Title
Edmond Lim and Gerd Paland vs. Catalina See
Case
G.R. No. 193569
Decision Date
Jan 25, 2023
Dispute on trademark registration ownership and bad faith registration resolved by SC reinstating denial of registrations to See, favoring Lim and Paland's opposition due to bad faith and lack of ownership proof.
trademark registration
intellectual property
opposition

Case Summary (G.R. No. 193569)

Factual Background

On March 20, 2000, Chai Seng Ang, identified in the record as the predecessor of See, filed six applications for registration of trademarks used on nippers, scissors, nail cutters, cutlery, files, spoons, forks, and knives. The marks included “CROWN DEVICE,” “JOWIKA & DEVICE,” “SCHISO & DEVICE,” “DEVICE MARK,” “CROWN,” and “ORO & DEVICE.” On February 26, 2003, Assignments of Trademark dated March 22, 2000 were filed, transferring those applications to See, who also filed Declarations of Actual Use. Sometime in 2004, Lim learned of the registrations in progress and, together with Paland, filed a verified Opposition on October 26, 2004, alleging that the marks were identical to marks owned and used by Paland and that Lim was the exclusive distributor of those marks in the Philippines.

Parties’ Commercial Histories

Paland testified that he is President of Gerd Paland Solingen, a Solingen, Germany manufacturer, and that his company and predecessor entities, including SchiSo-Cutlery, had manufactured and used the subject marks since the 1970s and had distributed the products worldwide, including to the Philippines, through multiple distributors. Lim asserted that he was the exclusive distributor in the Philippines of products bearing those marks. See testified that she and her sole proprietorship, Lena’s Enterprises, had dealt in the same brands since the 1960s through the Nightingale Bazaar in Quiapo, Manila, and that Ang had voluntarily assigned his trademark applications to her in 2000 in recognition of support from her family.

Evidence Presented by Petitioners (Lim and Paland)

Lim and Paland submitted affidavits and corroborating documentary evidence. Their proof included an Exclusive Distributorship Agreement dated December 15, 2004; authenticated German Certificates of Registration for several of the contested marks; photographs of products and packaging; a Special Power of Attorney; sales and delivery invoices showing transactions with various Philippine and foreign distributors across years; and a certified copy of the Articles of Partnership of Aaron Bros. and Company. The invoices and certificates were relied upon to show manufacture, distribution, and use of the marks by Paland and his predecessor companies over decades.

Evidence Presented by Respondent (See)

See offered affidavits from herself and two witnesses, a Certificate of Registration of Lena’s Enterprises, samples of nipper products bearing the contested trademarks, the original trademark applications filed by Ang, the Assignments of Trademark to See, web copies of brochures from several German manufacturers, and search material concerning other marks. Her testimony emphasized longstanding familiarity with the marks from the Nightingale Bazaar and the claimed assignment from Ang.

Ruling of the Bureau of Legal Affairs

On December 22, 2006, the Bureau of Legal Affairs largely denied the Notice of Opposition and gave See’s applications due course, except it granted the opposition against SCHISO & DEVICE. The Bureau credited See’s testimony of prior adoption and use in the Philippines, accepted the circumstances of her childhood familiarity with the family bazaar as adequate corroboration, and noted the absence of a distributorship or agency agreement between Ang and foreign manufacturers, as well as the omission of the subject marks from the manufacturer’s website, as reasons to reject the oppositors’ claim that Ang was merely an importer.

Ruling of the Office of the Director General, Intellectual Property Office

On March 13, 2009, the Director General reversed the Bureau of Legal Affairs. The Office found no record establishing Ang’s ownership of the marks and held that See’s narrative did not prove that Ang had the right to register the marks. The Office noted discrepancies in See’s sworn statements as to first use, the absence of sales receipts or invoices for the period between the alleged assignment and the Declarations of Actual Use, and the lack of evidence that Ang commissioned manufacture with instruction to affix the subject marks. The Office concluded that the evidence showed Paland or his predecessor companies to be the manufacturer, producer, source, and origin of the products bearing the contested marks, and it granted Lim and Paland’s appeal.

Ruling of the Court of Appeals

On April 21, 2010, the Court of Appeals, in CA-G.R. SP No. 108067, reversed the Office of the Director General and reinstated the Bureau of Legal Affairs’ decisions. The CA credited See’s account and found that she had adopted and used the marks as owner, not as mere importer or distributor. The CA applied the “first-to-apply” principle and held that because Ang filed before Paland, See, as assignee, was in a better position to register and acquire ownership. The CA found Paland’s evidence insufficient to prove a chain of title from his alleged predecessors and treated invoices and website exclusions as unconvincing to displace See’s ownership claim. A motion for reconsideration was denied on August 12, 2010.

Issues Presented to the Supreme Court

The central issue was whether Catalina See was entitled to register the subject trademarks under the Intellectual Property Code of the Philippines, specifically whether her registrations were made in good faith so as to confer ownership under Section 122 and withstand opposition under Section 134 and cancellation grounds under Section 151(b). A preliminary procedural issue concerned whether the oppositors’ verification was sufficient despite Paland’s failure personally to verify the Opposition.

Supreme Court’s Ruling on Verification

The Court found the verification requirement substantially complied with by Lim’s verification on behalf of Lim and Paland, citing this Court’s precedent that verification is satisfied when the signer has ample knowledge and the allegations are made in good faith. The Court thus dismissed the argument that Paland’s failure to sign rendered the opposition deficient.

Supreme Court’s Analysis on Merits and the Requirement of Good Faith Registration

The Court reiterated statutory definitions and principles: Section 121.1 defines a trademark and its functions; Section 122 provides that rights in a mark are acquired through valid registration; Section 134 governs oppositions; and Section 151(b) allows cancellation where registration was obtained fraudulently or contrary to law or where the registrant permits misrepresentation of source. The Court emphasized that registration creates only a prima facie presumption of ownership, which is rebuttable. Citing Zuneca Pharmaceutical v. Natrapharm, Inc. and related authorities, the Court held that the first-to-file principle does not protect registrations obtained in bad faith. Bad faith was defined as knowledge by the applicant of prior creation, use, or registration of an identical or similar mark, or other conduct equivalent to copying or trademark squatting. A registration not made in good faith is equivalent to no registration.

Supreme Court’s Findings on Evidence and Bad Faith

After reviewing the record, the Court found the factual findings of the CA unsupported by the evidence. The Court concluded that Ang acted in bad faith in claiming ownership and in seeking registration, and that See, by pursuing those registrations after assignment, acquired no valid ownership. The Court explained that See relied primarily on hearsay and self-serving testimony, failed to produce documentary proof of Ang’s acts of ownership or of commissioning manufacture, and left significant gaps in proof of continuous ownership and control. The Court found that the sales and delivery invoices tendered by Lim and Paland demonstrated longstanding distribution of products bearing the contested marks through multiple channels and supported the conclusion that Ang was one of several importers or distributors rather than the proprietor. The Court also noted See’s admission at trial that SCHISO & DEVICE did not belong to her father and observed that See nevertheless proceeded to file and defend its registration, which evidenced bad faith and a trademark squatting posture. Conversely, the Court found that Paland had sufficiently shown his connection to predecessor companies through testimony, sales invoices, and certificates of registration issued in Germany.

Disposition and Orders

The Supreme Court granted the Petition for Review on Certiorari. It reversed and set aside the Decision and Resolution of the Court of Appeals dated April 21, 2010 and August 12, 2010. The Court reinstated the March 13, 2009 Decision of the Office of the Directo

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