Category: Intellectual Property Law

Trademark Registration: Navigating Similarity and Consumer Confusion in Electronic Goods

In Taiwan Kolin Corporation, Ltd. v. Kolin Electronics Co., Inc., the Supreme Court ruled that Taiwan Kolin could register its “KOLIN” trademark for television and DVD players, despite Kolin Electronics already having a similar mark for voltage regulators and power supplies. The Court emphasized that even if products fall under the same general classification, the critical question is whether they are actually related in a way that would confuse consumers. This decision clarifies that mere similarity in product classification is not enough to deny trademark registration, offering guidance for businesses in related industries.

Can Two Electronics Companies Coexist with Similar Trademarks?

The heart of the matter lies in a trademark dispute between Taiwan Kolin Corporation, Ltd. (Taiwan Kolin) and Kolin Electronics Co., Inc. (Kolin Electronics). Taiwan Kolin sought to register the “KOLIN” trademark for its television sets and DVD players. Kolin Electronics opposed this, arguing that the mark was confusingly similar to its own registered “KOLIN” mark, which it used for automatic voltage regulators, converters, and other power supply products. This legal battle reached the Supreme Court, forcing it to address a crucial question: Can two companies in the electronics sector use similar trademarks for their respective products, or would this inevitably lead to consumer confusion?

The Intellectual Property Office (IPO) initially sided with Kolin Electronics, denying Taiwan Kolin’s application based on Section 123(d) of the Intellectual Property Code (IP Code), which prohibits the registration of a mark identical to a registered mark for the same or closely related goods. However, the IPO Director General reversed this decision, reasoning that product classification alone should not be the decisive factor and that the focus should be on the actual similarity of the products. The Court of Appeals (CA) then sided with Kolin Electronics, stating that the intertwined use of television sets with amplifiers and voltage regulators suggested that televisions were within Kolin Electronics’ natural expansion.

The Supreme Court disagreed with the CA’s assessment. The Court cited several precedents, including Acoje Mining Co., Inc. vs. Director of Patents, where the Court allowed Acoje Mining to register the trademark LOTUS for its soy sauce, despite Philippine Refining Company’s prior registration of the same mark for edible oil. The Court emphasized that uniformity in categorization does not automatically preclude the registration of an identical mark and that the focus should be on the similarity of the products involved, not just their classification.

“Verily, whether or not the products covered by the trademark sought to be registered by Taiwan Kolin, on the one hand, and those covered by the prior issued certificate of registration in favor of Kolin Electronics, on the other, fall under the same categories in the NCL is not the sole and decisive factor…emphasis should be on the similarity of the products involved and not on the arbitrary classification or general description of their properties or characteristics.”

The Court outlined several factors to consider when determining if products are related, drawing from the doctrine in Mighty Corporation v. E. & J Gallo Winery. These include the nature and cost of the articles, the descriptive properties and physical attributes, the purpose of the goods, and the channels of trade through which the goods flow. Applying these factors, the Court found that Taiwan Kolin’s television sets and DVD players were not closely related to Kolin Electronics’ power supply and audio equipment.

Moreover, the Court noted that the products belonged to different sub-categories within Class 9 of the Nice Classification: audiovisual equipment for Taiwan Kolin and devices for controlling the distribution and use of electricity for Kolin Electronics. In trademark disputes, the likelihood of consumer confusion is a central issue. The Court recognized that products involved in the case were various kinds of electronic products which are considered relatively luxury items not easily affordable.

“Among these, what essentially determines the attitudes of the purchaser, specifically his inclination to be cautious, is the cost of the goods. To be sure, a person who buys a box of candies will not exercise as much care as one who buys an expensive watch. As a general rule, an ordinary buyer does not exercise as much prudence in buying an article for which he pays a few centavos as he does in purchasing a more valuable thing.”

The Court observed that while both marks used the word “KOLIN” in uppercase and bold font, there were distinct visual and aural differences. Kolin Electronics’ mark was italicized and colored black, while Taiwan Kolin’s mark was white on a pantone red background. Furthermore, the Court emphasized that the products involved were not inexpensive household items but relatively pricey electronics, leading consumers to be more cautious and discriminating in their purchases.

This case is similar to Emerald Garment Manufacturing Corporation v. Court of Appeals, where the Court found no confusing similarity between “Stylistic Mr. Lee” and “LEE” for jeans, considering that the products were relatively expensive and purchased by informed buyers. Applying this principle, the Supreme Court concluded that the differences between the two “KOLIN” marks were sufficient to prevent consumer confusion. Also, the ordinary purchaser must be thought of as having, and credited with, at least a modicum of intelligence to be able to see the differences between the two trademarks in question.

FAQs

What was the key issue in this case?	The central issue was whether Taiwan Kolin could register its “KOLIN” trademark for televisions and DVD players, given that Kolin Electronics already had a similar trademark for power supply products.
What is the significance of Class 9 of the Nice Classification?	Class 9 includes a broad range of electronic products. The Court clarified that belonging to the same class is not enough to establish relatedness between goods for trademark purposes.
What factors determine if products are “related” for trademark purposes?	The Court considers factors like the nature, cost, and purpose of the goods, as well as the channels of trade through which they are sold.
What is the “ordinary intelligent buyer” standard?	This standard assumes that buyers of relatively expensive goods are more discerning and less likely to be confused by similar trademarks.
How did the Court distinguish this case from other trademark cases?	The Court distinguished this case from cases involving inexpensive household items, where consumers are less likely to exercise caution.
What was the visual difference between the two “KOLIN” trademarks?	Kolin Electronics’ mark was italicized and black, while Taiwan Kolin’s mark was white on a red background, which contributed to differentiating the brands.
What was the final ruling of the Supreme Court?	The Supreme Court ruled in favor of Taiwan Kolin, allowing them to register their “KOLIN” trademark for television sets and DVD players.
Why did the Court reverse the Court of Appeals’ decision?	The Court found that the Court of Appeals had misapplied the facts by assuming that all electronic products are closely related, overlooking critical differences in the nature and marketing of the products.

The Supreme Court’s decision in Taiwan Kolin v. Kolin Electronics provides valuable guidance for businesses navigating trademark registration in related industries. By emphasizing the importance of actual product similarity and consumer perception, the Court has clarified the boundaries of trademark protection. This ruling underscores the need for a nuanced approach to trademark disputes, one that considers the specific characteristics of the goods and the likely behavior of consumers.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Taiwan Kolin Corporation, Ltd. v. Kolin Electronics Co., Inc., G.R. No. 209843, March 25, 2015

March 25, 2015

Protecting Broadcast Rights: Copyright Infringement and Fair Use in News Rebroadcasting

In the Philippines, broadcasting organizations have rights that are infringed upon by another entity broadcasting the copyrighted material without prior consent. This landmark Supreme Court case clarifies the nuances of copyright law concerning news footage, emphasizing that while news itself is not copyrightable, the manner of its expression in video footage is. The decision emphasizes the importance of securing authorization before rebroadcasting and establishes guidelines for fair use, thereby balancing the protection of intellectual property with the public’s right to information.

GMA Network’s News Broadcast: A Copyright Clash Over Angelo Dela Cruz’s Homecoming

This case revolves around the legal battle between ABS-CBN Corporation and GMA Network, Inc. concerning the alleged copyright infringement during the news coverage of the homecoming of overseas Filipino worker Angelo dela Cruz. The focal point of the dispute was GMA-7’s use of ABS-CBN’s news footage, which GMA-7 obtained via Reuters, during its broadcast. At the heart of this legal challenge is the question of whether GMA-7’s actions constituted a violation of ABS-CBN’s copyright, particularly considering the principles of fair use and the potential defense of good faith.

The central point of contention is whether ABS-CBN’s news footage of Angelo dela Cruz’s arrival is copyrightable under Philippine law. The Intellectual Property Code grants copyright protection to various forms of creative work, including audiovisual and cinematographic works. ABS-CBN argued that its news footage, which involved creative choices in framing shots, using images, graphics, and sound effects, constitutes an expression of news and is therefore subject to copyright protection. In contrast, GMA-7 contended that the arrival of Angelo dela Cruz was a newsworthy event and that the news footage itself lacked the necessary ingenuity to qualify for copyright protection.

The Supreme Court unequivocally stated that **news footage is copyrightable**, emphasizing the distinction between an idea or event and the expression of that idea or event. While the news event itself is not subject to copyright, the creative manner in which it is captured and presented is entitled to protection. The Court referenced Section 175 of the Intellectual Property Code, acknowledging that “news of the day and other miscellaneous facts having the character of mere items of press information” are not protected. It clarified, however, that **the expression of news, particularly when it undergoes a creative process, is entitled to copyright protection**.

The Court also considered the concept of **fair use** as a limitation on copyright protection. Section 185 of the Intellectual Property Code outlines the factors to be considered in determining whether the use of a copyrighted work constitutes fair use, including the purpose and character of the use, the nature of the copyrighted work, the amount and substantiality of the portion used, and the effect of the use upon the potential market for the copyrighted work. The Court acknowledged the Court of Appeals’ finding that GMA-7 aired a five-second footage of the ABS-CBN news coverage. Nevertheless, it deferred to the trial court the determination of whether the broadcast qualifies as fair use, underscoring the need for a comprehensive evaluation of the facts and circumstances involved.

In its analysis, the Supreme Court underscored the importance of broadcast organizations’ related or neighboring rights, which are rights equivalent to copyright. It recognized that the broadcasting of a news event requires the assignment of values for each second of broadcast or airtime, as broadcasting organizations generate revenue through the sale of time slots to advertisers based on market share. To protect these rights, **the unauthorized rebroadcasting of copyrighted material without the owner’s consent constitutes a violation of the Intellectual Property Code**.

The Supreme Court addressed the argument of good faith as a defense against criminal prosecution for copyright infringement, definitively stating that **good faith is not a defense** in this context. It held that Philippine copyright law prescribes strict liability for copyright infringement, regardless of mens rea or culpa. The Court emphasized that copyright infringement under the Intellectual Property Code is malum prohibitum, meaning that the act is prohibited by law, and the intent to commit the act is irrelevant. The Court contrasted this with jurisdictions that require intent for criminal copyright infringement, highlighting the Philippines’ emphasis on protecting intellectual property rights.

Moreover, the Court examined the liability of corporate officers and employees in cases of copyright infringement. While acknowledging that corporations have separate and distinct personalities from their officers, the Court reiterated that corporate officers and/or agents may be held individually liable for a crime committed under the Intellectual Property Code. However, **the criminal liability of a corporation’s officers or employees stems from their active participation in the commission of the wrongful act**; mere membership in the Board or being President per se does not mean knowledge, approval, and participation in the act alleged as criminal.

In this particular case, the Court found that while respondents Grace Dela Peña-Reyes and John Oliver T. Manalastas actively participated in the infringement of ABS-CBN’s news footage, there was a lack of proof of actual participation by respondents Felipe Gozon, Gilberto R. Duavit, Jr., Marissa L. Flores, and Jessica A. Soho. As a result, the Court reinstated the Department of Justice Resolution as to respondents Dela Peña-Reyes and Manalastas, while absolving respondents Gozon, Duavit, Jr., Flores, and Soho from criminal liability.

This case showcases a balancing act. While the court recognizes intellectual property rights and aims to protect the market share of broadcasting companies, it also acknowledged fair use as an important limitation on copyright. Because this area requires careful judgment on a case-to-case basis, the defense of fair use should be threshed out during trial. In conclusion, this landmark case provides valuable insights into the intricacies of copyright law in the Philippines, particularly in the context of news broadcasting. It reinforces the importance of safeguarding intellectual property rights while also upholding the public’s right to information.

FAQs

What was the key issue in this case?	The key issue was whether GMA-7 infringed on ABS-CBN’s copyright by using its news footage of Angelo dela Cruz’s arrival, and whether good faith or fair use could be valid defenses.
Is news footage copyrightable in the Philippines?	Yes, the Supreme Court clarified that while news events themselves aren’t copyrightable, the specific expression of that news in video footage is protected. This includes the creative elements like camera angles, editing, and presentation.
What is fair use, and how does it apply to this case?	Fair use allows limited use of copyrighted material without permission for purposes like news reporting, commentary, or education. GMA-7 argued fair use because the footage was a short excerpt for news, but the Court left it for the trial court to determine if the use was indeed fair.
Is good faith a valid defense against copyright infringement?	No, the Supreme Court ruled that good faith is not a defense because copyright infringement is a malum prohibitum offense, meaning it’s illegal regardless of intent. The focus is on the act of infringement, not the intent behind it.
Can corporate officers be held liable for copyright infringement?	Yes, corporate officers can be held liable if they actively participated in the infringing act. However, mere membership in the board or holding a high position isn’t enough; there must be direct involvement.
What factors are considered in determining fair use?	The purpose and character of the use, the nature of the copyrighted work, the amount used, and the effect on the market value of the work are considered. These factors help balance copyright protection with public access.
What are broadcasting organizations’ neighboring rights?	Broadcasting organizations have neighboring rights, including the right to authorize or prevent rebroadcasting of their broadcasts. These rights protect their investment in creating and transmitting content.
What was the outcome for the individual respondents in this case?	The Supreme Court found probable cause against Grace Dela Peña-Reyes and John Oliver T. Manalastas due to their direct roles in the news broadcast. However, it absolved Felipe Gozon, Gilberto R. Duavit, Jr., Marissa L. Flores, and Jessica A. Soho due to a lack of evidence showing their direct participation in the infringement.

This decision underscores the importance of Philippine intellectual property law in protecting the rights of broadcasting organizations while balancing the need for fair use in reporting. It serves as a reminder to media entities to respect copyright laws and secure proper authorization before rebroadcasting content.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

March 11, 2015

Breach of Contract and Trust: Examining Obligations in Film Licensing Agreements

In Ricardo C. Honrado v. GMA Network Films, Inc., the Supreme Court ruled that GMA Films failed to prove that Ricardo Honrado breached their TV Rights Agreement or any trust. The Court reinstated the trial court’s decision dismissing GMA Films’ complaint, emphasizing that the rejection and replacement of films under the agreement were contingent upon disapproval by the Movie and Television Review and Classification Board (MTRCB), not merely the subjective assessment of the broadcasting network. This decision underscores the importance of adhering to the specific terms outlined in contracts, particularly concerning the roles and responsibilities of each party, and clarifies the circumstances under which films can be rejected or replaced in licensing agreements.

Lights, Camera, Contract: When TV Rights Don’t Go as Planned

The case originated from a “TV Rights Agreement” between Ricardo C. Honrado and GMA Network Films, Inc. (GMA Films), where Honrado, as licensor, granted GMA Films the exclusive right to telecast 36 films for a fee of P60.75 million. Two films, Evangeline Katorse and Bubot, became central to the dispute. GMA Films sued Honrado to recover amounts paid for these films, alleging that Evangeline Katorse was rejected due to its short running time and that Honrado failed to remit the full payment for Bubot to its owner. This led GMA Films to claim breach of contract and implied trust. The Regional Trial Court initially dismissed GMA Films’ complaint, but the Court of Appeals (CA) reversed this decision, finding Honrado liable. The Supreme Court then reviewed the CA’s decision, focusing on whether Honrado had indeed breached the agreement and if an implied trust existed between the parties.

The Supreme Court emphasized that the Agreement stipulated MTRCB’s disapproval as the basis for rejecting and replacing a film. Paragraph 4 of the Agreement states:

The PROGRAMME TITLES listed above shall be subject to approval by the Movie and Television Review and Classification Board (MTRCB) and, in the event of disapproval, LICENSOR [Petitioner] will either replace the censored PROGRAMME TITLES with another title which is mutually acceptable to both parties or, failure to do such, a proportionate reduction from the total price shall either be deducted or refunded whichever is the case by the LICENSOR OR LICENSEE [GMA Films].

The court noted that GMA Films rejected Evangeline Katorse due to its short running time, not MTRCB disapproval. Honrado voluntarily replaced it with Winasak na Pangarap. However, GMA Films rejected the replacement, citing its “bold” content. The Supreme Court found this rejection invalid under the Agreement, which explicitly requires MTRCB’s intervention before a film can be rejected and replaced. The court pointed out that GMA Network’s assessment of the film’s content overstepped its role, which was limited to technical quality checks, as outlined in Paragraphs 3 and 4 of the Agreement.

The Supreme Court also addressed GMA Films’ claim for the balance of fees paid for Bubot, which Honrado allegedly did not fully remit to the film’s owner. GMA Films argued that Honrado’s failure to remit the full amount created an implied trust. The CA agreed, stating that the Agreement did not entitle Honrado to any commission. The Supreme Court, however, disagreed with this interpretation. The Court clarified that the Agreement was a licensing contract where Honrado, as licensor, transferred the exclusive right to telecast films to GMA Films for a fee. The Court found that stipulations for payment of commission are not inherent in the agreement unless the licensor acted as an agent for the film owners. This was not the case here.

The Supreme Court highlighted that GMA Films was not a party to the separate contractual arrangements between Honrado and the film owners. Thus, GMA Films had no standing to question Honrado’s compliance with those arrangements. The Court stated:

Being a stranger to such arrangements, GMA Films is no more entitled to complain of any breach by petitioner of his contracts with the film owners than the film owners are for any breach by GMA Films of its Agreement with petitioner.

The Court also found the award of attorney’s fees to Honrado by the trial court improper, stating that such awards must be fully elaborated in the body of the ruling, which was not done in this case. Article 2208(11) of the Civil Code allows attorney’s fees if the court deems it just and equitable, but such grounds must be explicitly justified.

The Supreme Court ultimately granted Honrado’s petition, setting aside the CA’s decision and reinstating the trial court’s decision with the modification that the award of attorney’s fees was deleted. This decision emphasizes the importance of adhering to the specific terms outlined in contracts and clarifies the roles and responsibilities of each party involved. It also underscores that a party cannot claim a breach of contract or trust based on arrangements to which they are not a party. The Supreme Court’s ruling serves as a reminder to parties entering into licensing agreements to clearly define the conditions under which films can be rejected or replaced and to respect the boundaries of their contractual obligations.

FAQs

What was the key issue in this case?	The central issue was whether Ricardo Honrado breached his TV Rights Agreement with GMA Films by not remitting the full payment for a film and by replacing another film without proper grounds as defined in the contract. The Supreme Court examined the specific terms of the agreement to determine the validity of GMA Films’ claims.
What was the contractual requirement for film replacement?	According to the Agreement, a film could only be rejected and replaced if it was disapproved by the Movie and Television Review and Classification Board (MTRCB). This was a critical factor in the Supreme Court’s decision.
*Why did GMA Films reject Evangeline Katorse?*	GMA Films rejected Evangeline Katorse because its running time was too short for telecast, not because it was disapproved by MTRCB. This reason for rejection was not in line with the terms of the Agreement.
What was the role of GMA Network in the film selection process?	GMA Network was responsible for conducting broadcast quality tests on the films. However, they overstepped their role when they assessed the content of Winasak na Pangarap, a task that fell under the purview of MTRCB.
*Did Honrado have to remit the entire fee for Bubot* to the film owner?**	The Supreme Court clarified that the TV Rights Agreement did not obligate Honrado to remit the entire fee for Bubot to the film owner. GMA Films was not a party to the separate agreement between Honrado and the film’s owner.
What is an implied trust, and did it apply in this case?	An implied trust arises when property is acquired through mistake or fraud, obligating the acquirer to act as a trustee for the benefit of the original owner. The Supreme Court did not find that an implied trust existed because GMA Films had no legitimate interest in the disposition of fees paid to Honrado.
Why was the award of attorney’s fees to Honrado deleted?	The award of attorney’s fees was deleted because the trial court did not adequately explain the justification for the award. The Supreme Court requires that such awards be fully elaborated in the body of the ruling.
What does this case teach about contract interpretation?	This case underscores the importance of adhering to the specific terms outlined in contracts. Courts will interpret contracts based on the clear language used and will not imply obligations or conditions that are not expressly stated.

The Supreme Court’s decision in Honrado v. GMA Network Films offers a valuable lesson in contract law, emphasizing the need for clarity and precision in defining the rights and obligations of parties. By adhering to the specific terms of the agreement and respecting the defined roles, parties can avoid costly and time-consuming litigation. This case serves as a reminder that contractual disputes often hinge on the precise language of the agreement and the adherence to the roles and responsibilities of each party involved.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Ricardo C. Honrado, vs. GMA Network Films, Inc., G.R. No. 204702, January 14, 2015

January 14, 2015

Upholding Search Warrants in Copyright Infringement Cases: Balancing Rights and Due Process

The Supreme Court held that search warrants issued to seize illegally reproduced software were valid, reversing the Court of Appeals’ decision. This ruling emphasizes the importance of probable cause in intellectual property rights enforcement, while also clarifying the application of the three-day notice rule in motion hearings. The decision underscores the judiciary’s role in protecting copyright holders’ rights and promoting a fair marketplace.

Cracking Down on Counterfeit Software: When Probable Cause Justifies a Search

Microsoft Corporation and Adobe Systems Incorporated sought to enforce their copyrights against New Fields (Asia Pacific), Inc., suspecting the company of using unlicensed software. The case began when petitioners received information that New Fields was unlawfully reproducing and using unlicensed versions of their software. Acting on this information, petitioners engaged Orion Support, Inc. (OSI) to investigate. Two OSI Market Researchers, Norma L. Serrano and Michael A. Moradoz, were tasked with confirming the tip and were trained to identify unauthorized copies of Adobe and Microsoft software.

On March 26, 2010, Police Senior Inspector Ernesto V. Padilla, along with Serrano and Moradoz, visited New Fields’ office under the guise of legitimate business. During the visit, they accessed two computers owned by New Fields and gathered information about the installed software. This investigation revealed that multiple computers were using the same product identification numbers for Microsoft and Adobe software, suggesting unauthorized duplication. Serrano and Moradoz stated in their joint affidavit that this commonality of product IDs indicated unlicensed or illegally copied software, as each installation should have a unique identifier unless an Open License Agreement is in place.

Based on the gathered evidence, Padilla applied for search warrants before Judge Amor Reyes of the Regional Trial Court (RTC). On May 20, 2010, Judge Reyes issued Search Warrant Nos. 10-15912 and 10-15913. The warrants were executed on May 24, 2010, resulting in the seizure of several items, including CD installers and computers containing unauthorized copies of Microsoft and Adobe software.

New Fields filed a motion to quash Search Warrant No. 10-15912 on June 6, 2010, arguing against its validity. The RTC, however, on June 29, 2010, issued an Order quashing both warrants, directing the return of all seized items. The RTC reasoned that the petitioners should have identified specific computers with pirated software. The RTC also dismissed the petitioners’ argument regarding non-compliance with the three-day notice rule, emphasizing that personal notification had been given.

The petitioners moved for reconsideration, but the RTC denied this motion on August 27, 2010. Aggrieved, the petitioners elevated the matter to the Court of Appeals (CA) via a petition for certiorari under Rule 65, alleging grave abuse of discretion by the RTC. The Court of Appeals, however, denied the petition, upholding the RTC’s decision to quash the search warrants. The CA stated that although the three-day notice rule was not strictly followed, the petitioners were given an opportunity to present their case.

The Supreme Court addressed two key issues: compliance with the three-day notice rule and the existence of probable cause for issuing the search warrants. Regarding the three-day notice rule, the Court acknowledged that strict compliance could be relaxed if the adverse party had a reasonable opportunity to study the motion and present their opposition. Citing Anama v. Court of Appeals,^[29] the Court reiterated that the purpose of the rule is to safeguard due process rights, which were satisfied when the RTC allowed the petitioners to submit their comment on the motion to quash.

The more substantive issue was whether probable cause existed to justify the issuance of the search warrants. The Court emphasized that while it generally defers to the lower courts’ evaluation of evidence, it can overturn factual findings if there was grave abuse of discretion. In this case, the Supreme Court found that the RTC and CA erred in their appreciation of facts, leading them to wrongly quash the warrants.

The CA had reasoned that the witnesses lacked personal knowledge of the facts justifying the warrants, relying instead on screen shots from a confidential informant. The Supreme Court disagreed, pointing to the affidavit of Police Senior Inspector Padilla, who personally verified the informant’s tip. Padilla had observed the Product Keys or Product Identification Numbers of the Adobe and Microsoft software installed on the computers at New Fields. Moreover, Padilla, trained to identify illegally reproduced software, concluded that the software was unauthorized due to the common product identification numbers across multiple computers.

“At the time that I was inside the office premises of the NEW FIELDS, I saw the Product Keys or Product Identification Numbers of the ADOBE and MICROSOFT computer software programs installed in some of the computer units. Ms. Serrano and Mr. Moradoz were able to pull up these data since they were allowed to use some of the computers of the target companies in line with the pretext that we used to gain entry into NEW FIELDS. I actively read and attentively observed the information reflected from the monitor display unit of the computers that Ms. Serrano and Mr. Moradoz were able to use. x x x.”^[40]

The Supreme Court found that the applicant and witnesses verified the information obtained from their confidential source and there was probable cause for the issuance of a search warrant, satisfying the requirement of personal knowledge.

“Initial hearsay information or tips from confidential informants could very well serve as basis for the issuance of a search warrant, if followed up personally by the recipient and validated.”^[39]

The Supreme Court’s decision reinforces the protection of intellectual property rights and clarifies the standards for obtaining search warrants in copyright infringement cases. This ruling clarifies that personal verification of information from confidential sources is sufficient to establish probable cause, upholding the validity of the search warrants. By emphasizing the importance of probable cause and upholding the warrants, the Supreme Court aims to deter copyright infringement and promote a fair marketplace for software developers.

FAQs

What was the key issue in this case?	The key issue was whether there was probable cause to issue search warrants for copyright infringement, and whether the three-day notice rule was properly applied. The Supreme Court focused on whether the evidence presented by Microsoft and Adobe was sufficient to establish probable cause.
What is the three-day notice rule?	The three-day notice rule requires that a motion be served at least three days before the hearing. However, this rule can be relaxed if the adverse party has an opportunity to respond to the motion.
What constitutes probable cause for a search warrant in this context?	Probable cause exists when there is sufficient evidence to lead a reasonable person to believe that a crime has been committed. In this case, common product identification numbers and the investigators’ observations provided probable cause.
Why did the Court of Appeals initially quash the search warrants?	The Court of Appeals initially quashed the search warrants because they believed the witnesses lacked personal knowledge. They relied on the fact that the information was initially gathered from a confidential informant.
What evidence did the Supreme Court find persuasive in reversing the CA’s decision?	The Supreme Court found the affidavit of Police Senior Inspector Padilla persuasive, as he personally verified the informant’s tip. Padilla observed the Product Keys and Identification Numbers of the Adobe and Microsoft software installed on the computers at New Fields.
What is the significance of common product identification numbers?	Common product identification numbers across multiple computers suggest that the software was illegally copied or unlicensed. Legitimate software installations typically have unique product identification numbers.
What was the role of OSI Market Researchers in this case?	The OSI Market Researchers, Norma L. Serrano and Michael A. Moradoz, were engaged by petitioners to investigate New Fields. They were trained to detect unauthorized copies of Adobe and Microsoft software and were able to gather information from the computers at New Fields.
What are the practical implications of this ruling for copyright holders?	This ruling strengthens the ability of copyright holders to protect their intellectual property through search warrants. It provides clarity on the requirements for establishing probable cause in software piracy cases.
How does this case affect the use of confidential informants in obtaining search warrants?	This case clarifies that initial tips from confidential informants can serve as a basis for search warrants. However, they must be followed up and personally validated by law enforcement or investigators.

The Supreme Court’s decision in Microsoft Corporation v. Samir Farajallah provides important guidance on the requirements for obtaining and executing search warrants in copyright infringement cases. This ruling confirms that personal verification of information from confidential sources is sufficient to establish probable cause, thereby supporting copyright holders’ efforts to protect their intellectual property rights. The decision underscores the importance of balancing the rights of copyright holders with the constitutional rights of individuals and corporations.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Microsoft Corporation and Adobe Systems Incorporated v. Samir Farajallah, G.R. No. 205800, September 10, 2014

September 10, 2014

Deceptive Imitation: Upholding Fair Competition and Protecting Businesses from Counterfeit Goods

In Roberto Co v. Keng Huan Jerry Yeung, the Supreme Court affirmed that Roberto Co was liable for unfair competition for conspiring to sell counterfeit Greenstone Medicated Oil. The court found that Co, along with others, intentionally deceived the public by selling imitation products packaged to resemble the original, causing financial loss to the legitimate distributors. This decision reinforces the importance of protecting businesses from unfair practices like the sale of counterfeit goods, ensuring fair competition in the marketplace. The ruling highlights the judiciary’s commitment to safeguarding intellectual property rights and preventing consumer deception. This case underscores the legal consequences for those who engage in deceptive business practices that undermine legitimate businesses and mislead consumers.

Passing Off: When Imitation Leads to Unfair Competition

The case revolves around Greenstone Medicated Oil, a product manufactured by Greenstone Pharmaceutical in Hong Kong, owned by Keng Huan Jerry Yeung, and exclusively imported and distributed in the Philippines by Taka Trading, owned by Yeung’s wife, Emma Yeung. The respondents, Sps. Yeung, filed a complaint against Roberto Co and others for trademark infringement and unfair competition, alleging that they conspired to sell counterfeit Greenstone products. The central question is whether Co’s actions constituted unfair competition, warranting liability for damages. This case highlights the legal boundaries businesses must respect when marketing products similar to those of competitors, especially concerning potential consumer deception.

The Sps. Yeung presented evidence that a bottle of Greenstone purchased from Royal Chinese Drug Store, owned by Ling Na Lau, was of dubious authenticity. Yeung, along with his son, discovered seven bottles of counterfeit Greenstone on display for sale. Pinky Lau, the store’s proprietor, identified Co as the source of the counterfeit items, which she referred to as “Tienchi Fong Sap Oil Greenstone.” This led to the complaint against Co, who denied supplying counterfeit items and claimed that his Greenstone stocks came exclusively from Taka Trading. The Laus, on the other hand, claimed that the items were left by an unidentified person and that Pinky was forced to sign the note implicating Co.

The Regional Trial Court (RTC) ruled in favor of Sps. Yeung, finding Co and the Laus guilty of unfair competition. The RTC highlighted the conspiracy to sell counterfeit products, which resulted in confusion and deception among consumers. However, the RTC did not find them liable for trademark infringement due to the lack of evidence that the “Greenstone” trademark was registered at the time of the complained acts. Co and the Laus appealed the RTC’s decision.

The Court of Appeals (CA) affirmed the RTC’s decision, emphasizing the trial court’s credibility in assessing witnesses. The CA sustained the finding of unfair competition, noting that Sps. Yeung’s evidence outweighed that of Co and the Laus. Consequently, the CA upheld the awards of damages in favor of Sps. Yeung. Co then filed a petition to the Supreme Court.

The Supreme Court upheld the CA’s decision, emphasizing that factual findings of the lower courts are generally not reviewable under Rule 45 of the Rules of Court. It was found that both the RTC and CA adequately considered the evidence presented and correctly concluded that Co committed unfair competition.

Unfair competition is legally defined as:

the passing off (or palming off) or attempting to pass off upon the public of the goods or business of one person as the goods or business of another with the end and probable effect of deceiving the public. This takes place where the defendant gives his goods the general appearance of the goods of his competitor with the intention of deceiving the public that the goods are those of his competitor.

In this case, Co was found to have conspired with the Laus in selling counterfeit Greenstone products, packaged identically to the original. This established a fraudulent intent, leading to liability for unfair competition. The Court deemed the award of P300,000.00 as temperate damages appropriate, recognizing the pecuniary loss suffered by Sps. Yeung due to damage to goodwill. Additionally, the awards for moral and exemplary damages, attorney’s fees, and costs of suit were sustained.

While liable for unfair competition, Co was cleared of trademark infringement. This distinction hinged on the absence of proof that the trademark “Greenstone” was registered when the acts occurred. This highlights the differences between trademark infringement and unfair competition, as detailed in Del Monte Corporation v. Court of Appeals:

(a) the former is the unauthorized use of a trademark, whereas the latter is the passing off of one’s goods as those of another; (b) fraudulent intent is unnecessary in the former, while it is essential in the latter; and (c) in the former, prior registration of the trademark is a pre-requisite to the action, while it is not necessary in the latter.

The case also refers to Section 6, Rule 18 of A.M. No. 10-3-10-SC, or the “Rules of Procedure for Intellectual Property Rights Cases,” which provides guidance on intent to defraud or deceive:

SEC. 6. Intent to defraud or deceive. – In an action for unfair competition, the intent to defraud or deceive the public shall be presumed:

a) when the defendant passes off a product as his by using imitative devices, signs or marks on the general appearance of the goods, which misleads prospective purchasers into buying his merchandise under the impression that they are buying that of his competitors;

b) when the defendant makes any false statement in the course of trade to discredit the goods and business of another; or

c) where the similarity in the appearance of the goods as packed and offered for sale is so striking.

Moreover, Article 2224 of the Civil Code regarding temperate damages provides:

Art. 2224. Temperate or moderate damages, which are more than nominal but less than compensatory damages, may be recovered when the court finds that some pecuniary loss has been suffered but its amount can not, from the nature of the case, be proved with certainty.

This legal framework underscores the importance of fair competition and the protection of intellectual property rights, emphasizing the consequences of deceptive practices that undermine legitimate businesses and mislead consumers. The Supreme Court’s ruling serves as a crucial reminder for businesses to respect intellectual property rights and avoid practices that deceive consumers.

FAQs

What was the key issue in this case?	The key issue was whether Roberto Co was liable for unfair competition for selling counterfeit Greenstone Medicated Oil. The Supreme Court ultimately affirmed his liability.
What is unfair competition as defined by law?	Unfair competition involves passing off one’s goods as those of another to deceive the public. It includes giving goods a similar appearance to a competitor’s with the intent to mislead consumers.
What evidence was presented against Roberto Co?	Evidence showed that Co supplied counterfeit Greenstone products to Royal Chinese Drug Store, which were then sold to the public. These products were packaged identically to the original.
Why was Roberto Co not found liable for trademark infringement?	Co was not found liable for trademark infringement because there was no proof that the “Greenstone” trademark was registered at the time of the complained acts. Registration is a prerequisite for trademark infringement claims.
What damages were awarded to Sps. Yeung?	Sps. Yeung were awarded P300,000.00 as temperate damages, along with moral and exemplary damages, attorney’s fees, and costs of suit. These damages were meant to compensate for the financial loss and damage to goodwill suffered.
What is the difference between trademark infringement and unfair competition?	Trademark infringement is the unauthorized use of a registered trademark, while unfair competition involves passing off one’s goods as those of another. Fraudulent intent is essential in unfair competition but not in trademark infringement.
What does it mean to “pass off” goods?	“Passing off” refers to the act of presenting one’s products as those of a competitor, misleading consumers into thinking they are buying the competitor’s goods. This often involves imitating the appearance or packaging of the original product.
What is the significance of the Supreme Court’s decision in this case?	The decision reinforces the importance of protecting businesses from unfair practices and deceptive acts that undermine fair competition. It highlights the legal consequences for those who engage in the sale of counterfeit goods.

The Supreme Court’s decision in Roberto Co v. Keng Huan Jerry Yeung underscores the critical importance of fair competition and consumer protection in the marketplace. By holding Co liable for unfair competition, the Court reaffirmed the legal consequences for businesses that engage in deceptive practices, ensuring a level playing field for legitimate enterprises and preventing consumer deception. This case serves as a vital precedent for future disputes involving intellectual property rights and unfair trade practices, reinforcing the need for businesses to uphold ethical standards and respect the rights of their competitors.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: ROBERTO CO VS. KENG HUAN JERRY YEUNG AND EMMA YEUNG, G.R. No. 212705, September 10, 2014

September 10, 2014

Trademark Ownership: Actual Use vs. Registration Rights

In a dispute over the “BIRKENSTOCK” trademark, the Supreme Court sided with Birkenstock Orthopaedie GmbH & Co. KG, emphasizing that prior use and actual ownership of a trademark outweigh mere registration. The Court held that failure to file a Declaration of Actual Use (DAU) results in the loss of trademark rights, and registration does not automatically confer ownership. This decision reinforces the principle that true and lawful owners of trademarks are protected, even if another party registers the mark first.

BIRKENSTOCK Battle: Who Truly Owns a Brand?

This case revolves around the rightful ownership and registration of the “BIRKENSTOCK” trademark in the Philippines. Birkenstock Orthopaedie GmbH & Co. KG, a German corporation, sought to register several trademarks containing the name “BIRKENSTOCK.” However, their efforts were challenged by Philippine Shoe Expo Marketing Corporation, who claimed prior use and registration of the mark “BIRKENSTOCK AND DEVICE” through its predecessor-in-interest. The core legal question is whether the Philippine Shoe Expo Marketing Corporation, through prior registration of the “BIRKENSTOCK” mark, could prevent Birkenstock Orthopaedie GmbH & Co. KG, who claimed to be the original owner, from registering their trademarks. This issue underscores the tension between trademark registration and the actual use of a mark in commerce.

The controversy began when Birkenstock applied for trademark registrations with the Intellectual Property Office (IPO). These applications were initially suspended due to Philippine Shoe Expo Marketing Corporation’s existing registration. Birkenstock then filed a petition for cancellation of this registration, but the case was dismissed when Philippine Shoe Expo Marketing Corporation failed to submit the required 10th Year Declaration of Actual Use (DAU). Despite this failure, Philippine Shoe Expo Marketing Corporation opposed Birkenstock’s subsequent applications, leading to a series of conflicting rulings from the IPO’s Bureau of Legal Affairs (BLA), the IPO Director General, and the Court of Appeals (CA).

The BLA initially sided with Philippine Shoe Expo Marketing Corporation, emphasizing their prior use of the mark in the Philippines. However, the IPO Director General reversed this decision, asserting that the failure to file the 10th Year DAU nullified Philippine Shoe Expo Marketing Corporation’s rights. On appeal, the CA reinstated the BLA’s ruling, which disallowed Birkenstock’s registration. The CA argued that Philippine Shoe Expo Marketing Corporation’s failure to file the 10th Year DAU did not negate their ownership due to continuous use and promotion of the trademark.

The Supreme Court, however, disagreed with the CA’s position, and ultimately sided with Birkenstock. A critical point in the Supreme Court’s analysis was the admissibility of Birkenstock’s documentary evidence. The Court acknowledged that the petitioner submitted photocopies of its evidence, violating Section 8.1 of the Rules on Inter Partes Proceedings, which generally requires certified true copies. However, the Court also recognized the IPO’s discretion in relaxing procedural rules in the interest of substantial justice. The IPO had already obtained the originals of these documents in a related cancellation case.

The Court emphasized that procedural rules are tools for achieving justice and should not be strictly applied to frustrate it. The Court cited Section 5 of the Rules on Inter Partes Proceedings, stating:

Sec. 5. Rules of Procedure to be followed in the conduct of hearing of Inter Partes cases. – The rules of procedure herein contained primarily apply in the conduct of hearing of Inter Partes cases. The Rules of Court may be applied suppletorily. The Bureau shall not be bound by strict technical rules of procedure and evidence but may adopt, in the absence of any applicable rule herein, such mode of proceedings which is consistent with the requirements of fair play and conducive to the just, speedy and inexpensive disposition of cases, and which will give the Bureau the greatest possibility to focus on the contentious issues before it.

The legal basis for the Supreme Court’s decision rested on Republic Act No. (RA) 166, which governs trademark registration. Section 12 of RA 166 states:

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 certificate 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 Court interpreted this provision as requiring the filing of a DAU within specified periods, failure of which results in automatic cancellation of the trademark registration. This failure is deemed equivalent to abandoning the trademark rights. Since the respondent admitted failing to file the 10th Year DAU, they were considered to have lost their rights to the “BIRKENSTOCK” mark. Furthermore, the Court emphasized that ownership of a trademark is not acquired through registration alone. Ownership is established through actual use in commerce.

The Court cited Section 2-A of RA 166, stating that:

Sec. 2-A. Ownership of trademarks, trade names and service marks; how acquired. – Anyone who lawfully produces or deals in merchandise of any kind or who engages in any lawful business, or who renders any lawful service in commerce, by actual use thereof in manufacture or trade, in business, and in the service rendered, may appropriate to his exclusive use a trademark, a trade name , or a service mark not so appropriated by another, to distinguish his merchandise, business or service from the merchandise, business or services of others. The ownership or possession of a trademark, trade name, service mark, heretofore or hereafter appropriated, as in this section provided, shall be recognized and protected in the same manner and to the same extent as are other property rights known to this law.

The Court further clarified that registration merely creates a prima facie presumption of ownership. This presumption can be challenged and overcome by evidence of prior use by another party. In this case, Birkenstock presented substantial evidence of its prior and continuous use of the “BIRKENSTOCK” mark in commerce, tracing its origins back to 1774. They submitted evidence of registrations in various countries, proving their long-standing claim to the mark.

The Court found that the Philippine Shoe Expo Marketing Corporation’s evidence, consisting mainly of sales invoices and advertisements, was insufficient to prove ownership. The Court quoted the IPO Director General:

The facts and evidence fail to show that [respondent] was in good faith in using and in registering the mark BIRKENSTOCK. BIRKENSTOCK, obviously of German origin, is a highly distinct and arbitrary mark. It is very remote that two persons did coin the same or identical marks. To come up with a highly distinct and uncommon mark previously appropriated by another, for use in the same line of business, and without any plausible explanation, is incredible. The field from which a person may select a trademark is practically unlimited. As in all other cases of colorable imitations, the unanswered riddle is why, of the millions of terms and combinations of letters and designs available, [respondent] had to come up with a mark identical or so closely similar tQ the [petitioner’s] if there was no intent to take advantage of the goodwill generated by the [petitioner’s] mark. Being on the same line of business, it is highly probable that the [respondent] knew of the existence of BIRKENSTOCK and its use by the [petitioner], before [respondent] appropriated the same mark and had it registered in its name.

FAQs

What was the key issue in this case?	The key issue was determining the rightful owner of the “BIRKENSTOCK” trademark in the Philippines, focusing on whether prior registration or actual use in commerce holds more weight.
What is a Declaration of Actual Use (DAU)?	A DAU is an affidavit required by Philippine law to be filed periodically by trademark registrants to prove that the mark is still in use. Failure to file a DAU can result in the cancellation of the trademark registration.
Does trademark registration automatically confer ownership?	No, trademark registration creates a prima facie presumption of ownership, but this presumption can be challenged by evidence of prior use by another party.
What evidence did Birkenstock present to prove ownership?	Birkenstock presented evidence of its long-standing use of the mark in commerce, tracing its origins back to 1774, and registrations in various countries.
Why did the Supreme Court allow Birkenstock’s photocopied documents?	The Court allowed the photocopies because the IPO had already obtained the original documents in a related cancellation case, and the Court prioritized substantial justice over strict procedural rules.
What is the significance of prior use in trademark law?	Prior use is a critical factor in determining trademark ownership. It establishes that the party has been using the mark in commerce to identify their goods or services before another party’s registration.
What was the basis for the IPO Director General’s decision?	The IPO Director General based its decision on the cancellation of the respondent’s trademark registration due to failure to file the 10th Year DAU and on evidence proving that Birkenstock was the true and lawful owner and prior user of the trademark.
How does this decision affect trademark law in the Philippines?	This decision reinforces the principle that actual use and continuous commercial activity are essential for maintaining trademark rights, and registration alone is not sufficient.

This case emphasizes the importance of not only registering a trademark but also actively using and maintaining it in commerce. It serves as a reminder that trademark rights are not absolute and can be lost through inaction or failure to comply with legal requirements. This ruling provides clarity on the weight given to prior use versus registration in trademark disputes.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: BIRKENSTOCK ORTHOPAEDIE GMBH AND CO. KG vs. PHILIPPINE SHOE EXPO MARKETING CORPORATION, G.R. No. 194307, November 20, 2013

August 18, 2014

Geographical Trademark and Unfair Competition: Protecting Business Identity in Real Estate

In Shang Properties Realty Corporation v. St. Francis Development Corporation, the Supreme Court ruled that Shang Properties did not commit unfair competition by using the marks “THE ST. FRANCIS TOWERS” and “THE ST. FRANCIS SHANGRI-LA PLACE.” This decision hinged on the geographically descriptive nature of the mark “ST. FRANCIS” and the lack of evidence proving Shang Properties intended to deceive the public or that St. Francis Development Corporation had established a secondary meaning for the mark.

Trademark Turf Wars: When Location Names Can’t Be Exclusively Claimed

The case began when St. Francis Development Corporation (SFDC), a real estate developer, accused Shang Properties of unfair competition and trademark infringement for using “ST. FRANCIS” in its property developments. SFDC argued it had established goodwill with the public through its use of the “ST. FRANCIS” mark in its St. Francis Square Commercial Center. Shang Properties countered that “ST. FRANCIS” was a geographically descriptive term, referring to the location of their projects on St. Francis Avenue and St. Francis Street (now Bank Drive) in Ortigas Center. This dispute reached the Intellectual Property Office (IPO), where initial rulings were mixed. Some BLA rulings favored SFDC, while others sided with Shang Properties, leading to appeals and consolidation of cases before the IPO Director-General.

The IPO Director-General reversed the BLA’s finding of unfair competition, stating that SFDC could not claim exclusive use of the “ST. FRANCIS” mark. He reasoned that the mark was geographically descriptive and that customers were unlikely to confuse the two companies’ projects simply because of the shared name. SFDC appealed this decision to the Court of Appeals (CA), which sided with SFDC, finding Shang Properties guilty of unfair competition and ordering them to cease using “ST. FRANCIS.” Shang Properties then elevated the case to the Supreme Court, challenging the CA’s ruling on unfair competition.

At the heart of the Supreme Court’s decision was an analysis of unfair competition under Section 168 of the Intellectual Property Code (IP Code). This section defines unfair competition as employing deception or bad faith to pass off one’s goods or services as those of another who has established goodwill. The key element is proving fraudulent intent, which the Court found lacking in this case. The Court referenced the case of Republic Gas Corporation v. Petron Corporation, reiterating that unfair competition involves “’the passing off (or palming off) or attempting to pass off upon the public of the goods or business of one person as the goods or business of another with the end and probable effect of deceiving the public.’”

The Supreme Court emphasized that the CA erred in assuming SFDC had the exclusive right to use the “ST. FRANCIS” mark. The Court highlighted the mark’s geographically descriptive nature, referencing Great Southern Bank v. First Southern Bank, which states that “‘descriptive geographical terms are in the ‘public domain’ in the sense that every seller should have the right to inform customers of the geographical origin of his goods.” A geographically descriptive term identifies the location of origin, such as cities or streets, and is generally not subject to exclusive appropriation unless it has acquired a secondary meaning.

To establish a secondary meaning, a geographically descriptive mark must be associated by the public with a particular source rather than just a place. This concept was explained in Burke-Parsons-Bowlby Corporation v. Appalachian Log Homes, Inc. Section 123.2 of the IP Code specifies the requirements for establishing secondary meaning. These include substantial commercial use in the Philippines, distinctiveness resulting from such use, and proof of substantially exclusive and continuous commercial use for five years before claiming distinctiveness. Without establishing secondary meaning, Section 123.1(j) of the IP Code prevents the registration of geographically descriptive marks.

In this case, the Supreme Court found that SFDC failed to prove it had acquired a secondary meaning for the “ST. FRANCIS” mark. While SFDC had been using the mark since 1992, its use was primarily limited to its projects within Ortigas Center. This localized use did not demonstrate substantial commercial use throughout the Philippines, nor did it establish a clear association between the mark and SFDC’s enterprise in the minds of buyers. Even if secondary meaning had been acquired, the Court clarified that this alone does not automatically prove fraud, which is essential for unfair competition.

Considering the notoriety of the Shangri-La brand in real estate, the Court found that Shang Properties’ use of the marks was intended to identify their projects’ location, not to deceive the public. The IPO Director-General’s observation that “for these kinds of goods or services there can be no description of its geographical origin as precise and accurate as that of the name of the place where they are situated” further supported this conclusion. The Supreme Court therefore exonerated Shang Properties from the charge of unfair competition.

FAQs

What was the key issue in this case?	The key issue was whether Shang Properties committed unfair competition by using the marks “THE ST. FRANCIS TOWERS” and “THE ST. FRANCIS SHANGRI-LA PLACE,” considering St. Francis Development Corporation’s prior use of the “ST. FRANCIS” mark.
What is a geographically descriptive mark?	A geographically descriptive mark is a name or term that identifies the geographical origin of goods or services. These marks are generally not protectable unless they acquire a secondary meaning.
What is secondary meaning in trademark law?	Secondary meaning occurs when a geographically descriptive mark becomes associated in the public’s mind with a particular source or company rather than just the location itself. Establishing secondary meaning gives the mark owner exclusive rights to use the mark.
What are the requirements to prove secondary meaning?	To prove secondary meaning, the trademark owner must show substantial commercial use of the mark in the Philippines, distinctiveness resulting from such use, and substantially exclusive and continuous commercial use for five years before claiming distinctiveness.
What is unfair competition under the IP Code?	Unfair competition involves using deception or bad faith to pass off one’s goods or services as those of another who has established goodwill. A key element is proving the intent to deceive the public.
Why did the Supreme Court rule in favor of Shang Properties?	The Court ruled in favor of Shang Properties because the mark “ST. FRANCIS” was geographically descriptive, St. Francis Development Corporation failed to prove secondary meaning, and there was no evidence of intent to deceive the public.
What is the significance of the Shangri-La brand in this case?	The notoriety of the Shangri-La brand in the real estate industry diluted Shang Properties’ propensity to merely ride on St. Francis Development Corporation’s goodwill, supporting the conclusion that their use was to indicate location.
Can a geographically descriptive mark ever be registered?	Yes, a geographically descriptive mark can be registered if it has acquired a secondary meaning, meaning the public associates the mark with a specific source or company rather than just the location.

This case clarifies the limitations on protecting geographically descriptive trademarks and underscores the importance of proving secondary meaning and fraudulent intent in unfair competition claims. It reinforces the principle that businesses cannot exclusively claim geographic names unless they have successfully established a strong association between the name and their brand in the public’s mind.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Shang Properties Realty Corporation vs. St. Francis Development Corporation, G.R. No. 190706, July 21, 2014

July 21, 2014

Challenging Evidence: When Can You Question a Search in Intellectual Property Cases?

The Supreme Court has clarified the timing and grounds for challenging the admissibility of evidence obtained during an arrest, particularly in cases involving intellectual property violations. The Court ruled that objections to an arrest must be raised before entering a plea during arraignment. Failing to do so prevents the accused from later questioning the legality of the arrest, affecting the admissibility of any evidence seized as a result. This decision underscores the importance of timely raising constitutional rights issues in legal proceedings.

Counterfeit Brandy and Constitutional Rights: A Question of Evidence

This case revolves around Jay Candelaria and Eric Basit, who were arrested during a buy-bust operation for allegedly selling counterfeit Fundador Brandy. The central legal question is whether the evidence seized during their arrest should be admissible in court, considering the petitioners’ claim that their arrest and the subsequent search were unlawful. The Regional Trial Court (RTC) initially denied the petitioners’ Motion to Suppress/Exclude Evidence, leading them to file a Petition for Certiorari with the Supreme Court.

The petitioners argued that the evidence against them was obtained in violation of their constitutional right against unreasonable searches and seizures. They claimed they were not committing any crime at the time of their arrest, making the warrantless search and seizure invalid. However, the RTC, while acknowledging the need to object to an arrest before arraignment, based its decision on the arresting officers’ affidavit, which stated that the arrest was a valid warrantless arrest because the accused were caught *in flagrante delicto.*

The Supreme Court addressed the procedural and substantive aspects of the case. Procedurally, the Court emphasized the necessity of demonstrating the absence of other adequate legal remedies before resorting to a special civil action like certiorari. Specifically, the court stated that “[H]e must allege in his petition and establish facts to show that any other existing remedy is not speedy or adequate x x x.” This requirement ensures that certiorari is used only when other avenues for redress are insufficient.

Building on this procedural point, the Court found that the petitioners had failed to adequately demonstrate the lack of an appeal or any other plain, speedy, and adequate remedy. Citing *Visca v. Secretary of Agriculture and Natural Resources*, the Court reiterated that an applicant for certiorari must explicitly state facts showing the absence of other remedies, which is an indispensable requirement for a valid petition.

x x x [I]t is incumbent upon an applicant for a writ of certiorari to allege with certainty in his verified petition facts showing that “there is no appeal, nor any plain, speedy and adequate remedy in the ordinary course of law,” because this is an indispensable ingredient of a valid petition for certiorari.

Substantively, the Court clarified the scope of certiorari, emphasizing that it is reserved for cases where a lower court acted without or in excess of jurisdiction, or with grave abuse of discretion. The Court held that in situations where the court has jurisdiction over the case and the parties, any mistake in the application of the law or appreciation of evidence constitutes an error in judgment, correctible only by appeal.

The writ of certiorari is restricted to truly extraordinary cases wherein the act of the lower court or quasi-judicial body is wholly void. Moreover, it is designed to correct errors of jurisdiction and not errors in judgment. The rationale of this rule is that, when a court exercises its jurisdiction, an error committed while so engaged does not deprive it of the jurisdiction being exercised when the error is committed.

The Court found that the RTC had jurisdiction over the case and the petitioners, thus any error in its interpretation of the law or assessment of evidence would be an error of judgment, not of jurisdiction. The determination of the admissibility of evidence, such as that obtained during a search, falls within the court’s jurisdiction. Any perceived error in this determination should be addressed through appeal, not certiorari.

The Supreme Court also addressed the issue of grave abuse of discretion, defining it as the capricious and whimsical exercise of judgment equivalent to an excess or lack of jurisdiction. The abuse of discretion must be so patent and gross as to amount to an evasion of a positive duty or a virtual refusal to perform a duty enjoined by law. The Court found no such grave abuse of discretion on the part of the RTC, as the court thoroughly considered the pleadings and the joint affidavit submitted by the arresting officers before rendering its judgment.

Finally, the Court noted that the petitioners violated the principle of hierarchy of courts by directly appealing to the Supreme Court from the RTC. As stated in *Rayos v. City of Manila* : “A direct invocation of the Supreme Court’s original jurisdiction to issue these writs should be allowed only when there are special and important reasons therefor, clearly and specifically set out in the petition”. The Court emphasized that petitions for certiorari assailing interlocutory orders of the RTC should be filed with the Court of Appeals, unless special and important reasons justify a direct invocation of the Supreme Court’s original jurisdiction, which were not present in this case.

FAQs

What was the key issue in this case?	The key issue was whether the RTC committed grave abuse of discretion in denying the petitioners’ motion to suppress evidence obtained during an allegedly unlawful arrest for violating intellectual property laws.
What is a Motion to Suppress/Exclude Evidence?	A Motion to Suppress/Exclude Evidence is a request to a court to prohibit certain evidence from being presented in a trial, typically because it was obtained illegally or in violation of constitutional rights.
*What does “in flagrante delicto” mean?*	“In flagrante delicto” is a Latin term that means “caught in the act” of committing a crime. It is a legal justification for a warrantless arrest.
*What is a writ of certiorari?*	A writ of certiorari is a special civil action used to review decisions of lower courts or tribunals, typically on the grounds that they acted without jurisdiction, in excess of jurisdiction, or with grave abuse of discretion.
*Why was the Petition for Certiorari* dismissed?**	The Petition was dismissed because the petitioners failed to allege that there was no appeal or any other plain, speedy, and adequate remedy available, and because the RTC’s decision was deemed an error of judgment, not of jurisdiction.
What is grave abuse of discretion?	Grave abuse of discretion is the capricious and whimsical exercise of judgment equivalent to an excess or lack of jurisdiction, or the exercise of power in an arbitrary or despotic manner.
What is the principle of hierarchy of courts?	The principle of hierarchy of courts dictates that cases should be filed with the lowest appropriate court, and higher courts should only be invoked when there are special and important reasons.
What was the violation the petitioners were initially charged with?	The petitioners were charged with violating Section 155 in relation to Section 170 of Republic Act No. 8293, also known as the Intellectual Property Code of the Philippines, for selling counterfeit Fundador Brandy.

This case serves as a reminder of the importance of adhering to procedural rules and understanding the proper scope of legal remedies. Litigants must raise objections to arrests and searches promptly and pursue appeals for errors in judgment, rather than resorting to certiorari without demonstrating the inadequacy of other remedies. Understanding this ruling is essential for ensuring protection of constitutional rights in intellectual property and other criminal cases.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Jay Candelaria and Eric Basit v. Regional Trial Court, G.R. No. 173861, July 14, 2014

July 14, 2014

Patent Infringement: When a Permanent Injunction Renders a Preliminary Injunction Moot

In a patent infringement case, the Supreme Court ruled that when a lower court issues a permanent injunction, any pending questions about a preliminary injunction become irrelevant. This means the court won’t decide on the preliminary injunction’s validity because the permanent injunction already resolves the issue. The decision emphasizes judicial efficiency by avoiding decisions that have no practical effect due to later events. This clarifies the procedural implications when resolving intellectual property disputes involving patents and injunctions, ensuring resources are focused on current and enforceable remedies.

From Provisional Remedy to Permanent Bar: Did the CA Jump the Gun on the Preliminary Injunction?

This case, Sahar International Trading, Inc. v. Warner Lambert Co., LLC and Pfizer, Inc. (Philippines), revolves around a dispute over the pharmaceutical substance Atorvastatin. Warner Lambert, the patent holder, and Pfizer, its exclusive licensee in the Philippines, accused Sahar International Trading of infringing on their patents by selling a similar product under the name Atopitar. The legal battle started with Warner Lambert and Pfizer seeking a preliminary injunction to stop Sahar from selling Atopitar while the main case was ongoing. The Regional Trial Court (RTC) initially denied this request, but the Court of Appeals (CA) reversed the decision, granting the preliminary injunction. However, the story doesn’t end there. The RTC eventually dismissed the main case, only for the CA to reverse that decision as well, finding Sahar liable for patent infringement and issuing a permanent injunction. This sequence of events led the Supreme Court to declare the issue of the preliminary injunction moot.

The central legal question before the Supreme Court was whether the CA was correct in issuing a preliminary injunction against Sahar. However, the subsequent issuance of a permanent injunction by the CA in the main case significantly altered the landscape. The Supreme Court, in its resolution, focused on the principle of mootness. A case becomes moot when it no longer presents a justiciable controversy due to supervening events. In such instances, any court ruling would lack practical value or legal effect. This principle is deeply rooted in the Philippine legal system, aiming to prevent the courts from engaging in academic exercises that do not resolve actual disputes. The Supreme Court cited Peñafrancia Sugar Mill, Inc. v. Sugar Regulatory Administration to support this principle, explaining that a moot case ceases to present a justiciable controversy, rendering any adjudication practically useless.

Applying this principle, the Supreme Court determined that the CA’s decision to make the preliminary injunction permanent rendered the question of its initial issuance moot. The Court reasoned that since the patent infringement case had already been resolved on appeal with a permanent injunction in place, deciding whether the preliminary injunction was initially justified would be a purely academic exercise. The practical effect of the permanent injunction superseded any prior debate over the preliminary one. To further clarify, the Supreme Court emphasized that the main issue was resolved in the appeal, making any decision on the preliminary injunction unnecessary and irrelevant. The legal discussion pivoted to the procedural implications of the supervening event, rendering the original question academic. Here is the applicable excerpt from the decision:

A case or issue is considered moot and academic when it ceases to present a justiciable controversy by virtue of supervening events, so that an adjudication of the case or a declaration on the issue would be of no practical value or use. In such instance, there is no actual substantial relief which a petitioner would be entitled to, and which would be negated by the dismissal of the petition. Courts generally decline jurisdiction over such case or dismiss it on the ground of mootness. This is because the judgment will not serve any useful purpose or have any practical legal effect because, in the nature of things, it cannot be enforced.

The procedural history of the case is crucial to understanding the Supreme Court’s decision. Warner Lambert, as the registered owner of the patents for Atorvastatin, possessed the legal right to protect its intellectual property. Under Section 76 of the Intellectual Property Code (RA 8293), patent infringement occurs when someone makes, uses, sells, or imports a patented product without the patentee’s authorization. To reinforce this point, consider the explicit wording of the law:

Sec. 76. Civil Action for Infringement. –
76.1. The making, using, offering for sale, selling, or importing a patented product or a product obtained directly or indirectly from a patented process, or the use of a patented process without the authorization of the patentee constitutes patent infringement.

Pfizer, as the exclusive licensee, shared this right within the Philippines. When they discovered Sahar was selling Atopitar, containing Atorvastatin Calcium, they initiated legal action to protect their interests. The application for a preliminary injunction was a tactical move to prevent further potential damages pending the final resolution of the case. The RTC’s initial denial was based on the reasoning that granting the injunction would prematurely dispose of the main case. The CA disagreed, emphasizing that a preliminary injunction is meant to preserve the status quo and prevent irreparable injury. Ultimately, the CA’s grant of the preliminary injunction was aimed to provide immediate relief while the court determined the facts of the case.

The twist came with the RTC’s dismissal of the main case, followed by the CA’s reversal and finding of patent infringement. With the CA’s subsequent decision, the question of a preliminary injunction was rendered moot. The permanent injunction provided the ultimate relief sought, rendering any decision on the preliminary injunction a mere academic exercise. The Supreme Court’s decision underscores the importance of judicial economy and the principle that courts should only decide live controversies. Furthermore, it highlights the provisional nature of preliminary injunctions. These are temporary measures designed to maintain the status quo, pending a full determination of the merits of a case. Once a final judgment is rendered, the need for a preliminary injunction disappears. With that being said, here’s a final, critical element of the Supreme Court’s decision:

The Supreme Court explicitly stated that it would be premature to delve into the merits of the CA’s decision finding Sahar liable for patent infringement. This was because the appeal before it concerned only the preliminary injunction, not the substantive issues of patent infringement. The Supreme Court’s decision to dismiss the petition on the ground of mootness leaves the CA’s ruling on patent infringement undisturbed. The final decision of the Court of Appeals making the writ of preliminary injunction permanent was the determining factor.

FAQs

What was the key issue in this case?	The main issue was whether the Court of Appeals (CA) was correct in issuing a preliminary injunction to stop Sahar International Trading from selling a product that allegedly infringed on Warner Lambert’s patent. However, the Supreme Court dismissed the petition because the CA later issued a permanent injunction, making the issue of the preliminary injunction moot.
What does "mootness" mean in this context?	Mootness means that the issue is no longer a live controversy. Since the CA issued a permanent injunction, the question of whether a preliminary injunction should have been issued became irrelevant.
What is a preliminary injunction?	A preliminary injunction is a temporary court order that prevents a party from taking certain actions while a case is ongoing. It is designed to preserve the status quo and prevent irreparable harm until the court can make a final decision on the merits of the case.
What is a permanent injunction?	A permanent injunction is a final court order that permanently prohibits a party from taking certain actions. It is issued after a full trial on the merits and is intended to provide a long-term remedy for a legal wrong.
What is patent infringement?	Patent infringement occurs when someone makes, uses, sells, or imports a patented invention without the permission of the patent holder. Patent law protects inventors by giving them exclusive rights to their inventions for a certain period of time.
What was the product in question in this case?	The product in question was Atorvastatin, a pharmaceutical substance used to lower cholesterol. Warner Lambert held patents for Atorvastatin and its calcium form, which were marketed under the brand name Lipitor.
Why did the Supreme Court dismiss the petition?	The Supreme Court dismissed the petition because the CA’s subsequent issuance of a permanent injunction rendered the issue of the preliminary injunction moot and academic. This is because the permanent injunction already provided the relief sought by Warner Lambert and Pfizer.
What is the significance of the CA’s decision in CA-G.R. CV No. 97495?	The CA’s decision in CA-G.R. CV No. 97495 was significant because it reversed the RTC’s decision and found Sahar liable for patent infringement. It also made the preliminary injunction permanent, effectively resolving the dispute in favor of Warner Lambert and Pfizer.

In conclusion, the Supreme Court’s decision in this case underscores the importance of mootness in judicial proceedings. It serves as a reminder that courts should focus on resolving live controversies and avoid issuing rulings that have no practical effect. The dismissal of the petition regarding the preliminary injunction reflects the principle that provisional remedies are superseded by final judgments. This approach ensures that judicial resources are used efficiently and that legal decisions have a tangible impact on the parties involved.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Sahar International Trading, Inc. vs. Warner Lambert Co., LLC and Pfizer, Inc. (Philippines), G.R. No. 194872, June 09, 2014

June 9, 2014

Trademark Ownership: Priority of Use vs. International Recognition

The Supreme Court affirmed that Renaud Cointreau & Cie, a French partnership, is the rightful owner of the “LE CORDON BLEU & DEVICE” trademark, despite Ecole De Cuisine Manille’s prior use in the Philippines. The Court prioritized international recognition and prior registration in the country of origin, France, under the Paris Convention, over local prior use. This decision underscores that international treaties and the principle of protecting well-known foreign marks can override domestic use in trademark disputes, especially when the local user was aware of the mark’s existence and reputation abroad.

Culinary Clash: Who Holds the Recipe for a Trademark Dispute?

This case revolves around a dispute over the trademark “LE CORDON BLEU & DEVICE” between Ecole De Cuisine Manille (Ecole), claiming prior use in the Philippines, and Renaud Cointreau & Cie (Cointreau), asserting ownership based on international recognition and registration in France. The central legal question is: who has the superior right to register the trademark in the Philippines? This involves navigating the complexities of trademark law, particularly the interplay between local use, international treaties like the Paris Convention, and the principle of protecting well-known foreign marks.

The Intellectual Property Office (IPO) Director General reversed the Bureau of Legal Affairs’ (BLA) decision, siding with Cointreau. The IPO Director General emphasized that ownership, not mere use, is the primary determinant for registration. He considered Cointreau’s undisputed use of the mark since 1895 for its culinary school in Paris, France, and the fact that Ecole’s directress had trained there. This suggested Ecole’s appropriation of the mark was unjust. Conversely, the BLA initially favored Ecole, highlighting the significance of trademark adoption and use within the Philippine commerce and that the law on trademarks rests upon the doctrine of nationality or territoriality.

The Court of Appeals (CA) affirmed the IPO Director General’s decision, emphasizing that Cointreau, being the true owner, has the right to register the mark in the Philippines under Section 37 of Republic Act (R.A.) No. 166, the then-governing trademark law. It also noted that Ecole’s use of the mark, even if prior, was in bad faith, and Ecole lacked a certificate of registration that would notify Cointreau of its use. In resolving the dispute, the Supreme Court had to carefully examine the provisions of R.A. No. 166, particularly Sections 2 and 2-A.

Under Section 2 of R.A. No. 166, the trademark laws state:

Section 2. What are registrable. — Trademarks, trade names and service marks owned by persons, corporations, partnerships or associations domiciled in the Philippines and by persons, corporations, partnerships or associations domiciled in any foreign country may be registered in accordance with the provisions of this Act: Provided, That said trademarks, trade names, or service marks are actually in use in commerce and services not less than two months in the Philippines before the time the applications for registration are filed; And provided, further, That the country of which the applicant for registration is a citizen grants by law substantially similar privileges to citizens of the Philippines, and such fact is officially certified, with a certified true copy of the foreign law translated into the English language, by the government of the foreign country to the Government of the Republic of the Philippines.

Further, Section 2-A defines trademark ownership and how it is acquired under the law:

Section 2-A. Ownership of trademarks, trade names and service marks; how acquired. — Anyone who lawfully produces or deals in merchandise of any kind or who engages in any lawful business, or who renders any lawful service in commerce, by actual use thereof in manufacture or trade, in business, and in the service rendered, may appropriate to his exclusive use a trademark, a trade name, or a service mark from the merchandise, business, or service of others. The ownership or possession of a trademark, trade name or service mark not so appropriated by another, to distinguish his merchandise, business or service from the merchandise, business or services of others. The ownership or possession of a trademark, trade name, service mark, heretofore or hereafter appropriated, as in this section provided, shall be recognized and protected in the same manner and to the same extent as are other property rights known to this law.

The Supreme Court found Ecole’s argument, that it was the first to use the mark in the Philippines and therefore entitled to registration, untenable. While Section 2 of R.A. No. 166 requires actual use in commerce in the Philippines for two months before registration, it emphasizes ownership as the primary requirement. Section 2-A further clarifies that ownership is acquired through lawful production or dealing in merchandise, and that the mark must not have been previously appropriated by another. This highlights the importance of prior claim and good faith in trademark disputes.

Furthermore, the Philippines is a signatory to the Paris Convention for the Protection of Industrial Property, which obligates it to protect the trade names of nationals of signatory countries, whether or not the trade name is part of a trademark. Articles 6bis and 8 of the Paris Convention state that member countries must:

ARTICLE 6bis

(1) The countries of the Union undertake, ex officio if their legislation so permits, or at the request of an interested party, to refuse or to cancel the registration, and to prohibit the use, of a trademark which constitutes 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 as being already the mark of a person entitled to the benefits of this Convention and used for identical or similar goods. These provisions shall also apply when the essential part of the mark constitutes a reproduction of any such well- known mark or an imitation liable to create confusion therewith.

ARTICLE 8

A trade name shall be protected in all the countries of the Union without the obligation of filing or registration, whether or not it forms part of a trademark.

Cointreau’s long-standing use of the mark in France since 1895, coupled with Ecole’s awareness of this use, weighed heavily in the Court’s decision. This awareness was underscored by the fact that Ecole’s directress had trained at Cointreau’s Le Cordon Bleu culinary school in Paris. The court emphasized that Ecole could not claim ownership over a mark already in use by Cointreau. The decision highlights the interplay of prior use, international recognition, and good faith in determining trademark ownership.

The court’s decision ultimately rested on the principle that Ecole’s appropriation of the “LE CORDON BLEU & DEVICE” mark was not done in good faith, as it was fully aware of Cointreau’s prior use. This is further substantiated by the sequence of registration and application between Cointreau and Ecole. Cointreau registered its trademark first, both abroad and locally. In addition, Cointreau has 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. Ecole’s application was filed only on February 24, 1992, after Cointreau filed its trademark application. This underscores the importance of priority in trademark registration.

FAQs

What was the key issue in this case?	The key issue was determining the rightful owner of the “LE CORDON BLEU & DEVICE” trademark: Ecole, based on prior use in the Philippines, or Cointreau, based on international recognition and prior registration in France.
What is the significance of the Paris Convention in this case?	The Paris Convention obligates signatory countries, including the Philippines, to protect the trade names of nationals of other signatory countries, even without local registration, thus favoring Cointreau.
Did Ecole’s prior use in the Philippines give them a superior right to the trademark?	No, the Court ruled that Ecole’s prior use was not in good faith because they were aware of Cointreau’s prior use of the mark internationally.
Why was Cointreau considered the rightful owner of the trademark?	Cointreau’s registration in its country of origin, prior use since 1895, and Ecole’s knowledge of such use, established Cointreau as the rightful owner of the mark.
What does R.A. No. 166 say about trademark ownership?	R.A. No. 166 emphasizes that ownership of a trademark is acquired through lawful production or dealing in merchandise, provided the mark has not been previously appropriated by another.
How did Ecole’s directress’s training at Le Cordon Bleu affect the case?	It demonstrated Ecole’s awareness of Cointreau’s use of the mark, undermining their claim of good faith in appropriating the mark for their own use.
What is the current law on trademarks in the Philippines?	The current law is Republic Act No. 8293, also known as the Intellectual Property Code of the Philippines, as amended, which has dispensed with the requirement of prior actual use at the time of registration.
What is the main function of a trademark?	The function of a trademark is to distinctly point out the origin or ownership of goods or services and to protect the manufacturer against the sale of inferior or different articles as its product.

In conclusion, the Supreme Court’s decision in this case underscores the importance of international treaties and good faith in trademark disputes. It serves as a reminder that prior use alone does not guarantee trademark ownership, especially when the user is aware of a prior claim by another party abroad. The ruling also highlights that current trademark laws, like Republic Act No. 8293, have further evolved to prioritize ownership over prior use, reflecting a shift towards greater protection of international brands and intellectual property rights.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Ecole de Cuisine Manille v. Renaud Cointreau, G.R. No. 185830, June 05, 2013

February 24, 2014