G.R. No. L-53672 - Bata Industries, Ltd. vs. Court of Appeals

Case Summary (G.R. No. L-53672)

Factual Background

New Olympian Rubber Products Co., Inc. filed to register the trademark BATA for casual rubber shoes and alleged continuous use of the mark in the Philippines since July 1, 1970. Bata Industries, Ltd. opposed registration, asserting that it owned and had not abandoned the trademark. The parties stipulated that Bata Industries, Ltd. had no license to do business in the Philippines, was not then selling footwear under the trademark BATA in the Philippines, and had no licensing agreement with any local entity to sell its products in the Philippines. The evidence showed that shoes bearing the Bata name, manufactured by Gerbec and Hrdina of Czechoslovakia, had been sold in the Philippines before World War II and that some shoes made by Bata of Canada may have been sold until 1948, but that no foreign entity had registered the trademark BATA in the Philippines.

Philippine Patent Office Determination

The Director of Patents found that Bata Industries, Ltd. had, to all intents and purposes, technically abandoned the trademark BATA in the Philippines. The Director further found that New Olympian Rubber Products Co., Inc. had overwhelmingly and convincingly established its right to the trademark by demonstrating lawful use in commerce from July 1, 1970, substantial expenditure on advertising, and the creation of goodwill in the Philippines through its efforts. The Director noted that the applicant had obtained three copyright registrations for the word BATA and had claimed a Tagalog meaning for the term, and on that basis dismissed the opposition and ordered registration in favor of the domestic corporation.

Court of Appeals Proceedings

Bata Industries, Ltd. appealed the Director's decision to the Court of Appeals. A decision authored by Justice Cortez dated August 9, 1979, with Justices Serrano and Jimenez concurring, reversed the Director of Patents. A motion for reconsideration filed by New Olympian Rubber Products Co., Inc. was denied by the same panel on October 17, 1979. Subsequently, a different appellate panel composed of Justices Gutierrez, Agrava, and Nocon rendered a resolution setting aside the August 9, 1979 decision and affirming the Director of Patents. Justice Gutierrez authored an extended resolution supporting affirmation.

Parties' Contentions

Bata Industries, Ltd. maintained that it owned the trademark BATA and had not abandoned it, and it questioned the circumstances that accompanied the issuance of the Court of Appeals' later resolutions, suggesting impropriety in a new panel reaching a different conclusion. New Olympian Rubber Products Co., Inc. contended that it had used the mark since 1970, invested heavily in advertising to build goodwill in the Philippines, and had acquired copyright registrations for the word BATA, thereby entitling it to registration and protection. The Director of Patents concluded that applicant's evidence was clear and convincing and that opposer lacked Philippine goodwill that would be damaged by registration.

Supreme Court Ruling on Reconsideration

The Supreme Court denied the motion for reconsideration for lack of merit. The Court expressly adopted and agreed with the reasoning set forth in the extended resolution penned by Justice Gutierrez that had earlier affirmed the Director of Patents. The Court held that any slight goodwill generated by the Czechoslovakian product during the Commonwealth years had been completely abandoned and lost in the more than thirty-five years that elapsed since the liberation of Manila. The Court concluded that more than substantial evidence supported the Director of Patents' findings and that the appellant had no Philippine goodwill that would be injured by registration of the mark in the appellee's favor. The motion for reconsideration was denied and no special pronouncement as to costs was made.

Legal Basis and Reasoning

The Court relied on principles governing trademark ownership and abandonment within the territorial jurisdiction of the Philippines. It treated long nonuse and the absence of privity or succession in interest from prior foreign users as establishing abandonment of any residual goodwill attributable to Czechoslovakian manufacturers. The Court accepted the Director of Patents' factual findings that New Olympian Rubber Products Co., Inc. had established lawful use in commerce beginning July 1, 1970, had expended funds on advertising to develop goodwill, and had obtained copyright registrations for the word BATA, all of which supported registration. The Court gave weight to the Director's finding that the opposer had not shown continuing Philippine goodwill or proprietary rights that would be impaired by registration

Case Syllabus (G.R. No. L-53672)

Parties and Procedural Posture

BATA INDUSTRIES, LTD. filed a petition that was denied on October 27, 1980, and thereafter moved for reconsideration.
THE HONORABLE COURT OF APPEALS, TIBURCIO S. EVALLE, DIRECTOR OF PATENTS, and NEW OLYMPIAN RUBBER PRODUCTS CO., INC. appeared as respondents.
A hearing on the motion for reconsideration was held on June 7, 1982.
The Court of Appeals initially rendered a decision on August 9, 1979, which was later set aside by a subsequent resolution of a different CA division.
The Supreme Court, Second Division, denied the motion for reconsideration for lack of merit and made no special pronouncement as to costs.

Key Factual Allegations

New Olympian Rubber Products Co., Inc. sought registration of the mark BATA for casual rubber shoes in Inter Partes Case No. 654 of the Philippine Patent Office.
The applicant alleged continuous use of the mark BATA in commerce since July 1, 1970.
Bata Industries, Ltd. opposed registration on the ground that it owned and had not abandoned the trademark BATA.
Evidence showed that Bata shoes made by Gerbec and Hrdina of Czechoslovakia were sold in the Philippines prior to World War II and that some shoes made by Bata of Canada were sold until 1948.
The trademark BATA was never registered in the Philippines by any foreign entity.

Stipulations

The parties stipulated that Bata Industries, Ltd. had no license to do business in the Philippines.
The parties stipulated that Bata Industries, Ltd. was not presently selling footwear under the trademark BATA in the Philippines.
The parties stipulated that Bata Industries, Ltd. had no licensing agreement with any local entity or firm to sell its products in the Philippines.

Philippine Patent Office Findings

The Director of Patents found that opposer had "technically abandoned" the trademark BATA in the Philippines.
The Director found that the applicant had overwhelmingly and convincingly established its right to the trademark BATA by lawful use in commerce since July 1, 1970.
The Director found that the applicant had spent considerable money and effort advertising the mark and had thereby created the goodwill associated with BATA in the Philippines.
The Director noted that the applicant had secured three copyright registrations for the word BATA, which fortified its claim of ownership.
The Director dismissed the opposition and ordered registration of the trademark BATA in favor of the domestic corporation.

Court of Appeals Proceedings

Bata Industries, Ltd. appealed the Director of Patents' decision to the Court of Appeals.
A CA decision dated August