177.1 in relation to Section 177.3 of Republic Act !"3 #hen "he ob)e!"ssub)e!" of "he same are pa"en"ly no" !opyrigh"able.

%" is #or"hy "o s"a"e "ha" "he #ors pro"e!"ed under "he La# on Copyrigh" are' li"erary or

ar"is"i! #ors ,Se!. 142( and deri$a"i$e #ors ,Se!. 145(. he Leaf Spring 6ye Bushing and7ehi!le Bearing Cushion fall on nei"her !lassifi!a"ion. !!ordingly if in "he firs" pla!e "hei"em sub)e!" of "he pe"i"ion is no" en"i"led "o be pro"e!"ed by "he la# on !opyrigh" ho# !an"here be any $iola"ion[1*]

The petitionerHs +otion for reconsideration of the said decision suffered the sa+efate& The petitioner forthwith filed the present petition for review on certiorari0contendin, that the revocation of his cop.ri,ht certificates should 2e raised in a directaction and not in a search warrant proceedin,&

The petitioner posits that even assu+in, ex argumentithat the trial court +a.resolve the validit. of his cop.ri,ht in a proceedin, to 5uash a search warrant foralle,edl. infrin,in, ite+s0 the RTC co++itted a ,rave a2use of its discretion when itdeclared that his wor7s are not cop.ri,hta2le in the first place& Ge clai+s that R&!&No& @A/0 otherwise 7nown as the Intellectual 'ropert. Code of the 'hilippines0 whichtoo7 effect on -anuar. 10 1AA@0 provides in no uncertain ter+s that cop.ri,htprotection auto+aticall. attaches to a wor7 2. the sole fact of its creation0 irrespectiveof its +ode or for+ of epression0 as well as of its content0 5ualit. or purpose& [1>]Thelaw ,ives a non$inclusive definition of 9wor7; as referrin, to ori,inal intellectual

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creations in the literar. and artistic do+ain protected fro+ the +o+ent of theircreation and includes ori,inal orna+ental desi,ns or models for articles ofmanufacture0 whether or not re,istra2le as an industrial desi,n and other wor7s ofapplied art under Section 1(&1"h# of R&!& No& @A/&

!s such0 the petitioner insists0 notwithstandin, the classification of the wor7s aseither literar. and=or artistic0 the said law0 li7ewise0 enco+passes wor7s which +a.have a 2earin, on the utilit. aspect to which the petitionerHs utilit. desi,ns wereclassified& 3oreover0 accordin, to the petitioner0 what the Cop.ri,ht :aw protects isthe authorHs intellectual creation0 re,ardless of whether it is one with utilitarianfunctions or incorporated in a useful article produced on an industrial scale&

The petitioner also +aintains that the law does not provide that the intended useor use in industr. of an article eli,i2le for patent 2ars or invalidates its re,istrationunder the :aw on Cop.ri,ht& The test of protection for the aesthetic is not 2eaut. andutilit.0 2ut art for the cop.ri,ht and invention of ori,inal and orna+ental desi,n fordesi,n patents&[1]In li7e +anner0 the fact that his utilit. desi,ns or +odels for articlesof +anufacture have 2een epressed in the field of auto+otive parts0 or 2ased onso+ethin, alread. in the pu2lic do+ain does not auto+aticall. re+ove the+ fro+ theprotection of the :aw on Cop.ri,ht&[1(]

The petitioner faults the C! for i,norin, Section 1@ of R&!& No& @A/ which ,ivesthe sa+e presu+ption to an affidavit eecuted 2. an author who clai+s cop.ri,htownership of his wor7&

The petitioner adds that a findin, of pro2a2le cause to ustif. the issuance of asearch warrant +eans +erel. a reasona2le suspicion of the co++ission of theoffense& It is not e5uivalent to a2solute certaint. or a findin, of actual and positivecause&[1@]Ge assists that the deter+ination of pro2a2le cause does not concern theissue of whether or not the alle,ed wor7 is cop.ri,hta2le& Ge +aintains that to ustif.a findin, of pro2a2le cause in the issuance of a search warrant0 it is enou,h thatthere eists a reasona2le suspicion of the co++ission of the offense&

The petitioner contends that he has in his favor the 2enefit of the presu+ption thathis cop.ri,ht is valid hence0 the 2urden of overturnin, this presu+ption is on thealle,ed infrin,ers0 the respondents herein& 4ut this 2urden cannot 2e carried in ahearin, on a proceedin, to 5uash the search warrants0 as the issue therein iswhether there was pro2a2le cause for the issuance of the search warrant& Thepetitioner concludes that the issue of pro2a2le cause should 2e resolved withoutinvalidatin, his cop.ri,ht&

In their co++ent on the petition0 the respondents aver that the wor7 of thepetitioner is essentiall. a technical solution to the pro2le+ of wear and tear inauto+o2iles0 the su2stitution of +aterials0 i.e.0 fro+ ru22er to plastic +atter of

pol.vin.l chloride0 an oil resistant soft teture plastic +aterial stron, enou,h toendure pressure 2rou,ht a2out 2. the vi2ration of the counter 2earin, and thus2rin,s 2ushin,s& Such wor70 the respondents assert0 is the su2ect of cop.ri,htunder Section 1(&1 of R&!& No& @A/& The respondents posit that a technicalsolution in an. field of hu+an activit. which is novel +a. 2e the su2ect of a patent0and not of a cop.ri,ht& The. insist that the certificates issued 2. the National :i2rar.are onl. certifications that0 at a point in ti+e0 a certain wor7 was deposited in the saidoffice& urther+ore0 the re,istration of cop.ri,hts does not provide for auto+aticprotection& Citin, Section 1@&"2# of R&!& No& @A/0 the respondents aver that no

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cop.ri,ht is said to eist if a part. cate,oricall. 5uestions its eistence and le,alit.&3oreover0 under Section 0 Rule ( of the I+ple+entin, Rules of R&!& No& @A/0 there,istration and deposit of wor7 is not conclusive as to cop.ri,ht outla. or the ti+e ofcop.ri,ht or the ri,ht of the cop.ri,ht owner& The respondents +aintain that acop.ri,ht eists onl. when the wor7 is covered 2. the protection of R&!& No& @A/&

The petition has no +erit&

The RTC had urisdiction to delve into and resolve the issue whether thepetitionerHs utilit. +odels are cop.ri,hta2le and0 if so0 whether he is the owner of acop.ri,ht over the said +odels& It 2ears stressin, that upon the filin, of theapplication for search warrant0 the RTC was dut.$2ound to deter+ine whetherpro2a2le cause eisted0 in accordance with Section *0 Rule 1 of the Rules ofCri+inal 'rocedureB

S6C. :. Re#uisite for issuing search $arrant. + sear!h #arran" shall no" issue bu" uponprobable !ause in !onne!"ion #i"h one spe!ifi! offense "o be de"ermined personally by "he)udge af"er e/amina"ion under oa"h or affirma"ion of "he !omplainan" and "he #i"nesses hemay produ!e and par"i!ularly des!ribing "he pla!e "o be sear!hed and "he "hings "o be sei;ed.

In Solid Triangle Sales Corporation v. The Sheriff of RTC C0 4r& A/0[1A]the Courtheld that in the deter+ination of pro2a2le cause0 the court +ust necessaril. resolvewhether or not an offense eists to ustif. the issuance of a search warrant or the5uashal of one alread. issued 2. the court& Indeed0 pro2a2le cause is dee+ed toeist onl. where facts and circu+stances eist which could lead a reasona2l.

cautious and prudent +an to 2elieve that an offense has 2een co++itted or is 2ein,co++itted& 4esides0 in Section /0 Rule 1 of the Rules of Cri+inal 'rocedure0 asearch warrant +a. 2e issued for the search and sei?ure of personal propert. "a#su2ect of the offense "2# stolen or e+2e??led and other proceeds or fruits of theoffense or "c# used or intended to 2e used as the +eans of co++ittin, an offense&

The RTC is +andated under the Constitution and Rules of Cri+inal 'rocedure todeter+ine pro2a2le cause& The court cannot a2dicate its constitutional o2li,ation 2.refusin, to deter+ine whether an offense has 2een co++itted& [)]The a2sence ofpro2a2le cause will cause the outri,ht nullification of the search warrant&[1]

or the RTC to deter+ine whether the cri+e for infrin,e+ent under R&!& No& @A/as alle,ed in an application is co++itted0 the petitioner$applicant was 2urdened toprove that "a# respondents -essie Chin, and -oseph

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petitioner there2. authori?ed the RTC "in resolvin, the application#0 to delve into anddeter+ine the validit. of the cop.ri,ht which he clai+ed he had over the utilit.+odels& The petitioner cannot see7 relief fro+ the RTC 2ased on his clai+ that hewas the cop.ri,ht owner over the utilit. +odels and0 at the sa+e ti+e0 repudiate thecourtHs urisdiction to ascertain the validit. of his clai+ without runnin, afoul to thedoctrine of estoppel&

To dischar,e his 2urden0 the applicant +a. present the certificate of re,istrationcoverin, the wor7 or0 in its a2sence0 other evidence& []! cop.ri,ht certificateprovidesprima facieevidence of ori,inalit. which is one ele+ent of cop.ri,ht validit.&It constitutesprima facieevidence of 2oth validit. and ownership [(]and the validit. ofthe facts stated in the certificate&[@]The presu+ption of validit. to a certificate ofcop.ri,ht re,istration +erel. orders the 2urden of proof& The applicant should notordinaril. 2e forced0 in the first instance0 to prove all the +ultiple facts that underlinethe validit. of the cop.ri,ht unless the respondent0 effectivel. challen,in, the+0 shiftsthe 2urden of doin, so to the applicant&[A]Indeed0 Section 1@& of R&!& No& @A/providesB

218.2. %n an a!"ion under "his Chap"er'

,a( Copyrigh" shall be presumed "o subsis" in "he #or or o"her sub)e!" ma""er "o #hi!h "hea!"ion rela"es if "he defendan" does no" pu" in issue "he ues"ion #he"her !opyrigh" subsis"s in"he #or or o"her sub)e!" ma""er* and

,b(

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2od. havin, a co$aial 2ore that is centrall. located and provided with aperpendicular flan,e on one of its ends and a c.lindrical +etal ac7et surroundin, theperipheral walls of said 2od.0 with the 2ushin, +ade of plastic that is either pol.vin.lchloride or pol.prop.lene&[/1]:i7ewise0 the Vehicle 4earin, Cushion is illustrated as a2earin, cushion co+prisin, a ,enerall. se+i$circular 2od. havin, a central hole tosecure a conventional 2earin, and a pluralit. of rid,es provided therefore0 with saidcushion 2earin, 2ein, +ade of the sa+e plastic +aterials&[/]'lainl.0 these are notliterar. or artistic wor7s& The. are not intellectual creations in the literar. and artisticdo+ain0 or wor7s of applied art& The. are certainl. not orna+ental desi,ns or onehavin, decorative 5ualit. or value&

It 2ears stressin, that the focus of cop.ri,ht is the usefulness of the artisticdesi,n0 and not its +ar7eta2ilit.& The central in5uir. is whether the article is a wor7 ofart&[//]6or7s for applied art include all ori,inal pictorials0 ,raphics0 and sculpturalwor7s that are intended to 2e or have 2een e+2odied in useful article re,ardless offactors such as +ass production0 co++ercial eploitation0 and the potentialavaila2ilit. of desi,n patent protection&[/*]

!s ,leaned fro+ the description of the +odels and their o2ectives0 these articlesare useful articles which are defined as one havin, an intrinsic utilitarian function thatis not +erel. to portra. the appearance of the article or to conve. infor+ation&Indeed0 while wor7s of applied art0 ori,inal intellectual0 literar. and artistic wor7s arecop.ri,hta2le0 useful articles and wor7s of industrial desi,n are not&[/>]! useful article+a. 2e cop.ri,hta2le onl. if and onl. to the etent that such desi,n incorporatespictorial0 ,raphic0 or sculptural features that can 2e identified separatel. fro+0 and arecapa2le of eistin, independentl. of the utilitarian aspects of the article&

6e a,ree with the contention of the petitioner "citin, Section 1(1&1) of R&!& No&@A/#0 that the authorHs intellectual creation0 re,ardless of whether it is a creation withutilitarian functions or incorporated in a useful article produced on an industrial scale0is protected 2. cop.ri,ht law& Gowever0 the law refers to a 9wor7 of applied art whichis an artistic creation&; It 2ears stressin, that there is no cop.ri,ht protection forwor7s of applied art or industrial desi,n which have aesthetic or artistic features thatcannot 2e identified separatel. fro+ the utilitarian aspects of the article& [/]unctional

co+ponents of useful articles0 no +atter how artisticall. desi,ned0 have ,enerall.2een denied cop.ri,ht protection unless the. are separa2le fro+ the useful article&[/(]

In this case0 the petitionerHs +odels are not wor7s of applied art0 nor artisticwor7s& The. are utilit. +odels0 useful articles0 al2eit with no artistic desi,n or value&Thus0 the petitioner descri2ed the utilit. +odel as followsB

L6> S&?%@A 66 BS-%@A >=? =M=B%L6

no#n bushings inser"ed "o leafEspring eye "o hold leafEsprings of au"omobile are made ofhard rubber. hese rubber bushings af"er a "ime upon sub)e!"ing "hem "o so mu!h or

in"ermi""en" pressure #ould e$en"ually #ore ,sic( ou" "ha" #ould !ause "he #obbling of "heleaf spring.

he primary ob)e!" of "his u"ili"y model "herefore is "o pro$ide a leafEspring eye bushing forau"omobile "ha" is made up of plas"i!.

no"her ob)e!" of "his u"ili"y model is "o pro$ide a leafEspring eye bushing for au"omobilesmade of poly$inyl !hloride an oil resis"an" sof" "e/"ure plas"i! or polypropylene a hard

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plas"i! ye" bo"h !auses !ushion "o "he leaf spring ye" s"rong enough "o endure pressurebrough" abou" by "he up and do#n mo$emen" of said leaf spring.

e" an ob)e!" of "his u"ili"y model is "o pro$ide a leafEspring eye bushing for au"omobiles "ha"has a mu!h longer life span "han "he rubber bushings.

S"ill an ob)e!" of "his u"ili"y model is "o pro$ide a leafEspring eye bushing for au"omobiles "ha"has a $ery simple !ons"ru!"ion and !an be made using simple and ordinary moldingeuipmen".

fur"her ob)e!" of "his u"ili"y model is "o pro$ide a leafEspring eye bushing for au"omobile"ha" is supplied #i"h a me"al )a!e" "o reinfor!e "he plas"i! eye bushing #hen in engaged #i"h"he s"eel ma"erial of "he leaf spring.

hese and o"her ob)e!"s and ad$an"ages #ill !ome "o $ie# and be unders"ood upon a readingof "he de"ailed des!rip"ion #hen "aen in !on)un!"ion #i"h "he a!!ompanying dra#ings.

>igure 1 is an e/ploded perspe!"i$e of a leafEspring eye bushing a!!ording "o "he presen"u"ili"y model*

>igure 2 is a se!"ional $ie# "aen along line 2E2 of >ig. 1*

>igure 5 is a longi"udinal se!"ional $ie# of ano"her embodimen" of "his u"ili"y model*

>igure : is a perspe!"i$e $ie# of a "hird embodimen"* and

>igure F is a se!"ional $ie# "hereof.

?eferring no# "o "he se$eral $ie#s of "he dra#ings #herein lie referen!e numeralsdesigna"ed same par"s "hroughou" "here is sho#n a u"ili"y model for a leafEspring eye bushingfor au"omobile generally designa"ed as referen!e numeral 10.

Said leafEspring eye bushing 10 !omprises a generally !ylindri!al body 11 ha$ing a !oEa/ialbore 12 !en"rally pro$ided "hereof.

s sho#n in >igs. 1 and 2 said leafEspring eye bushing 10 is pro$ided #i"h a perpendi!ularflange 15 on one of i"s ends and a !ylindri!al me"al )a!e" 1: surrounding "he peripheral #alls1F of said body 11. igure 5 on "he o"her hand sho#s "he #alls 1G of "he !oEa/ial bore 12 of said bushing 10 isinser"ably pro$ided #i"h a s"eel "ube 14 "o reinfor!e "he inner por"ion "hereof. his s"eel "ube14 a!!ommoda"es or engages #i"h "he leafEspring bol" ,no" sho#n( !onne!"ing "he leaf spring

and "he au"omobileHs !hassis.

>igures : and F sho# ano"her embodimen" #herein "he leaf eye bushing 10 is elonga"ed and!ylindri!al as "o i"s !ons"ru!"ion. Said ano"her embodimen" is also made of polypropylene or

poly$inyl !hloride plas"i! ma"erial. he s"eel "ube 14 and me"al )a!e" 1: may also be applied"o "his embodimen" as an op"ion "hereof. [/@]

76-%CL6 B6?%@A CS-%=@

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no#n bearing !ushions inser"ed "o bearing housings for $ehi!le propeller shaf"s are made ofhard rubber. hese rubber bushings af"er a "ime upon sub)e!"ing "hem "o so mu!h orin"ermi""en" pressure #ould e$en"ually be #orn ou" "ha" #ould !ause "he #obbling of "he!en"er bearing.

he primary ob)e!" of "his u"ili"y model "herefore is "o pro$ide a $ehi!leEbearing !ushion "ha"is made up of plas"i!.

no"her ob)e!" of "his u"ili"y model is "o pro$ide a $ehi!le bearing !ushion made of poly$inyl!hloride an oil resis"an" sof" "e/"ure plas"i! ma"erial #hi!h !auses !ushion "o "he propellerHs!en"er bearing ye" s"rong enough "o endure pressure brough" abou" by "he $ibra"ion of "he!en"er bearing.

e" an ob)e!" of "his u"ili"y model is "o pro$ide a $ehi!leEbearing !ushion "ha" has a mu!hlonger life span "han rubber bushings.

S"ill an ob)e!" of "his u"ili"y model is "o pro$ide a $ehi!le bearing !ushion "ha" has a $erysimple !ons"ru!"ion and !an be made using simple and ordinary molding euipmen".

hese and o"her ob)e!"s and ad$an"ages #ill !ome "o $ie# and be unders"ood upon a readingof "he de"ailed des!rip"ion #hen "aen in !on)un!"ion #i"h "he a!!ompanying dra#ings.

>igure 1 is a perspe!"i$e $ie# of "he presen" u"ili"y model for a $ehi!leEbearing !ushion* and

>igure 2 is a se!"ional $ie# "hereof.

?eferring no# "o "he se$eral $ie#s of "he dra#ing #herein lie referen!e numeral designa"e

same par"s "hroughou" "here is sho#n a u"ili"y model for a $ehi!leEbearing !ushion generallydesigna"ed as referen!e numeral 10.

Said bearing !ushion 10 !omprises of a generally semiE!ir!ular body 11 ha$ing !en"ral hole12 "o house a !on$en"ional bearing ,no" sho#n(. s sho#n in >igure 1 said body 11 is

pro$ided #i"h a plurali"y of ridges 15 #hi!h ser$es reinfor!ing means "hereof.

he sub)e!" bearing !ushion 10 is made of poly$inyl !hloride a sof" "e/"ure oil and !hemi!alresis"an" plas"i! ma"erial #hi!h is s"rong durable and !apable of enduring se$ere pressurefrom "he !en"er bearing brough" abou" by "he ro"a"ing mo$emen" of "he propeller shaf" of "he$ehi!le.[/A]

! utilit. +odel is a technical solution to a pro2le+ in an. field of hu+an activit.which is new and industriall. applica2le& It +a. 2e0 or +a. relate to0 a product0 orprocess0 or an i+prove+ent of an. of the aforesaid&[*)]Essentiall.0 a utilit. +odelrefers to an invention in the +echanical field& This is the reason wh. its o2ect isso+eti+es descri2ed as a device or useful o2ect&[*1]! utilit. +odel varies fro+ aninvention0 for which a patent for invention is0 li7ewise0 availa2le0 on at least threeaspectsB first0 the re5uisite of 9inventive step;[*]in a patent for invention is notre5uired second0 the +ai+u+ ter+ of protection is onl. seven .ears[*/]co+pared toa patent which is twent. .ears0[**]2oth rec7oned fro+ the date of the application and

third0 the provisions on utilit. +odel dispense with its su2stantive ea+ination[*>]andprefer for a less co+plicated s.ste+&

4ein, plain auto+otive spare parts that +ust confor+ to the ori,inal structuraldesi,n of the co+ponents the. see7 to replace0 the :eaf Sprin, E.e 4ushin, andVehicle 4earin, Cushion are not orna+ental& The. lac7 the decorative 5ualit. orvalue that +ust characteri?e authentic wor7s of applied art& The. are not even artisticcreations with incidental utilitarian functions or wor7s incorporated in a useful article&

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In actualit.0 the personal properties descri2ed in the search warrants are +echanicalwor7s0 the principal function of which is utilit. sansan. aesthetic e+2ellish+ent&

Neither are we to re,ard the :eaf Sprin, E.e 4ushin, and Vehicle 4earin,Cushion as included in the catch$all phrase 9other literar.0 scholarl.0 scientific and

artistic wor7s; in Section 1(&1"a# of R&!& No& @A/& !ppl.in, the principleof e!usdem generiswhich states that 9where a statute descri2es thin,s of a particularclass or 7ind acco+panied 2. words of a ,eneric character0 the ,eneric word willusuall. 2e li+ited to thin,s of a si+ilar nature with those particularl. enu+erated0unless there 2e so+ethin, in the contet of the state which would repel suchinference0;[*]the :eaf Sprin, E.e 4ushin, and Vehicle 4earin, Cushion are notcop.ri,hta2le0 2ein, not of the sa+e 7ind and nature as the wor7s enu+erated inSection 1( of R&!& No& @A/&

No cop.ri,ht ,ranted 2. law can 2e said to arise in favor of the petitioner despitethe issuance of the certificates of cop.ri,ht re,istration and the deposit of the :eafSprin, E.e 4ushin, and Vehicle 4earin, Cushion& Indeed0 in "oa#uin, "r. v.$rilon [*(]and %earl & $ean '%hil.(, Incorporated v. Shoemart, Incorporated0[*@]theCourt ruled thatB

Copyrigh" in "he s"ri!" sense of "he "erm is purely a s"a"u"ory righ". %" is a ne# or independen"righ" gran"ed by "he s"a"u"e and no" simply a preEe/is"ing righ" regula"ed by i". Being as"a"u"ory gran" "he righ"s are only su!h as "he s"a"u"e !onfers and may be ob"ained anden)oyed only #i"h respe!" "o "he sub)e!"s and by "he persons and on "erms and !ondi"ionsspe!ified in "he s"a"u"e. !!ordingly i" !an !o$er only "he #ors falling #i"hin "he s"a"u"ory

enumera"ion or des!rip"ion.

That the wor7s of the petitioner +a. 2e the proper su2ect of a patent does notentitle hi+ to the issuance of a search warrant for violation of cop.ri,ht laws& In )hov. Court of Appeals[*A]and %earl & $ean '%hil.(, Incorporated v. Shoemart,Incorporated0[>)]the Court ruled that 9these cop.ri,ht and patent ri,hts are co+pletel.distinct and separate fro+ one another0 and the protection afforded 2. one cannot 2eused interchan,ea2l. to cover ite+s or wor7s that exclusivel*pertain to the others&;The Court epounded further0 thusB

rademar !opyrigh" and pa"en"s are differen" in"elle!"ual proper"y righ"s "ha" !anno" bein"er!hanged #i"h one ano"her. "rademar is any $isible sign !apable of dis"inguishing "hegoods ,"rademar( or ser$i!es ,ser$i!e mar( of an en"erprise and shall in!lude a s"amped ormared !on"ainer of goods. %n rela"ion "here"o a "rade name means "he name or designa"ioniden"ifying or dis"inguishing an en"erprise. Mean#hile "he s!ope of a !opyrigh" is !onfined "oli"erary and ar"is"i! #ors #hi!h are original in"elle!"ual !rea"ions in "he li"erary and ar"is"i!domain pro"e!"ed from "he momen" of "heir !rea"ion. &a"en"able in$en"ions on "he o"her handrefer "o any "e!hni!al solu"ion of a problem in any field of human a!"i$i"y #hi!h is ne#in$ol$es an in$en"i$e s"ep and is indus"rially appli!able.

The petitioner cannot find solace in the rulin, of the 8nited States Supre+e Courtin Ma+er v. Stein[>1]to 2uttress his petition& In that case0 the artifacts involved in thatcase were statuettes of dancin, +ale and fe+ale fi,ures +ade of se+i$vitreouschina& The controvers. therein centered on the fact that althou,h cop.ri,hted as9wor7s of art0; the statuettes were intended for use and used as 2ases for ta2lela+ps0 with electric wirin,0 soc7ets and la+pshades attached& The issue raised waswhether the statuettes were cop.ri,ht protected in the 8nited States0 considerin, thatthe cop.ri,ht applicant intended pri+aril. to use the+ as la+p 2ases to 2e +ade andsold in 5uantit.0 and carried such intentions into effect& !t that ti+e0 the Cop.ri,ht

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Office interpreted the 1A)A Cop.ri,ht !ct to cover wor7s of artistic crafts+anshipinsofar as their for+0 2ut not the utilitarian aspects0 were concerned& !fter reviewin,the histor. and intent of the 8S Con,ress on its cop.ri,ht le,islation and theinterpretation of the cop.ri,ht office0 the 8S Supre+e Court declared that thestatuettes were held cop.ri,hta2le wor7s of art or +odels or desi,ns for wor7s of art&The Gi,h Court ruled thatB

]

The Gi,h Court went on to state that 9[t]he dichoto+. of protection for theaesthetic is not 2eaut. and utilit. 2ut art for the cop.ri,ht and the invention of ori,inaland orna+ental desi,n for desi,n patents&; Si,nificantl.0 the cop.ri,ht officepro+ul,ated a rule to i+ple+ent 3a?er to witB

I J%Kf "he sole in"rinsi! fun!"ion of an ar"i!le is i"s u"ili"y "he fa!" "ha" "he #or is uniue anda""ra!"i$ely shaped #ill no" ualify i" as a #or of ar".3

In this case0 the 2ushin, and cushion are not wor7s of art& The. are0 as thepetitioner hi+self ad+itted0 utilit. +odels which +a. 2e the su2ect of a patent&

IN LIGH! OF ALL !HE FOREGOING, the instant petition is here2. DENIED forlac7 of +erit& The assailed Decision and Resolution of the Court of !ppeals in C!$%&R& S' No& ()*11 are !IR3ED& Search 6arrant Nos& )1$*)1 and )1$*)issued on Octo2er 1>0 ))1 are !NN8::ED !ND SET !SIDE& Costs a,ainst thepetitioner&

SO OR)ERE).

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?epubli! of "he &hilippinesS&?6M6 C=?

Manila

>%?S D%7%S%=@

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

and ENGRACIO YAP,

&e"i"ioners &resen"'

C=?=@ C.(. Chairperson 76LSC= ?.

E $ersus E L6=@?D= E D6 CS?= D6L CS%LL= and

&6?6((.

SHEN DAR ELECTRICITY AND &romulga"ed'MACHINERY CO., LTD.,

?esponden". =!"ober 20 2010/EEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEE/

D E C I S I O N

VELASCO, JR.,J.

T!" Ca#"

his &e"i"ion for ?e$ie# on Cer"iorari under ?ule :F sees "o nullify and re$erse "he

>ebruary 21 2008 De!isionJ1Kand "he =!"ober G 2008 ?esolu"ion J2Krendered by "he Cour"

of ppeals ,C( in CEA.?. S& @o. 995FG en"i"led Shen Dar )lectricity and *achinery

Co.+ %td. ,. ).-. &ndustrial Sales+ &nc. and )ngracio -ap .

he assailed de!ision re$ersed "he De!ision da"ed May 2F 2004J5Kissued by "he

Dire!"or Aeneral of "he %n"elle!"ual &roper"y =ffi!e ,%&=( in&nter artesCase @o. 1:E

200:E0008:. he %&= Dire!"or Aeneral upheld Cer"ifi!a"e of ?egis"ra"ion ,C=?( @o. :E

1999E00F595 issued by "he %&= for "he "rademar 76S&3 in fa$or of pe"i"ioner 6..

%ndus"rial Sales %n!. ,6%S( bu" ordered "he !an!ella"ion of C=? @o. :E1994E121:92

also for "he "rademar 76S&3 issued in fa$or of responden" Shen Dar 6le!"ri!i"y andMa!hinery Co. L"d. ,Shen Dar(. he De!ision of "he %&= Dire!"or Aeneral in effe!"

affirmed "he De!ision da"ed May 29 200G J:Kissued by "he Dire!"or of "he Bureau of Legal

ffairs ,BL( of "he %&=.

T!" $a%

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6%S is a domes"i! !orpora"ion engaged in "he produ!"ion dis"ribu"ion and sale of

air !ompressors and o"her indus"rial "ools and euipmen". JFK &e"i"ioner 6ngra!io ap is "he

Chairman of "he Board of Dire!"ors of 6%S.JGK

?esponden" Shen Dar is a ai#anEbased foreign !orpora"ion engaged in "hemanufa!"ure of air !ompressors.J4K

Bo"h !ompanies !laimed "o ha$e "he righ" "o regis"er "he "rademar 76S&3 for air

!ompressors.

>rom 1994 "o 200: 6%S impor"ed air !ompressors from Shen Dar "hrough sales

!on"ra!"s. %n "he Sales Con"ra!" da"ed pril 20 2002J8Kfor e/ample Shen Dar #ould

supply 6%S in one ,1( year #i"h 2: "o 50 uni"s of :0Ef". !on"ainers #or"h of air!ompressors iden"ified in "he &a!ingNebruary 8 2004

Shen Dar #as also issued C=? @o. :E1994E121:92.J15K

%n "he mean"ime on une 21 200: Shen Dar filed a &e"i"ion for Can!ella"ion of

6%SH C=? #i"h "he BL.J1:K%n "he &e"i"ion Shen Dar primarily argued "ha" "he issuan!e

of "he C=? in fa$or of 6%S $iola"ed Se!"ion 125.1 paragraphs ,d( ,e( and ,f( of ?epubli!!" @o. ,?( 8295 o"her#ise no#n as "he&ntellectual roperty Code,%& Code( ha$ing

firs" filed an appli!a"ion for "he mar. Shen Dar fur"her alleged "ha" 6%S #as a mere

dis"ribu"or of air !ompressors bearing "he mar 76S&3 #hi!h i" impor"ed from Shen

Dar. Shen Dar also argued "ha" i" had prior and e/!lusi$e righ" "o "he use and regis"ra"ion

of "he mar 76S&3 in "he &hilippines under "he pro$isions of "he &aris Con$en"ion. J1FK

%n i"s ns#er 6%S and ap denied "he !laim of Shen Dar "o be "he "rue o#ners of

"he mar 76S&3 being "he sole assembler and fabri!a"or of air !ompressors sin!e "he

early 1990s. hey fur"her alleged "ha" "he air !ompressors "ha" Shen Dar allegedlysupplied "hem bore "he mar SD3 for Shen Dar and no" 76S&.3 Moreo$er 6%S

argued "ha" Shen Dar no" being "he o#ner of "he mar !ould no" see pro"e!"ion from "he

pro$isions of "he &aris Con$en"ion or "he %& Code.J1GK

hereaf"er "he Dire!"or of "he BL issued i"s De!ision da"ed May 29 200G in fa$or

of 6%S and agains" Shen Dar "he disposi"i$e por"ion of #hi!h reads'

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=?6 premises !onsidered "he &e"i"ion for Can!ella"ion is as i" ishereby D6@%6D. Conseuen"ly Cer"ifi!a"e of ?egis"ra"ion @o. :E1999EJ00F595K for "hemar 76S&3 gran"ed in "he name of 6.. %ndus"rial Sales %n!. on 9 anuary 2004 ishereby upheld.

Le" "he file#rapper of 76S& sub)e!" ma""er of "his !ase be for#arded "o "hedminis"ra"i$e >inan!ial and -uman ?esour!e De$elopmen" Ser$i!es Bureau for issuan!eand appropria"e a!"ion in a!!ordan!e #i"h "his D6C%S%=@ and a !opy "hereof furnished "o"he Bureau of rademars for informa"ion and upda"e of i"s re!ords.

S= =?D6?6D.J14K

Shen Dar appealed "he de!ision of "he BL Dire!"or "o "he Dire!"or Aeneral of "he

%&=. %n "he appeal Shen Dar raised "he follo#ing issues'

1. ur"her le" also"he Dire!"ors of "he Bureau of rademars "he dminis"ra"i$e >inan!ial and -uman?esour!es De$elopmen" Ser$i!es Bureau and "he Do!umen"a"ion %nforma"ion ande!hnology ransfer Bureau be furnished a !opy of "his De!ision for informa"ionguidan!e and re!ords purposes.J19K

Shen Dar appealed "he abo$e de!ision of "he %&= Dire!"or Aeneral "o "he C #here

Shen Dar raised "he follo#ing issues'

1.

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G.

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T!" R'()n* o+ &!" Co'&

he appeal is meri"orious.

$)#& I##'"

-!"&!" &!)# Co'& a/ ")" &!" 2'"#&)on# o+ +a%& 3"#"n&"d

&e"i"ioners raise "he fa!"ual issue of #ho "he "rue o#ner of "he mar is. s a general

rule "his Cour" is no" a "rier of fa!"s. -o#e$er su!h rule is sub)e!" "o e/!ep"ions.

%n/e$ City 0uilders+ &nc. ,. /ational %abor Relations CoissionJ2:K"he Cour"

ruled "ha"'

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" "he ou"se" #e no"e pe"i"ionerHs failure "o addu!e any e$iden!e in suppor" of i"s

allega"ions in "he &e"i"ion for Can!ella"ion. &e"i"ioner did no" file nor submi" i"s marede$iden!e as reuired in "his BureauHs =rder @o. 200GE1F4 da"ed 2F anuary 200G in!omplian!e #i"h =ffi!e =rder @o. 49 Series of 200F mendmen"s "o "he ?egula"ions

on&nter artes&ro!eedings.J2FK/ / /

%n re$ersing su!h finding "he C !i"ed Se!. 2.: of BL Memorandum Cir!ular @o.

05 Series of 200F #hi!h s"a"es'Se!"ion 2.:. %n all !ases failure "o file "he do!umen"ary e$iden!es in a!!ordan!e

#i"h Se!"ions 4 and 8 of "he rules on summary pro!eedings shall be !ons"rued as a #ai$eron "he par" of "he par"ies. %n su!h a !ase "he original pe"i"ion opposi"ion ans#er and "hesuppor"ing do!umen"s "herein shall !ons"i"u"e "he en"ire e$iden!e for "he par"ies sub)e!" "oappli!able rules.

he C !on!luded "ha" Shen Dar needed no" formally offer i"s e$iden!e bu" merely

needed "o a""a!h i"s e$iden!e "o i"s posi"ion paper #i"h "he proper marings J2GK#hi!h i" did

in "his !ase.

he %& Code pro$ides under i"s Se!. 10.5 "ha" "he Dire!"or Aeneral of "he %&= shall

es"ablish "he pro!edure for "he appli!a"ion for "he regis"ra"ion of a "rademar as #ell as "he

opposi"ion "o i"'

Se!"ion 10. he Bureau of Legal ffairs.he Bureau of Legal ffairs shall ha$e

"he follo#ing fun!"ions'/ / / /10.5. he Dire!"or Aeneral may by ?egula"ions es"ablish "he pro!edure "o go$ern

"he implemen"a"ion of "his Se!"ion.

hus "he Dire!"or Aeneral issued =ffi!e =rder @o. 49 Series of 200F amending"he regula"ions on&nter artes&ro!eedings Se!. 12.1 of #hi!h pro$ides'

Se!"ion 12.),idence for the arties

12.1. he $erified pe"i"ion or opposi"ion reply if any duly mared affida$i"s of "he

#i"nesses and "he do!umen"s submi""ed shall !ons"i"u"e "he en"ire e$iden!e for "hepe"i"ioner or opposer. he $erified ans#er re)oinder if any and "he duly mared affida$i"sand do!umen"s submi""ed shall !ons"i"u"e "he e$iden!e for "he responden". ffida$i"sdo!umen"s and o"her e$iden!e no" submi""ed and duly mared in a!!ordan!e #i"h "he

pre!eding se!"ions shall no" be admi""ed as e$iden!e.

he pre!eding se!"ions referred "o in "he abo$e pro$ision refer "o Se!s. 4.1 8.1 and

9 #hi!h in "urn pro$ide'Se!"ion 4.2iling of etition or pposition

4.1. he pe"i"ion or opposi"ion "oge"her #i"h "he affida$i"s of #i"nesses and

originals of "he do!umen"s and o"her reuiremen"s shall be filed #i"h "he Bureau

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pro$ided "ha" in !ase of publi! do!umen"s !er"ified !opies shall be allo#ed in lieu of "heoriginals. he Bureau shall !he! if "he pe"i"ion or opposi"ion is in due form as pro$ided in"he ?egula"ions par"i!ularly ?ule 5 Se!"ion 5* ?ule : Se!"ion 2* ?ule F Se!"ion 5* ?ule GSe!"ion 9* ?ule 4 Se!"ions 5 and F* ?ule 8 Se!"ions 5 and :. >or pe"i"ion for !an!ella"ionof layou" design ,"opography( of in"egra"ed !ir!ui"s ?ule 5 Se!"ion 5 applies as "o "he

form and reuiremen"s. he affida$i"s do!umen"s and o"her e$iden!e shall be mared!onse!u"i$ely as 6/hibi"s3 beginning #i"h "he le""er 3.

Se!"ion 8.Ans$er

8.1.

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of ?egis"ra"ion @o. :E1994E121:92 #ould nullify "he e/!lusi$e righ"s of ppellee as "he"rue and regis"ered o#ner of "he mar 76S& and defea" "he purpose of "he "rademarregis"ra"ion sys"em.J24K

Shen Dar !hallenges "he proprie"y of su!h !an!ella"ion on "he ground "ha" "here #asno pe"i"ion for !an!ella"ion as reuired under Se!. 1F1 of ? 8295.

=ffi!e =rder @o. 49 Series of 200F pro$ides under i"s Se!. F "ha"'

Se!"ion F.Rules of rocedure to be follo$ed in the conduct of hearing of &nter

artes cases.he rules of pro!edure herein !on"ained primarily apply in "he !ondu!" of

hearing of %n"er &ar"es !ases. he ?ules of Cour" may be applied supple"orily. T!" '"a'#!a(( no& 7" 7o'nd 7/ #&)%& &"%!n)%a( '("# o+ 3o%"d'" and ")d"n%" 7'& a/ ado3&,

)n &!" a7#"n%" o+ an/ a33()%a7(" '(" !"")n, #'%! od" o+ 3o%""d)n*# !)%! )#%on#)#&"n& )&! &!" "2')""n o+ +a) 3(a/ and %ond'%)" &o &!" :'#&, #3""d/ and

)n";3"n#)" d)#3o#)&)on o+ %a#"#, and !)%! )(( *)" &!" '"a' &!" *"a&"#&

3o##)7)()&/ &o +o%'# on &!" %on&"n&)o'# )##'"# 7"+o" )&. ,6mphasis supplied.(

he abo$e rule refle!"s "he of"Erepea"ed legal prin!iple "ha" uasiE)udi!ial and

adminis"ra"i$e bodies are no" bound by "e!hni!al rules of pro!edure. Su!h prin!iple

ho#e$er is "empered by fundamen"al e$iden"iary rules in!luding due pro!ess. hus #e

ruled inAya4ay+ Sr. ,. Arpaphil Shipping Corp.'J28K

ha" adminis"ra"i$e uasiE)udi!ial bodies lie "he @L?C are no" bound by "e!hni!al

rules of pro!edure in "he ad)udi!a"ion of !ases does no" mean "ha" "he basi! rules onpro$ing allega"ions should be en"irely dispensed #i"h. par"y alleging a !ri"i!al fa!" mus"s"ill suppor" his allega"ion #i"h subs"an"ial e$iden!e. ny de!ision based onunsubs"an"ia"ed allega"ion !anno" s"and as i" #ill offend due pro!ess.

/ / / he liberali"y of pro!edure in adminis"ra"i$e a!"ions is sub)e!" "o limi"a"ions

imposed by basi! reuiremen"s of due pro!ess. s "his Cour" said in ng ibay $. C%? "hepro$ision for fle/ibili"y in adminis"ra"i$e pro!edure does no" go so far as "o )us"ify orders

#i"hou" a basis in e$iden!e ha$ing ra"ional proba"i$e $alue.3 More spe!ifi!ally as held ini!hi!o $. @L?C'

%" is "rue "ha" adminis"ra"i$e and uasiE)udi!ial bodies lie "he @L?C are no"

bound by "he "e!hni!al rules of pro!edure in "he ad)udi!a"ion of !ases. -o#e$er"his pro!edural rule should no" be !ons"rued as a li!ense "o disregard !er"ainfundamen"al e$iden"iary rules.

his #as la"er rei"era"ed in%epanto Consolidated *ining Copany ,. Duapis'J29K

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before "he L and "he @L?C "heir de!ision mus" be based on e$iden!e "ha" mus" a" "he$ery leas" be subs"an"ial.

he fa!" "ha" no pe"i"ion for !an!ella"ion #as filed agains" "he C=? issued "o Shen

Dar does no" pre!lude "he !an!ella"ion of Shen DarHs C=?. %" mus" be emphasi;ed "ha"

during "he hearing for "he !an!ella"ion of 6%SH C=? before "he BL Shen Dar "ried "o

es"ablish "ha" i" no" 6%S #as "he "rue o#ner of "he mar 76S&3 and "hus en"i"led "o

ha$e i" regis"ered. Shen Dar had more "han suffi!ien" oppor"uni"y "o presen" i"s e$iden!e

and argue i"s !ase and i" did. %" #as gi$en i"s day in !our" and i"s righ" "o due pro!ess #as

respe!"ed. he %&= Dire!"or AeneralHs disregard of "he pro!edure for "he !an!ella"ion of a

regis"ered mar #as a $alid e/er!ise of his dis!re"ion.

$o'&! I##'"

-!"&!" &!" +a%&'a( +)nd)n*# o+ &!" IPO a" 7)nd)n* on &!" CA

@e/" pe"i"ioners !hallenge "he CHs re$ersal of "he fa!"ual findings of "he BL "ha"

Shen Dar and no" 6%S is "he prior user and "herefore "rue o#ner of "he mar. %n arguing

i"s posi"ion pe"i"ioners !i"e numerous rulings of "his Cour" #here i" #as enun!ia"ed "ha" "he

fa!"ual findings of adminis"ra"i$e bodies are gi$en grea" #eigh" if no" !on!lusi$e upon "he

!our"s #hen suppor"ed by subs"an"ial e$iden!e.

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,G( #hen "he )udgmen" of "he Cour" of ppeals is premised on a misapprehensionof fa!"s*

6 !"n &!" Co'& o+ A33"a(# +a)(# &o no&)%" %"&a)n "("an& +a% !)%!, )+

3o3"(/ %on#)d""d, )(( :'#&)+/ a d)++""n& %on%('#)onirs" as "o "he da"e of firs" use of "he mar by "he par"ies "he C s"a"ed'o begin #i"h #hen responden"sEappellees filed i"s appli!a"ion for regis"ra"ion of

"he 76S& "rademar on uly 28 1999 "hey s"a"ed under oa"h as found in "heirD6CL?%=@ => CL S6 "ha" "heir firs" use of "he mar #as on De!ember 221998. =n "he o"her hand JShen DarK in i"s appli!a"ion da"ed une 09 1994 s"a"ed lie#iseunder oa"h in "heir D6CL?%=@ => CL S6 "ha" i"s firs" use of "he mar #as

in une 199G. his !anno" be made any !learer. JShen DarK #as no" only "he firs" "o file anappli!a"ion for regis"ra"ion bu" lie#ise firs" "o use said regis"rable mar.J52K

6$iden"ly "he C an!hors i"s finding "ha" Shen Dar #as "he firs" "o use "he mar on

"he s"a"emen"s of "he par"ies in "heir respe!"i$e De!lara"ions of !"ual se. Su!h

!on!lusion is prema"ure a" bes".

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,6/hibi"s P:H "o P54FH(. Sales %n$oi!e @o. 1204F da"ed Mar!h 24 199F an"eda"espe"i"ionerHs da"e of firs" use on anuary 1 1994 indi!a"ed in i"s "rademar appli!a"ion filedon une 9 1994 as #ell as "he da"e of firs" use in une of 199G as indi!a"ed in "heDe!lara"ion of !"ual se submi""ed on De!ember 5 2001 ,6/hibi" P58FH(. he use byresponden" regis"ran" in "he !on!ep" of o#ner is sho#n by !ommer!ial do!umen"s sales

in$oi!es unambiguously des!ribing "he goods as 76S&3 air !ompressors. &ri$a"eresponden"s ha$e sold "he air !ompressors bearing "he 76S&3 "o $arious lo!a"ions in"he &hilippines as far as Mindanao and "he 7isayas sin!e "he early 1990Hs.

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he "erm o#ner does no" in!lude "he impor"er of "he goods bearing "he"rademar "rade name ser$i!e mar or o"her mar of o#nership unless su!himpor"er is a!"ually "he o#ner "hereof in "he !oun"ry from #hi!h "he goods areimpor"ed. hus "his Cour" has on se$eral o!!asions ruled "ha" #here "heappli!an"Hs alleged o#nership is no" sho#n in any no"arial do!umen" and "he

appli!an" appears "o be merely an impor"er or dis"ribu"or of "he mer!handise!o$ered by said "rademar i"s appli!a"ion !anno" be gran"ed.3J5GK

his is a non se#uitur. %" does no" follo#. he fa!" "ha" 6%S des!ribed i"self in i"s

sales in$oi!e as an impor"er #holesaler and re"ailer does no" pre!lude i"s being a

manufa!"urer. Se!. 254 of "he @a"ional %n"ernal ?e$enue Code s"a"es'

Se!"ion 254.&ssuance of Receipts or Sales or Coercial &n,oices.ll persons

sub)e!" "o an in"ernal re$enue "a/ shall for ea!h sale and "ransfer of mer!handise or for

ser$i!es rendered $alued a" #en"yEfi$e pesos ,&2F.00( or more issue duly regis"eredre!eip"s or sale or !ommer!ial in$oi!es prepared a" leas" in dupli!a"e #!o)n* &!" da&" o+&an#a%&)on, 2'an&)&/, 'n)& %o#& and d"#%)3&)on o+ "%!and)#" o na&'" o+

#")%" &ro$ided ho#e$er ha" #here "he re!eip" is issued "o !o$er paymen" made asren"als !ommissions !ompensa"ion or fees re!eip"s or in$oi!es shall be issued #hi!h shallsho# "he name business s"yle if any and address of "he pur!haser !us"omer or !lien".

he original of ea!h re!eip" or in$oi!e shall be issued "o "he pur!haser !us"omer or

!lien" a" "he "ime "he "ransa!"ion is effe!"ed #ho if engaged in business or in "he e/er!iseof profession shall eep and preser$e "he same in his pla!e of business for a period of"hree ,5( years from "he !lose of "he "a/able year in #hi!h su!h in$oi!e or re!eip" #as

issued #hile "he dupli!a"e shall be ep" and preser$ed by "he issuer also in his pla!e ofbusiness for a lie period.

he Commissioner may in meri"orious !ases e/emp" any person sub)e!" "o an

in"ernal re$enue "a/ from !omplian!e #i"h "he pro$isions of "his Se!"ion. ,6mphasissupplied.(

Correla"i$ely in ?e$enue Memorandum @o. 1GE2005 da"ed May 20 2005 "he

Bureau of %n"ernal ?e$enue defined a Sales %n$oi!e and iden"ified i"s reuired informa"ion

as follo#s'

Sales %n$oi!es ,S%(NCash %n$oi!e ,C%( + is #ri""en a!!oun" of goods sold or ser$i!es

rendered and "he pri!es !harged "herefor used in "he ordinary !ourse of business e$iden!ingsale and "ransfer or agreemen" "o sell or "ransfer of goods and ser$i!es. %" !on"ains "hesame informa"ion found in "he =ffi!ial ?e!eip".

=ffi!ial ?e!eip" ,=?( + is a re!eip" issued for "he paymen" of ser$i!es rendered or

goods sold. %" !on"ains "he follo#ing informa"ion'a. Business name and address*b. a/payer %den"ifi!a"ion @umber*!. @ame of prin"er ,B%? &ermi" @o.( #i"h in!lusi$e serial number of boole"s and

da"e of issuan!e of re!eip"s.

here is no reuiremen" "ha" a sales in$oi!e should a!!ura"ely s"a"e "he na"ure of all

"he businesses of "he seller. here is no legal ground "o s"a"e "ha" 6%SH de!lara"ion3 in

i"s sales in$oi!es "ha" i" is an impor"er #holesaler and re"ailer is res"ri!"i$e and #ould

pre!lude i"s being a manufa!"urer.

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>rom "he abo$e findings "here #as no )us"ifiable reason for "he C "o disregard "he

fa!"ual findings of "he %&=. he rulings of "he %&= Dire!"or Aeneral and "he BL Dire!"or

#ere suppor"ed by !lear and !on$in!ing e$iden!e. he fa!"s !i"ed by "he C and Shen Dar

do no" )us"ify a differen" !on!lusion from "ha" of "he %&=. -en!e "he findings of "he BLDire!"or and "he %&= Dire!"or Aeneral mus" be deemed as !on!lusi$e on "he C.

$)+&! I##'"

-!"&!" EYIS )# &!" &'" on" o+ &!" a> ?VESPA@

%n any e$en" gi$en "he leng"h of "ime already in$es"ed by "he par"ies in "he ins"an"

!ase "his Cour" mus" #ri"efinis"o "he ins"an" !on"ro$ersy by de"ermining on!e and for all

"he "rue o#ner of "he mar 76S&3 based on "he e$iden!e presen"ed.

? 8295 espouses "he firs"E"oEfile3 rule as s"a"ed under Se!. 125.1,d( #hi!h s"a"es'

Se!"ion 125. ?egis"rabili"y. E 125.1. mar !anno" be regis"ered if i"'/ / / /,d( %s iden"i!al #i"h a regis"ered mar belonging "o a differen" proprie"or or a mar

#i"h an "a()" +)()n* o 3)o)&/ da&" in respe!" of'

,i( he same goods or ser$i!es or

,ii( Closely rela"ed goods or ser$i!es or,iii( %f i" nearly resembles su!h a mar as "o be liely "o de!ei$e or !ause!onfusion. ,6mphasis supplied.(

nder "his pro$ision "he regis"ra"ion of a mar is pre$en"ed #i"h "he filing of an

earlier appli!a"ion for regis"ra"ion. his mus" no" ho#e$er be in"erpre"ed "o mean "ha"

o#nership should be based upon an earlier filing da"e.

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%on&)n'o'# '#" o+ &!" a> o &ad" na" 7/ ano&!" %an o"%o" &!" 3"#'3&)"

on"#!)3 o+ &!" "*)#&an& and a/ "/ "(( "n&)&(" &!" +o" &o 7" d"%(a"d on"

)n an a33o3)a&" %a#".

/ / / /

=#nership of a mar or "rade name may be a!uired no" ne!essarily by regis"ra"ionbu" by adop"ion and use in "rade or !ommer!e. s be"#een a!"ual use of a mar #i"hou"regis"ra"ion and regis"ra"ion of "he mar #i"hou" a!"ual use "hereof "he former pre$ailso$er "he la""er. >or a rule #idely a!!ep"ed and firmly en"ren!hed be!ause i" has !omedo#n "hrough "he years is "ha"a%&'a( '#" )n %o"%" o 7'#)n"## )# a 3"="2')#)&" &o&!" a%2')#)&)on o+ &!" )*!& o+ on"#!)3.

/ / / /By i"self regis"ra"ion is no" a mode of a!uiring o#nership. -!"n &!" a33()%an& )#

no& &!" on" o+ &!" &ad"a> 7")n* a33()"d +o, !" !a# no )*!& &o a33(/ +o"*)#&a&)on o+ &!" #a".?egis"ra"ion merely !rea"es a prima fa!ie presump"ion of "he$alidi"y of "he regis"ra"ion of "he regis"ran"Hs o#nership of "he "rademar and of "hee/!lusi$e righ" "o "he use "hereof. Su!h presump"ion )us" lie "he presump"i$e regulari"y in"he performan!e of offi!ial fun!"ions is rebu""able and mus" gi$e #ay "o e$iden!e "o "he!on"rary.

-ere "he in!on"ro$er"ible "ru"h as es"ablished by "he e$iden!e submi""ed by "he

par"ies is "ha" 6%S is "he prior user of "he mar. he e/haus"i$e dis!ussion on "he ma""er

made by "he BL suffi!ien"ly addresses "he issue'

Based on "he e$iden!e ?esponden" 6.. %ndus"rial is a legi"ima"e !orpora"ionengaged in buying impor"ing selling indus"rial ma!hineries and "ools manufa!"uringamong o"hers sin!e i"s in!orpora"ion in 1988. ,6/hibi" 13(. %ndeed pri$a"e responden"sha$e submi""ed pho"ographs ,6/hibi" 54G3 5443 5483 5493( sho#ing an assemblyline of i"s manufa!"uring or assembly pro!ess.

More impor"an"ly "he pri$a"e responden"Hs prior adop"ion and !on"inuous use of "he

mar 76S&3 on air !ompressors is bols"ered by numerous do!umen"ary e$iden!e!onsis"ing of sales in$oi!es issued in "he name of responden" 6 %ndus"rial and Bills of

Lading. ,6/hibi"s :3 "o 54F3(. Sales %n$oi!e @o. 1204F da"ed Mar!h 24 199F an"eda"espe"i"ionerHs da"e of firs" use in anuary 1 1994 indi!a"ed in i"s "rademar appli!a"ion filedin une 9 1994 as #ell as "he da"e of firs" use in une of 199G as indi!a"ed in "heDe!lara"ion of !"ual se submi""ed on De!ember 5 2001 ,6/hibi" 58F3(. he use byresponden"Eregis"ran" in "he !on!ep" of o#ner is sho#n by !ommer!ial do!umen"s salesin$oi!es unambiguously des!ribing "he goods as 76S&3 air !ompressors. &ri$a"eresponden"s ha$e sold "he air !ompressors bearing "he 76S&3 "o $arious lo!a"ions in"he &hilippines as far as Mindanao and "he 7isayas sin!e "he early 1990Hs.

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=n "he o"her hand Shen Dar failed "o refu"e "he e$iden!e !i"ed by "he BL in i"s

de!ision. More impor"an"ly Shen Dar failed "o presen" suffi!ien" e$iden!e "o pro$e i"s

o#n prior use of "he mar 76S&.3

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R"3'7()% o+ &!" P!)()33)n"#

S'3"" Co'&

a*')o C)&/

SECOND DIVISION

SUPERIOR COMMERCIAL

ENTERPRISES, INC.,

&e"i"ioner

E $ersus E

UNNAN ENTERPRISES LTD.

AND SPORTS CONCEPT B

DISTRIUTOR, INC.,

?esponden"s.

G.R. No. 14

&resen"'

C?&%=+ (.+ Chairperson+

B?%=@ D6L CS%LL= BD and &6?6((.

&romulga"ed'

pril 20 2010

;=========================================================================================;

D E C I S I O N

RION,J.

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J9K6@@6R O D67%C63J10K&?= 6@@6R3J11Kand &?=E6@@6R3 ,disputed

tradearks(.J12K Second i" also asser"ed i"s prior use of "hese "rademars presen"ing as

e$iden!e of o#nership "he &rin!ipal and Supplemen"al ?egis"ra"ions of "hese "rademars in

i"s name. 6hird S&6?%=? also alleged "ha" i" e/"ensi$ely sold and ad$er"ised spor"ing

goods and produ!"s !o$ered by i"s "rademar regis"ra"ions. 2inally S&6?%=? presen"edas e$iden!e of i"s o#nership of "he dispu"ed "rademars "he preambular !lause of "he

Dis"ribu"orship greemen" da"ed =!"ober 1 1982 ,Distributorship Agreeent( i" e/e!u"ed

#i"h @@@ #hi!h s"a"es'# )n ) na". @@@ alleged "ha" i" #as

in!orpora"ed in 1942 under "he name 6@@6R Spor"s Corpora"ion for "he purpose of

manufa!"uring and selling spor"s#ear and spor"s euipmen"* i" !ommer!ially mare"ed i"s

produ!"s in differen" !oun"ries in!luding "he &hilippines sin!e 1942.J1:K %" !rea"ed and firs"

used &?= 6@@6R3 deri$ed from i"s original !orpora"e name as a dis"in!"i$e

"rademar for i"s produ!"s in 194G. @@@ also alleged "ha" i" regis"ered "he &?=6@@6R3 "rademar no" only in "he &hilippines bu" also in 51 o"her !oun"ries and #idely

promo"ed "he 6@@6R3 and &?= 6@@6R3 "rademars "hrough #orld#ide

ad$er"isemen"s in prin" media and sponsorships of no#n "ennis players.

=n =!"ober 1 1982 af"er "he e/pira"ion of i"s ini"ial dis"ribu"orship agreemen" #i"h

ano"her !ompanyJ1FK@@@ appoin"ed S&6?%=? as i"s e/!lusi$e dis"ribu"or in

"he &hilippines under a Dis"ribu"orship greemen" #hose per"inen" pro$isions s"a"e'J1GK

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5. @@@ #ill guaran"ee "o "he Superior "ha" no o"her "hird par"ies #ill be

permi""ed "o supply "he 6@@6R &?=DCS in "he &hilippines e/!ep"only "o "he Superior. %f @@@ $iola"es "his s"ipula"ion "he "ransfer of "he6@@6R "rademar shall be null and $oid.

:. %f "here is a ne!essi"y "he Superior #ill be appoin"ed for "he pro"e!"ion of

in"eres" of bo"h par"ies as "he agen" in "he &hilippines #i"h full po#er "oe/er!ise and gran"ed "he po#er of a""orney "o pursue any !ase of &ira"ing%nfringemen" and Coun"erfei"ing "he JsicK 6@@6R "rade mar in "he&hilippine "erri"ory.

F. he Superior #ill be gran"ed from JsicK @@@Hs appro$al before maingand selling any 6@@6R produ!"s made in "he &hilippines and "he o"her!oun"ries and if "his is "he si"ua"ion @@@ is en"i"led "o ha$e a royal"yof FE8 of >=B as "he righ".

G.

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5. S'3")o a*""# &!a& )& )(( "&'n 7a%> &!" a7o""n&)on"d&ad"a># &o UNNAN )&!o'& !"#)&a&)on a& &!" "2'"#& o+ UNNAN a&

an/ &)". @@@ agrees "ha" "he !os" for "he !on!erned assignmen" of "heabo$emen"ioned "rademars shall be !ompensa"ed by @@@.

:. Superior agrees "ha" "he abo$emen"ioned "rademars #hen reues"ed by@@@ shall be !lean and #i"hou" any in!umben!y.

F. Superior agrees "ha" af"er "he assignmen" of "he abo$emen"ioned"rademars i" shall ha$e no righ" "o reassign or li!ense "he said "rademars "oany o"her par"ies e/!ep" @@@. J6mphasis suppliedK

P)o &o and d')n* &!" 3"nd"n%/ o+ &!" )n+)n*""n& and 'n+a) %o3"&)&)on

%a#" 7"+o" &!" RTC, UNNAN +)("d )&! &!" no d"+'n%& '"a' o+ Pa&"n,Tad"a># and T"%!no(o*/ Tan#+"F1#"3aa&" P"&)&)on# +o &!" Can%"((a&)on o+

R"*)#&a&)on Tad"a> No#. 410, SR , 40, 54, 40 and 48 do!e"ed

as %n"er &ar"es Cases @os. 5409 5410 5811 5812 5815 and 581: a# "(( a# O33o#)&)on

&o A33()%a&)on S")a( No#. 8455 and 845 do!e"ed as %n"er &ar"es Cases @os. :101

and :102 ,Consolidated etitions for Cancellation( in$ol$ing "he 6@@6R and &?=

6@@6R "rademars.J20K %n essen!e @@@ filed "he &e"i"ion for Can!ella"ion and

=pposi"ion on "he ground "ha" S&6?%=? fraudulen"ly regis"ered and appropria"ed "he

dispu"ed "rademars* as mere dis"ribu"or and no" as la#ful o#ner i" ob"ained "he

regis"ra"ions and assignmen"s of "he dispu"ed "rademars in $iola"ion of "he "erms of "he

Dis"ribu"orship greemen" and Se!"ions 2E and 14 of ?epubli! !" @o. 1GG as amended.J21K

=n De!ember 5 1991 upon "he "ermina"ion of i"s dis"ribu"orship agreemen"

#i"h S&6?%=? @@@ appoin"ed S&=?S C=@C6& as i"s ne#

dis"ribu"or. Subseuen"ly @@@ also !aused "he publi!a"ion of a @o"i!e and

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"rademar ?PRO=ENNE@ "he !onsolida"ed &e"i"ions for Can!ella"ion and"he @o"i!es of =pposi"ion are hereby GRANTED. Conseuen"ly "he"rademar ?PRO=ENNE@bearing ?egis"ra"ion @os. :1052 :052G 592F::450 :9998 for "he mar &?=E6@@6R issued in fa$or of SuperiorCommer!ial 6n"erprises %n!. herein ?esponden"E?egis"ran" under "he &rin!ipal

?egis"er and S? @o. GGG5 are hereby CANCELLED. !!ordingly "rademarappli!a"ion @os. 8:FGF and 8:FGG lie#ise for "he regis"ra"ion of "he mar&?=E6@@6R are hereby REJECTED.

Le" "he file #rappers of &?=E6@@6R sub)e!" ma""er of "hese !ases befor#arded "o "he dminis"ra"i$e >inan!e and -uman ?esour!es De$elopmen"Ser$i!es Bureau ,>-?DSB( for appropria"e a!"ion in a!!ordan!e #i"h "hisDe!ision and a !opy "hereof be furnished "he Bureau of rademars ,B=( forinforma"ion and upda"e of i"s re!ord.J2GK

=n >ebruary : 200F @@@ again filed ano"her Manifes"a"ion reues"ing "ha"

"he IPO D)"%&o G"n"a(9# d"%)#)on on a33"a( da&"d D"%"7" 8, 004,

d"n/)n*SUPERIOR9# a33"a( be gi$en #eigh" in "he disposi"ion of "he !ase. J24K he

disposi"i$e por"ion of "he de!ision reads'J28K

=?6 premises !onsidered "here is no !ogen" reason "o dis"urb

De!ision @o. 2005E5F da"ed 50 =!"ober 2005 rendered by "he Dire!"or of "heBureau of Legal ffairs. !!ordingly "he ins"an" appeal is D6@%6D and "heappealed de!ision is hereby >>%?M6D.

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!on"rary e$iden!e.J52Khe C fur"her emphasi;ed "ha" "he Cer"ifi!a"es of Supplemen"al

?egis"ra"ion issued in S&6?%=?Hs name do no" e$en en)oy "he presump"ion of o#nership

a!!orded "o regis"ra"ion in "he prin!ipal regis"er* i" does no" amoun" "o apria

faciee$iden!e of "he $alidi"y of regis"ra"ion or of "he regis"ran"Hs e/!lusi$e righ" "o use "he

"rademars in !onne!"ion #i"h "he goods business or ser$i!es spe!ified in "he !er"ifi!a"e.J55K

%n !on"ras" #i"h "he failure of S&6?%=?Hs e$iden!e "he C found "ha" @@@

presen"ed suffi!ien" e$iden!e "o rebu" S&6?%=?Hs presump"ion of o#nership o$er "he

"rademars. @@@ es"ablished "ha" S&6?%=? far from being "he righ"ful o#ner of

"he dispu"ed "rademars #as merely @@@Hs e/!lusi$e dis"ribu"or. his !on!lusion

#as based on "hree pie!es of e$iden!e "ha" "o "he C !learly es"ablished

"ha" S&6?%=? had no proprie"ary in"eres" o$er "he dispu"ed "rademars.

2irst "he C found "ha" "he Dis"ribu"orship greemen" !onsidered in i"s en"ire"y

posi"i$ely !onfirmed "ha" S&6?%=? sough" "o be "he @@@Hs e/!lusi$e

dis"ribu"or. he C based "his !on!lusion on "he follo#ing pro$isions of "he

Dis"ribu"orship greemen"'

,1( "ha" S&6?%=? #as desirous of JbeingK appoin"ed as "he sole dis"ribu"or by@@@ in "he "erri"ory of "he &hilippines*3

,2( "ha" @@@ #ill appoin" "he sole dis"ribu"orship righ" "o Superior in"he &hilippines*3 and,5( "ha" no "hird par"ies #ill be permi""ed "o supply 6@@6R &?=DCS in"he &hilippines e/!ep" only "o Superior.3

he C "hus emphasi;ed "ha" "he ?C erred in unduly relying on "he firs" #hereas

!lause #hi!h s"a"es "ha" @@@ in"ends "o a!uire o#nership of J"heK 6@@6R

"rademar regis"ered by S&6?%=? in "he &hilippines3 #i"hou" !onsidering "he en"ire"y of

"he Dis"ribu"orship greemen" indi!a"ing "ha" S&6?%=? had been merely appoin"ed by

@@@ as i"s dis"ribu"or.

Second "he C also no"ed "ha" S&6?%=? made "he e/press under"aing in "he

ssignmen" greemen" "o a!no#ledge "ha"8//A/ is still the real and truthful o$ner

of the :R 8)//)9; tradearks3 and "ha" i" shall agree "ha" i" #ill not use the right of

the abo,eentioned tradearks to do anything $hich is unfa,ourable or harful to

8//A/.3 o "he C "hese pro$isions are !learly in!onsis"en" #i"h S&6?%=?Hs !laim

of o#nership of "he dispu"ed "rademars. he C also obser$ed "ha" al"hough "hessignmen" greemen" #as a pri$a"e do!umen" i"s au"hen"i!i"y and due e/e!u"ion #as

pro$en by "he similari"y of Mr. an Bon DiongHs signa"ure in "he Dis"ribu"orship

greemen" and "he ssignmen" greemen".

6hird "he C also "oo no"e of S&6?%=?Hs Le""er da"ed @o$ember 12 198G

addressed "o Brig. Aen. ose lmon"e iden"ifying i"self as "he sole and e

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produ!"s.3 ""a!hed "o "he le""er #as an agreemen" #i"h @@@ iden"ifying "he la""er

as "he foreign anufacturerof all 6@@6R produ!"s.3 he C !on!luded "ha" in "his

le""er S&6?%=? a!no#ledged i"s s"a"us as a dis"ribu"or in i"s dealings #i"h @@@

and e$en in i"s "ransa!"ions #i"h "hird persons.

Based on "hese reasons "he C ruled "ha" S&6?%=? #as a mere dis"ribu"or and

had no righ" "o "he regis"ra"ion of "he dispu"ed "rademars sin!e "he righ" "o regis"er a

"rademar is based on o#nership. Ci"ing Se!"ion : of ?epubli! !" @o. 1GG J5:Kand

es"ablished )urispruden!eJ5FK"he C held "ha" S&6?%=? + as an e/!lusi$e dis"ribu"or +

did no" a!uire any proprie"ary in"eres" in "he prin!ipalHs ,@@@Hs( "rademar.

he C denied S&6?%=?Hs mo"ion for re!onsidera"ion for la! of meri" in i"s

?esolu"ion da"ed =!"ober : 200F.

THE PETITION

%n "he presen" pe"i"ion S&6?%=? raises "he follo#ing issues'

%. &&6LS 6??6D %@ -=LD%@A- &6%%=@6? S&6?%=? %S @= -6 ?6 @D ?%A->L

= -6 ?D6M?S 6@@6R3 @D &?=E6@@6R3 %@-6 &-%L%&&%@6S

%%.

&&6LS 6??6D%@ -=LD%@A - &6%%=@6? S&6?%=? %S M6?6D%S?%B=? => ?6S&=@D6@ @@@ %@ -6 &-%L%&&%@6S

%%%.

&&6LS 6??6D%@ ?676?S%@A @D S6%@A S%D6 -6 D6C%S%=@ => -6?6A%=@L ?%L C=? => Q6=@ C% %@ C%7%L CS6 @=. QE95E1:888 L%>%@A -6 &?6L%M%@? %@@C%=@ %SS6DA%@S ?6S&=@D6@S @@@ @D S&=?S C=@C6& @DD%SM%SS%@A -6 C=M&L%@ >=? %@>?%@A6M6@ =>?D6M? @D @>%? C=M&6%%=@

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# #!o'(d 7" %an%"(("d 7"%a'#" SUPERIOR a# no& &!" on" o+, and %o'(d

no& )n &!" +)#& 3(a%" !a" a()d(/ "*)#&""d &!"#" &ad"a># . hus as of "he finali"y

of "he C de!ision on De!ember 5 2004 "hese "rademar regis"ra"ions #ere effe!"i$ely

!an!elled and S&6?%=? #as no longer "he regis"ran" of "he dispu"ed "rademars.

Se!"ion 22 of ?epubli! !" @o. 1GG as amended ,? 1GG3( J5GK"he la# appli!able

"o "his !ase defines "rademar infringemen" as follo#s'

Se!"ion 22. &nfringeent+ $hat constitutes. TAny3"#on !oF1 shall'#", )&!o'& &!" %on#"n& o+ &!""*)#&an" anyreprodu!"ion

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!oun"erfei" !opy or !olorable imi"a"ion o+ any"*)#&""d a>or "radeEname inconnection $ith"he sale offering for sale or ad$er"ising of anygoods businessor ser$i!es on or in connection $ith#hi!h su!h use is liely "o !ause !onfusionor mis"ae or "o de!ei$e pur!hasers or o"hers as to"he sour!e or origin of su!hgoods or ser$i!es or iden"i"y of su!h business* or J2K reprodu!e !oun"erfei"

!opy or !olorably imi"a"eanysu!h mar or "radeEname and apply su!hreprodu!"ion !oun"erfei" !opy or !olorable imi"a"ion "o labels signs prin"s

pa!ages #rappers re!ep"a!les or ad$er"isemen"s in"ended "o be useduponor inconnection $ithsu!h goods business or ser$i!esshallbe liable toa !i$il a!"ion

by "he regis"ran" for anyor all of"he remedies hereinpro$ided. J6mphasissuppliedK

6ssen"ially Se!"ion 22 of ? 1GG s"a"es "ha" only a regis"ran" of a mar !an file a !ase for

infringemen". Corollary "o "his Se!"ion 19 of ? 1GG pro$ides "ha" any righ" !onferred

upon "he regis"ran" under "he pro$isions of ? 1GGJ54K"ermina"es #hen "he )udgmen" ororder of !an!ella"ion has be!ome final ,i='

Se!"ion 19. Cancellation of registration.E %f "he Dire!"or finds "ha" a !ase for !an!ella"ionhas been made ou" he shall order "he !an!ella"ion of "he regis"ra"ion. he order shall no"be!ome effe!"i$e un"il "he period for appeal has elapsed or if appeal is "aen un"il "he)udgmen" on appeal be!omes final. -!"n &!" od" o :'d*"n& 7"%o"# +)na(, an/)*!& %on+""d 7/ #'%! "*)#&a&)on '3on &!" "*)#&an& o an/ 3"#on )n )n&""#& o+

"%od #!a(( &")na&". @o"i!e of !an!ella"ion shall be published in "he =ffi!ial Aa;e""e.J6mphasis supplied.K

hus #e ha$e pre$iously held "ha" "he !an!ella"ion of regis"ra"ion of a "rademar

has "he effe!" of depri$ing "he regis"ran" of pro"e!"ion from infringemen" from "he momen"

)udgmen" or order of !an!ella"ion has be!ome final.J58K

%n "he presen" !ase by opera"ion of la# spe!ifi!ally Se!"ion 19 of ? 1GG "he

"rademar infringemen" aspe!" of S&6?%=?Hs !ase has been rendered moo" and

a!ademi! in $ie# of "he finali"y of "he de!ision in "he ?egis"ra"ion Can!ella"ion Case. %n

shor" S&6?%=? is lef" #i"hou" any !ause of a!"ion for "rademar infringemen" sin!e "he!an!ella"ion of regis"ra"ion of a "rademar depri$ed i" of pro"e!"ion from infringemen"

from "he momen" )udgmen" or order of !an!ella"ion be!ame final. o be sure in a

"rademar infringemen" "i"le "o "he "rademar is indispensable "o a $alid !ause of a!"ion

and su!h "i"le is sho#n by i"s !er"ifi!a"e of regis"ra"ion.J59K

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any ineui"able !ondu!" on "he par" of "he manufa!"urer an e/!lusi$e dis"ribu"or #ho

employs "he "rademar of "he manufa!"urer does no" a!uire proprie"ary righ"s of "he

manufa!"urer and a "*)#&a&)on o+ &!" &ad"a> 7/ &!" d)#&)7'&o a# #'%! 7"(on*# &o

&!" an'+a%&'" pro$ided "he fidu!iary rela"ionship does no" "ermina"e before

appli!a"ion for regis"ra"ion is filed.J:0K hus "he C in "he ?egis"ra"ion Can!ella"ion Case!orre!"ly held'

s a mere dis"ribu"or pe"i"ioner Superior undoub"edly had no righ" "oregis"er "he ues"ioned mar in i"s name.

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Based on "hese elemen"s #e find i" immedia"ely ob$ious "ha" "he se!ond elemen" +

"he plain"iffHs o#nership of "he mar + #as #ha" "he ?egis"ra"ion Can!ella"ion

Casede!ided #i"h finali"y. =n "his elemen" depended "he $alidi"y of "he regis"ra"ions "ha"

on "heir o#n only ga$e rise "o "he presump"ion of bu" #as no" !on!lusi$e on "he issue of

o#nership.J:FK

%n no un!er"ain "erms &!" a33"((a&" %o'& )n &!" R"*)#&a&)on Can%"((a&)on Ca#"

'("d &!a& SUPERIOR a# a "" d)#&)7'&o and %o'(d no& !a" 7""n &!" on",

and a# &!'# an )na()d "*)#&an& o+ &!" d)#3'&"d &ad"a>#. Signifi!an"ly "hese are

"he e/a!" "erms of "he ruling "he C arri$ed a" in "he presen" pe"i"ion no# under our

re$ie#. hus #he"her #i"h one or "he o"her "he ruling on "he issue of o#nership of "he

"rademars is "he same. Ai$en ho#e$er "he final and e/e!u"ory ruling in "he ?egis"ra"ion

Can!ella"ion Case on "he issue of o#nership "ha" binds us and "he par"ies any fur"herdis!ussion and re$ie# of "he issue of o#nership + al"hough "he !urren" C ruling is legally

!orre!" and !an s"and on i"s o#n meri"s + be!omes a poin"less a!ademi! dis!ussion.

On the Issue of Unfair Competition

=ur re$ie# of "he re!ords sho#s "ha" "he nei"her "he ?C nor "he C made any

fa!"ual findings #i"h respe!" "o "he issue of unfair !ompe"i"ion. %n i"s

Complain"S&6?%=? alleged "ha"'J:GK

14. %n anuary 1995 "he plain"iff learned "ha" "he defendan" unnan 6n"erprisesL"d. is in"ending "o appoin" "he defendan" Spor"s Con!ep" and Dis"ribu"ors %n!.as i"s alleged dis"ribu"or for spor"s#ear and spor"ing goods bearing "he "rademar&?=E6@@6R.3 >or "his reason on anuary 20 1995 "he plain"iff "hrough!ounsel #ro"e "he defendan" Spor"s Con!ep" and Dis"ribu"orHs %n!. ad$ising saiddefendan" "ha" "he "rademar &?=E6@@6R3 #as regis"ered and o#ned by "he

plain"iff herein.18. he abo$e informa"ion #as affirmed by an announ!emen" made by "he

defendan"s in he Manila Bulle"in issue of anuary 29 1995 informing "hepubli! "ha" defendan" unnan 6n"erprises L"d. has appoin"ed "he defendan"Spor"s Con!ep" and Dis"ribu"ors %n!. as i"s alleged dis"ribu"or of spor"s#ear andspor"ing goods and euipmen" bearing "he "rademars 6@@6R and &?=E6@@6R3 #hi!h "rademars are o#ned by and regis"ered in "he name of

plain"iff herein as alleged hereinabo$e.

/ / / /

24. he a!"s of defendan"s as pre$iously !omplained herein #ere designed "oand are of "he na"ure so as "o !rea"e !onfusion #i"h "he !ommer!ial a!"i$i"ies of

plain"iff in "he &hilippines and is liable "o mislead "he publi! as "o "he na"ure andsui"abili"y for "heir purposes of plain"iffHs business and "he defendan"Hs a!"s areliely "o dis!redi" "he !ommer!ial a!"i$i"ies and fu"ure gro#"h of plain"iffHs

business.

>rom )urispruden!e unfair !ompe"i"ion has been defined as "he passing off ,or

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palming off( or a""emp"ing "o pass off upon "he publi! of "he goods or business of one

person as "he goods or business of ano"her #i"h "he end and probable effe!" of de!ei$ing

"he publi!. he essen"ial elemen"s of unfair !ompe"i"ionJ:4Kare ,1( !onfusing similari"y in

"he general appearan!e of "he goods* and ,2( in"en" "o de!ei$e "he publi! and defraud a

!ompe"i"or.J:8K

urispruden!e also formula"ed "he follo#ing "rue "es"3 of unfair

!ompe"i"ion' #he"her "he a!"s of "he defendan" ha$e "he in"en" of de!ei$ing or are

!al!ula"ed "o de!ei$e "he ordinary buyer maing his pur!hases under "he ordinary

!ondi"ions of "he par"i!ular "rade "o #hi!h "he !on"ro$ersy rela"es. =ne of "he essen"ial

reuisi"es in an a!"ion "o res"rain unfair !ompe"i"ion is proof of fraud* "he in"en" "o de!ei$e

a!"ual or probable mus" be sho#n before "he righ" "o re!o$er !an e/is".J:9K

%n "he presen" !ase no e$iden!e e/is"s sho#ing "ha" @@@ e$er a""emp"ed "o

pass off "he goods i" sold ,i.e. spor"s#ear spor"ing goods and euipmen"( as "hose

ofS&6?%=?. %n addi"ion "here is no e$iden!e of bad fai"h or fraud impu"able "o

@@@ in using "he dispu"ed "rademars. Spe!ifi!ally S&6?%=? failed "o addu!e any

e$iden!e "o sho# "ha" @@@ by "he abo$eE!i"ed a!"s in"ended "o de!ei$e "he publi! as

"o "he iden"i"y of "he goods sold or of "he manufa!"urer of "he goods sold. %n*cDonald?s

Corporation ,. %.C. 0ig *ak 0urger+ &nc.+JF0K#e held "ha" "here !an be "rademar

infringemen" )&!o'& 'n+a) %o3"&)&)on su!h as #hen "he infringer d)#%(o#"# on &!"

(a7"(# %on&a)n)n* &!" a> &!a& !" an'+a%&'"# &!" *ood#, &!'# 3""n&)n* &!"3'7()% +o 7")n* d"%")"d &!a& &!" *ood# o)*)na&" +o &!" &ad"a> on". %n

"his !ase no issue of !onfusion arises be!ause "he same manufa!"ured produ!"s are sold*

only "he o#nership of "he "rademars is a" issue. >ur"hermore @@@Hs anuary 29

1995 no"i!e by i"s "erms pre$en"s "he publi! from being de!ei$ed "ha" "he goods origina"ed

from S&6?%=? sin!e "he no"i!e !learly indi!a"ed "ha" @@@ is "he manufa!"urer of

"he goods bearing "he "rademars 6@@6R3 and &?= 6@@6R.3 his no"i!e s"a"es in

full'JF1K

@=%C6 @D

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%n i"s pla!e @@@ has appoin"ed S&=?S C=@C6& @D

D%S?%B=?S %@C. as i"s e/!lusi$e &hilippine dis"ribu"or of spor"s#ear andspor"ing goods and euipmen" bearing "he "rademars 6@@6R and &?=6@@6R. T!" 3'7()% )# ad)#"d &o 7'/ #3o&)n* *ood# and "2')3"n&7"a)n* &!"#" &ad"a># on(/ +o SPORTS CONCEPT AND

DISTRIUTORS, INC. &o "n#'" &!a& &!" 3od'% &!"/ a" 7'/)n* a"

an'+a%&'"d 7/ 'nnan En&"3)#"# L&d. J6mphasis supplied.K

>inally #i"h "he es"ablished ruling "ha" @@@ is "he righ"ful o#ner of "he

"rademars of "he goods "ha" S&6?%=? asser"s are being unfairly sold by @@@

under "rademars regis"ered in S&6?%=?Hs name "he la""er is lef" #i"h no effe!"i$e righ"

"o mae a !laim. %n o"her #ords #i"h "he CHs final ruling in "he ?egis"ra"ion

Can!ella"ion Case S&6?%=?Hs !ase no longer presen"s a $alid !ause of a!"ion. >or "his

reason "he unfair !ompe"i"ion aspe!" of "he S&6?%=?Hs !ase lie#ise falls.

-HERE$ORE premises !onsidered #e DENY Superior Commer!ial 6n"erprises

%n!.Hs pe"i"ion for re$ie# on certiorari for la! of meri". Cos" agains" pe"i"ionerSuperior

Commer!ial 6n"erprises %n!.

SO ORDERED.

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Repu2lic of the 'hilippinesS#PREME CO#R!

3anila

SECOND DIVISION

G.R. No. 190 No3e4e& 20, 201

"IRENS!OC OR!HOPAE)IE GM"H AN) CO. G $(o&4e&78 "IRENS!OC OR!HOPAE)IEGM"H,'etitioner0vs&PHILIPPINE SHOE EPO MARE!ING CORPORA!ION,Respondent&

D E C I S I O N

PERLAS:"ERNA"E, J.:

!ssailed in this 'etition for Review on Certiorari1are the Court of !ppeals "C!# Decisiondated -une >0 )1)and Resolution/dated Octo2er (0 )1) in C!$%&R& S' No& 11(@ which reversed and set aside theIntellectual 'ropert. Office "I'O# Director %eneralHs Decision *dated Dece+2er 0 ))A that allowed there,istration of various trade+ar7s in favor of petitioner 4ir7enstoc7 Orthopaedie %+2G J Co& K%&

The acts

'etitioner0 a corporation dul. or,ani?ed and eistin, under the laws of %er+an.0 applied for varioustrade+ar7 re,istrations 2efore the I'O0 na+el.B "a# L4IRKENSTOCKL under Trade+ar7 !pplication Serial No&"T!SN# *$1AA*$)A1>)@ for ,oods fallin, under Class > of the International Classification of %oods andServices "Nice Classification# with filin, date of 3arch 110 1AA* "2# L4IRKENSTOCK 4!D GONNE $RGEINJ DEVICE CO3'RISIN% O RO8ND CO3'!N< SE!: !ND RE'RESENT!TION O ! OOT0 CROSS !NDS8N4E! 3L under T!SN *$1AA*$)A1>)A for ,oods fallin, under Class > of the Nice Classification with filin,date of 3arch 110 1AA* and "c# L4IRKENSTOCK 4!D GONNE$RGEIN J DEVICE CO3'RISIN% ORO8ND CO3'!N< SE!: !ND RE'RESENT!TION O ! OOT0 CROSS !ND S8N4E!3L under T!SN *$1AA*$)A>)*/ for ,oods fallin, under Class 1) of the Nice Classification with filin, date of Septe+2er >0 1AA*"su2ect applications#&>

Gowever0 re,istration proceedin,s of the su2ect applications were suspended in view of an eistin,re,istration of the +ar7 L4IRKENSTOCK !ND DEVICEL under Re,istration No& >//* dated Octo2er 101AA/ "Re,istration No& >//*# in the na+e of Shoe Town International and Industrial Corporation0 thepredecessor$in$interest of respondent 'hilippine Shoe Epo 3ar7etin, Corporation&In this re,ard0 on 3a.(0 1AA( petitioner filed a petition for cancellation of Re,istration No& >//* on the ,round that it is the lawfuland ri,htful owner of the 4ir7enstoc7 +ar7s "Cancellation Case#& (Durin, its pendenc.0 however0 respondentand=or its predecessor$in$interest failed to file the re5uired 1)th 0 1AA10 respondentHs predecessor$in$interest li7ewise o2tained a Certificate of Cop.ri,htRe,istration No& )$111A/ for the word L4IRKENSTOCKL "d# while respondent and its predecessor$in$interestfailed to file the 1)th

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and "e# to record its continued ownership and eclusive ri,ht to use the L4IRKENSTOCKL +ar7s0 it has filedT!SN *$))$)1)(/ as a L re$application L of its old re,istration0 Re,istration No& >//*& 1/On Nove+2er 1/0))(0 the 4ureau of :e,al !ffairs "4:!# of the I'O issued Order No& ))($)>1 consolidatin, the aforesaidinter partes cases "Consolidated Opposition Cases#&1*

The Rulin, of the 4:!

In its Decision1>dated 3a. @0 ))@0 the 4:! of the I'O sustained respondentHs opposition0 thus0 orderin, thereection of the su2ect applications& It ruled that the co+petin, +ar7s of the parties are confusin,l. si+ilarsince the. contained the word L4IRKENSTOCKL and are used on the sa+e and related ,oods&