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INTELLECTUAL PROPERTY ASSOCIATION OF THE PHILIPPINES vs. HON.

PAQUITO OCHOA

Facts:

 The Madrid System for the International Registration of Marks (Madrid System), which is the centralized
system providing a one-stop solution for registering and managing marks worldwide, allows the trademark
owner to file one application in one language, and to pay one set of fees to protect his mark in the territories
of up to 97 member-states.
 The Madrid Protocol, which was adopted in order to remove the challenges deterring some countries from
acceding to the Madrid Agreement, has two objectives, namely: (1) to facilitate securing protection for
marks; and (2) to make the management of the registered marks easier in different countries.
 In 2004; the Intellectual Property Office of the Philippines (IPOPHL), the government agency mandated to
administer the intellectual property system of the country and to implement the state policies on intellectual
property; began considering the country's accession to the Madrid Protocol. However, based on its
assessment in 2005, the IPOPHL needed to first improve its own operations before making the
recommendation in favor of accession. The IPOPHL thus implemented reforms to eliminate trademark
backlogs and to reduce the turnaround time for the registration of marks.
 In the meanwhile, the IPOPHL mounted a campaign for information dissemination to raise awareness of the
Madrid Protocol. It launched a series of consultations with stakeholders and various business groups
regarding the Philippines' accession to the Madrid Protocol.
 It recommended in September 2011 to the Department of Foreign Affairs (DFA) that the Philippines should
accede to the Madrid Protocol.
 After its own review, the DFA endorsed to the President the country's accession to the Madrid Protocol.
Conformably with its express authority under Section 9 of Executive Order No. 459 (Providing for the
Guidelines in the Negotiation of International Agreements and its Ratification) dated November 25, 1997,
the DFA determined that the Madrid Protocol was an executive agreement.
 On March 27, 2012, President Benigno C. Aquino III ratified the Madrid Protocol through an instrument of
accession, The instrument of accession was deposited with the Director General of the World Intellectual
Property Organization (WIPO).
 The Madrid Protocol entered into force in the Philippines on July 25, 2012.
 Petitioner IP AP, an association of more than 100 law firms and individual practitioners in Intellectual
Property Law whose main objective is to promote and protect intellectual property rights in the Philippines
through constant assistance and involvement in the legislation of intellectual property law, has commenced
this special civil action for certiorari and prohibition to challenge the validity of the President's accession to
the Madrid Protocol without the concurrence of the Senate.
 According to the IPAP, the Madrid Protocol is a treaty, not an executive agreement; hence, respondent DFA
Secretary Albert Del Rosario acted with grave abuse of discretion in determining the Madrid Protocol as an
executive agreement.
 The IPAP has insisted that Article 2 of the Madrid Protocol means that foreign trademark applicants may file
their applications through the International Bureau or the WIPO, and their applications will be automatically
granted trademark protection without the need for designating their resident agents in the country.

Issues:

1. Whether or not the President's ratification of the Madrid Protocol is valid and constitutional
2. Whether or not the Madrid Protocol is in conflict with the IP Code.

Held:

1. YES. In view of the expression of state policy having been made by the Congress itself, the IPAP is plainly
mistaken in asserting that "there was no Congressional act that authorized the accession of the Philippines
to the Madrid Protocol."
DFA Secretary Del Rosario’s determination and treatment of the Madrid Protocol as an executive
agreement; being in apparent contemplation of the express state policies on intellectual property as well as
within his power under Executive Order No. 459, are upheld. We observe at this point that there are no hard
and fast rules on the propriety of entering into a treaty or an executive agreement on a given subject as an
instrument of international relations. The primary consideration in the choice of the form of agreement is the
parties' intent and desire to craft their international agreement in the form they so wish to further their
respective interests. The matter of form takes a back seat when it comes to effectiveness and binding effect
of the enforcement of a treaty or an executive agreement; inasmuch as all the parties; regardless of the
form, become obliged to comply conformably with the time-honored principle of pacta sunt servanda. The
principle binds the parties to perform in good faith their parts in the agreements.

2. NO. The IPAP misapprehends the procedure for examination under the Madrid Protocol, The difficulty,
which the IPAP illustrates, is minimal, if not altogether inexistent. The IPOPHL actually requires the
designation of the resident agent when it refuses the registration of a mark. Local representation is further
required in the submission of the Declaration of Actual Use, as well as in the submission of the license
contract. The Madrid Protocol accords with the intent and spirit of the IP Code, particularly on the subject of
the registration of trademarks. The Madrid Protocol does not amend or modify the IP Code on the
acquisition of trademark rights considering that the applications under the Madrid Protocol are still examined
according to the relevant national law, In that regard, the IPOPHL will only grant protection to a mark that
meets the local registration requirements.
Birkenstock vs Philippine Shoe Expo

Facts:

 Petitioner, a corporation duly organized and existing under the laws of Germany, applied for various
trademark registrations before the IPO
 However, registration proceedings of the subject applications were suspended in view of an existing
registration of the mark "BIRKENSTOCK AND DEVICE" under Registration No. 56334 dated October 21,
1993 (Registration No. 56334) in the name of Shoe Town International and Industrial Corporation, the
predecessor-in-interest of respondent Philippine Shoe Expo Marketing Corporation.
 In this regard, on May 27, 1997 petitioner filed a petition for cancellation of Registration No. 56334 on the
ground that it is the lawful and rightful owner of the Birkenstock marks (Cancellation Case).
 During its pendency, however, respondent and/or its predecessor-in-interest failed to file the required 10th
Year Declaration of Actual Use (10th Year DAU) for Registration No. 56334 on or before October 21, 2004,
thereby resulting in the cancellation of such mark. Accordingly, the cancellation case was dismissed for
being moot and academic.
 The aforesaid cancellation of Registration No. 56334 paved the way for the publication of the subject
applications in the IPO e-Gazette on February 2, 2007. In response, respondent filed three (3) separate
verified notices of oppositions to the subject applications claiming that:

1. it, together with its predecessor-in-interest, has been using Birkenstock marks in the Philippines for
more than 16 years through the mark "BIRKENSTOCK AND DEVICE"
2. the marks covered by the subject applications are identical to the one covered by Registration No.
56334 and thus, petitioner has no right to the registration of such marks
3. on November 15, 1991, respondent’s predecessor-in-interest likewise obtained a Certificate of
Copyright Registration No. 0-11193 for the word "BIRKENSTOCK" ;
4. while respondent and its predecessor-in-interest failed to file the 10th Year DAU, it continued the use of
"BIRKENSTOCK AND DEVICE" in lawful commerce; and
5. to record its continued ownership and exclusive right to use the "BIRKENSTOCK" marks, it has filed
TASN 4-2006-010273 as a " re-application " of its old registration, Registration No. 56334.

Issue: Whether or not the subject marks should be allowed registration in the name of petitioner

Held:

 YES
 In this case, respondent admitted that it failed to file the 10th Year DAU for Registration No. 56334 within the
requisite period, or on or before October 21, 2004. As a consequence, it was deemed to have abandoned or
withdrawn any right or interest over the mark "BIRKENSTOCK." Neither can it invoke Section 236 of the IP
Code which pertains to intellectual property rights obtained under previous intellectual property laws, e.g.,
RA 166, precisely because it already lost any right or interest over the said mark.
 Besides, petitioner has duly established its true and lawful ownership of the mark "BIRKENSTOCK."
 Under Section 2 of RA 166, which is also the law governing the subject applications, in order to register a
trademark, one must be the owner thereof and must have actually used the mark in commerce in the
Philippines for two (2) months prior to the application for registration. Section 2-A of the same law sets out to
define how one goes about acquiring ownership thereof. Under the same section, it is clear that actual use
in commerce is also the test of ownership but the provision went further by saying that the mark must not
have been so appropriated by another. Significantly, to be an owner, Section 2-A does not require that the
actual use of a trademark must be within the Philippines. Thus, under RA 166, one may be an owner of a
mark due to its actual use but may not yet have the right to register such ownership here due to the owner’s
failure to use the same in the Philippines for two (2) months prior to registration.
 It must be emphasized that registration of a trademark, by itself, is not a mode of acquiring
ownership.1âwphi1 If the applicant is not the owner of the trademark, he has no right to apply for its
registration. Registration merely creates a prima facie presumption of the validity of the registration,
of the registrant’s ownership of the trademark, and of the exclusive right to the use thereof. Such
presumption, just like the presumptive regularity in the performance of official functions, is rebuttable and
must give way to evidence to the contrary.
 Clearly, it is not the application or registration of a trademark that vests ownership thereof, but it is the
ownership of a trademark that confers the right to register the same. A trademark is an industrial property
over which its owner is entitled to property rights which cannot be appropriated by unscrupulous entities that,
in one way or another, happen to register such trademark ahead of its true and lawful owner. The
presumption of ownership accorded to a registrant must then necessarily yield to superior evidence of actual
and real ownership of a trademark.
 In the instant case, petitioner was able to establish that it is the owner of the mark "BIRKENSTOCK." It
submitted evidence relating to the origin and history of "BIRKENSTOCK" and its use in commerce long
before respondent was able to register the same here in the Philippines. It has sufficiently proven that
"BIRKENSTOCK" was first adopted in Europe in 1774 by its inventor, Johann Birkenstock, a shoemaker, on
his line of quality footwear and thereafter, numerous generations of his kin continuously engaged in the
manufacture and sale of shoes and sandals bearing the mark "BIRKENSTOCK" until it became the entity
now known as the petitioner. Petitioner also submitted various certificates of registration of the mark
"BIRKENSTOCK" in various countries and that it has used such mark in different countries worldwide,
including the Philippines.
 On the other hand, aside from Registration No. 56334 which had been cancelled, respondent only presented
copies of sales invoices and advertisements, which are not conclusive evidence of its claim of ownership of
the mark "BIRKENSTOCK" as these merely show the transactions made by respondent involving the same.
 In view of the foregoing circumstances, the Court finds the petitioner to be the true and lawful owner of the
mark "BIRKENSTOCK" and entitled to its registration, and that respondent was in bad faith in having it
registered in its name.
Superior Commercial Enterprises vs Kunnan Enterprises Ltd and Sports Concept

Facts:

 SUPERIOR filed a complaint for trademark infringement and unfair competition with preliminary injunction
against KUNNAN and SPORTS CONCEPT with the RTC.
 In support of its complaint, SUPERIOR first claimed to be the owner of the trademarks, trading styles,
company names and business names "KENNEX", "KENNEX & DEVICE", "PRO KENNEX" and "PRO-
KENNEX" (disputed trademarks). Second, it also asserted its prior use of these trademarks, presenting as
evidence of ownership the Principal and Supplemental Registrations of these trademarks in its name. Third,
SUPERIOR also alleged that it extensively sold and advertised sporting goods and products covered by its
trademark registrations. Finally, SUPERIOR presented as evidence of its ownership of the disputed
trademarks the preambular clause of the Distributorship Agreement dated October 1, 1982 (Distributorship
Agreement) it executed with KUNNAN.
 In its defense, KUNNAN disputed SUPERIOR’s claim of ownership and maintained that SUPERIOR – as
mere distributor from October 6, 1982 until December 31, 1991 – fraudulently registered the trademarks in
its name. KUNNAN alleged that it was incorporated in 1972, under the name KENNEX Sports Corporation
for the purpose of manufacturing and selling sportswear and sports equipment; it commercially marketed its
products in different countries, including the Philippines since 1972.
 After the expiration of its initial distributorship agreement with another company, KUNNAN appointed
SUPERIOR as its exclusive distributor in the Philippines under a Distributorship Agreement.
 Even though this Agreement clearly stated that SUPERIOR was obligated to assign the ownership of the
KENNEX trademark to KUNNAN, the latter claimed that the Certificate of Registration for the KENNEX
trademark remained with SUPERIOR because Mariano Tan Bon Diong (Mr. Tan Bon Diong), SUPERIOR’s
President and General Manager, misled KUNNAN’s officers into believing that KUNNAN was not qualified to
hold the same due to the "many requirements set by the Philippine Patent Office" that KUNNAN could not
meet
 KUNNAN filed the Petition for Cancellation and Opposition on the ground that SUPERIOR fraudulently
registered and appropriated the disputed trademarks; as mere distributor and not as lawful owner, it
obtained the registrations and assignments of the disputed trademarks in violation of the terms of the
Distributorship Agreement and Sections 2-A and 17 of Republic Act No. 166, as amended.

Issue: 1. Whether or not KUNNAN is the owner of the disputed trademarks

2.Whether or not KUNNAN committed trademark infringement.

Held:

 1. YES. As to whether respondent Kunnan was able to overcome the presumption of ownership in favor of
Superior, the former sufficiently established the fraudulent registration of the questioned trademarks by
Superior. The Certificates of Registration No. SR-4730 (Supplemental Register) and 33487 (Principal
Register) for the KENNEX trademark were fraudulently obtained by petitioner Superior. Even before
PROKENNEX products were imported by Superior into the Philippines, the same already enjoyed popularity
in various countries and had been distributed worldwide, particularly among the sports and tennis
enthusiasts since 1976.
 Riding on the said popularity, Superior caused the registration thereof in the Philippines under its name
when it knew fully well that it did not own nor did it manufacture the PROKENNEX products. Superior
claimed ownership of the subject marks and failed to disclose in its application with the IPO that it was
merely a distributor of KENNEX and PROKENNEX products in the Philippines.

 2. NO. Section 19 of RA 166 provides that any right conferred upon the registrant under the provisions of RA
166 terminates when the judgment or order of cancellation has become final.
 In the present case, by operation of law, specifically Section 19 of RA 166, the trademark infringement
aspect of SUPERIOR’s case has been rendered moot and academic in view of the finality of the decision in
the Registration Cancellation Case. In short, SUPERIOR is left without any cause of action for trademark
infringement since the cancellation of registration of a trademark deprived it of protection from infringement
from the moment judgment or order of cancellation became final. To be sure, in a trademark infringement,
title to the trademark is indispensable to a valid cause of action and such title is shown by its certificate of
registration. With its certificates of registration over the disputed trademarks effectively cancelled with
finality, SUPERIOR’s case for trademark infringement lost its legal basis and no longer presented a valid
cause of action.
 Even prior to the cancellation of the registration of the disputed trademarks, SUPERIOR – as a mere
distributor and not the owner – cannot assert any protection from trademark infringement as it had no right in
the first place to the registration of the disputed trademarks. In fact, jurisprudence holds that in the absence
of any inequitable conduct on the part of the manufacturer, an exclusive distributor who employs the
trademark of the manufacturer does not acquire proprietary rights of the manufacturer, and a registration of
the trademark by the distributor as such belongs to the manufacturer, provided the fiduciary relationship
does not terminate before application for registration is filed.
ECOLE DE CUISINE MANILLE vs RENAUD COINTREAU

Facts:

 On June 21, 1990, Cointreau, a partnership registered under the laws of France, filed before the (now
defunct) Bureau of Patents, Trademarks, and Technology Transfer (BPTTT) of the Department of Trade and
Industry a trademark application for the mark "LE CORDON BLEU & DEVICE" for goods falling under
classes 8, 9, 16, 21, 24, 25, 29, and 30 of the International Classification of Goods and Services for the
Purposes of Registrations of Marks ("Nice Classification") (subject mark).
 Petitioner Ecole De Cuisine Manille, Inc. (Ecole) filed an opposition to the subject application, averring that:
(a) it is the owner of the mark "LE CORDON BLEU, ECOLE DE CUISINE MANILLE," which it has been
using since 1948 in cooking and other culinary activities, including in its restaurant business; and (b) it has
earned immense and invaluable goodwill such that Cointreau’s use of the subject mark will actually create
confusion, mistake, and deception to the buying public as to the origin and sponsorship of the goods, and
cause great and irreparable injury and damage to Ecole’s business reputation and goodwill as a senior user
of the same.
 Cointreau filed its answer claiming to be the true and lawful owner of the subject mark. It averred that: (a) it
has filed applications for the subject mark’s registration in various jurisdictions, including the Philippines; (b)
Le Cordon Bleu is a culinary school of worldwide acclaim which was established in Paris, France in 1895; (c)
Le Cordon Bleu was the first cooking school to have set the standard for the teaching of classical French
cuisine and pastry making; and (d) it has trained students from more than eighty (80) nationalities, including
Ecole’s directress, Ms. Lourdes L. Dayrit. Thus, Cointreau concluded that Ecole’s claim of being the
exclusive owner of the subject mark is a fraudulent misrepresentation.
 During the pendency of the proceedings, Cointreau was issued Certificates of Registration Nos. 60631 and
54352 for the marks "CORDON BLEU & DEVICE" and "LE CORDON BLEU PARIS 1895 & DEVICE" for
goods and services under classes 21 and 41 of the Nice Classification, respectively.

Issue: Whether or not Ecole is the rightful owner of the subject mark.

Held:

 NO
 Under Section 2 of R.A. No. 166, in order to register a trademark, one must be the owner thereof and must
have actually used the mark in commerce in the Philippines for two (2) months prior to the application for
registration. Section 2-A of the same law sets out to define how one goes about acquiring ownership thereof.
Under Section 2-A, it is clear that actual use in commerce is also the test of ownership but the provision
went further by saying that the mark must not have been so appropriated by another. Additionally, it is
significant to note that Section 2-A does not require that the actual use of a trademark must be within the
Philippines. Thus, as correctly mentioned by the CA, under R.A. No. 166, one may be an owner of a mark
due to its actual use but may not yet have the right to register such ownership here due to the owner’s
failure to use the same in the Philippines for two (2) months prior to registration.
 In the instant case, it is undisputed that Cointreau has been using the subject mark in France since 1895,
prior to Ecole’s averred first use of the same in the Philippines in 1948, of which the latter was fully aware
thereof. In fact, Ecole’s present directress, Ms. Lourdes L. Dayrit (and even its foundress, Pat Limjuco
Dayrit), had trained in Cointreau’s Le Cordon Bleu culinary school in Paris, France. Cointreau was likewise
the first registrant of the said mark under various classes, both abroad and in the Philippines, having
secured Home Registration No. 1,390,912 dated November 25, 1986 from its country of origin, as well as
several trademark registrations in the Philippines.
 On the other hand, Ecole has no certificate of registration over the subject mark but only a pending
application covering services limited to Class 41 of the Nice Classification, referring to the operation
of a culinary school. Its application was filed only on February 24, 1992, or after Cointreau filed its
trademark application for goods and services falling under different classes in 1990. Under the
foregoing circumstances, even if Ecole was the first to use the mark in the Philippines, it cannot be
said to have validly appropriated the same.
 It is thus clear that at the time Ecole started using the subject mark, the same was already being
used by Cointreau, albeit abroad, of which Ecole’s directress was fully aware, being an alumna of
the latter’s culinary school in Paris, France. Hence, Ecole cannot claim any tinge of ownership
whatsoever over the subject mark as Cointreau is the true and lawful owner thereof. As such, the
IPO Director General and the CA were correct in declaring Cointreau as the true and lawful owner
of the subject mark and as such, is entitled to have the same registered under its name.
 In any case, the present law on trademarks, Republic Act No. 8293, otherwise known as the Intellectual
Property Code of the Philippines, as amended, has already dispensed with the requirement of prior actual
use at the time of registration. Thus, there is more reason to allow the registration of the subject mark under
the name of Cointreau as its true and lawful owner.

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