FIRST DIVISION
[G.R. No. L-28554. February 28, 1983.]
UNNO COMMERCIAL ENTERPRISES, INCORPORATED,Petitioner, v. GENERAL
MILLING CORPORATION and TIBURCIO S. EVALLE, in his capacity as
Director of Patents,Respondents.
Salem & Dionisio Law Office forPetitioner.
Siquion Reyna, Montecillo, Bello & Ongsiako forPrivate
Respondent.
SYLLABUS
1. MERCANTILE LAW; TRADEMARK; RIGHT TO REGISTER IT, 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. A local importer, however, may make
application for the registration of a foreign trademark, trade name
or other mark of ownership.
2. ID.; ID.; OWNER; SCOPE UNDER THE TRADEMARK LAW. 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.
3. ID.; ID.; DEED OF ASSIGNMENT; PROOF OF OWNERSHIP. The
Director of Patents correctly found that ample evidence was
presented that Centennial Mills, Inc. was the owner and prior user
in the Philippines of the trademark "All Montana" through a local
importer and broker. The Deed of Assignment itself constitutes
sufficient proof of its ownership of the trademark "All Montana,
"showing that Centennial Mills was a corporation duly organized and
existing under and by virtue of the laws of the State of Oregon,
U.S.A. with principal place and business at Portland, Oregon,
U.S.A. and the absolute and registered owner of several trademarks
for wheat flour, i.e. (Imperial, White Lily, Duck, General, Swan,
White Horse, Vinta, El Paro, Bakers Joy, Choice, Red Bowl, All
Montana and Dollar) all of which were assigned by it to respondent
General Milling Corporation.
4. ID.; ID.; OWNERSHIP NOT ACQUIRED BY REGISTRATION ALONE.
Petitioners contention that it is the owner of the mark "All
Montana because of its certificate of registration issued by the
Director of Patents, must fail, since ownership of a trademark is
not acquired by the mere fact of registration alone. 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. Registration does not
perfect a trademark right. As conceded itself by petitioner,
evidence may be presented to overcome the presumption. Prior use by
one will controvert a claim of legal appropriation by subsequent
users.
5. REMEDIAL LAW; EVIDENCE; FINDINGS OF FACT BY THE DIRECTOR OF
PATENTS; CONCLUSIVE IF SUPPORTED BY SUBSTANTIAL EVIDENCE. It is
well-settled that we are precluded from making further inquiry,
since the findings of fact of the Director of Patents in the
absence of any showing that there was grave abuse of discretion is
binding on us and the findings of facts by the Director of Patents
are deemed conclusive in the Supreme Court provided that they are
supported by substantial evidence. Petitioner has failed to show
that the findings of fact of the Director of Patents are not
substantially supported by evidence nor that any grave abuse of
discretion was committed.
6. MERCANTILE LAW; DIRECTOR OF PATENTS; AUTHORITY TO ORDER
CANCELLATION OF A REGISTERED MARK OR TRADENAME IN AN INTER PARTES
CASE. Finally, the Court finds without merit petitioners argument
that the Director of Patents could not order the cancellation of
its certificate of registration in an interference proceeding and
that the question of whether or not a certificate of registration
is to be cancelled should have been brought in cancellation
proceedings. Under Rule 178 of the Rules of the Patent Office in
Trademark Cases, the Director of Patents is expressly authorized to
order the cancellation of a registered mark or trade name or name
or other mark of ownership in an inter partes case, such as the
interference proceeding at bar.
D E C I S I O N
TEEHANKEE,J.:
The Court affirms respondent Director of Patents decision
declaring respondent General Milling Corporation as the prior user
of the trademark "All Montana" on wheat flour in the Philippines
and ordering the cancellation of the certificate of registration
for the same trademark previously issued in favor of petitioner
Unno Commercial Enterprises, Incorporated, it appearing that Unno
Commercial Enterprises, Inc. merely acted as exclusive distributor
of All Montana wheat flour in the Philippines. Only the owner of a
trademark, trade name or service mark may apply for its
registration and an importer, broker, indentor or distributor
acquires no rights to the trademark of the goods he is dealing with
in the absence of a valid transfer or assignment of the trade
mark.
On December 11, 1962, respondent General Milling Corporation
filed an application for the registration of the trademark "All
Montana" to be used in the sale of wheat flour. In view of the
fact, that the same trademark was previously registered in favor of
petitioner Unno Commercial Enterprises, Inc., the Chief Trademark
Examiner of the Philippines Patent Office declared an interference
proceeding 1 between respondent corporations application (Serial
No. 9732), as Junior/Party-Applicant, and petitioner companys
registration (Registration No. 9589), as Senior Party-Applicant,
docketed in the Philippines Patent Office as Inter Partes Case No.
313, to determine which party has previously adopted and used the
trademark "All Montana."
Respondent General Milling Corporation, in its application for
registration, alleged that it started using the trademark "All
Montana" on August 31, 1955 and subsequently was licensed to use
the same by Centennial Mills, Inc. by virtue of a deed of
assignment executed on September 20, 1962. On the other hand,
petitioner Unno Commercial Enterprises, Inc. argued that the same
trademark had been registered in its favor on March 8, 1962
asserting that it started using the trademark on June 30, 1956, as
indentor or broker for S.H. Huang Bros. & Co., a local
firm.chanrobles law library : red
The Director of Patents, after hearing, ruled in favor of
respondent General Milling Corporation and rendered its decision as
follows:jgc:chanrobles.com.ph
"However, there is testimony in the record (t.s.n., pp. 11-12,
Jan. 17, 1967, testimony of Jose Uy) to the effect that,
indispensable, "ALL MONTANA" wheat flour is a premium flour
produced from premium wheat coming from the State of Montana,
U.S.A. It is apparent that the trademark is primarily
geographically descriptive of the goods. It is therefore a matter
overlooked by the Trademark Examiner, and it is incumbent upon him
to determine if the applicant should claim and is qualified to
claim distinctiveness under Section 4(f) of the Trademark Statute.
Otherwise, it is registrable on the Supplemental Register and
should thus be registered therein.
"WHEREFORE, the Junior Party-Applicant is adjudged prior user of
the trademark ALL MONTANA, but because it is primarily
geographically descriptive, the application is herein remanded to
the Chief Trademark Examiner for proper proceeding before issuance
of the certificate of registration.
"The certificate of registration issued to the Senior Party is
ordered cancelled.
"IT IS SO ORDERED."cralaw virtua1aw library
After its motion for reconsideration was denied, petitioner
brought the instant petition seeking the reversal of the decision
and praying that it be declared the owner and prior user of the
trademark "All Montana" on wheat flour.
Petitioner based its claim of ownership over the trademark in
question by the fact that it acted as an indentor or broker for S.
H. Huang Bros. & Co., a local importer of wheat flour, offering
as evidence the various shipments, documents, invoices and other
correspondence of Centennial Mills, Inc., shipping thousand of bags
of wheat flour bearing the trademark "All Montana" to the
Philippines. Petitioner argued that these documents, invoices and
correspondence proved the fact that it has been using the trademark
"All Montana" as early as 1955 in the concept of an owner and
maintained that anyone, whether he is only an importer, broker or
indentor can appropriate, use and own a particular mark of its own
choice although he is not the manufacturer of the goods he deals
with. Relying on the provisions of Section 2-A of the Trademarks
Law 2 (Republic Act 166), petitioner insists that "the
appropriation and ownership of a particular trademark is not merely
confined to producers or manufacturers but likewise to anyone who
lawfully deals in merchandise who renders any lawful service in
commerce, like petitioner in the case at bar." 3
The right to register trademark is based on ownership. 4 When
the applicant is not the owner of the trademark being applied for,
he has no right to apply for the registration of the same. 5 Under
the Trademark Law only the owner of the trademark, trade name or
service mark used to distinguish his goods, business or service
from the goods, business or service of others is entitled to
register the same. 6
The term owner does not include the importer of the goods
bearing the trademark, trade name, service mark, or other mark of
ownership, unless such importer is actually the owner thereof in
the country from which the goods are imported. A local importer,
however, may make application for the registration of a foreign
trademark, trade name or service mark if he is duly authorized by
the actual owner of the name or other mark of ownership. 7
Thus, 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. 8
Moreover, the provision relied upon by petitioner (Sec. 2-A,
Rep. Act No. 166) allows one "who lawfully produces or deals in
merchandise . . . or who engages in any lawful business or who
renders any lawful service in commerce, by actual use thereof . . .
(to) appropriate to his exclusive use a trademark, or a service
mark not so appropriated by another." In the case at bar, the
evidence showed that the trademark "All Montana" was owned and
registered in the name of Centennial Mills, Inc. which later
transferred it to respondent General Milling Corporation by way of
a deed of assignment. It is undisputed that way back in March,
1955, Centennial Mills, Inc. under the tradename Wenatchee Milling
Co., exported flour to the Philippines, through its distributor,
herein petitioner Unno Commercial Enterprises, Inc. which acted as
indentor or broker for the firm S. H. Huang Bros. & Co.
However, because of increased taxes and subsidies, Centennial Mills
discontinued shipments of flour in the Philippines and eventually
sold its brands for wheat flour, including "All Montana" brand to
respondent General Milling Corporation in consideration of 1,000
shares of stock of respondent corporation with a par value of
P100.00 per share or a total of P100,000.00. Respondent General
Milling Corporation, since the start of the operation in 1961 of
its flour mills located in Lapu-lapu City, Cebu has been
manufacturing and selling "All Montana" flour in the
Philippines.chanrobles law library : red
As against petitioners argument that respondent failed to
establish convincingly the ownership of the trademark "All Montana"
by its assignor Centennial Mills, Inc., the Director of Patents
correctly found that ample evidence was presented that Centennial
Mills, Inc. was the owner and prior user in the Philippines of the
trademark "All Montana" through a local importer and broker. The
Deed of Assignment itself constitutes sufficient proof of its
ownership of the trademark "All Montana," showing that Centennial
Mills was a corporation duly organized and existing under and by
virtue of the laws of the State of Oregon, U.S.A. with principal
place and business at Portland, Oregon, U.S.A. and the absolute and
registered owner of several trademarks for wheat flour, i.e.
(Imperial, White Lily, Duck, General, Swan, White Horse, Vinta, El
Paro, Bakers Joy, Choice, Red Bowl, All Montana and Dollar) all of
which were assigned by it to respondent General Milling
Corporation. The deed of assignment was signed by its president,
Dugald MacGregor, duly acknowledged before James Hunt, a notary
public for the State of Oregon, accompanied by a certification
issued by the Secretary of State of the State of Oregon stating
that the said James Hunt is a duly qualified Notary Public with
full power and authority to take acknowledgments of all oaths and
that full faith and credit should be given to his official acts as
notary public.
The Director of Patents likewise correctly rejected petitioners
contention that in a 1954 conference in Manila the ownership and
use by petitioner of the brand "All Montana" was agreed upon, on
the contrary finding that "Details of that meeting were, however,
explained by Mr. Dugald MacGregor, President of Centennial Mills,
Inc., as the Junior Partys rebuttal witness. Mr. MacGregor
confirmed holding such conference in a restaurant in Manila with
representatives of the Senior Party, namely; Messrs. Jose Uy,
Francisco Gonzales and S.H. Huang, although he could not remember
the name of the restaurant. He further explained that his company
owned the trademark; that it had been using the mark in the United
States; and that ownership of the mark had never been conferred
upon any other company, much less the Senior Party" ; and "Inasmuch
as it was not the owner of the trademark, the Senior Party could
not be regarded as having used and adopted it, and had no right to
apply for its registration. It acknowledged that it was a mere
importer of flour, and a mere importer and distributor acquires no
rights in the mark used on the imported goods by the foreign
exporter in the absence of an assignment of any kind . . .,
Trademarks used and adopted on goods manufactured or packed in a
foreign country in behalf of a domestic importer, broker, or
indentor and distributor are presumed to be owned by the
manufacturer or packer, unless there is a written agreement clearly
showing that ownership vests in the importer, broker, indentor or
distributor."cralaw virtua1aw library
Thus, petitioners contention that it is the owner of the mark
"All Montana" because of its certificate of registration issued by
the Director of Patents, must fail, since ownership of a trademark
is not acquired by the mere fact of registration alone. 9
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. 10
Registration does not perfect a trademark right. 11 As conceded
itself by petitioner, evidence may be presented to overcome the
presumption. Prior use by one will controvert a claim of legal
appropriation by subsequent users. In the case at bar, the Director
of Patents found that "ample evidence was presented in the record
that Centennial Mills, Inc. was the owner and prior user in the
Philippines of the trademark All Montana through a local importer
and broker. Use of a trademark by a mere importer, indentor or
exporter (the Senior Party herein) inures to the benefit of the
foreign manufacturer whose goods are identified by the trademark.
The Junior Party has hereby established a continuous chain of title
and, consequently, prior adoption and use" and ruled that "based on
the facts established, it is safe to conclude that the Junior Party
has satisfactorily discharged the burden of proving priority of
adoption and use and is entitled to registration." It is
well-settled that we are precluded from making further inquiry,
since the findings of fact of the Director of Patents in the
absence of any showing that there was grave abuse of discretion is
binding on us 12 and the findings of facts by the Director of
Patents are deemed conclusive in the Supreme Court provided that
they are supported by substantial evidence. 13 Petitioner has
failed to show that the findings of fact of the Director of Patents
are not substantially supported by evidence nor that any grave
abuse of discretion was committed.cralawnad
Finally, the Court finds without merit petitioners argument that
the Director of Patents could not order the cancellation of its
certificate of registration in an interference proceeding and that
the question of whether or not a certificate of registration is to
be cancelled should have been brought in cancellation proceedings.
Under Rule 178 of the Rules of the Patent Office in Trademark
Cases, 14 the Director of Patents is expressly authorized to order
the cancellation of a registered mark or trade name or name or
other mark of ownership in an inter partes case, such as the
interference proceeding at bar. 15
WHEREFORE, the appealed decision is hereby affirmed. No
costs.
Melencio-Herrera, Plana, Vazquez, Relova and Gutierrez, Jr.,JJ.,
concur.
SECOND DIVISION
[G.R. No. 75420. November 15, 1991.]
KABUSHI KAISHA ISETAN, also known and trading as ISETAN CO.,
LTD.,Petitioner, v. THE INTERMEDIATE APPELLATE COURT, THE DIRECTOR
OF PATENTS, and ISETANN DEPARTMENT STORE, INC. respondents.
Agcaoili & Associates forPetitioner.
Cruz, Durian, Agabin, Atienza, Alday & Tuason forPrivate
Respondent.
SYLLABUS
1. REMEDIAL LAW; ACTIONS; APPEALS; STRINGENT APPLICATION OF
PERIOD OF APPEAL APPLIED IN THE ABSENCE OF COMPELLING EQUITABLE
CONSIDERATIONS FOR RELAXATION OF RULE; CASE AT BAR. The Court
dismissed the petition in a resolution dated July 8, 1987, on the
ground that it was filed fourteen (14) days later. However, on
motion for reconsideration, whereby the petitioner appealed to this
Court on equitable grounds stating that it has a strong and
meritorious case, the petition was given due course in a resolution
dated May 19, 1988 to enable us to examine more fully any possible
denial of substantive justice. The parties were then required to
submit their memoranda. After carefully considering the records of
this case, we reiterate our July 8, 1987 resolution dismissing the
petition. There are no compelling equitable considerations which
call for the application of the rule enunciated in Serrano v. Court
of Appeals (139 SCRA 179 [1985]) and Orata v. Intermediate
Appellate Court, Et. Al. (185 SCRA 148 [1990]) that considerations
of substantial justice manifest in the petition may relax the
stringent application of technical rules so as not to defeat an
exceptionally meritorious petition.
2. ID.; EVIDENCE; FINDINGS OF FACT OF THE PATENT OFFICE, UPHELD
ON APPEAL. Regarding the petitioners claims of substantial justice
which led us to give due course, we decline to disturb the rulings
of the Patent Office and the Court of Appeals. The rule is that the
findings of facts of the Director of patents are conclusive on the
Supreme Court, provided they are supported by substantial
evidence.
3. MERCANTILE LAW; TRADEMARKS; ACTUAL USE, PREREQUISITE TO
ACQUISITION OF OWNERSHIP. A fundamental principle of Philippine
Trademarks Law is that actual use in commerce in the Philippines is
a pre-requisite to the acquisition of ownership over a trademark or
a tradename.
4. ID.; ID.; ID.; PRIOR REGISTRANT CANNOT CLAIM EXCLUSIVE USE OF
TRADENAME. A prior registrant cannot claim exclusive use of the
trademark unless it uses it in commerce.
5. ID.; ID.; ID.; MERE ADOPTION OF A PARTICULAR TRADENAME
WITHOUT ACTUAL USE THEREOF, INSUFFICIENT; CASE AT BAR. The records
show that the petitioner has never conducted any business in the
Philippines. It has never promoted its tradename or trademark in
the Philippines. It has absolutely no business goodwill in the
Philippines. It is unknown to Filipinos except the very few who may
have noticed it while travelling abroad. It has never paid a single
centavo of tax to the Philippine government. Under the law, it has
no right to the remedy it seeks. There can be no question from the
records that the petitioner has never used its tradename or
trademark in the Philippines. The mere origination or adoption of a
particular tradename without actual use thereof in the market is
insufficient to give any exclusive right to its use (Johnson Mfg,
Co. v. Leader Filling Stations Corp. 196 N.E. 852, 291 Mass. 394),
even though such adoption is publicly declared, such as by use of
the name in advertisements, circulars, price lists, and on signs
and stationery. (Consumers Petroleum Co. v. Consumers Co. of Ill.
169 F 2d 153).
6. ID.; PARIS CONVENTION FOR THE PROTECTION OF INDUSTRIAL
PROPERTY; DOES NOT AUTOMATICALLY EXCLUDE OTHER COUNTRIES FROM USING
A TRADENAME USED IN ONE COUNTRY. The Paris Convention for the
Protection of Industrial Property does not automatically exclude
all countries of the world have signed it from using a tradename
which happens to be used in one country.
D E C I S I O N
GUTIERREZ, JR.,J.:
This is a petition for review oncertiorariwhich seeks to set
aside (1) the decision of the Court of Appeals dated June 2, 1986
in AC-G.R. SP No. 008873 entitled "Kabushi Kaisha Isetan, also
known and trading as Isetan Company Limited v. Isetann Department
Store, Inc." dismissing the petitioners appeal from the decision of
the Director of Patents; and (2) the Resolution dated July 11, 1986
denying the petitioners motion for reconsideration.
As gathered from the records, the facts are as
follows:chanrob1es virtual 1aw library
Petitioner Kabushi Kaisha Isetan is a foreign corporation
organized and existing under the laws of Japan with business
address at 14-1 Shinjuku, 3-Chrome, Shinjuku, Tokyo, Japan. It is
the owner of the trademark "Isetan" and the "Young Leaves
Design."
The petitioner alleges that it first used the trademark Isetan
on November 5, 1936. It states that the trademark is a combination
of "Ise" taken from "Iseya" the first name of the rice dealer in
Kondo, Tokyo in which the establishment was first located and "Tan"
which was taken from "Tanji Kosuge the First." The petitioner
claims to have expanded its line of business internationally from
1936 to 1974. The trademark "Isetan" and "Young Leaves Design" were
registered in Japan covering more than 34 classes of goods. On
October 3, 1983, the petitioner applied for the registration of
"Isetan" and "Young Leaves Design" with the Philippine Patent
Office under Permanent Serial Nos. 52422 and 52423 respectively,
(Rollo, p. 43)
Private respondent, Isetann Department Store, on the other hand,
is a domestic corporation organized and existing under the laws of
the Philippines with business address at 423-430 Rizal Avenue, Sta.
Cruz, Manila, Philippines.chanrobles virtualawlibrary
chanrobles.com:chanrobles.com.ph
It claims that it used the word "Isetann" as part of its
corporated name and on its products particularly on shirts in
Joymart Department Store sometime in January 1979. The suffix
"Tann" means an alter, the place of offering in Chinese and this
was adopted to harmonize the corporate name and the corporate logo
of two hands in cup that symbolizes the act of offering to the
Supreme Being for business blessing.
On May 30, 1980 and May 20, 1980, the private respondent
registered "Isetann Department Store, Inc." and Isetann and Flower
Design in the Philippine Patent Office under SR. Reg. Nos. 4701 and
4714, respectively, as well as with the Bureau of Domestic Trade
under Certificate of Registration No. 32020. (Rollo, pp. 43-44)
On November 28, 1980, the petitioner filed with the Phil. Patent
Office two (2) petitions for the cancellation of Certificates of
Supplemental Registration Nos. SR-4717 and SR-4701 stating among
others that:jgc:chanrobles.com.ph
". . . except for the additional letter N in the word "Isetan",
the mark registered by the registrant is exactly the same as the
trademark ISETAN owned by the petitioner and that the young leaves
registered by the registrant is exactly the same as the young
leaves design owned by the petitioner."cralaw virtua1aw library
The petitioner further alleged that private respondents act of
registering a trademark which is exactly the same as its trade mark
and adopting a corporate name similar to that of the petitioner
were with the illegal and immoral intention of cashing in on the
long established goodwill and popularity of the petitioners
reputation, thereby causing great and irreparable injury and damage
to it (Rollo, p. 521). It argued that both the petitioners and
respondents goods move in the same channels of trade, and ordinary
people will be misled to believe that the products of the private
respondent originated or emanated from, are associated with, or are
manufactured or sold, or sponsored by the petitioner by reason of
the use of the challenged trademark.
The petitioner also invoked the Convention of Paris of March 20,
1883 for the Protection of Industrial Property of which the
Philippines and Japan are both members, The petitioner stressed
that the Philippines adherence to the Paris Convention committed
the government to the protection of trademarks belonging not only
to Filipino citizens but also to those belonging to nationals of
other member countries who may seek protection in the Philippines.
(Rollo, p. 522)
The petition was docketed as Inter Partes Cases Nos. 1460 and
1461 (Rollo, p. 514).
Meanwhile, the petitioner also filed with the Securities and
Exchange Commission (SEC) a petition to cancel the mark "ISETAN" as
part of the registered corporate name of Isetann Department Store,
Inc. which petition was docketed as SEC Case No. 2051 (Rollo, p.
524). On May 17, 1985, this petition was denied in a decision
rendered by SECs Hearing Officer, Atty. Joaquin C.
Garaygay.chanrobles.com : virtual law library
On appeal, the Commission reversed the decision of the Hearing
Officer on February 25, 1986. It directed the private respondent to
amend its Articles of Incorporation within 30 days from finality of
the decision.
On April 15, 1986, however, respondent Isetann Department Store
filed a motion for reconsideration. (Rollo, pp. 325-353). And on
September 10, 1987, the Commission reversed its earlier decision
dated February 25, 1986 thereby affirming the decision rendered by
the Hearing Officer on May 17, 1985. The Commission stated that
since the petitioners trademark and tradename have never been used
in commerce on the petitioners products marketed in the
Philippines, the trademark or tradename have not acquired a
reputation and goodwill deserving of protection from usurpation by
local competitors. (Rollo, p. 392)
This SEC decision which denied and dismissed the petition to
cancel was submitted to the Director of Patents as part of the
evidence for the privateRespondent.
On January 24, 1986, the Director of Patents after notice and
hearing rendered a joint decision in Inter Partes Cases Nos. 1460
and 1461, the dispositive portion of which
reads:jgc:chanrobles.com.ph
"WHEREFORE, all the foregoing considered, this Office is
constrained to hold that the herein Petitioner has not successfully
made out a case of cancellation. Accordingly, Inter Partes Cases
Nos. 1460 and 1461 are, as they are hereby, DISMISSED. Hence,
Respondents Certificate of Supplemental Registration No. 4717
issued on May 20, 1980 covering the tradename ISETANN DEPT. STORE,
INC. & FLOWER DESIGN are, as they are hereby ordered to remain
in full force and effect for the duration of their term unless
sooner or later terminated by law.
The corresponding application for registration in the Principal
Register of the Trademark and of the tradename aforesaid are hereby
given due course.
Let the records of these cases be transmitted to the Trademark
Examining Division for appropriate action in accordance with this
Decision."cralaw virtua1aw library
On February 21, 1986, Isetan Company Limited moved for the
reconsideration of said decision but the motion was denied on April
2, 1986 (Rollo, pp. 355-359).
From this adverse decision of the Director of Patents, the
petitioner appealed to the Intermediate Appellate Court (now Court
of Appeals).
On June 2, 1986, the IAC dismissed the appeal on the ground that
it was filed out of time.
The petitioners motion for reconsideration was likewise denied
in a resolution dated July 11, 1986.
Hence, this petition.
Initially, the Court dismissed the petition in a resolution
dated July 8, 1987, on the ground that it was filed fourteen (14)
days later. However, on motion for reconsideration, whereby the
petitioner appealed to this Court on equitable grounds stating that
it has a strong and meritorious case, the petition was given due
course in a resolution dated May 19, 1988 to enable us to examine
more fully any possible denial of substantive justice. The parties
were then required to submit their memoranda. (Rollo, pp. 2-28;
Resolution, pp. 271; 453).
After carefully considering the records of this case, we
reiterate our July 8, 1987 resolution dismissing the petition.
There are no compelling equitable considerations which call for the
application of the rule enunciated in Serrano v. Court of Appeals
(139 SCRA 179 [1985]) and Orata v. Intermediate Appellate Court,
Et. Al. (185 SCRA 148 [1990]) that considerations of substantial
justice manifest in the petition may relax the stringent
application of technical rules so as not to defeat an exceptionally
meritorious petition.chanrobles lawlibrary : rednad
There is no dispute and the petitioner does not question the
fact that the appeal was filed out of time.
Not only was the appeal filed late in the Court of Appeals, the
petition for review was also filed late with us. In common
parlance, the petitioners case is "twice dead" and may no longer be
reviewed.
The Court of Appeals correctly rejected the appeal on the sole
ground of late filing when it ruled:jgc:chanrobles.com.ph
"Perfection of an appeal within the time provided by law is
jurisdictional, and failure to observe the period is fatal.
The decision sought to be appealed is one rendered by the
Philippine Patent Office, a quasi-judicial body. Consequently,
under Section 23(c) of the Interim Rules of Court, the appeal shall
be governed by the provisions of Republic Act No. 5434, which
provides in its Section 2;
SECTION 2. Appeals to Court of Appeals. Appeals to the Court of
Appeals shall be filed within fifteen (15) days from notice of the
ruling, award, order, decision or judgment or from the date of its
last publication, if publication is required by law for its
effectivity; or in case a motion for reconsideration is filed
within that period of fifteen (15) days, then within ten (10) days
from notice or publication, when required by law, of the resolution
denying the motion for reconsideration. No more than one motion for
reconsideration shall be allowed any party. If no appeal is filed
within the periods here fixed, the ruling, award, order, decision
or judgment shall become final and may be executed as provided by
existing law.
Attention is invited to that portion of Section 2 which states
that in case a motion for reconsideration is filed, an appeal
should be filed within ten (10) days from notice of the resolution
denying the motion for reconsideration."cralaw virtua1aw
library
The petitioner received a copy of the Court of Appeals
resolution denying its motion for reconsideration on July 17, 1986.
It had only up to August 1, 1986 to file a petition for review with
us. The present petition was posted on August 2, 1986 and received
by us on August 8, 1986. There is no question that it was again,
filed late because the petitioner filed an ex-parte motion for
admission explaining the delay.
The decision of the Patent Office has long become final and
executory. So has the Court of Appeals decision.
Regarding the petitioners claims of substantial justice which
led us to give due course, we decline to disturb the rulings of the
Patent Office and the Court of Appeals.
A fundamental principle of Philippine Trademarks Law is that
actual use in commerce in the Philippines is a pre-requisite to the
acquisition of ownership over a trademark or a tradename.chanrobles
virtual lawlibrary
The Trademark Law, Republic Act No. 166, as amended, under which
this case was heard and decided provides:jgc:chanrobles.com.ph
"SECTION 2. What are registrable. Trademarks, tradenames and
service marks owned by persons, corporation, partnerships or
associations domiciled in the Philippines and by persons,
corporations, partnerships or associations domiciled in any foreign
country may be registered in accordance with the provisions of this
Act: Provided, That said trademarks, tradenames, or service marks
are actually in use in commerce and services not less than two
months in the Philippines before the time the applications for
registration are filed: And provided, further, That the country of
which the applicant for registration is a citizen grants by law
substantially similar privileges to citizens of the Philippines,
and such fact is officially certified, with a certified true copy
of the foreign law translated into the English language, by the
government of the foreign country to the Government of the Republic
of the Philippines. (As amended by R.A. No. 865).
SECTION 2-A. Ownership of trademarks, tradenames and service
marks; how acquired. Anyone who lawfully produces or deals in
merchandise of any kind or who engages in any lawful business, or
who renders any lawful service in commerce, by actual use thereof
in manufacture or trade, in business, and in the service rendered,
may appropriate to his exclusive use a trademark, a tradename, or a
service mark not so appropriated by another, to distinguish his
merchandise, business or service from the merchandise, business or
service of others. The ownership or possession of a trademark,
tradename, service mark, heretofore or hereafter appropriated, as
in this section provided, shall be recognized and protected in the
same manner and to the same extent as are other property rights
known to this law. (As amended by R.A. No. 638)"
These provisions have been interpreted in Sterling Products
International, Inc. v. Farbenfabriken Bayer Actiengesellschaft (27
SCRA 1214 [1969]) in this way:jgc:chanrobles.com.ph
"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 prerequisite to the acquisition of the right of
ownership over a trademark.xxx
". . . Adoption alone of a trademark would not give exclusive
right thereto. Such right grows out of their actual use. Adoption
is not use. One may make advertisements, issue circulars, give out
price lists on certain goods; but these alone would not give
exclusive right of use. For trademark is a creation of use. The
underlying reason for all these is that purchasers have come to
understand the mark as indicating the origin of the wares. Flowing
from this is the traders right to protection in the trade he has
built up and the goodwill he has accumulated from use of the
trademark. . . . ."cralaw virtua1aw library
In fact, a prior registrant cannot claim exclusive use of the
trademark unless it uses it in commerce.
We rule in Pagasa Industrial Corporation v. Court of Appeals
(118 SCRA 526 [1982]):jgc:chanrobles.com.ph
"3. The Trademark law is very clear. It requires actual
commercial use of the mark prior to its registration. There is no
dispute that respondent corporation was the first registrant, yet
it failed to fully substantiate its claim that it used in trade or
business in the Philippines the subject mark; it did not present
proof to invest it with exclusive, continuous adoption of the
trademark which should consist among others, of considerable sales
since its first use. The invoices (Exhibits 7, 7-a, and 8-b)
submitted by respondent which were dated way back in 1957 show that
the zippers sent to the Philippines were to be used as samples and
of no commercial value. The evidence for respondent must be clear,
definite and free from inconsistencies. (Sy Ching v. Gaw Lui, 44
SCRA 148-149) Samples are not for sale and therefore, the fact of
exporting them; to the Philippines cannot be considered to be
equivalent to the use contemplated by the law. Respondent did not
expect income from such samples. There were no receipts to
establish sale, and no proof were presented to show that they were
subsequently sold in the Philippines." (Pagasa Industrial Corp. v.
Court of Appeals, 118 SCRA 526 [1982]; Emphasis Supplied)
The records show that the petitioner has never conducted any
business in the Philippines. It has never promoted its tradename or
trademark in the Philippines. It has absolutely no business
goodwill in the Philippines. It is unknown to Filipinos except the
very few who may have noticed it while travelling abroad. It has
never paid a single centavo of tax to the Philippine government.
Under the law, it has no right to the remedy it seeks.cralawnad
There can be no question from the records that the petitioner
has never used its tradename or trademark in the Philippines.
The petitioners witnesses, Mr. Mayumi Takayama and Mr. Hieoya
Murakami, admitted that:chanrob1es virtual 1aw library
1) The petitioners company is not licensed to do business in the
Philippines;
2) The petitioners trademark is not registered under Philippine
law; and
3) The petitioners trademark is not being used on products in
trade, manufacture, or business in the Philippines.
It was also established from the testimony of Atty. Villasanta,
petitioners witness, that the petitioner has never engaged in
promotional activities in the Philippines to popularize its
trademark because not being engaged in business in the Philippines,
there is no need for advertising. The claim of the petitioner that
millions of dollars have been spent in advertising the petitioners
products, refers to advertising in Japan or other foreign places.
No promotional activities have been undertaken in the Philippines,
by the petitioners own admission.
Any goodwill, reputation, or knowledge regarding the name
Isetann is purely the work of the privateRespondent. Evidence was
introduced on the extensive promotional activities of the
privateRespondent.
It might be pertinent at this point to stress that what is
involved in this case is not so much a trademark as a tradename.
Isetann Department Store, Inc. is the name of a store and not of
products sold in various parts of the country. This case must be
differentiated from cases involving products bearing such familiar
names as "Colgate", "Singer", "Toyota", or "Sony" where the
products are marketed widely in the Philippines. There is no
product with the name "Isetann" popularized with that brand name in
the Philippines. Unless one goes to the store called Isetann in
Manila, he would never know what the name means. Similarly, until a
Filipino buyer steps inside a store called "Isetan" in Tokyo or
Hongkong, that name would be completely alien to him. The records
show that among Filipinos, the name cannot claim to be
internationally well-known.
The rule is that the findings of facts of the Director of
Patents are conclusive on the Supreme Court, provided they are
supported by substantial evidence. (Chua Che v. Phil. Patent
Office, 13 SCRA 67 [1965]; Chung Te v. Ng Kian Giab, 18 SCRA 747
[1966]; Marvex Commercial Co., Inc. v. Petra Hawpia & Co., 18
SCRA 1178 [1966]; Lim Kiah v. Kaynee, Co. 25 SCRA 485 [1968]; Kee
Boc v. Dir. of Patents, 34 SCRA 570 [1970].
The conclusions of the Director of Patents are likewise based on
applicable law and jurisprudence:jgc:chanrobles.com.ph
"What is to be secured from unfair competition in a given
territory is the trade which one has in that particular territory.
There is where his business is carried on where the goodwill
symbolized by the trademark has immediate value; where the
infringer may profit by infringement.chanrobles law library
There is nothing new in what we now say. Plaintiff itself
concedes (Brief for Plaintiff-Appellant, p. 88) that the principle
of territoriality of the Trademark law has been recognized in the
Philippines, citing Ingenohl v. Walter E. Olsen, 71 L. ed. 762. As
Callmann puts it, the law of trademarks rests upon the doctrine of
nationality or territoriality." (2 Callmann, Unfair Competition and
Trademarks, 1945, ed., p. 1006) (Sterling Products International,
Inc. v. Farbenfabriken Bayer Aktiengesellachaft, 27 SCRA 1214
[1969];Emphasis supplied)
The mere origination or adoption of a particular tradename
without actual use thereof in the market is insufficient to give
any exclusive right to its use (Johnson Mfg, Co. v. Leader Filling
Stations Corp. 196 N.E. 852, 291 Mass. 394), even though such
adoption is publicly declared, such as by use of the name in
advertisements, circulars, price lists, and on signs and
stationery. (Consumers Petroleum Co. v. Consumers Co. of Ill. 169 F
2d 153).
The Paris Convention for the Protection of Industrial Property
does not automatically exclude all countries of the world have
signed it from using a tradename which happens to be used in one
country. To illustrate If a taxicab or bus company in a town in the
United Kingdom or India happens to use the tradename "Rapid
Transportation", it does not necessarily follow that "Rapid" can no
longer be registered in Uganda, Fiji, or the Philippines.
As stated by the Director of Patents
"Indeed, the Philippines is a signatory to this Treaty and,
hence, we must honor our obligation thereunder on matters
concerning internationally known or well known marks. However, this
Treaty provision clearly indicated the conditions which must exist
before any trademark owner can claim and be afforded rights such as
the Petitioner herein seeks and those conditions are
that:chanrob1es virtual 1aw library
a) the mark must be internationally known or well known;
b) the subject of the right must be a trademark, not a patent or
copyright or anything else;
c) the mark must be for use in the same or similar kinds of
goods, and
d) the person claiming must be the owner of the mark (The
Parties Convention Commentary on the Paris Convention. Article by
Dr. Bogach, Director General of the World Intellectual Property
Organization, Geneva, Switzerland, 1985)."
The respondent registered its trademark in 1979. It has
continuously used that name in commerce. It has established a
goodwill through extensive advertising. The people who buy at
Isetann Store do so because of Isetanns efforts. There is no
showing that the Japanese firms registration in Japan or Hongkong
has any influence whatsoever on the Filipino buying
public.chanrobles virtual lawlibrary
WHEREFORE, premises considered, the petition is hereby
DISMISSED.
SO ORDERED.
THIRD DIVISION
[G.R. No. 91332. July 16, 1993.]
PHILIP MORRIS, INC., BENSON & HEDGES (CANADA), INC., AND
FABRIQUES OF TABAC REUNIES, S.A.,Petitioners, v. THE COURT OF
APPEALS AND FORTUNE TOBACCO CORPORATION,Respondents.
Quasha, Asperilla, Ancheta, Pea & Nolasco Law Office,
forPetitioners.
Teresita Gandionco-Oledan forPrivate Respondent.
SYLLABUS
1. MERCANTILE LAW; TRADEMARK LAW; FOREIGN CORPORATION NOT
ENGAGED IN LOCAL COMMERCE, MAY SUE FOR INFRINGEMENT. To sustain a
successful prosecution of their suit for infringement,Petitioners,
as foreign corporations not engaged in local commerce, rely on
Section 21-A of the Trademark Law to drive home the point that they
are not precluded from initiating a cause of action in the
Philippines on account of the principal perception that another
entity is pirating their symbol without any lawful authority to do
so. Judging from a perusal of the aforequoted Section 21-A, the
conclusion reached by petitioners is certainly correct for the
proposition in support thereof is embedded in Philippine legal
jurisprudence.
2. ID.; ID.; ID.; ALLEGATION OF PERSONALITY TO SUE, MANDATORY
REQUIREMENT. On May 21, 1984, Section 21-A, the provision under
consideration, was qualified by this Court in La Chemise Lacoste
S.A. v. Fernandez (129 SCRA 373 [1984]), to the effect that a
foreign corporation not doing business in the Philippines may have
the right to sue before Philippine Courts, but existing adjective
axioms require that qualifying circumstances necessary for the
assertion of such right should first be affirmatively pleaded (2
Agbayani, Commercial Laws of the Philippines, 1991 Ed., p. 598; 4
Martin, Philippine Commercial Laws, Rev. Ed., 1986, p. 381).
Indeed, it is not sufficient for a foreign corporation suing under
Section 21-A to simply allege its alien origin. Rather, it must
additionally allege its personality to sue. Relative to this
condition precedent, it may be observed that petitioners were not
remiss in averring their personality to lodge a complaint for
infringement especially so when they asserted that the main action
for infringement is anchored on an isolated transaction (Atlantic
Mutual Ins. Co. v. Cebu Stevedoring Co., Inc., 17 SCRA 1037 [1966],
1 Regalado, Remedial Law Compendium, Fifth Rev. Ed., 1988, p.
103)
3. ID.; ID.; ID.; ID.; CASE AT BAR. Given these confluence of
existing laws amidst the cases involving trademarks, there can be
no disagreement to the guiding principle in commercial law that
foreign corporations not engaged in business in the Philippines may
maintain a cause of action for infringement primarily because of
Section 21-A of the Trademark Law when the legal standing to sue is
alleged, which petitioners have done in the case at hand.
4. ID.; ID.; ACTUAL COMMERCIAL USE OF TRADEMARK, NECESSARY FOR
ACQUISITION OF OWNERSHIP THEREOF. In assailing the justification
arrived at by respondent court when it recalled the writ of
preliminary injunction, petitioners are of the impression that
actual use of their trademarks in Philippine commercial dealings is
not an indispensable element under Article 2 of the Paris
Convention. Yet petitioners perception along this line is
nonetheless resolved by Sections 2 and 2-A of the Trademark Law
which speak loudly about the necessity of actual commercial use of
the trademark in the local forum.
5. INTERNATIONAL LAW; RULES ON INTERNATIONAL LAW GIVEN AN EQUAL
STANDING, NOT SUPERIOR, TO NATIONAL LEGISLATIVE ENACTMENTS; CASE AT
BAR. Following universal acquiescene and comity, our municipal law
on trademarks regarding the requirement of actual use in the
Philippines must subordinate an international agreement inasmuch as
the apparent clash is being decided by a municipal tribunal
(Mortensen v. Peters, Great Britain, High Court of Judiciary of
Scotland, 1906, 8 Sessions 93; Paras, International Law and World
Organization, 1971 Ed., p. 20). Withal, the fact that international
law has been made part of the law of the land does not by any means
imply the primacy of international law over national law in the
municipal sphere. Under the doctrine of incorporation as applied in
most countries, rules of international law are given a standing
equal, not superior, to national legislative enactments (Salonga
and Yap, Public International Law, Fourth ed., 1974, p. 6).
6. REMEDIAL LAW; PROVISIONAL REMEDIES; PRELIMINARY INJUNCTION;
RELUCTANCE TO ISSUE WRIT, DEFERENCE TO LOWER COURTS OVER ASSAILED
INTERLOCUTORY ORDERS. We can not help but notice the manner the
ascription was framed which carries with it the implied but
unwarranted assumption of the existence of petitioners right to
relief. It must be emphasized that this aspect of exclusive
dominion to the trademarks, together with the corollary allegation
of irreparable injury, has yet to be established by petitioners by
the requisite quantum of evidence in civil cases. It cannot be
denied that our reluctance to issue a writ of preliminary
injunction is due to judicial deference to the lower courts,
involved as there is a mere interlocutory order (Villarosa v.
Teodoro, Sr., 100 Phil. 25 [1956]). In point of adjective law, the
petition has its roots on a remedial measure which is but ancillary
to the main action for infringement still pending factual
determination before the court of origin.
7. ID.; ID.; ID.; EXISTENCE OF RIGHT TO BE PROTECTED,
INDISPENSABLE; NOT MET IN CASE AT BAR. More telling are the
allegations of petitioners in their complaint as well as in the
very petition filed with this Court indicating that they are not
doing business in the Philippines, for these frank representations
are inconsistent and incongruent with any pretense of a right which
can be breached (Article 1431, New Civil Code; Section 4, Rule 129;
Section 3, Rule 58, Revised Rules of Court). Indeed, to be entitled
to an injunctive writ, petitioner must show that there exists a
right to be protected and that the facts against which injunction
is directed are violative of said right (Searth Commodities
Corporation v. Court of Appeals, 207 SCRA 622 [1992]). It may be
added in this connection that albeit petitioners are holders of
certificate of registration in the Philippines of their symbols as
admitted by private respondent, the fact of exclusive ownership
cannot be made to rest solely on these documents since dominion
over trademarks is not acquired by the mere fact of registration
alone and does not perfect a trademark right (Unno Commercial
Enterprises, Inc. v. General Milling Corporation, 120 SCRA 804
[1983]).
8. ID.; ID.; ID.; PRIOR PROOF OF TRANSGRESSION OF ACTUAL
EXISTING RIGHT, INDISPENSABLE REQUIREMENT. What we are simply
conveying is another basic tenet in remedial law that before
injunctive relief may properly issue, complainants right or title
must be undisputed and demonstrated on the strength of ones own
title to such a degree as to unquestionably exclude dark clouds of
doubt, rather than on the weakness of the adversarys evidence,
inasmuch as the possibility of irreparable damages, without prior
proof of transgression of an actual existing right, is no ground
for injunction being mere damnum absque injuria (Talisay-Silay
Milling Co., Inc. v. CFI of Negros Occidental, 42 SCRA 577 [1971];
Francisco, Rules of Court, Second ed., 1985, p. 225; 3 Martin,
Rules of Court, 1986 ed., p. 82).
9. ID.; ID.; ID.; GROUNDS FOR DENIAL AND/OR DISSOLUTION OF WRIT.
Under Section 6, Rule 58 of the Revised Rules of Court, injunction
may be refused, or, if granted, may be dissolved, on the following
instances: (1) If there is insufficiency of the complaint as shown
by the allegations therein. Refusal or dissolution may be granted
in this case with or without notice to the adverse party. (2) If it
appears after hearing that although the plaintiff is entitled to
the injunction, the issuance or continuance thereof would cause
great damage to the defendant, while the plaintiff can be fully
compensated for such damages as he may suffer. The defendant, in
this case, must file a bond in an amount fixed by the judge
conditioned that he will pay all damages which the plaintiff may
suffer by the refusal or the dissolution of the injunction. (3) On
other grounds upon affidavits on the part of the defendant which
may be opposed by the plaintiff also by affidavits. Modification of
the injunction may also be ordered by the court if it appears that
the extent of the preliminary injunction granted is too great. (3
Martin, Rules of Court, 1986 ed., p. 99; Francisco, supra, at p.
268.)
10. ID.; ID.; ID.; FOREIGN CORPORATION NOT DOING BUSINESS IN THE
PHILIPPINES NOT ENTITLED TO ISSUANCE OF WRIT OF PRELIMINARY
INJUNCTION IN THE ABSENCE OF THEIR RIGHT TO BE PROTECTED; CASE AT
BAR. In view of the explicit representation of petitioners in the
complaint that they are not engaged in business in the Philippines,
it inevitably follows that no conceivable damage can be suffered by
them not to mention the foremost consideration heretofore discussed
on the absence of their "right" to be protected. WHEREFORE, the
petition is hereby DISMISSED and the Resolutions of the Court of
Appeals dated September 14, 1989 and November 29, 1989 are hereby
AFFIRMED.
11. ID.; ID.; ID.; ERRONEOUS LIFTING OF WRIT MAY BE CURED BY
APPEAL AND NOT BY PETITION FOR CERTIORARI. Assuming in gratia
argumenti that respondent court erroneously lifted the writ it
previously issued, the same may be cured by appeal and not in the
form of a petition forcertiorari(Clark v. Philippine Ready Mix
Concrete Co., 88 Phil. 460 [1951]).
12. ID.; ID.; ID.; WRIT MAY BE DISSOLVED WITHOUT PREVIOUS NOTICE
TO ADVERSE PARTY AND WITHOUT HEARING. Verily, and mindful of the
rule that a writ of preliminary injunction is an interlocutory
order which is always under the control of the court before final
judgment petitioners criticism must fall flat on the ground, so to
speak, more so when extinction of the previously issued writ can
even be made without previous notice to the adverse party and
without a hearing (Caluya v. Ramos, 79 Phil. 640 [1947]; 3 Moran,
Rules of Court, 1970 ed., p. 81).
D E C I S I O N
MELO,J.:
In the petition before us, petitioners Philip Morris, Inc.,
Benson and Hedges (Canada), Inc., and Fabriques of Tabac Reunies,
S.A., are ascribing whimsical exercise of the faculty conferred
upon magistrates by Section 6, Rule 58 of the Revised Rules of
Court when respondent Court of Appeals lifted the writ of
preliminary injunction it earlier had issued against Fortune
Tobacco Corporation, herein private respondent, from manufacturing
and selling "MARK" cigarettes in the local market.chanrobles
lawlibrary : rednad
Banking on the thesis that petitioners respective symbols "MARK
VII", "MARK TEN", and "LARK", also for cigarettes, must be
protected against unauthorized appropriation, petitioners twice
solicited the ancillary writ in the course of the main suit for
infringement but the court of origin was unpersuaded.
Before we proceed to the generative facts of the case at bar, it
must be emphasized that resolution of the issue on the propriety of
lifting the writ of preliminary injunction should not be construed
as a prejudgment of the suit below. Aware of the fact that the
discussion we are about to enter into involves a mere interlocutory
order, a discourse on the aspect of infringement must thus be
avoided. With these caveat, we shall now shift our attention to the
events which spawned the controversy.
As averred in the initial pleading, Philip Morris, Incorporated
is a corporation organized under the laws of the State of Virginia,
United States of America, and does business at 100 Park Avenue, New
York, New York, United States of America. The two other plaintiff
foreign corporations, which are wholly-owned subsidiaries of Philip
Morris, Inc., are similarly not doing business in the Philippines
but are suing on an isolated transaction. As registered owners of
"MARK VII", "MARK TEN", and "LARK" per certificates of registration
issued by the Philippine Patent Office on April 26, 1973, May 28,
1964, and March 25, 1964, plaintiffs-petitioners asserted that
defendant Fortune Tobacco Corporation has no right to manufacture
and sell cigarettes bearing the allegedly identical or confusingly
similar trademark "MARK" in contravention of Section 22 of the
Trademark Law, and should, therefore, be precluded during the
pendency of the case from performing the acts complained of via a
preliminary injunction (p. 75, Court of Appeals Rollo in AC-G.R. SP
No. 13132).
For its part, Fortune Tobacco Corporation admitted petitioners
certificates of registration with the Philippine Patent Office
subject to the affirmative and special defense on misjoinder of
party plaintiffs. Private respondent alleged further that it has
been authorized by the Bureau of Internal Revenue to manufacture
and sell cigarettes bearing the trademark "MARK", and that "MARK"
is a common word which cannot be exclusively appropriated (p. 158,
Court of Appeals Rollo in AC-G.R. SP No. 13132).
On March 28, 1983, petitioners prayer for preliminary injunction
was denied by the Presiding Judge of Branch 166 of the Regional
Trial Court of the National Capital Judicial Region stationed at
Pasig, premised upon the following propositions:chanrob1es virtual
1aw library
Plaintiffs admit in paragraph 2 of the complaint that." . . they
are not doing business in the Philippines and are suing on an
isolated transaction . . ." This simply means that they are not
engaged in the sale, manufacture, importation, expor[t]ation and
advertisement of their cigarette products in the Philippines. With
this admission, defendant asks: ". . . how could defendants "MARK"
cigarettes cause the former "irreparable damage" within the
territorial limits of the Philippines?" Plaintiffs maintain that
since their trademarks are entitled to protection by treaty
obligation under Article 2 of the Paris Convention of which the
Philippines is a member and ratified by Resolution No. 69 of the
Senate of the Philippines and as such, have the force and effect of
law under Section 12, Article XVII of our Constitution and since
this is an action for a violation or infringement of a trademark or
trade name by defendant, such mere allegation is sufficient even in
the absence of proof to support it. To the mind of the Court,
precisely, this is the issue in the main case to determine whether
or not there has been an invasion of plaintiffs right of property
to such trademark or trade name. This claim of plaintiffs is
disputed by defendant in paragraphs 6 and 7 of the Answer; hence,
this cannot be made a basis for the issuance of a writ of
preliminary injunction.
There is no dispute that the First Plaintiff is the registered
owner of trademar[k] "MARK VII" with Certificate of Registration
No. 18723, dated April 26, 1973 while the Second Plaintiff is
likewise the registered owner of trademark "MARK TEN" under
Certificate of Registration No. 11147, dated May 28, 1963 and the
Third Plaintiff is a registrant of trademark "LARK" as shown by
Certificate of Registration No. 10953 dated March 23, 1964, in
addition to a pending application for registration of trademark
"MARK VII" filed on November 21, 1980 under Application Serial No.
43243, all in the Philippine Patent Office. In the same manner,
defendant has a pending application for registration of the
trademark "LARK" cigarettes with the Philippine Patent Office under
Application Serial No. 44008. Defendant contends that since
plaintiffs are "not doing business in the Philippines" coupled by
the fact that the Director of Patents has not denied their pending
application for registration of its trademark "MARK", the grant of
a writ of preliminary injunction is premature. Plaintiffs contend
that this act(s) of defendant is but a subterfuge to give semblance
of good faith intended to deceive the public and patronizers into
buying the products and create the impression that defendants goods
are identical with or come from the same source as plaintiffs
products or that the defendant is a licensee of plaintiffs when in
truth and in fact the former is not. But the fact remains that with
its pending application, defendant has embarked in the
manufacturing, selling, distributing and advertising of "MARK"
cigarettes. The question of good faith or bad faith on the part of
defendant are matters which are evidentiary in character which have
to be proven during the hearing on the merits; hence, until and
unless the Director of Patents has denied defendants application,
the Court is of the opinion and so holds that issuance of a writ of
preliminary injunction would not lie.
There is no question that defendant has been authorized by the
Bureau of Internal Revenue to manufacture cigarettes bearing the
trademark "MARK" (Letter of Ruben B. Ancheta, Acting Commissioner
addressed to Fortune Tobacco Corporation dated April 3, 1981,
marked as Annex "A", defendants "OPPOSITION, etc." dated September
24, 1982). However, this authority is qualified." . . that the said
brands have been accepted and registered by the Patent Office not
later than six (6) months after you have been manufacturing the
cigarettes and placed the same in the market." However, this
grant." . . does not give you protection against any person or
entity whose rights may be prejudiced by infringement or unfair
competition in relation to your indicated trademarks/brands." As
aforestated, the registration of defendants application is still
pending in the Philippine Patent Office.
It has been repeatedly held in this jurisdiction as well as in
the United States that the right or title of the applicant for
injunction remedy must be clear and free from doubt. Because of the
disastrous and painful effects of an injunction, Courts should be
extremely careful, cautious and conscionable in the exercise of its
discretion consistent with justice, equity and fair play.
"There is no power the exercise of which is more delicate which
requires greater caution, deliberation, and sound discretion, or
(which is) more dangerous in a doubtful case than the issuing of an
injunction; it is the strong arm of equity that never ought to be
extended unless to cases of great injury, where courts of law
cannot afford an adequate or commensurate remedy in damages. The
right must be clear, the injury impending or threatened, so as to
be averted only by the protecting preventive process of
injunction." (Bonaparte v. Camden, etc. N. Co., 3 F. Cas. No. 1,
617, Baldw. 205, 217.)
"Courts of equity constantly decline to lay down any rule which
injunction shall be granted or withheld. There is wisdom in this
course, for it is impossible to foresee all exigencies of society
which may require their aid to protect rights and restrain wrongs."
(Merced M. Go v. Freemont, 7 Gal. 317, 321; 68 Am. Dec. 262.)
"It is the strong arm of the court; and to render its operation
benign and useful, it must be exercised with great discretion, and
when necessary requires it." (Attorney-General v. Utica Inc. Co.,
P. John Ch. (N.Y.) 371.)
Having taken a panoramic view of the position[s] of both parties
as viewed from their pleadings, the picture reduced to its minimum
size would be this: At the crossroads are the two (2) contending
parties, plaintiffs vigorously asserting the rights granted by law,
treaty and jurisprudence to restrain defendant in its activities of
manufacturing, selling, distributing and advertising its "MARK"
cigarettes and now comes defendant who countered and refused to be
restrained claiming that it has been authorized temporarily by the
Bureau of Internal Revenue under certain conditions to do so as
aforestated coupled by its pending application for registration of
trademark "MARK" in the Philippine Patent Office. This circumstance
in itself has created a dispute between the parties which to the
mind of the Court does not warrant the issuance of a writ of
preliminary injunction.
"It is well-settled principle that courts of equity will refuse
an application for the injunctive remedy where the principle of law
on which the right to preliminary injunction rests is disputed and
will admit of doubt, without a decision of the court of law
establishing such principle although satisfied as to what is a
correct conclusion of law upon the facts. The fact, however, that
there is no such dispute or conflict does not in itself constitute
a justifiable ground for the court to refuse an application for the
injunctive relief." (Hackensack Impr. Commn. v. New Jersey Midland
P. Co., 22 N.J. Eg. 94.)chanrobles virtual lawlibrary
Hence, the status quo existing between the parties prior to the
filing of this case should be maintained. For after all, an
injunction, without reference to the parties, should not be
violent, vicious nor even vindictive. (pp. 338-341, Rollo in G.R.
No. 91332.)
In the process of denying petitioners subsequent motion for
reconsideration of the order denying issuance of the requested
writ, the court of origin took cognizance of the certification
executed on January 30, 1984 by the Philippine Patent Office
attesting to the fact that private respondents application for
registration is still pending appropriate action. Apart from this
communication, what prompted the trial court judge to entertain the
idea of prematurity and untimeliness of petitioners application for
a writ of preliminary injunction was the letter from the Bureau of
Internal Revenue dated February 2, 1984 which reads:chanrob1es
virtual 1aw library
MRS. TERESITA GANDIONGCO OLEDAN
Legal Counsel
Fortune Tobacco Corporation
Madam:chanrob1es virtual 1aw library
In connection with your letter dated January 25, 1984,
reiterating your query as to whether your label approval
automatically expires or becomes null and void after six (6) months
if the brand is not accepted and by the patent office, please be
informed that no provision in the Tax Code or revenue regulation
that requires an applicant to comply with the aforementioned
condition in order that his label approved will remain valid and
existing.
Based on the document you presented, it shows that registration
of this particular label is still pending resolution by the Patent
Office. These being so, you may therefore continue with the
production of said brand of cigarette until this Office is
officially notified that the question of ownership of "MARK" brand
is finally resolved.
Very truly yours,
TEODORO D. PAREO
Chief, Manufactured Tobacco
Tax Division
TAN-P6531-D 2830-A-6
(p. 348, Rollo.)
It appears from the testimony of Atty. Enrique Madarang, Chief
of the Trademark Division of the then Philippine Patent Office that
Fortunes application for its trademark is still pending before said
office (p. 311, Rollo).
Petitioners thereafter cited supervening events which supposedly
transpired since March 28, 1983, when the trial court first
declined issuing a writ of preliminary injunction, that could alter
the results of the case in that Fortunes application had been
rejected, nay, barred by the Philippine Patent Office, and that the
application had been forfeited by abandonment, but the trial court
nonetheless denied the second motion for issuance of the injunctive
writ on April 22, 1987, thus:chanrob1es virtual 1aw library
For all the prolixity of their pleadings and testimonial
evidence, the plaintiffs-movants have fallen far short of the legal
requisites that would justify the grant of the writ of preliminary
injunction prayed for. For one, they did not even bother to
establish by competent evidence that the products supposedly
affected adversely by defendants trademark now subject of an
application for registration with the Philippine Patents Office,
are in actual use in the Philippines. For another, they
concentrated their fire on the alleged abandonment and forfeiture
by defendant of said application for registration.
The Court cannot help but take note of the fact that in their
complaint plaintiffs included a prayer for issuance of a writ of
preliminary injunction. The petition was duly heard, and thereafter
the matter was assiduously discussed lengthily and resolved against
plaintiffs in a 15-page Order issued by the undersigneds
predecessor on March 28, 1983. Plaintiffs motion for
reconsideration was denied in another well-argued 8 page Order
issued on April 5, 1984, and the matter was made to rest.
However, on the strength of supposed changes in the material
facts of this case, plaintiffs came up with the present motion
citing therein the said changes which are: that defendants
application had been rejected and barred by the Philippine Patents
Office, and that said application has been deemed abandoned and
forfeited. But defendant has refiled the same.
Plaintiffs arguments in support of the present motion appear to
be a mere rehash of their stand in the first above-mentioned
petition which has already been ruled upon adversely against them.
Granting that the alleged changes in the material facts are
sufficient grounds for a motion seeking a favorable grant of what
has already been denied, this motion just the same cannot
prosper.
In the first place there is no proof whatsoever that any of
plaintiffs products which they seek to protect from any adverse
effect of the trademark applied for by defendant, is in actual use
and available for commercial purposes anywhere in the Philippines.
Secondly, as shown by plaintiffs own evidence furnished by no less
than the chief of Trademarks Division of the Philippine Patent
Office, Atty. Enrique Madarang, the abandonment of an application
is of no moment, for the same can always be refiled. He said there
is no specific provision in the rules prohibiting such refiling
(TSN, November 21, 1986, pp. 60 & 64, Raviera). In fact,
according to Madarang, the refiled application of defendant is now
pending before the Patents Office. Hence, it appears that the
motion has no leg to stand on. (pp. 350-351, Rollo in G.R. No.
91332.)chanrobles law library : red
Confronted with this rebuff, petitioners filed a previous
petition forcertioraribefore the Court, docketed as G.R. No. 78141,
but the petition was referred to the Court of Appeals.
The Court of Appeals initially issued a resolution which set
aside the court of origins order dated April 22, 1987, and granted
the issuance of a writ of preliminary injunction enjoining Fortune,
its agents, employees, and representatives, from manufacturing,
selling, and advertising "MARK" cigarettes. The late Justice
Cacdac, speaking for the First Division of the Court of Appeals in
CA-G.R. SP No. 13132, remarked:chanrob1es virtual 1aw library
There is no dispute that petitioners are the registered owners
of the trademarks for cigarettes "MARK VII", "MARK TEN", and
"LARK." (Annexes B, C and D, petition). As found and reiterated by
the Philippine Patent Office in two (2) official communications
dated April 6, 1983 and January 24, 1984, the trademark "MARK" is
"confusingly similar" to the trademarks of petitioners, hence,
registration was barred under Sec. 4(d) of Rep. Act No. 166, as
amended (pp. 106, 139, SCA rollo). In a third official
communication dated April 8, 1986, the trademark application of
private respondent for the mark "MARK" under Serial No. 44008 filed
on February 13, 1981 which was declared abandoned as of February
16, 1986, is now deemed forfeited, there being no revival made
pursuant to Rule 98 of the Revised Rules of Practitioners in
Trademark Cases." (p. 107, CA rollo). The foregoing documents or
communications mentioned by petitioners as "the changes in material
facts which occurred after March 28, 1983", are not also questioned
by respondents.
Pitted against the petitioners documentary evidence, respondents
pointed to (1) the letter dated January 30, 1979 (p. 137, CA rollo)
of Conrado P. Diaz, then Acting Commissioner of Internal Revenue,
temporarily granting the request of private respondent for a permit
to manufacture two (2) new brands of cigarettes one of which is
brand "MARK" filter-type blend, and (2) the certification dated
September 26, 1986 of Cesar G. Sandico, Director of Patents (p.
138, CA rollo) issued upon the written request of private
respondents counsel dated September 17, 1986 attesting that the
records of his office would show that the "trademark MARK" for
cigarettes is now the subject of a pending application under Serial
No. 59872 filed on September 16, 1986.
Private respondents documentary evidence provides the reasons
neutralizing or weakening their probative values. The penultimate
paragraph of Commissioner Diaz letter of authority
reads:jgc:chanrobles.com.ph
"Please be informed further that the authority herein granted
does not give you protection against any person or entity whose
rights may be prejudiced by infringement or unfair competition in
relation to your above-named brands/trademarks."cralaw virtua1aw
library
while Director Sandicos certification contained similar
conditions as follows:jgc:chanrobles.com.ph
"This Certification, however, does not give protection as
against any person or entity whose right may be prejudiced by
infringement or unfair competition in relation to the aforesaid
trademark nor the right to register if contrary to the provisions
of the Trademark Law, Rep. Act No. 166 as amended and the Revised
Rules of Practice in Trademark Cases."cralaw virtua1aw library
The temporary permit to manufacture under the trademark "MARK"
for cigarettes and the acceptance of the second application filed
by private respondent in the height of their dispute in the main
case were evidently made subject to the outcome of the said main
case or Civil Case No. 47374 of the respondent Court. Thus, the
Court has not missed to note the absence of a mention in the
Sandico letter of September 26, 1986 of any reference to the
pendency of the instant action filed on August 18, 1982. We believe
and hold that petitioners have shown a prima facie case for the
issuance of the writ of prohibitory injunction for the purposes
stated in their complaint and subsequent motions for the issuance
of the prohibitory writ. (Buayan Cattle Co. v. Quintillan, 125 SCRA
276).
The requisites for the granting of preliminary injunction are
the existence of the right protected and the facts against which
the injunction is to be directed as violative of said right.
(Buayan Cattle Co. v. Quintillan, supra; Ortigas & Co. v. Ruiz,
148 SCRA 326). It is a writ framed according to the circumstances
of the case commanding an act which the Court regards as essential
to justice and restraining an act it deems contrary to equity and
good conscience (Rosauro v. Cuneta, 119 SCRA 570). If it is not
issued, the defendant may, before final judgment, do or continue
the doing of the act which the plaintiff asks the court to
restrain, and thus make ineffectual the final judgment rendered
afterwards granting the relief sought by the plaintiff (Calo v.
Roldan, 76 Phil. 445). Generally, its grant or denial rests upon
the sound discretion of the Court except on a clear case of abuse
(Belish Investment & Finance Co. v. State House, 151 SCRA 636).
Petitioners right of exclusivity to their registered trademarks
being clear and beyond question, the respondent courts denial of
the prohibitive writ constituted excess of jurisdiction and grave
abuse of discretion. If the lower court does not grant preliminary
injunction, the appellate court may grant the same. (Service
Specialists, Inc. v. Sheriff of Manila, 145 SCRA 139). (pp.
165-167, Rollo in G.R. No. 91332.)chanrobles lawlibrary :
rednad
After private respondent Fortunes motion for reconsideration was
rejected, a motion to dissolve the disputed writ of preliminary
injunction with offer to post a counterbond was submitted which was
favorably acted upon by the Court of Appeals, premised on the
filing of a sufficient counterbond to answer for whatever perjuicio
petitioners may suffer as a result thereof, to wit:chanrob1es
virtual 1aw library
The private respondent seeks to dissolve the preliminary
injunction previously granted by this Court with an offer to file a
counterbond. It was pointed out in its supplemental motion that
lots of workers employed will be laid off as a consequence of the
injunction and that the government will stand to lose the amount of
specific taxes being paid by the privateRespondent. The specific
taxes being paid is the sum total of P120,120,295.98 from January
to July 1989.
The petitioners argued in their comment that the damages caused
by the infringement of their trademark as well as the goodwill it
generates are incapable of pecuniary estimation and monetary
evaluation and not even the counterbond could adequately compensate
for the damages it will incur as a result of the dissolution of the
bond. In addition, the petitioner further argued that doing
business in the Philippines is not relevant as the injunction
pertains to an infringement of a trademark right.
After a thorough re-examination of the issues involved and the
arguments advanced by both parties in the offer to file a
counterbond and the opposition thereto, WE believe that there are
sound and cogent reasons for Us to grant the dissolution of the
writ of preliminary injunction by the offer of the private
respondent to put up a counterbond to answer for whatever damages
the petitioner may suffer as a consequence of the dissolution of
the preliminary injunction.
The petitioner will not be prejudiced nor stand to suffer
irreparably as a consequence of the lifting of the preliminary
injunction considering that they are not actually engaged in the
manufacture of the cigarettes with the trademark in question and
the filing of the counterbond will amply answer for such
damages.
While the rule is that an offer of a counterbond does not
operate to dissolve an injunction previously granted, nevertheless,
it is equally true that an injunction could be dissolved only upon
good and valid grounds subject to the sound discretion of the
court. As WE have maintained the view that there are sound and good
reasons to lift the preliminary injunction, the motion to file a
counterbond is granted. (pp. 53-54, Rollo in G.R. No. 91332.)
Petitioners, in turn, filed their own motion for re-examination
geared towards reimposition of the writ of preliminary injunction
but to no avail (p. 55, Rollo in G.R. No. 91332).
Hence, the instant petition casting three aspersions that
respondent court gravely abused its discretion tantamount to excess
of jurisdiction when:chanrob1es virtual 1aw library
I. . . . it required, contrary to law and jurisprudence, that in
order that petitioners may suffer irreparable injury due to the
lifting of the injunction, petitioners should be using actually
their registered trademarks in commerce in the Philippines;
II. . . . it lifted the injunction in violation of section 6 of
Rule 58 of the Rules of Court; and
III. . . . after having found that the trial court had committed
grave abuse of discretion and exceeded its jurisdiction for having
refused to issue the writ of injunction to restrain private
respondents acts that are contrary to equity and good conscience,
it made a complete about face for legally insufficient grounds and
authorized the private respondent to continue performing the very
same acts that it had considered contrary to equity and good
conscience, thereby ignoring not only the mandates of the Trademark
Law, the international commitments of the Philippines, the judicial
admission of private respondent that it will have no more right to
use the trademark "MARK" after the Director of Patents shall have
rejected the application to register it, and the admonitions of the
Supreme Court. (pp. 24-25, Petition; pp. 25-26, Rollo.)
To sustain a successful prosecution of their suit for
infringement,Petitioners, as foreign corporations not engaged in
local commerce, rely on Section 21-A of the Trademark Law reading
as follows:chanrob1es virtual 1aw library
SECTION 21-A. Any foreign corporation or juristic person to
which a mark or trade-name has been registered or assigned under
this act may bring an action hereunder for infringement, for unfair
competition, or false designation of origin and false description,
whether or not it has been licensed to do business in the
Philippines under Act Numbered Fourteen hundred and fifty-nine, as
amended, otherwise known as the Corporation Law, at the time it
brings complaint: Provided, That the country of which the said
foreign corporation or juristic person is a citizen or in which it
is domiciled, by treaty, convention or law, grants a similar
privilege to corporate or juristic persons of the Philippines. (As
inserted by Sec. 7 of Republic Act No. 638.)
to drive home the point that they are not precluded from
initiating a cause of action in the Philippines on account of the
principal perception that another entity is pirating their symbol
without any lawful authority to do so. Judging from a perusal of
the aforequoted Section 21-A, the conclusion reached by petitioners
is certainly correct for the proposition in support thereof is
embedded in Philippine legal jurisprudence.
Indeed, it was stressed in General Garments Corporation v.
Director of Patents (41 SCRA 50 [1971]) by then Justice (later
Chief Justice) Makalintal that:chanrob1es virtual 1aw library
Parenthetically, it may be stated that the ruling in the
Mentholatum case was subsequently derogated when Congress,
purposely to "counteract the effects" of said case, enacted
Republic Act No. 638, inserting Section 21-A in the Trademark Law,
which allows a foreign corporation or juristic person to bring an
action in Philippine courts for infringement of a mark or
tradename, for unfair competition, or false designation of origin
and false description, "whether or not it has been licensed to do
business in the Philippines under Act Numbered Fourteen hundred and
fifty-nine, as amended, otherwise known as the Corporation Law, at
the time it brings complaint."cralaw virtua1aw library
Petitioner argues that Section 21-A militates against
respondents capacity to maintain a suit for cancellation, since it
requires, before a foreign corporation may bring an action, that
its trademark or tradename has been registered under the Trademark
Law. The argument misses the essential point in the said provision,
which is that the foreign corporation is allowed thereunder to sue
"whether or not it has been licensed to do business in the
Philippines" pursuant to the Corporation Law (precisely to
counteract the effects of the decision in the Mentholatum case).
(at p. 57.)
However, on May 21, 1984, Section 21-A, the provision under
consideration, was qualified by this Court in La Chemise Lacoste
S.A. v. Fernandez (129 SCRA 373 [1984]), to the effect that a
foreign corporation not doing business in the Philippines may have
the right to sue before Philippine Courts, but existing adjective
axioms require that qualifying circumstances necessary for the
assertion of such right should first be affirmatively pleaded (2
Agbayani, Commercial Laws of the Philippines, 1991 Ed., p. 598; 4
Martin, Philippine Commercial Laws, Rev. Ed., 1986, p. 381).
Indeed, it is not sufficient for a foreign corporation suing under
Section 21-A to simply allege its alien origin. Rather, it must
additionally allege its personality to sue. Relative to this
condition precedent, it may be observed that petitioners were not
remiss in averring their personality to lodge a complaint for
infringement (p. 75, Rollo in AC-G.R. SP No. 13132) especially so
when they asserted that the main action for infringement is
anchored on an isolated transaction (p. 75, Rollo in AC-G.R. SP No.
13132; Atlantic Mutual Ins. Co. v. Cebu Stevedoring Co., Inc., 17
SCRA 1037 (1966), 1 Regalado, Remedial Law Compendium, Fifth Rev.
Ed., 1988, p. 103).
Another point which petitioners considered to be of significant
interest, and which they desire to impress upon us is the
protection they enjoy under the Paris Convention of 1965 to which
the Philippines is a signatory. Yet, insofar as this discourse is
concerned, there is no necessity to treat the matter with an
extensive response because adherence of the Philippines to the 1965
international covenant due to pact sunt servanda had been
acknowledged in La Chemise (supra at page 390).
Given these confluence of existing laws amidst the cases
involving trademarks, there can be no disagreement to the guiding
principle in commercial law that foreign corporations not engaged
in business in the Philippines may maintain a cause of action for
infringement primarily because of Section 21-A of the Trademark Law
when the legal standing to sue is alleged, which petitioners have
done in the case at hand.chanrobles.com:cralaw:red
In assailing the justification arrived at by respondent court
when it recalled the writ of preliminary injunction, petitioners
are of the impression that actual use of their trademarks in
Philippine commercial dealings is not an indispensable element
under Article 2 of the Paris Convention in that:chanrob1es virtual
1aw library
(2) . . . no condition as to the possession of a domicile or
establishment in the country where protection is claimed may be
required of persons entitled to the benefits of the Union for the
enjoyment of any industrial property rights. (p. 28, Petition; p.
29, Rollo in G.R. No. 91332.)
Yet petitioners perception along this line is nonetheless
resolved by Sections 2 and 2-A of the Trademark Law which speak
loudly about the necessity of actual commercial use of the
trademark in the local forum:chanrob1es virtual 1aw library
SEC. 2. What are registrable. Trademarks, tradenames and service
marks owned by persons, corporations, partnerships or associations
domiciled in the Philippines and by persons, corporations,
partnerships or associations domiciled in any foreign country may
be registered in accordance with the provisions of this Act;
Provided, That said trademarks, tradenames, or service marks are
actually in use in commerce and services not less than two months
in the Philippines before the time the applications for
registration are filed; And provided, further, That the country of
which the applicant for registration is a citizen grants by law
substantially similar privileges to citizens of the Philippines,
and such fact is officially certified, with a certified true copy
of the foreign law translated into the English language, by the
government of the foreign country to the Government of the Republic
of the Philippines. (As amended by R.A. No. 865).
SEC. 2-A. Ownership of trademarks, tradenames and service marks;
how acquired. Anyone who lawfully produces or deals in merchandise
of any kind or who engages in any lawful business, or who renders
any lawful service in commerce, by actual use thereof in
manufacture or trade, in business, and in the service rendered, may
appropriate to his exclusive use a trademark, a tradename, or a
service mark not so appropriated by another, to distinguish his
merchandise, business or service from the merchandise, business or
service of others. The ownership or possession of a trademark,
tradename, service mark, heretofore or hereafter appropriated, as
in this section provided, shall be recognized and protected in the
same manner and to the same extent as are other property rights
known to the law. (As amended by R.A. No. 638). (Kabushi Kaisha
Isetan v. Intermediate Appellate Court, 203 SCRA 583 [1991], at pp.
589-590; italics ours.)
Following universal acquiescence and comity, our municipal law
on trademarks regarding the requirement of actual use in the
Philippines must subordinate an international agreement inasmuch as
the apparent clash is being decided by a municipal tribunal
(Mortensen v. Peters, Great Britain, High Court of Judiciary of
Scotland, 1906, 8 Sessions 93; Paras, International Law and World
Organization, 1971 Ed., p. 20). Withal, the fact that international
law has been made part of the law of the land does not by any means
imply the primacy of international law over national law in the
municipal sphere. Under the doctrine of incorporation as applied in
most countries, rules of international law are given a standing
equal, not superior, to national legislative enactments (Salonga
and Yap, Public International Law, Fourth ed., 1974, p.
16).chanrobles.com.ph : virtual law library
The aforequoted basic provisions of our Trademark Law, according
to Justice Gutierrez, Jr., in Kabushi Kaisha Isetan v. Intermediate
Appellate Court (203 SCRA 583 [1991]), have been construed in this
manner:chanrob1es virtual 1aw library
A fundamental principle of Philippine Trademark Law is that
actual use in commerce in the Philippines is a pre-requisite to the
acquisition of ownership over a trademark or a tradename.xxx
These provisions have been interpreted in Sterling Products
International, Inc. v. Farbenfabriken Bayer Actiengesellschaft (27
SCRA 1214 [1969]) in this way:jgc:chanrobles.com.ph
"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 prerequisite to the acquisition of the right of
ownership over a trademark.xxx
". . . Adoption alone of a trademark would not give exclusive
right thereto. Such right grows out of their actual use. Adoption
is not use. One may make advertisements, issue circulars, give out
price lists on