W Land Holdings, Inc. v. Starwood Hotels and Resorts Worldwide, Inc.

GR No. 222366 04 Dec 2017

Facts

Starwood had applied for the trademark registration of "W" with the Intellectual Property
Office (IPO) in 2005, and it was granted in 2007. In contrast, W Land applied for its own
"W" mark registration in 2006, after Starwood's application. Starwood opposed W
Land's application, which was initially supported by the Bureau of Legal Affairs (BLA). W
Land then filed a motion for reconsideration, but it was denied.

To challenge Starwood's trademark, W Land filed a petition for cancellation, arguing that
Starwood had no hotel establishment in the Philippines using the "W" mark. Starwood
countered these claims, stating that they conducted hotel and leisure businesses
through subsidiaries and franchisees, and their interactive websites catered to global
clients. The BLA ruled in favor of W Land, ordering Starwood to cancel its "W" mark
registration.

Starwood appealed to the Office of the Director General of the IPO, and their appeal
was granted, dismissing W Land's petition for cancellation. The Court of Appeals
affirmed this decision. Consequently, W Land brought the case to the Supreme Court.

Issues

Whether or not Starwood’s trademark “W” registration be canceled for non-use?

Court’s Ruling

Trademark protection aims to preserve goodwill and prevent customer confusion about
goods and services. A certificate of registration of a mark serves as proof of its validity,
ownership, and exclusive right to use the mark in relation to the specified goods or
services. However, this presumption can be disputed by suitable measures, such as
proving the non-use of the mark.

In the case of Starwood's "W" trademark, it cannot be canceled for non-use based on
the Intellectual Property Code. To maintain a registered mark, the owner must
demonstrate "actual use" of the mark representing goods or services in commerce. The
Code does not specifically define "use," but it should be genuine and not merely token.
Further, the following shall be proof of actual use “(a) labels of the mark as these are
used; (b) downloaded pages from the website of the applicant or registrant clearly
showing that the goods are being sold or the services are being rendered in the
Philippines; (c) photographs (including digital photographs printed on ordinary paper) of
goods bearing the marks as these are actually used or of the stamped or marked
container of goods and of the establishment/s where the services are being rendered;
(d) brochures or advertising materials showing the actual use of the mark on the goods
being sold or services being rendered in the Philippines; (e) for online sale, receipts of
sale of the goods or services rendered or other similar evidence of use, showing that
the goods are placed on the market or the services are available in the Philippines or
that the transaction took place in the Philippines; and lastly (f) copies of contracts for
services showing the use of the mark. Computer printouts of the drawing or
reproduction of marks will not be accepted as evidence of use”

Under the amended Trademark Regulations, the Intellectual Property Office (IPO)
recognizes interactive websites as acceptable proof of actual use. Since the internet
has transformed global commerce, a registered mark owner is entitled to generate and
strengthen commercial goodwill by actively marketing and transacting goods or services
online.

However, merely displaying goods or services on the internet does not constitute actual
use. The "use" required by law is genuine use, which involves a bona fide kind of use
leading to a commercial transaction in the ordinary course of trade. Therefore, to
maintain a trademark registration, it must be shown that the owner has actually
transacted or targeted customers in a specific jurisdiction, establishing an actual
commercial link to that country.

Great White Shark Enterprises, Inc. v. Danilo M. Caralde, Jr.

GR No. 192294 21 Nov 2012

Facts

Caralde submitted a trademark application to the Bureau of Legal Affairs (BLA) for the
registration of the mark "SHARK & LOGO" on his manufactured goods, such as
slippers, shoes, and sandals. In response to that, Great White Shark Enterprises, a
foreign corporation, opposed the application, claiming to own the "GREG NORMAN
LOGO," which features a representation of a shark in color. They argued that their
mark's pending registration since February 19, 2002, and the similarities between the
two marks could deceive or confuse consumers.

Caralde countered by stating that the marks are distinct and easily distinguishable, with
only the word "shark" being similar. The BLA Director rejected Caralde's application,
asserting that the dominant features of both marks (the illustration of the shark) were
strikingly similar, leading to potential consumer confusion. However, the Director found
insufficient evidence to support the Great White Shark's claim that its mark was famous
and well-known.

The IPO Director general upheld the BLA Director's decision, citing that both marks
belonged to the same class and that Great White Shark had applied for registration
earlier than Caralde. The Court of Appeals (CA) later reversed these findings, granting
Caralde's application. The CA concluded that there was no confusing similarity between
the marks, as Caralde's mark was more fanciful and colorful, with several
distinguishable elements. Furthermore, the CA considered the different price ranges
and channels of trade for the products, concluding that there was no likelihood of
confusion between the two marks.

Issues

● Whether the Court of Appeals is incorrect in ruling that the respondent's mark
subject of the application being opposed by the petitioner is not confusingly
similar to petitioner's registered mark.
● Whether the Court of Appeals incorrect in ruling that the cost of goods could
negate likelihood of con[f]usion.

Court’s Ruling

The court ruled in favor of the respondent, emphasizing that a trademark can be
registered if it is created fancifully or arbitrarily and effectively distinguishes and
identifies the goods of one manufacturer or seller from those of another. The key factor
for trademark registrability involves both commercial utility and distinctiveness.

The respondent's shark mark, designed in a distinctive manner, meets the criteria for
trademark registration. The court applied the Dominancy Test and the Holistic or Totality
Test in its evaluation process. The Dominancy Test scrutinizes the similarity of the
primary features in competing trademarks that could potentially lead to confusion,
misinterpretation, and deception in the mind of an ordinary consumer. The Holistic or
Totality Test examines the entirety of the marks to determine if one is deceptively similar
to the other, potentially misguiding the ordinary consumer.

By employing these tests, the court concluded that there was no deceptive similarity
between the subject marks. Although both marks incorporate the shape of a shark, the
court pointed out the noticeable differences in visual and auditory aspects between
them, ultimately ruling in favor of the respondent.

Phil Pharmawealth, Inc., v. Pfizer, Inc. and Pfizer (Phil.) Inc.,

GR No. 167715 17 Nov 2010

Facts
Pfizer Inc. and Pfizer (Phil) Inc., the respondent companies, filed a complaint against
Phil Pharmawealth Inc., the petitioner, for alleged patent infringement. The complaint
was submitted to the Bureau of Legal Affairs of the Intellectual Property Office. Pfizer
claimed ownership of the patent covering ampicillin sodium and beta-lactam antibiotic,
sulbactam sodium. This patent was valid until July 16, 2004.

In 2003, Pfizer discovered that Phil Pharmawealth had submitted bids for the supply of
Sulbactam Ampicillin to various hospitals without Pfizer's consent, violating Pfizer's
intellectual property rights. In response, Pfizer sent letters to the hospitals, demanding
they cease and desist from accepting bids for the product. However, Phil Pharmawealth
and the hospitals disregarded Pfizer's demand, leading Pfizer to seek a permanent
injunction, damages, forfeiture, and impounding of the alleged infringing products.

When the case reached the Court of Appeals (CA), petitioner Phil Pharmawealth argued
that Pfizer's patent had expired in July 2004, thus rendering Pfizer without any
monopoly rights over Sulbactam Ampicillin.

Issues

Whether or not respondent Pfizer’s exclusive right to monopolize the subject matter of
the patent exists only within the term of the patent.

Court’s Ruling

Based on the provision of Section 37 of RA No. 165, which is the applicable law during
the issuance of the respondents' patent, states that a patent holder has the exclusive
right to make, use, and sell the patented machine, article, or product, and to utilize the
patented process for industrial or commercial purposes throughout the Philippines for
the patent's term. Unauthorized making, using, or selling by another person constitutes
patent infringement.

According to that legal provision, a patent holder's exclusive rights to make, use, and
sell a patented product, article, or process are valid only during the patent's term. In this
case, Philippine Letters Patent No. 21116, relied upon by the respondents in their
complaint to the BLA-IPO, was issued on July 16, 1987. The respondents admitted to
this fact in their complaint and also acknowledged the patent's validity until July 16,
2004, which aligns with Section 21 of RA 165, stating a patent's term is 17 years from
its issuance.

In the Section 4, Rule 129 of the Rules of Court, it highlights that admissions, either
verbal or written, be made by a party during court proceedings in the same case do not
require proof and can only be contradicted by demonstrating a palpable mistake or no
such admission was made. In the present situation, there is no dispute over the
respondents' admission that their patent's term expired on July 16, 2004, and no
evidence to suggest a palpable mistake in their admission. Consequently, contrary to
the Court of Appeals' assertion, there is no longer a need to present evidence regarding
the expiration of the respondents' patent.

Republic of the Philippines v. Heirs of Jose C. Tupaz,

GR No. 197335 07 Sept 2020

Facts

In 1996, the PNP authorized procuring new uniforms and equipment, including cap
devices and badges. The current PNP cap device and badge feature distinct elements:
a native shield, Lapu-Lapu with a sword and shield, eight rays representing revolting
provinces, three pentagram stars for Luzon, Visayas, and Mindanao, laurel leaves, and
the words "service, honor, and justice." These designs were previously used by the
Philippine Constabulary Coat of Arms.

The PNP's Research and Development, Clothing, and Criminalistics Equipment Division
collaborated with Tupaz to create the new PNP cap device and badge designs. Tupaz
worked pro bono, creating designs based on PNP specifications and instructions, which
were then approved by the National Police Commission. After approval, the PNP held a
public bidding for procuring the new cap devices and badges. El Oro, with Tupaz as its
then-president and board chair, submitted the second-highest bid. Despite this, El Oro
was awarded the contract.

El Oro presented copyright registration certificates for the PNP cap device and badge
designs in Tupaz's favor. However, the National Library did not act on a request to
cancel these registrations, claiming the cap and badge designs were created by the
PNP Directorate on Research and Development, Clothing, and Criminalistics Equipment
Division.

Subsequently, the Philippine government filed a complaint in the Quezon City Regional
Trial Court to cancel Tupaz's copyright registrations and seek a preliminary injunction.
Tupaz argued that El Oro claimed to be the exclusive and official engraver of Philippine
heraldry items since 1953, with Tupaz's ancestor, Jose T. Tupaz Jr., developing the
original designs on which the current PNP cap device and badge were based.
Consequently, El Oro owned the copyright for the new designs and was the only
qualified bid

Issues

● Whether or not the new designs of the PNP cap device and badge are entitled to
protection as derivative works under Section 8 of Presidential Decree No. 49.

● Whether or not the PNP, as contributor of ideas, should be deemed as the author
of the new designs.

Court’s Ruling

Yes. It favored the CA decision and elaborated on Tupaz's copyright ownership, citing
Section 178.4 of The Intellectual Property Code, which applies to works generated while
being employed. Section 178.4 of Republic Act No. 8293 states that the creator
normally owns the copyright to a commissioned work. The parties may agree in writing
to transfer copyright to the person who commissioned the work.

In this specific case, the petitioner is not entitled to own the copyright because the
designs were neither commissioned works nor creations made during Tupaz's
employment. Firstly, although the parties verbally agreed to collaborate, the petitioner
did not hire Tupaz's services for a fee or a commission. Instead, Tupaz offered his
services voluntarily. Consequently, the new designs do not qualify as commissioned
works. Secondly, there was no employer-employee relationship between the parties
when the designs were created. The petitioner's failure to establish a contract that
clearly outlined the rights of both parties regarding the new design led to the conclusion
that the PNP cannot claim copyright ownership over the designs created by Tupaz.