Shangri-la International Hotel Management Ltd v Developers Group of Companies Inc,

GR No 159938 (March 31, 2006)

Facts:

Respondent DGCI applied for and was granted registration of the ‘Shangri-La’ mark and ‘S’ logo in its
restaurant business. Petitioner Shangri-La, chain of hotels and establishments owned by the Kuok family
worldwide, moved to cancel the registration of the mark on the ground that it was illegally and
fraudulently obtained and appropriated by respondents. Petitioner also moved to register the mark and
logo in its own name. Later, respondent DGCI filed before the trial court a complaint for infringement
against petitioner alleging that DGCI had been the prior exclusive user and the registered owner in the
Philippines of said mark and logo. Petitioner Shangri-La argued that respondent had no right to apply for
the registration because it did not have prior actual commercial use thereof. The trial court found for
respondent. CA affirmed.

Issue:

Whether or not respondent’s prior use of the mark is a requirement for its registration.

Ruling: YES.

While the present law on trademarks has dispensed with the requirement of prior actual use at the time
of registration, the law in force at the time of registration must be applied. Under the provisions of the
former trademark law, R.A. No. 166, as amended, hence, the law in force at the time of respondent’s
application for registration of trademark, the root of ownership of a trademark is actual use in
commerce. Section 2 of said law requires that before a trademark can be registered, it must have been
actually used in commerce and service for not less than two months in the Philippines prior to the filing
of an application for its registration. Trademark is a creation of use and therefore actual use is a pre-
requisite to exclusive ownership and its registration with the Philippine Patent Office is a mere
administrative confirmation of the existence of such right.

While the petitioners may not have qualified under Section 2 of R.A. No. 166 as a registrant, neither did
respondent DGCI, since the latter also failed to fulfill the 2-month actual use requirement. What is
worse, DGCI was not even the owner of the mark. For it to have been the owner, the mark must not
have been already appropriated (i.e.,  used) by someone else. At the time of respondent DGCI’s
registration of the mark, the same was already being used by the petitioners, albeit abroad, of which
DGCI’s president was fully aware.

Ration decidendi:

Ownership of a mark or trade name may be acquired not necessarily by registration but by adoption and
use in trade or commerce. As between actual use of a mark without registration, and registration of the
mark without actual use thereof, the former prevails over the latter. For 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 pre-requisite to the acquisition of the right of ownership.
Ecole De Cuisine Manille v. Cointreau (G.R. No. 185830)

Facts:

Respondent Cointreau, a partnership registered under the laws of France, applied for the registration of
the mark ‘Le Cordon Bleu & Device.’ Petitioner Ecole De Cuisine opposed on the ground that it is the
owner of the mark ‘Le Cordon Bleu, Ecole De Cuisine Manille’ used in its culinary activities and
restaurant business and that the registration will create confusion to the public. Respondent Cointreau
answered claiming it is the true and lawful owner of the mark and had long been using it worldwide. The
IPO Bureau of Legal Affairs sustained petitioner’s opposition stating that Cointreau had no prior use of
the mark in the Philippines to be entitled to a proprietary right over it. The IPO Director General reversed
the decision and allowed the mark’s registration holding that under RA No. 166, actual use in the
Philippines is not necessary to acquire ownership of the mark.

Issue:

Whether or not respondent’s prior use of the mark is a requirement for its registration.

Ruling: YES.

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 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 2 months prior to registration. In the
instant case, it is undisputed that Cointreau has been using the subject mark in France, prior to Ecole’s
averred first use of the same in the Philippines, of which the latter was fully aware thereof. On the other
hand, Ecole has no certificate of registration over the subject mark but only a pending application. 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.

Ratio decidendi:

The Philippines is obliged to follow international conventions such as of that Paris Convention. Article
6bis and Article 8 are one of the examples of such provisions wherein the Philippines is a signatory
thereof. Hence, even without a legislative enactment, the provisions are binding and valid as a law here
in the Philippines. Except, when the country is not a signatory of the convention or there are no
provisions in their domestic law about reciprocity.

Ownership: First use rule.

Zuneca Pharmaceutical v Natrapharm, Inc.

G.R. 211850 08 September 2020

Facts:

Under the brand name “ZYNAPS,” Zuneca sells carbamazepine, an anti-convulsant used to treat a variety
of seizure disorders, including epilepsy. After obtaining a Certificate of Product Registration from the
Bureau of Food and Drugs in 2003, it has been selling the medicine under the aforementioned mark
since 2004. According to the organization’s president, she was unable to register her trademark since she
was unable to find the time owing to her father’s illness. On the other hand, Natrapharm sells a drug
called citicoline under the trademark “ZYNAPSE” for the treatment of cerebrovascular disease or stroke.
The trademark was registered with the IPOPHL in 2007. Prior to registration, the Vice President used a
research tool, which lists pharmaceutical products in the Philippines, to verify that no other product
used the abovesaid mark. Only after verification was the mark registered. Natrapharm filed a suit for
trademark infringement against Zuneca before the Quezon City Regional Trial Court. The RTC ruled for
Natrapharm. On appeal, the Court of Appeals sustained the RTC.

Issues:

Whether Zuneca is liable for trademark infringement.

Ruling:

The Supreme Court ruled in the negative. After a lengthy discussion regarding the legislative history of
Intellectual Property Law in the Philippines, the Supreme Court declared that, under the Intellectual
Property Code or R.A. 8293, the mode of acquiring ownership over trademark is by valid registration of
the same with the IPO in accordance with law. This is evidenced by Section 122 of the IP Code, and
Section 123 of the same Code or the first-to-file rule. Prior use in commerce is no longer a mode of
acquiring ownership over marks. However, actual use in commerce remains necessary for the purpose
of maintaining ownership over the marks. In light of the abovesaid ruling, the Court proceeded to state
that Natrapharm is the first-to-file registrant in good faith of “ZYNAPSE”. Thus, it acquired all the rights
of trademark owner over that mark. On the other hand, Zuneca is a prior user in good faith of the mark
“ZYNAPS”. Hence, the fact that Natrapharm was able to register “ZYNAPSE” first does not automatically
mean that Zuneca is liable for trademark infringement because it used the confusingly similar mark
“ZYNAPS”.

Ratio decidendi: Bad Faith and First to file vs First to use

What constitutes fraud or bad faith in trademark registration? Bad faith means that the applicant or
registrant has knowledge of prior creation, use and/or registration by another of an identical or similar
trademark. In other words, it is copying and using somebody else's trademark. Fraud, on the other hand,
may be committed by making false claims in connection with the trademark application and registration,
particularly, on the issues of origin, ownership, and use of the trademark in question, among other
things.
The concept of fraud contemplated above is not a mere inaccurate claim as to the origin, ownership, and
use of the trademark. In civil law, the concept of fraud has been defined as the deliberate intention to
cause damage or prejudice. The same principle applies in the context of trademark registrations: fraud is
intentionally making false claims to take advantage of another's goodwill thereby causing damage or
prejudice to another. Indeed, the concepts of bad faith and fraud go hand-in-hand in this context. There
is no distinction between the concepts of bad faith and fraud in trademark registrations because the
existence of one necessarily presupposes the existence of the other.

(Abandons the case decided in Beris, which was the first to use rule.)
Abercrombie & Fitch Co v Hunting World,

537 F2d 4 (2nd Cir 1976)

Facts:

For many years A&F has used the mark 'Safari' on articles "exclusively offered and sold by it." Since 1936
it has used the mark on a variety of men's and women's outer garments. HW filed an answer and
counterclaim. This alleged, inter alia, that "the word 'safari' is an ordinary, common, descriptive,
geographic, and generic word" which "is commonly used and understood by the public to mean and
refer to a journey or expedition, especially for hunting or exploring in East Africa, and to the hunters,
guides, men, animals, and equipment forming such an expedition" and is not subject to exclusive
appropriation as a trademark. HW sought cancellation of all of A&F's registrations using the word 'Safari'
on the ground that A&F had fraudulently failed to disclose the true nature of the term to the Patent
Office.

HW having moved for summary judgment, Judge Lasker granted this only in part, 327 F.Supp. 657
(S.D.N.Y.1971). He held, 327 F.Supp. at 662, that: Although "safari" is a generic word, a genuine issue of
fact exists as to whether the plaintiff has created a secondary meaning in its use of the word "identifying
the source" and showing that "purchasers are moved to buy it because of its source." On the other hand,
he concluded that A&F had no right to prevent HW from using the word 'Safari' to describe its business
as distinguished from use in the sale of a particular product3 a conclusion we do not understand to be
disputed; that HW had not infringed A&F's registered mark using the word 'Safari' under its brand name
on a "classical safari hat" or in advertising this as "The Hat for Safari" since such use was purely
descriptive, 327 F.Supp. at 664; that HW had also not infringed by using the term 'Minisafari' as a name
for its narrower brimmed safari hats, and that HW was entitled to use the word 'Safariland' as the
description of an area within its shop and as the name of a corporation engaged in the wholesale
distribution of products imported from East Africa by an affiliate, Lee Expeditions, Ltd., and in the
"Safariland News," a newsletter issued by HW and Lee Expeditions, 327 F.Supp. at 664-65. With respect
to shoes he concluded that both parties had used the word 'Safari' in a fanciful rather than a descriptive
sense and hence that plaintiff might have a valid infringement claim it it could establish a secondary
meaning.

On A&F's appeal this court reversed and remanded for trial, 461 F.2d 1040 (2 Cir. 1972). Most of Judge
Thomsen's opinion for the court concerned the issue of appealability, as did most of Judge Timbers'
concurring opinion and all of Judge Feinberg's dissent. Intimating no opinion on the ultimate merits, this
court concluded "that genuine issues of fact exist which made it improper to enter a summary judgment
finally denying even in part the injunctive relief sought by plaintiff." Id. at 1042. Judge Ryan, before
whom the action was tried on remand, ruled broadly in HW's favor. He found there was frequent use of
the word 'Safari' in connection with wearing apparel, that A&F's policing efforts thus had evidently been
unsuccessful, and that A&F had itself used the term in a descriptive sense not covered by its registration,
e.g., in urging customers to make a "Christmas Gift Safari" to the A&F store. After referring to statements
by Judge Lasker that 'Safari' was a "weak" mark, 327 F.Supp. at 663, the judge found the mark to be
invalid. 'Safari,' the court held, "is merely descriptive and does not serve to distinguish plaintiff's goods
as listed on the registration from anybody else's"; while such terms are afforded protection by the
Lanham Act if they come to identify the company merchandising the product, rather than the product
itself, A&F had failed to establish that this had become the situation with respect to 'Safari'. 4 The
opinion

The opinion did not discuss A&F's assertion that some of its marks had become incontestable under § 15
of the Lanham Act, 15 U.S.C. § 1065. The court entered a judgment which dismissed the complaint and
canceled not only the four registered trademarks in suit but all A&F's other registered 'Safari'
trademarks.5 A&F has appealed.

Issue:

WON the word Safari as used by AF is a generic term under the Lanham Act (spectrum of
distinctiveness).

Ruling:

There are four spectrum of distinctiveness under the Lanhman Act (sect. 15) 1. Generic, 2. Descriptive, 3.
Suggestive, 4. Arbitrary/Fanciful/Coined.

We have reached the following conclusions: (1) applied to specific types of clothing 'safari' has become a
generic term and 'minisafari' may be used for a smaller brim hat; (2) 'safari' has not, however, become a
generic term for boots or shoes; it is either "suggestive" or "merely descriptive" and is a valid trademark
even if " merely descriptive" since it has become incontestable under the Lanham Act; but (3) in light of
the justified finding below that 'Camel Safari,' 'Hippo Safari' and 'Safari Chukka' were devoted by HW to a
purely descriptive use on its boots, HW has a defense against a charge of infringement with respect to
these on the basis of "fair use."

We thus hold that the district court was correct in dismissing the complaint.

Matal v Tam, 582 US __ (June 19, 2017)

Facts of the case

Simon Tam and his band, The Slants, sought to register the band’s name with the U.S. Trademark Office.
The Office denied the application because it found that the name would likely be disparaging towards
“persons of Asian descent.” The office cited the Disparagement Clause of the Lanham Act of 1946, which
prohibits trademarks that “[consist] of or [comprise] 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.” Tam appealed the trademark
officer’s decision, and the name was refused a second time by a board comprised of members of the
office. Tam appealed to a panel of judges on the U.S. Court of Appeals for the Federal Circuit, which
found that the trademark officials were within their rights to refuse the trademark application under the
Disparagement Clause. The appellate court then reviewed the case en banc and found that the
trademark office was incorrect in refusing the trademark application and that the Disparagement Clause
violated the First Amendment.

Question
Is the Disparagement Clause invalid under the First Amendment?

Conclusion

The Disparagement Clause prohibits trademarks that disparage the members of a racial or ethnic group
and violates the Free Speech Clause of the First Amendment. Justice Samuel A. Alito, Jr. delivered the
opinion for the 8-0 majority. The Court held that, the plain meaning of the text clearly indicated that the
Disparagement Clause applied to racial and ethnic groups, and therefore the Clause applied to the mark
at issue in this case. The Clause also facially discriminated based on viewpoint, as giving offense
constitutes a viewpoint. Because the PTO simply approved trademarks, they were not government
speech--to which the First Amendment prohibitions on viewpoint regulation did not apply--and holding
otherwise would constitute a massive and unwise expansion of the government speech doctrine.
Similarly, PTO approval of a trademark did not constitute government-provided subsidy, an area of cases
in which viewpoint discrimination was sometimes determined to be constitutional. The Disparagement
Clause was also not a permissible regulation of commercial speech because it was not narrowly drawn to
serve a substantial interest. Any asserted interest of avoiding offense clearly contravened the purpose of
the First Amendment’s protection of free speech, and the Clause was too broad to serve the
government’s other stated interest of protecting the orderly flow of commerce.

Justice Anthony M. Kennedy wrote an opinion concurring in part and concurring in the judgment in
which he argued that the First Amendment’s protections against viewpoint discrimination clearly applied
in this case. There are very narrow and specific categories in which the government may regulate
speech--such as fraud, defamation, and incitement--and the trademark at issue here did not fall within
these categories. Instead, the Disparagement Clause specifically singled out a subset of messages that
the government determined to be offensive and prohibits them, which was plainly unconstitutional
viewpoint discrimination. Justice Kennedy also wrote that the majority opinion does not govern how any
other provisions of the Lanham Act should be interpreted under the First Amendment, nor was the
government speech doctrine at issue in this case. Justice Ruth Bader Ginsburg, Justice Sonia Sotomayor,
and Justice Elena Kagan joined in the opinion concurring in part and concurring in the judgment. In his
separate opinion concurring in part and concurring in the judgment, Justice Clarence Thomas wrote that
all government regulation of commercial speech should be analyzed under the strict scrutiny standard.

Justice Neil Gorsuch did not participate in the discussion or decision of this case.

Iancu v Brunetti, No. 18–302, 588 U.S. ___ (2019)

Brunetti sought federal registration of the trademark FUCT. The Patent and Trademark Office denied his
application under a Lanham Act provision that prohibits registration of trademarks that consist of or
comprise "immoral[ ] or scandalous matter,” 15 U.S.C. 1052(a).

The Supreme Court affirmed the Federal Circuit in holding that the provision violates the First
Amendment. The Court noted that it previously invalidated the Act’s ban on registering marks that
“disparage” any “person[ ], living or dead.” The “immoral or scandalous” bar similarly discriminates on
the basis of viewpoint. Expressive material is “immoral” when it is “inconsistent with rectitude, purity, or
good morals”; “wicked”; or “vicious”; the Act permits registration of marks that champion society’s
sense of rectitude and morality, but not marks that denigrate those concepts. Material is “scandalous”
when it “giv[es] offense to the conscience or moral feelings”; “excite[s] reprobation”; or “call[s] out
condemnation”; the Act allows registration of marks when their messages accord with, but not when
their messages defy, society’s sense of decency or propriety. The statute, on its face, distinguishes
between ideas aligned with conventional moral standards and those hostile to them.

The Court rejected an argument that the statute is susceptible of a limiting construction. The “immoral
or scandalous” bar does not draw the line at lewd, sexually explicit, or profane marks. Nor does it refer
only to marks whose “mode of expression,” independent of viewpoint, is particularly offensive. To cut
the statute off where the government urges would not interpret the statute Congress enacted, but
fashion a new one.

|Ginebra San Miguel, Inc. v. Director of the Bureau of Trademarks, G.R. Nos. 196372, 210224, 216104
& 219632, [August 9, 2022])En banc

In Ginebra San Miguel, Inc. v. Director of the Bureau of Trademarks, G.R. No. 196372/G.R. No.
210224/G.R. No. 216104/G.R. No. 219632, (9 August 2022), the Supreme Court held that “GINEBRA” is
not a generic mark, but a descriptive mark that has become a distinctive mark through secondary
meaning.

It was argued that “GINEBRA” cannot be registered since it is merely the Spanish word for “gin,” which is
a generic term. Moreover, “GINEBRA” cannot acquire secondary meaning because the doctrine of
secondary meaning applies only to descriptive marks under Sec. 123.2 of the Intellectual Property Code
(IP Code).

The Supreme Court held that the ultimate factor in determining whether a particular word is generic, is
public perception. Based on public perception, a word is regarded as generic if the relevant consuming
public understands such word as referring merely to the general class of products it purports to
represent as a mark. Conversely, if the relevant consuming public understands a word as pertaining to
the product of a particular enterprise, such word is not considered as generic but a distinctive one.

The Supreme Court also held that the while the doctrine of foreign equivalents stipulates that “generic
or descriptive names for a product, in whatever language, belong in the public domain if the typical
consumer would recognize those names as generic or descriptive,” there are limitations to the
applicability of this doctrine. It is merely a guideline to determine the registrability of a mark and will not
apply when, based on the test of primary significance pursuant to public perception, the relevant public
has placed a different meaning to a foreign word.

The Court found that based on survey evidence, along with the other documentary and testimonial
evidence presented by Ginebra San Miguel, Inc. (GSMI), the relevant public’s perception views
“GINEBRA” not as a generic English term for gin.

Moreover, “GINEBRA” may be considered a descriptive mark because its accurate translation is
“Genever” or “Jenever,” the juniper berry-flavored grain spirit which originated from the Netherlands in
the 17th century, a specific kind of gin. It had already become distinctive of the products of GSMI in view
of its extensive and substantive use of the term ”GINEBRA” on its gin products for over one hundred
eighty (180) years. The exclusive use of the descriptive mark was likewise established. GSMI’s product
was the only well-known “GINEBRA” brand in the market based on public perception. While the
competitors of GSMI contemplated to use the word “GINEBRA” in their products, their attempts never
materialized.

Under the doctrine of secondary meaning, a word or phrase that is originally incapable of exclusive
appropriation may be used as a trademark if, by reason of the long and exclusive use thereof with
reference to its article, it has come to mean that such article was its product.

As GSMI satisfied all the requirements of the doctrine of secondary meaning with respect to
descriptiveness, prolonged commercial use, and exclusivity in the market, the descriptive mark
“GINEBRA” can be protected and may be registered in favor of GSMI, to the exclusion of others.