QUIZ 13

1. Sec. 29, RA 166, as amended

Section 29. Unfair competition, rights and remedies. - A person who has identified in the mind of the public the goods he manufactures
or deals in, his business or services from those of others, whether or not a mark or trade-name is employed, has a property right in the
goodwill of the said goods, business or services so identified, which will be protected in the same manner as other property rights. Such a
person shall have the remedies provided in section twenty-three, Chapter V hereof.

Any person who shall employ deception or any other means contrary to good faith by which he shall pass off the goods manufactured by
him or in which he deals, or his business, or services for those of the one having established such goodwill, or who shall commit any acts
calculated to produce said result, shall be guilty of unfair competition, and shall be subject to an action therefor.

In particular, and without in any way limiting the scope of unfair competition, the following shall be deemed guilty of unfair competition:

(a) Any person, who in selling his goods shall give them the general appearance of goods of another manufacturer or dealer, either
as to the goods themselves or in the wrapping of the packages in which they are contained, or the devices or words thereon, or in
any other feature of their appearance, which would be likely to influence purchasers to believe that the goods offered are those of a
manufacturer or dealer other than the actual manufacturer or dealer, or who otherwise clothes the goods with such appearance as
shall deceive the public and defraud another of his legitimate trade, or any subsequent vendor of such goods or any agent of any vendor
engaged in selling such goods with a like purpose;

(b) Any person who by any artifice, or device, or who employs any other means calculated to induce the false belief that such person
is offering the services of another who has identified such services in the mind of the public;

(c) Any person who shall make any false statement in the course of trade or who shall commit any other act contrary to good faith
of a nature calculated to discredit the goods, business or services of another.

Unfair Competition
Q: In what ways would a case for infringement of trademark be different from a case for unfair competition? (2015 Bar)
A:
1. In infringement of trademark, prior registration of the trademark is a prerequisite to the action, whereas in unfair competition, trademark
registration is not necessary.
2. Trademark infringement is the unauthorized use of the registered trademark, while unfair competition is the passing off of one’s goods as
those of another.
3. In infringement of trademark, fraudulent intent is unnecessary, whereas in unfair competition, fraudulent intent is essential.

Q: In what way is an infringement of a trademark similar to that which pertains to unfair competition? (2003 Bar)
A: The similarity lies in both their ability to disrupt fair competition amongst business enterprises and other businesses. They can also create
confusion, mistake, and deception as to the minds of the consumers with regard to the source or identity of their products or services due to
its similarity in appearance or packaging.

Q: N Corporation manufactures rubber shoes under the trademark “Jordann” which hit the Philippine Market in 1985, and
registered its trademark with the Bureau of Patents, Trademarks and Technology Transfer (BPTTT) in 1990. PK Company also
manufactures rubber shoes with the trademark “Javorski” which it registered with the BPTTT in 1978. In 1992, PK Company
adopted and copied the design of N Corporation’s “Jordann” rubber shoes, both as to shape and color, but retained the trademark
“Javorski” on its products. May PK Company be held liable to N Corporation? Explain. (1996 Bar)

A: PK may be held liable for unfairly competing against N Corporation. By copying the design, shape and color of N’s “Jordann” rubber
shoes and using the same in its rubber shoes trademarked “Javorski”, PK is obviously trying to pass off its shoes for those of N. It is of no
moment that the trademark “Javorski” was registered ahead of the trademark “Jordann”. Priority in registration is not material in an action
for infringement of trademark. The basis of an action for unfair competition is confusing and misleading similarly in general
appearance, not similarity of trademarks.

Q: X, a dealer of low grade oil, to save on expenses, uses the containers of different companies. Before marketing to the public his
low grade oil, X totally obliterates and erases the brands or marks stenciled on the containers. Y brings an action against X for
unfair competition upon its discovery that its containers have been used by X for his low grade oil. Is there unfair competition?
State briefly your reasons. (1988 Bar)
A: There is no unfair competition, unfair competition is passing off of one’s goods as those of another and requires fraudulent intent on
the part of the user. These elements are not present in the problem.

2. Section 123 ( E ) of the Intellectual Property Code

Section 123. Registrability. - 123.1. A mark cannot be registered if it:

(a) Consists of immoral, deceptive or scandalous matter, or matter which may disparage or falsely suggest a connection with persons, living
or dead, institutions, beliefs, or national symbols, or bring them into contempt or disrepute;
 (b) Consists of the flag or coat of arms or other insignia of the Philippines or any of its political subdivisions, or of any foreign nation, or any
simulation thereof;
(c) Consists of a name, portrait or signature identifying a particular living individual except by his written consent, or the name, signature, or
portrait of a deceased President of the Philippines, during the life of his widow, if any, except by written consent of the widow;
(d) Is identical with a registered mark belonging to a different proprietor or a mark with an earlier filing or priority date, in respect of:
(i) The same goods or services, or
(ii) Closely related goods or services, or
(iii) If it nearly resembles such a mark as to be likely to deceive or cause confusion;
(e) Is identical with, or confusingly similar to, or constitutes a translation of a mark which is considered by the competent authority of the
Philippines to be well-known internationally and in the Philippines, whether or not it is registered here, as being already the mark of a
person other than the applicant for registration, and used for identical or similar goods or services: Provided, That in determining whether
a mark is well-known, account shall be taken of the knowledge of the relevant sector of the public, rather than of the public at large,
including knowledge in the Philippines which has been obtained as a result of the promotion of the mark;

Non-Registrable Marks
Q: In 1988, the FDA approved the labels submitted by Turbo Corporation for its new drug brand name, “Axilon”. Turbo is now
applying with the Bureau of Patents, Trademarks and Technology Transfer for the registration of said brand name. It was
subsequently confirmed that “Accilonne” is a generic term for a class of anti-fungal drugs and is used as such by the medical
professional and the pharmaceutical industry, and that it is used as generic chemical name in various scientific and professional
publications. A competing drug manufacturer asks you to contest the registration of the brand name “Axilon” by Turbo.What will
be your advice? (1990 Bar)
A: The application for registration by Turbo Corporation may be contested. The Trademark Law would not allow the registration of a trademark
which, when applied to or used in connection with his products, is merely descriptive or deceptively misdescriptive of them. Confusion can
result from the result from the use of “Axilon” as the generic product itself.

Tests to Determine Confusing Similarity between Marks

Q: What is the “test of dominancy”? (1996 Bar)
A: The test of dominancy requires that if the competing trademark contains the main or essential features of another and confusion and
deception is likely to result, infringement takes place. Duplication or imitation is not necessary; nor is it necessary that the infringing label
should suggest an effort to imitate. Similarity in size, form and color, while relevant, is not conclusive.

Q: Skechers Corporation sued Inter-Pacific for trademark infringement claiming that Inter-Pacific used Skechers’ registered “S”
logo mark on Inter- Pacific’s shoe products without its consent. Skechers has registered the trademark “SKECHERS” and the
trademark “S” (with an oval design) with the Intellectual Property Office (IPO). In its complaint, Skechers points out the following
similarities: the color scheme of the blue, white and gray utilized by Skechers. Even the design and “wave-like” pattern of the mid-
sole and outer sole of Inter-Pacific’s shoes are very similar to Skechers’ shoes, if not exact patterns thereof. On the side of Inter-
Pacific’s shoes, near the upper part, appears the stylized “S” placed in the exact location as that of the stylized “S” the Skechers
shoes. On top of the “tongue” of both shoes, appears
stylized “S” in practically the same location and size. In its defense, Inter-Pacific claims that under the Holistic Test, the following
dissimilarities are present: the mark “S” found in Strong shoes is not enclosed in an “oval design”; the word “Strong” is
conspicuously placed at the backside and insoles; the hang tags labels attached to the shoes bear the word “Strong” for Inter
Pacific and Skeckers U.S.A.” for Skechers; and, Strong shoes modestly priced compared to the cost of Skechers shoes. Under the
foregoing circumstances, which is the proper test to be applied—Holistic or Dominancy Test? Decide. (2014 Bar)
A: The proper test to be applied is the dominancy test. Applying the dominancy test, there is a confusing similarity “Skechers” rubber shoes
and “Strong” rubber shoes. The use of the stylized “S” by Inter-Pacific in its Strong Shoes infringes on the trademark “Skechers” already
registered by Skechers U.S.A. with the IPO. While it is undisputed that Skechers U.S.A. stylized “S” is within an oval design , the dominant
feature of the trademark is stylized “S” as it is precisely the stylized “S” which catches the eye of the purchaser (Skechers, USA, Inc. v. Inter-
Pacific Industrial Trading, Nov. 30, 2006).

3. Unno Commercial Enterprises, Inc. vs. General Milling Corp. & Tiburcio S. Evalle as Director of Patents, G.R. No. L-28554
Q. Is registration alone sufficient to maintain an action fro infringement?

A. Registration alone without actually using the mark in commerce in the Philippines, will not justify the filing of an infringement suit. The
underlying reason is that any likelihood of confusion, or mistake, or deception can only occur if the registered mark is actually used in the
market and known by the ordinary purchaser. (Unno Commercial Enterprises, Inc. vs. General Milling Corp. & Tiburcio S. Evalle as Director
of Patents, G.R. No. L-28554)

4. McDonald’s Corporation vs. LC Big Mak Burger, Inc., G.R. 143993, August 18, 2004

Issue: Whether respondent corporation is liable for trademark infringement and unfair competition.?

Law: Any person, who in selling his goods shall give them the general appearance of goods of another manufacturer or dealer,
either as to the goods themselves or in the wrapping of the packages in which they are contained, or the devices or words
thereon, shall be deemed guilty of unfair competition

Probable Bar Question: McDonald's Corporation (''McDonald's") is an American corporation operating a global chain of fast-food
restaurants. McDonald's owns a family of marks including the "Big Mac" mark for its "double-decker hamburger sandwich." This was
registered with the US Trademarks Registry as well as with IPO. L.C. Big Mak Burger, Inc. is a domestic corporation which operates
fast-food outlets and snack vans in Metro Manila and nearby provinces. It offers hamburger sandwiches to its clients. LC Big Mak uses
 "Big Mak" in its hamburgers. In a suit for trademark infringement and unfair competition, LC. Big Mak insists that it did not fraudulently
pass off its hamburger sandwiches as those of Mcdonald's. Will this defense exculpate LC Big Mak from liability?

Answer: NO. The use of the "Big Mak" mark will result in likelihood of confusion. First, "Big Mak" sounds exactly the same as "Big Mac."
Second, the first word in "Big Mak" is exactly the same as the first word in "Big Mac." Third, the first two letters in "Mak" are the same
as the first two letters in "Mac." Fourth, the last letter in "Mak" while a "k" sounds the same as "c" when the word "Mak" is pronounced.
In short, aurally the two marks are the same, with the first word of both marks phonetically the same, and the second word of both marks
also phonetically the same. Visually, the two marks have both two words and six letters, with the first word of both marks having the
same letters and the second word having the same first two letters. Clearly, LC Big Mak Burger adopted in "Big Mak" not only the
dominant but also almost all the features of Mcdonald's "Big Mac." Applied to the same food product of hamburgers, the two marks will
likely result in confusion in the public mind. (McDonald's Corporation v. L.C. Big Mak Burger, Inc., 437 SCRA 10).

5. Shangri-la International Hotel Management v. Makati Shangri-la Hotel and Resort Inc., G.R. No. 111580. June 21, 2001
Infringement and Remedies

Q: K-9 Corporation, a foreign corporation alleging itself to be the registered owner of trademark “K-9” and logo “K”, filed an Inter
Partes case with the Intellectual Property Office against Kanin Corporation for the cancellation of the latter’s mark “K-9” and logo
“K.” During the pendency of the case before the IPO, Kanin Corporation brought suit against K-9 Corporation before the RTC for
infringement and damages. Could the action before the RTC prosper? Why? (2003 Bar)

A:Yes, the action before the RTC can prosper. According to Sec. 151.2 of the IPC, the filing of a suit to enforce the registered mark with the
proper court or agency shall exclude any other court or agency from assuming jurisdiction over a subsequently filed petition to cancel the
same mark. On the other hand, the earlier filing of petition to cancel the mark with the Bureau of Legal Affairs shall not constitute a prejudicial
question that must be resolved before an action to enforce the rights to same registered mark may be decided. The issues raised before the
different the IPO and the RTC are different. The issue raised before the IPO is whether or not the cancellation of the subsequent trademark
is proper because of the prior ownership of the disputed mark by K-9. While the issue raised before the RTC pertains to infringement.
Furthermore, an action for infringement or unfair competition, as well as the remedy of injunction and relief for damages, is explicitly and
unquestionably within the competence and jurisdiction of ordinary courts (Shangri-la International Hotel Management v. Makati Shangri-la
Hotel and Resort Inc., G.R. No. 111580. June 21, 2001).

6. Shangri-la International Hotel Management v. Developers Group of Companies, Inc. G.R. No. 159938
Well-Known Marks

Q: S Development Corporation sued Shangrila Corporation for using the “S” logo and the tradename “Shangrila.” The former
claims that it was the first to register the logo and the tradename in the Philippines and that it had been using the same in its
restaurant business. Shangrila Corporation counters that it is an affiliate of an international organization which has been using
such logo and tradename “Shangrila” for over 20 years. However, Shangrila Corporation registered the tradename and logo in the
Philippines only after the suit was filed.
a. Which of the two corporations has a better right to use the logo and the tradename? Explain. 

b. How does the international affiliation of Shangrila Corporation affect the outcome of the dispute? Explain(2005 Baar)
A:
a. S Corporation. Sec. 122 of the IPC provides that the rights in a trademark are acquired through valid registration. Actual prior use in
commerce in the Philippines has been abolished as a condition for the registration of a trademark (Record of the Senate, Vol. II, No.
29, 8 Oct.1996; Journal of the House of Representatives, No. 35. 12 Nov. 1996, 34).

b. Shangrila’s international affiliation shall result in a decision favorable to it. The Paris Convention mandates that protection should be
afforded to internationally known marks as signatory to the Paris Convention, without regard as to whether the foreign corporation is
registered, licensed or doing business in the Philippines. Shangrila’s separate personalities from their mother corporation c annot be an
obstacle in the enforcement of their rights as part of the Kuok Group of Companies and as official repository, manager and op erator of the
subject mark and logo. Besides, R.A. No. 166 did not require the party seeking relief to be the owner of the mark but "any person who
believes that he is or will be damaged by the registration of a mark or trade name." (Shangri-la International Hotel Management v. Developers
Group of Companies, Inc. G.R. No. 159938).

7. W.E. Olsen & Co., Inc. vs. Lambert, 42 Phil. 633

Q. Ashley Manufacturing Company, a manufacturer in France of a certain brand of cigarette paper, appoints “X” Company the exclusive agent
to sell its paper in the Philippines. Among its customers are well-known cigarette manufacturers in the Philippines.

“Y” Company imports from a dealer in France the same cigarette paper which Ashley Manufacturing Company produces, and sells it to several
outlets. The dealer in France has no restriction whatsoever from the manufacturer regarding the sale of such paper for export, nor did “Y”
Company have any dealings with “X” Company. Nonetheless, “Y” Company is fully aware of the exclusive right of “X” Company to handle the
distributorship of the said cigarette paper in the Philippines.

Is “Y” Company liable for unfair competition under the Trademark Law, as amended, and could it be enjoined from selling said cigarette paper?
 Answer:

No, Y Company is not liable for unfair competition under the Trademark Law. First Alternative Reason—If X Company has suffered any
damage, it is merely the indirect result of legitimate competition in business, from which no right of action can arise. (W.E. Olsen & Co., Inc.
v. Lambert, 42 Phil 633) Second Alternative Reason—The requisites of unfair competition in the Trademark Law are not present.

8. E.Y. Industrial Sales vs. Shien Dar Electricity and Machinery, G.R. No. 184850, October 20, 2010, 634 SCRA 363; Ecole de Cuisine Manille
vs. Renaud Cointreau, G.R. No. 185830, June 5 2013, 697 SCRA 345

Prior Use of Mark as a Requirement

Q: CHEN, Inc., a Taiwanese company, is a manufacturer of tires with the mark Light Year. From 2009 to 2014, Clark Enterprises, a
Philippine-registered corporation, imported tires from CHEN, Inc. under several sales contracts and sold them herein the
Philippines. In 2015, CHEN, Inc. filed a trademark application with the Intellectual Property Office (IPO) for the mark Light Year to
be used for tires. The IPO issued CHEN, Inc. a certificate of registration (COR) for said mark. Clark Enterprises sought the
cancellation of the COR and claimed it had a better right to register the mark Light Year. CHEN, Inc. asserted that it was the owner
of the mark and Clark Enterprises was a mere distributor. Clark Enterprises argued that there was no evidence on record that the
tires it imported from CHEN, Inc. bore the mark Light Year and Clark Enterprises was able to prove that it was the first to use the
mark here in the Philippines. Decide the case. (2015 Bar)

A: While RA 8293 removed the previous requirement of proof of actual use prior to the filing of an application for registration of a mark, proof
of prior and continuous use is necessary to establish ownership of trademark. Such ownership of the trademark confers the right to register
the trademark. Since Chen owns the trademark as evidenced by its actual and continuous use prior to the Clark Enterprises, then it is the
one entitled to the registration of the trademark. The fact that Clark was the first one to use the mark here in the Philippines will not matter.
Chen’s prior actual use of the trademark even in another country bars Clark from applying for the registration of the same trademark. Also,
a mere distributor does not own the trademark to the goods he distributes and his right over the trademark cannot prevail over the owner
(E.Y Industrial Sales v. Shien Dar Electricity and Machinery, GR no. 184850, Oct. 20, 2010; Ecole de Cuisine Manille v. Renaud Cointreau,
GR 185830, June 5, 2013)

Probable Bar Question: Cointreau, a partnership registered under the laws of France, filed an application before the IPO for the mark "LE
CORDON BLEU & DEVICE," for its worldwide acclaim culinary school. Ecole De Cuisine Manille, Inc. (Ecole) opposed the 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. Cointreau claims that its mark
is registered in France and its school has long been established in Paris since 1895. It has trained students from more than eighty (80)
nationalities, including Ecole's directress, Lourdes. Thus, Coi~treau concluded that Ecole's claim of being the exclusive owner of the subject
mark is a fraudulent misrepresentation. Should the application of Cointreau be granted?

Answer: YES. Foreign marks which are not registered in the Philippines are still accorded protection. Under the Paris Convention for the
Protection of Industrial Property of which Philippines and France are both signatories, the use of a trademark which co nstitutes a
reproduction, an imitation, or a translation, liable to create confusion of a mark considered by the competent authority of the country of
registration or use to be well known in that country is prohibited. The Philippines is obligated to assure nationals of the signatory-countries
that they are afforded an effective protection against violation of their intellectual property rights in the Philippines in the same way that their
own -countries are obligated to accord similar protection to Philippine nationals. Thus, a trade name of a national of a State that is a party to
the Paris Convention, whether or not the trade name forms part of a trademark, is protected even without the obligation of filing or registration.
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.
The latter was fully aware I thereof as in fact, Ecole's present directress, Lourdes had trained in Cointreau's Le Cordon Bleu culinary school
in Paris, France. Ecole has no certificate of registration over the subject mark but only a pending application for the operation of a culinary
school. Even if Ecole was the first to use the mark in the Philippines, it cannot be said to have validly appropriated the same. cointreau is the
true and lawful owner of the subject mark and thus, entitled to have the same registered. (Ecole De Cuisine Manille [Cordon Bleu of the
Philippines], Inc. v. Renaud Cointreau & Cie, 697 SCRA 345).

9. Kho v. Court of Appeals, (G.R. No. 115758, March 19, 2002); Juan v. Juan, (G.R. No. 221372, August 23, 2017
10. EY Industrial Sales v. Shen Dar 634 SCRA 363(2010) NOTE: Questions 9 & 10, and Sec 123 (E), nasa isang question lang.

A distinctive-tasting pastillas is well-known throughout the country as having been developed within a close-knit women’s group in
Barangay San Ysmael which is located along a very busy national highway. Its popularity has encouraged the setting up of several
shops selling similar delicacies, with the most famous product being the pastillas of “Barangay San Ysmael.” Eventually, the pastillas
of Aling Voling under the brand name “Ysmaellas” began to attract national distinction. Aling Voling therefore registered it as a
copyright with the National Library. Her neighbor, Aling Yasmin, realizing the commercial value of the brand, s tarted using the
term “Ysmaellas” for her pastillas but used different colors. Aling Yasmin registered the brand name “Ysmaellas” with the Intellectual
Property Office (IPO).

• Can Aling Voling successfully obtain court relief to prohibit Aling Yasmin from using the brand name “Ysmaellas” in her products
on the basis of her (Aling Yoling’s) copyright? What is the difference between registration as a copyright and registration as a
trade or brand name? (2.5%)

SUGGESTED ANSWER: • Aling Yoling cannot successfully obtain court relief to prohibit Aling Yasmin from using the brand name
“ Ysmaellas “ in her product on the basis of Aling Yoling’s copyright. The brand name “ Ysmaellas “ is pro per subject of
trademark, not copyright. They can not be interchanged. The copyright on a trade name or mark does not guarantee her the right
to the exclusive use of the same for the reason that it is not a proper subject of said intellectual right (Kho v. Court of Appeals,
 (G.R. No. 115758, March 19, 2002); Juan v. Juan, (G.R. No. 221372, August 23, 2017)). The registration of a copyright is only
a proof of the recording of the copyright but not a condition precedent for the copyright to subsist and for copyright infringement
suit to prosper; whereas, registration of a trademark is an indispensable requisite for any trademark infringement suit.

• Can Aling Yasmin seek injunctive relief against Aling Yoling from using the brand name “Ysmaellas,” the latter relying on the
doctrine of “prior use” as evidenced by her prior copyright registration? (2.5%)

SUGGESTED ANSWER: • Aling Yasmien can seek injunctive relief against Aling Yoling from using the brand name “ Ysmaellas
“ because of the doctrine of prior use. It is ownership of the trademark that confers the right to register. Registration does not
confer ownership. Since Aling Yasmin was the first one to use the brand or trade name in commerce, then she is considered the
owner thereof [EY Industrial Sales v. Shen Dar 634 SCRA 363(2010)].

• Can Aling Yoling seek the cancellation of Aling Yasmin’s trademark registration of the brand name “Ysmaellas” on the ground
of “Well Known Brand” clearly evidenced by her (Aling Yoling’s) prior copyright registration, actual use of the brand, and several
magazine coverages? (2.5%)

SUGGESTED ANSWER: (c) NO, Aling Yoling can not seek the cancellation of Aling Yasmin’s trademark registration of the brand
name “ Ysmaellas on the ground of well-known brand, because the well- known mark rule only applies to a mark which is well-
known internationally and in the Philippines [Section 123 ( E ) of the Intellectual Property Code]. She, however, can seek the
cancellation of the trademark for being the prior user even though the mark is not well-known.

11. Jesse G. Ching vs. William M. Salinas, Sr., et. al., G.R. No. 161295

Q. Y is the maker and manufacturer of vehicle spare parts, described as “Leaf Spring Eye Bushing for Automobile” and “Vehicle Bearing
Cushion” made up of plastic. He was issued Certificates of Copyright Registration by the National Library for the said works. Is Y entitled to
copyright protection over his works? Explain briefly.

A. No, Y is not entitled copyright protection over his works. Copyright extends protection to artistic and literary works as well as artistic
element works of applied art provided the artistic element can be separated from the utilitarian element of the work. Being plain automotive
spare parts that must conform to the original structural design of the components they seek to replace, the “Leaf Spring Eye Bushing” and
“Vehicle Bearing Cushion” are not ornamental. They lack the decorative quality or value that must characterize authentic works of applied
art. The works of Y are utility models or useful articles, albeit with no artistic design or value.
Copyright and patent rights, as well as trademarks, are completely distinct and separate from one another, and the protection afforded by
one cannot be used interchangeably to cover items or works that exclusively pertain to the others. (Jesse G. Ching vs. William M. Salinas,
Sr., et. al., G.R. No. 161295)

12. Birkenstock Orthopaedia GMBH vs. Philippines Shoe Expo Marketing Corporation, G.R. No. 194307, November 20, 2013

Jurisprudence: The registration of trademark, by itself, is not a mode of acquiring ownership. If the applicant is not the owner of the trademark,
he has no right to apply for its registration. Registration merely creates a prima facie presumption of the validity of the registration, of the
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.

FACTS: Petitioner, a corporation duly organized and existing under the laws of Germany, applied for three trademark registrations before
the IPO. However, the registration proceedings of the applications were suspended in view of an existing registration of the mark “Birkenstock
and Device” in the name of Shoe Town International and Industrial Corporation, the predecessor-in-interest of respondent Philippine Shoe
Expo Marketing. During sometime, the respondent failed to file the required 10th Year Declaration of Actual Use, thereby resu lting in the
cancellation of such mark. The cancellation paved way for the publication of the subject applications in the IPO e-Gazette. In response, the
respondent filed three verified notices of oppositions to the application before the Bureau of Legal Affairs (BLA) of the IPO . In its Decision,
the BLA sustained the respondent’s opposition and ruled that the competing marks of the parties are confusingly similar since they contained
the work “Birkenstock” and are used on the same and related goods. Aggrieved, the petitioner appealed to the IPO Director General, which
later on rendered a decision reversing and setting aside the ruling of BLA, thus allowing the registration of the subject applications. Finding
the reversal unacceptable, the respondent filed a petition for review with the CA. The appellate court reinstated the ruling of BLA and
disallowed the registration of the subject applications. It held that the respondent’s failure to file the 10th Year DAU did not deprive the
petitioner of its ownership of Birkenstock mark since it has submitted substantial evidence showing its continued use, promotion and
advertisement thereof to the present. It also opined that when respondent’s predecessor-in-interest adopted and started its actual use of
“Birkenstock,” there is neither an existing registration nor a pending application for the same and thus, it cannot be said that it acted in bad
faith in adopting and starting the use of such mark. Dissatisfied, the petitioner filed a Motion for Reconsideration, which was, however, denied.
Hence, the petition.

ISSUE Whether or not the subject mark should be allowed registration in the name of the petitioner? (YES)

RULING: Petition Granted. RA 166 requires the filing of a DAU on specified periods, to wit: Section 12. Duration—Each certificate of
registration shall remain in force for twenty years: Provided, That registrations under the provisions of this Act shall be cancelled by the
Director, unless within one year following the fifth, tenth, and fifteenth anniversaries of the date of issue of the certific ate of registration, the
registrant shall file in the Patent Office an affidavit showing that the mark or trade-name is still in use or showing that its non-use is due to
special circumstance which excuse such non-use and is not due to any intention to abandon the same, and pay the required fee. The Director
shall notify the registrant who files the above-prescribed affidavits of his acceptance or refusal thereof and, if a refusal, the reasons therefor.

The aforementioned provision clearly reveals that failure to file the DAU within the requisite period results in the automatic
cancellation of registration of a trademark. In turn, such failure is tantamount to the abandonment or withdrawal of any right or interest the
registrant has over his trademark. In this case, respondent admitted that it failed to file the 10th Year DAU within the requisite period.
 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
precisely because it already lost any right or interest over the said mark. Besides, petitioner had duly established its true and lawful ownership
of the mark “BIRKENSTOCK.” Under Section 2 of RA 166, which is 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 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 the 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 months prior to registration. It must be emphasized
that registration of trademark, by itself, is not a mode of acquiring ownership. If the applicant is not the owner of the trademark,
he has no right to apply for its registration. Registration merely creates a prima facie presumption of the validity of the registration,
of the 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.

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. 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.

13. Canon Kabushiki Kaisha vs. CA, G.R. No. 120900, July 20, 2000
Q. In 1985, private respondent NBS Rubber corporation filed an application for registration of the mark “CANON” for sandals with the Bureau
of patents, Trademarks amd Technology Transfer (BPTTT). Petitioner, a foreign corporation duly organized and existing under the laws of
Japan, alleging that it will be damaged, opposed the application. BPTTT dismissed the opposition of petitioner and gave due course to private
respondent’s application. Petitioner appealed to the CA but the CA affirmed the decision of the BPTTT. The BPTTT and the CA opined that
the trademark “CANON” as used by petitioner for its paints, chemical products, toner, and dyestuff could be used by private respondent for
the sandals because the products are dissimilar.

Issue: Whether or not petitioner is entitled to the exclusive use pf “CANON”.

Held: No. Ordinarily, the ownership of s trademark or tradename is a property right that the owner is entitled to protect. However, when a
trademark is used by a party for a production in which the other party does not deal, the use of the same trademark on the latter’s product
cannot be validly objected. The certificates of registration for the trademark “CANON in other countries and in the Philippines as presented
by petitioner showed that they cover goods belonging to class 2 (paints, chemical products, toner, dyestuff). As such, private respondents
can use trademark “CANON” for its goods classified as Class 25 (sandals)

Neither is petitioner’s contention that such might mislead the public and cause confusion as to origin of the goods an of business, tenable.
As can be deduced from RA 166 (Trademark Law) a tradename refers to the business and its goodwill, a trademark refers to the goods.

The Convention of Paris for the protection of Industrial Property us a multilateral treaty that seeks to protect industry property. The Convention
however, does not automatically exclude all countries of the world which have signed it from using a tradename which happens to be used
in one country. In 1983, the Director of patents issued guidelines to implement the convention. The conditions are:
a. The mark must be internationally 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 the goods, and
d. The person claiming must be the owner of the mark.

In this case, petitioner failed to comply with the third requirement of the guidelines. Hence, petitioner’s contention of confusion must fail.

Q. May the trademark “CANON” as used by company X for its paints and chemical products be used by company Y for its rubber balls?

A. Yes. Ordinarily, the ownership of s trademark or tradename is a property right that the owner is entitled to protect. However, when a
trademark is used by a party for a production in which the other party does not deal, the use of the same trademark on the latter’s product
cannot be validly objected to.

Moreover, the use of trademark by both companies would not mislead the public and cause confusion as to the origin of the goods and of
business, As can be deduced from RA 166 (Trademark Law), a tradename refers to the business and its goodwill; trademark refers to the
goods.

Goods are related when they belong to the same class or have the same descriptive properties, when they possess the same physical
attributes or essential characteristics with reference to their form, composition, texture or quality. They may also be related because they
serve the same purpose.