Case Summary (G.R. No. 194307)
Procedural Posture and Relief Sought
Petitioner sought registration of various BIRKENSTOCK marks (Class 25 and Class 10) by trademark applications filed in 1994. Registration of those applications was initially suspended because respondent’s predecessor held Registration No. 56334 for BIRKENSTOCK AND DEVICE (issued October 21, 1993). Petitioner previously filed a cancellation petition against Registration No. 56334 (Cancellation Case). Registration No. 56334 was later cancelled for respondent’s failure to file the 10th Year Declaration of Actual Use (DAU). After cancellation, petitioner’s applications were published and respondent filed oppositions. Administrative rulings at the IPO Bureau of Legal Affairs (BLA), IPO Director General, the Court of Appeals (CA), and finally the Supreme Court followed.
Facts Relevant to Ownership and Use
Petitioner presented historical and international trademark registrations and evidence of prior and worldwide use tracing the mark’s origin to 1774 and continuous use by petitioner’s predecessors. Respondent relied on its previously registered mark (Registration No. 56334), copies of sales invoices and advertisements, and a 1991 Certificate of Copyright Registration for the word BIRKENSTOCK obtained by respondent’s predecessor. Respondent admitted failure to file the 10th Year DAU on or before October 21, 2004 for Registration No. 56334, leading to its cancellation.
Rulings Below
BLA (May 28, 2008): Sustained respondent’s oppositions and ordered rejection of petitioner’s applications, finding confusing similarity and respondent as prior user; discounted petitioner’s evidence as inadmissible photocopies. IPO Director General (Dec. 22, 2009): Reversed BLA, allowed petitioner’s registrations, found petitioner the true and lawful owner and rejected respondent’s copyright argument as irrelevant. CA (June 25, 2010): Reversed Director General, reinstated BLA decision, held respondent retained prior rights by continuous use despite failure to file DAU and found petitioner’s documentary evidence noncompliant with rules. Supreme Court granted review.
Issue Presented to the Supreme Court
Whether the subject BIRKENSTOCK marks should be registered in the name of petitioner, focusing on (1) admissibility of petitioner’s documentary evidence despite being photocopies, and (2) whether petitioner established ownership and the right to register given respondent’s prior registration that was cancelled for failure to file the DAU.
Admissibility of Petitioner’s Documentary Evidence
The Court applied the principle that procedural rules are tools to facilitate justice and must not be rigidly applied where technicality would frustrate substantive rights. The IPO’s Rules on Inter Partes Proceedings (Section 5) expressly permit the Bureau not to be bound by strict technical rules of procedure and evidence and to adopt procedures consistent with fair play and just, speedy, inexpensive disposition. The Court noted that the IPO already possessed the originals of petitioner’s documents from the earlier Cancellation Case; under the circumstances and given the merits, the Director General’s relaxation of the requirement for certified true copies was a valid exercise of discretion to secure substantial justice. Consequently, the photocopies were admissible.
Legal Principles on Ownership, Registration, and Effect of Failure to File DAU
Under RA 166 Section 12, failure to file the required DAU within prescribed periods results in automatic cancellation of registration and is tantamount to abandonment of rights in the mark. Registration itself creates only a rebuttable prima facie presumption of ownership and exclusive right to use; actual ownership derives from use in commerce and may be proven by prior use. Section 2 of RA 166 required two months’ use in the Philippines before filing; Section 2-A recognizes ownership through lawful actual use in commerce (not necessarily limited to use within the Philippines for the purpose of acquiring ownership). The IP Code carried forward the DAU requirements (Sections 124.2 and 145) and implementing rules (Rules 204 and 801) underline that non-filing leads to removal from the Register. Section 236 of the IP Code preserves existing rights acquired in good faith prior to the Code’s effective date, but it cannot rescue a registrant who already lost rights through abandonment by failing to meet statutory DAU requirements.
Application of Law to Facts: Abandonment and Prior Use
Respondent admitted non-filing of the 10th Year DAU for Registration No. 56334 by the deadline; under RA 166 this resulted in cancellation and legal abandonment of any right or interest in the mark. Because Registration No. 56334 was cancelled for non-filing, respondent could no longer rely on that registration as a barrier to petitioner’s applications. Petitioner presented substantial evidence of originating and prior international and local use of the BIRKENSTOCK mark predating respondent’s activities and of continuous use by petitioner’s predecessors; respondent’s evide
...continue readingCase Syllabus (G.R. No. 194307)
Citation and Panel
- Full citation as presented: 721 Phil. 867; 110 OG No. 33, 5178 (August 18, 2014); SECOND DIVISION; G.R. No. 194307, November 20, 2013.
- Opinion penned by Justice Perlas-Bernabe.
- Decision: petition granted; the Court of Appeals Decision dated June 25, 2010 and Resolution dated October 27, 2010 in CA-G.R. SP No. 112278 reversed and set aside; the IPO Director General’s Decision dated December 22, 2009 reinstated.
- Concurring Justices: Brion (Acting Chairperson), Del Castillo, Perez, and Reyes, JJ.; Reyes designated Additional Member per raffle dated October 17, 2012.
Parties and Nature of Action
- Petitioner: Birkenstock Orthopaedie GmbH & Co. KG (formerly Birkenstock Orthopaedie GmbH), a German corporation, seeking registration of various trademark applications in the Philippines.
- Respondent: Philippine Shoe Expo Marketing Corporation (and its predecessor-in-interest, Shoe Town International and Industrial Corporation), opposing petitioner’s trademark applications and asserting prior rights in the BIRKENSTOCK mark.
- Nature of the proceeding before the Supreme Court: Petition for Review on Certiorari contesting the Court of Appeals’ reversal of the IPO Director General’s allowance of petitioner’s trademark registrations.
Facts — Trademark Applications and Subject Marks
- Petitioner filed three trademark applications with the Intellectual Property Office (IPO):
- TASN 4-1994-091508 for the mark “BIRKENSTOCK” for goods in Class 25 (filed March 11, 1994).
- TASN 4-1994-091509 for the mark “BIRKENSTOCK BAD HONNEF-RHEIN & DEVICE COMPRISING OF ROUND COMPANY SEAL AND REPRESENTATION OF A FOOT, CROSS AND SUNBEAM” for goods in Class 25 (filed March 11, 1994).
- TASN 4-1994-095043 for the mark similarly described for goods in Class 10 (filed September 5, 1994).
- Registration proceedings for these subject applications were initially suspended because of an existing local registration (Registration No. 56334 dated October 21, 1993) for the mark “BIRKENSTOCK AND DEVICE” in the name of Shoe Town International and Industrial Corporation (predecessor-in-interest of respondent).
Prior Registration, Cancellation, and Related Cancellation Case
- On May 27, 1997 petitioner filed a petition for cancellation of Registration No. 56334, asserting it was the lawful and rightful owner of the BIRKENSTOCK marks (the Cancellation Case).
- Respondent’s predecessor-in-interest assigned Registration No. 56334 to respondent on February 24, 2004.
- Respondent (and/or its predecessor-in-interest) failed to file the required 10th Year Declaration of Actual Use (10th Year DAU) for Registration No. 56334 on or before October 21, 2004.
- Failure to file the 10th Year DAU resulted in the cancellation of Registration No. 56334; as a consequence, the earlier cancellation case was dismissed as moot and academic.
Publication and Oppositions
- The cancellation of Registration No. 56334 allowed petitioner’s subject applications to be published in the IPO e-Gazette on February 2, 2007.
- In response, respondent filed three separate verified notices of opposition to the subject applications, docketed as Inter Partes Case Nos. 14-2007-00108, 14-2007-00115, and 14-2007-00116.
- Respondent’s principal claims in opposition included:
- That respondent and/or its predecessor-in-interest had been using “BIRKENSTOCK AND DEVICE” in the Philippines for more than 16 years.
- That the subject applications covered marks identical to Registration No. 56334 and thus petitioner had no right to register such marks.
- That respondent’s predecessor-in-interest obtained a Certificate of Copyright Registration No. 0-11193 for the word “BIRKENSTOCK” on November 15, 1991.
- That despite failing to file the 10th Year DAU, respondent continued to use “BIRKENSTOCK AND DEVICE” in lawful commerce and had filed TASN 4-2006-010273 as a re-application of Registration No. 56334 to record continued ownership.
Consolidation and BLA Ruling (IPO Bureau of Legal Affairs)
- On November 13, 2007, the Bureau of Legal Affairs (BLA) of the IPO issued Order No. 2007-2051 consolidating the three inter partes cases (the Consolidated Opposition Cases).
- In Decision No. 2008-102 dated May 28, 2008, the BLA sustained respondent’s opposition and ordered rejection of petitioner’s subject applications.
- The BLA’s principal findings and reasons:
- The competing marks were confusingly similar because they contained the word “BIRKENSTOCK” and were used on identical or related goods.
- Respondent and its predecessor-in-interest were found to be the prior user and adopter of “BIRKENSTOCK” in the Philippines.
- Petitioner failed to present evidence of actual use of the marks in trade and business in the Philippines.
- The cancellation of Registration No. 56334 did not extinguish respondent’s prior rights because respondent presented proof of continuous and uninterrupted use in Philippine trade and business.
- Petitioner’s certificates of registration submitted were photocopies and thus, in the BLA’s view, inadmissible; petitioner’s marks were not found to be well-known domestically or internationally.
IPO Director General’s Decision
- Petitioner appealed the BLA’s Decision to the IPO Director General.
- In Decision dated December 22, 2009, the IPO Director General reversed and set aside the BLA’s ruling and allowed registration of the subject applications.
- The IPO Director General’s key conclusions:
- The cancellation of Registration No. 56334 for respondent’s failure to file the 10th Year DAU removed the basis to reject petitioner’s applications on the ground of a prior registration.
- Petitioner proved that it was the true and lawful owner and prior user of the “BIRKENSTOCK” marks, entitling it to registration.
- Respondent’s copyright registration for the word “BIRKENSTOCK” was not determinative because copyright and trademark are distinct forms of intellectual property and are not interchangeable.
Court of Appeals Decision and Motion for Reconsideration
- Respondent filed a petition for review with the Court of Appeals (CA).
- In its Decision dated June 25, 2010, the CA reversed the IPO Director General and reinstated the BLA’s Decision, disallowing petitioner’s registration of the subject marks.
- The CA’s principal holdings and reasons:
- The marks in petitioner’s applications were confusingly similar or effectively identical to respondent’s mark.
- Respondent’s failure to f