Professional Documents
Culture Documents
14193
2. Pearl and dean v. Shoemart GR no. 148222
3. Kho v. CA GR. No. 115758
4. Tanada v. Angara GR. No. 118295
5. Mighty Corporation v. Gallo winery Gr. No.
154342
6. Phil Pharma wealth v. Pfizer Gr. NO. 167715
7. In n Out Burger v. Sehwawi inc Gr. No.
179127
8. Roma drug v. Bfad Gr. No. 14997
SECOND DIVISION
Petitioners
filed
a
special
civil
action
for certiorari with the Court of Appeals (CA) docketed
as CA-G.R. SP No. 52151 which was dismissed per its
Decision dated January 26, 2000. [13]According to the
CA, the petition is not the proper remedy in assailing a
denial of a motion to quash, and that the grounds
raised therein should be raised during the trial of the
case on the merits.[14] The dispositive portion of the
assailed Decision reads:
WHEREFORE, premises considered, the petition for
certiorari is hereby DISMISSED. Respondent court is
hereby ordered to conduct further proceedings with
dispatch in Criminal Case No. 98-166147.
SO ORDERED.[15]
Petitioners sought reconsideration of the Decision
but this was denied by the CA.[16]
Hence,
the
present
petition
for
review
on certiorari under Rule 45 of the Rules of Court, with
issues raised as follows:
1. WHETHER A FOREIGN CORPORATION NOT
ENGAGED AND LICENSE (sic) TO DO
BUSINESS IN THE PHILIPPINES MAY
MAINTAIN A CAUSE OF ACTION FOR
UNFAIR COMPETITION.
2. WHETHER AN OFFICER OF A FOREIGN
CORPORATION MAY ACT IN BEHALF OF A
CORPORATION WITHOUT AUTHORITY
FROM ITS BOARD OF DIRECTORS.
3. WHETHER A FOREIGN CORPORATION NOT
ENGAGED IN BUSINESS AND WHOSE
EMBLEM IT SOUGHT TO PROTECT IS
NOT IN ACTUAL USE IS ENTITLED TO
THE PROTECTION OF THE PHILIPPINE
LAW.
4. WHETHER THE RESPONDENT REGIONAL
TRIAL COURT CORRECTLY ASSUMED
JURISDICTION OVER THE CASE AND THE
PERSONS OF THE ACCUSED.
5. WHETHER THE COURT OF APPEALS
COMMITTED GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OF
JURISDICTION WHEN IT DISMISSED THE
PETITION.[17]
Petitioners reiterate the argument that the
complaint filed by Rick Welts of the NBA Properties,
Inc., is defective and should have been dismissed by
the fiscal because it should have been personally
sworn to by the complainant before the investigating
prosecutor. They also reiterate the claim that Welts
failed to show any board resolution showing his
authority to institute any action in behalf of the
company, and that the NBAs trademarks are not being
actually used in the Philippines, hence, they are of
public dominion and cannot be protected by Philippine
THIRD DIVISION
[G.R. No. 148222. August 15, 2003]
PEARL
&
DEAN
(PHIL.), INCORPORATED, petitioner, vs. SH
OEMART,
INCORPORATED, and
NORTH
EDSA
MARKETING, INCORPORATED, respondent
s.
DECISION
CORONA, J.:
In
the
instant
petition
for
review
on certiorari under Rule 45 of the Rules of Court,
petitioner Pearl & Dean (Phil.) Inc. (P & D) assails the
May 22, 2001 decision[1] of the Court of Appeals
reversing the October 31, 1996 decision [2] of the
Regional Trial Court of Makati, Branch 133, in Civil Case
No. 92-516 which declared private respondents
Shoemart Inc. (SMI) and North Edsa Marketing Inc.
(NEMI) liable for infringement of trademark and
copyright, and unfair competition.
FACTUAL ANTECEDENTS
The May 22, 2001 decision of the Court of
Appeals[3] contained a summary of this dispute:
Plaintiff-appellant Pearl and Dean (Phil.), Inc. is a
corporation engaged in the manufacture of advertising
display units simply referred to as light boxes. These
units utilize specially printed posters sandwiched
between plastic sheets and illuminated with back
lights. Pearl and Dean was able to secure a Certificate
of Copyright Registration dated January 20, 1981 over
these illuminated display units. The advertising light
boxes were marketed under the trademark Poster
Ads. The application for registration of the trademark
was filed with the Bureau of Patents, Trademarks and
Technology Transfer on June 20, 1983, but was
approved only on September 12, 1988, per Registration
No. 41165. From 1981 to about 1988, Pearl and Dean
employed the services of Metro Industrial Services to
manufacture its advertising displays.
Sometime in 1985, Pearl and Dean negotiated with
defendant-appellant Shoemart, Inc. (SMI) for the lease
and installation of the light boxes in SM City North
Edsa. Since SM City North Edsa was under construction
at that time, SMI offered as an alternative, SM Makati
and SM Cubao, to which Pearl and Dean agreed. On
September 11, 1985, Pearl and Deans General
Manager, Rodolfo Vergara, submitted for signature the
contracts covering SM Cubao and SM Makati to SMIs
Advertising Promotions and Publicity Division Manager,
Ramonlito Abano. Only the contract for SM Makati,
the
Court
of
Appeals
ISSUES
xxxxxxxxx
In resolving this very interesting case, we are
challenged once again to put into proper perspective
four main concerns of intellectual property law patents,
copyrights, trademarks and unfair competition arising
from infringement of any of the first three. We shall
focus then on the following issues:
xxx
Now, whilst no one has a right to print or publish his
book, or any material part thereof, as a book intended
to convey instruction in the art, any person may
practice and use the art itself which he has described
and illustrated therein. The use of the art is a
totally different thing from a publication of the
book explaining it. The copyright of a book on
bookkeeping cannot secure the exclusive right to
make, sell and use account books prepared upon the
plan set forth in such book. Whether the art might or
might not have been patented, is a question, which is
not before us. It was not patented, and is open and free
to the use of the public. And, of course, in using the
art, the ruled lines and headings of accounts must
necessarily be used as incident to it.
The plausibility of the claim put forward by the
complainant in this case arises from a confusion of
ideas produced by the peculiar nature of the art
described in the books, which have been made the
subject of copyright. In describing the art, the
illustrations and diagrams employed happened to
correspond more closely than usual with the actual
work performed by the operator who uses the
art. x x x The description of the art in a book,
though entitled to the benefit of copyright, lays
no foundation for an exclusive claim to the art
itself. The object of the one is explanation; the
object of the other is use. The former may be
secured by copyright. The latter can only be
secured, if it can be secured at all, by letters
patent. (underscoring supplied)
ON THE ISSUE OF TRADEMARK INFRINGEMENT
This issue concerns the use by respondents of the
mark Poster Ads which petitioners president said was a
contraction of poster advertising. P & D was able to
secure a trademark certificate for it, but one where the
goods specified were stationeries such as letterheads,
envelopes, calling cards and newsletters. [22] Petitioner
admitted it did not commercially engage in or market
these goods. On the contrary, it dealt in electrically
operated backlit advertising units and the sale of
advertising spaces thereon, which, however, were not
at all specified in the trademark certificate.
Under the circumstances, the Court of Appeals
correctly cited Faberge Inc. vs. Intermediate Appellate
Court,[23] where we, invoking Section 20 of the old
Trademark Law, ruled that the certificate of registration
issued by the Director of Patents can confer (upon
petitioner) the exclusive right to use its own
symbol only to those goods specified in the certificate,
subject to any conditions and limitations specified in
the certificate x x x. One who has adopted and used a
trademark on his goods does not prevent the adoption
and use of the same trademark by others for products
which are of a different description.[24] Faberge,
Sandoval-
SO ORDERED.5
In granting the petition, the appellate court ruled that:
The registration of the trademark or
brandname "Chin Chun Su" by KEC with the
supplemental register of the Bureau of Patents,
Trademarks and Technology Transfer cannot be
equated with registration in the principal
register, which is duly protected by the
Trademark Law.1wphi1.nt
xxx
xxx
xxx
IV
RESPONDENT HONORABLE COURT OF APPEALS
COMMITTED GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OF JURISDICTION IN
FAILING TO CITE THE PRIVATE RESPONDENTS IN
CONTEMPT.9
The petitioner faults the appellate court for not
dismissing the petition on the ground of violation of
Supreme Court Circular No. 28-91. Also, the petitioner
contends that the appellate court violated Section 6,
Rule 9 of the Revised Internal Rules of the Court of
Appeals when it failed to rule on her motion for
reconsideration within ninety (90) days from the time it
is submitted for resolution. The appellate court ruled
only after the lapse of three hundred fifty-four (354)
days, or on June 3, 1994. In delaying the resolution
thereof, the appellate court denied the petitioner's
right to seek the timely appellate relief. Finally,
petitioner describes as arbitrary the denial of her
motions for contempt of court against the respondents.
We rule in favor of the respondents.
Pursuant to Section 1, Rule 58 of the Revised Rules of
Civil Procedure, one of the grounds for the issuance of
a writ of preliminary injunction is a proof that the
applicant is entitled to the relief demanded, and the
whole or part of such relief consists in restraining the
commission or continuance of the act or acts
complained of, either for a limited period or
perpetually. Thus, a preliminary injunction order may
be granted only when the application for the issuance
of the same shows facts entitling the applicant to the
relief demanded.10 This is the reason why we have
ruled that it must be shown that the invasion of the
right sought to be protected is material and
substantial, that the right of complainant is clear and
unmistakable, and, that there is an urgent and
paramount necessity for the writ to prevent serious
damage.11
In the case at bar, the petitioner applied for the
issuance of a preliminary injunctive order on the
ground that she is entitled to the use of the trademark
on Chin Chun Su and its container based on her
copyright and patent over the same. We first find it
appropriate to rule on whether the copyright and
patent over the name and container of a beauty cream
product would entitle the registrant to the use and
ownership over the same to the exclusion of others.
Trademark, copyright and patents are different
intellectual property rights that cannot be interchanged
with one another. A trademark is any visible sign
capable of distinguishing the goods (trademark) or
services (service mark) of an enterprise and shall
include a stamped or marked container of goods.12 In
relation thereto, a trade name means the name or
designation identifying or distinguishing an
enterprise.13 Meanwhile, the scope of a copyright is
PANGANIBAN, J.:
The emergence on January 1, 1995 of the World Trade
Organization, abetted by the membership thereto of
the vast majority of countries has revolutionized
international business and economic relations amongst
states. It has irreversibly propelled the world towards
trade liberalization and economic globalization.
Liberalization, globalization, deregulation and
Investment Measures
Agreement on Implementation of
Article VI of he
General Agreement on Tariffs and Trade
1994
Agreement on Implementation of
Article VII of the
General on Tariffs and Trade 1994
Agreement on Pre-Shipment Inspection
Agreement on Rules of Origin
Agreement on Imports Licensing
Procedures
Agreement on Subsidies and
Coordinating
Measures
Agreement on Safeguards
Annex 1B: General Agreement on Trade
in Services and Annexes
Annex 1C: Agreement on Trade-Related
Aspects of Intellectual
Property Rights
ANNEX 2
Understanding on Rules
and Procedures
Governing
the Settlement of
Disputes
ANNEX 3
Trade Policy Review
Mechanism
On December 16, 1994, the President of the Philippines
signed 7 the Instrument of Ratification, declaring:
NOW THEREFORE, be it known that I,
FIDEL V. RAMOS, President of the
Republic of the Philippines, after having
seen and considered the
aforementioned Agreement
Establishing the World Trade
Organization and the agreements and
associated legal instruments included
in Annexes one (1), two (2) and three
(3) of that Agreement which are
integral parts thereof, signed at
Marrakesh, Morocco on 15 April 1994,
do hereby ratify and confirm the same
and every Article and Clause thereof.
To emphasize, the WTO Agreement ratified by the
President of the Philippines is composed of the
Agreement Proper and "the associated legal
instruments included in Annexes one (1), two (2) and
three (3) of that Agreement which are integral parts
thereof."
Article XII
The Annex referred to reads as follows:
NATIONAL ECONOMY AND PATRIMONY
ANNEX
inflows attributable to
the enterprise; or
Illustrative List
1. TRIMS that are inconsistent with the
obligation of national treatment
provided for in paragraph 4 of Article III
of GATT 1994 include those which are
mandatory or enforceable under
domestic law or under administrative
rulings, or compliance with which is
necessary to obtain an advantage, and
which require:
(a) the purchase or use
by an enterprise of
products of domestic
origin or from any
domestic source,
whether specified in
terms of particular
products, in terms of
volume or value of
products, or in terms of
proportion of volume or
value of its local
production; or
(b) that an enterprise's
purchases or use of
imported products be
limited to an amount
related to the volume
or value of local
products that it
exports.
2. TRIMS that are inconsistent with the
obligations of general elimination of
quantitative restrictions provided for in
paragraph 1 of Article XI of GATT 1994
include those which are mandatory or
enforceable under domestic laws or
under administrative rulings, or
compliance with which is necessary to
obtain an advantage, and which
restrict:
(a) the importation by
an enterprise of
products used in or
related to the local
production that it
exports;
(b) the importation by
an enterprise of
products used in or
related to its local
production by
restricting its access to
foreign exchange
21
is
Article 34
Process Patents: Burden of Proof
1. For the purposes of civil proceedings
in respect of the infringement of the
rights of the owner referred to in
paragraph 1 (b) of Article 28, if the
subject matter of a patent is a process
for obtaining a product, the judicial
authorities shall have the authority to
order the defendant to prove that the
process to obtain an identical product
is different from the patented process.
Therefore, Members shall provide, in at
least one of the following
circumstances, that any identical
product when produced without the
consent of the patent owner shall, in
the absence of proof to the contrary,
be deemed to have been obtained by
the patented process:
(a) if the product
obtained by the
patented process is
new;
(b) if there is a
substantial likelihood
that the identical
product was made by
the process and the
owner of the patent
has been unable
through reasonable
efforts to determine the
process actually used.
2. Any Member shall be free to provide
that the burden of proof indicated in
paragraph 1 shall be on the alleged
infringer only if the condition referred
to in subparagraph (a) is fulfilled or
only if the condition referred to in
subparagraph (b) is fulfilled.
3. In the adduction of proof to the
contrary, the legitimate interests of
defendants in protecting their
manufacturing and business secrets
shall be taken into account.
From the above, a WTO Member is required to provide
a rule of disputable (not the words "in the absence of
proof to the contrary") presumption that a product
shown to be identical to one produced with the use of a
patented process shall be deemed to have been
obtained by the (illegal) use of the said patented
process, (1) where such product obtained by the
patented product is new, or (2) where there is
"substantial likelihood" that the identical product was
made with the use of the said patented process but the
owner of the patent could not determine the exact
process used in obtaining such identical product.
Hence, the "burden of proof" contemplated by Article
34 should actually be understood as the duty of the
alleged patent infringer to overthrow such
presumption. Such burden, properly understood,
actually refers to the "burden of evidence" (burden of
going forward) placed on the producer of the identical
(or fake) product to show that his product was
produced without the use of the patented process.
The foregoing notwithstanding, the patent owner still
has the "burden of proof" since, regardless of the
presumption provided under paragraph 1 of Article 34,
such owner still has to introduce evidence of the
existence of the alleged identical product, the fact that
it is "identical" to the genuine one produced by the
patented process and the fact of "newness" of the
genuine product or the fact of "substantial likelihood"
that the identical product was made by the patented
process.
The foregoing should really present no problem in
changing the rules of evidence as the present law on
the subject, Republic Act No. 165, as amended,
otherwise known as the Patent Law, provides a similar
presumption in cases of infringement of patented
design or utility model, thus:
Sec. 60. Infringement. Infringement
of a design patent or of a patent for
utility model shall consist in
unauthorized copying of the patented
design or utility model for the purpose
of trade or industry in the article or
product and in the making, using or
selling of the article or product copying
the patented design or utility
model. Identity or substantial identity
with the patented design or utility
model shall constitute evidence of
copying. (emphasis supplied)
Moreover, it should be noted that the requirement of
Article 34 to provide a disputable presumption applies
only if (1) the product obtained by the patented
process in NEW or (2) there is a substantial likelihood
that the identical product was made by the process
and the process owner has not been able through
reasonable effort to determine the process used.
Where either of these two provisos does not obtain,
members shall be free to determine the appropriate
method of implementing the provisions of TRIPS within
their own internal systems and processes.
By and large, the arguments adduced in connection
with our disposition of the third issue derogation of
legislative power will apply to this fourth issue also.
Suffice it to say that the reciprocity clause more than
justifies such intrusion, if any actually exists. Besides,
Article 34 does not contain an unreasonable burden,
- versus -
x-------------------------------------------------x
DECISION
PERALTA, J.:
Before the Court is a petition for review
on certiorari seeking to annul and set aside the
Resolutions dated January 18, 2005[1] and April 11,
2005[2] by the Court of Appeals (CA) in CA-G.R. SP No.
82734.
The instant case arose from a Complaint [3] for patent
infringement
filed
against
petitioner
Phil
Pharmawealth, Inc. by respondent companies, Pfizer,
Inc. and Pfizer (Phil.), Inc., with the Bureau of Legal
Affairs of the Intellectual Property Office (BLA-IPO). The
Complaint alleged as follows:
xxxx
6. Pfizer is the registered owner of Philippine Letters
Patent No. 21116 (the Patent) which was issued by this
Honorable Office on July 16, 1987. The patent is valid
until July 16, 2004. The claims of this Patent are
directed to a method of increasing the effectiveness of
a beta-lactam antibiotic in a mammalian subject, which
goods
outside the
Republic
of
the
Philippines
SUPREME
COURT
Manila
SECOND DIVISION
G.R. No. 149907
April 16, 2009
ROMA DRUG and ROMEO RODRIGUEZ, as
Proprietor
of
ROMA
DRUG, Petitioners,
vs.
THE REGIONAL TRIAL COURT OF GUAGUA,
PAMPANGA, THE PROVINCIAL PROSECUTOR OF
PAMPANGA, BUREAU OF FOOD & DRUGS (BFAD)
and GLAXO SMITHKLINE, Respondents.
DECISION
TINGA, J.:
On 14 August 2000, a team composed of the National
Bureau of Investigation (NBI) operatives and inspectors
of the Bureau of Food and Drugs (BFAD) conducted a
raid on petitioner Roma Drug, a
duly registered sole proprietorship of petitioner Romeo
Rodriguez (Rodriguez) operating a drug store located at
San Matias, Guagua, Pampanga. The raid was
conducted pursuant to a search warrant1 issued by the
Regional Trial Court (RTC), Branch 57, Angeles City. The
raiding team seized several imported medicines,
including Augmentin (375mg.) tablets, Orbenin
(500mg.) capsules, Amoxil (250mg.) capsules and
Ampiclox (500mg.).2 It appears that Roma Drug is one
of six drug stores which were raided on or around the
same time upon the request of SmithKline Beecham
Research Limited (SmithKline), a duly registered
corporation which is the local distributor of
pharmaceutical products manufactured by its parent
London-based corporation. The local SmithKline has
since merged with Glaxo Wellcome Phil. Inc to form
Glaxo SmithKline, private respondent in this case. The
seized medicines, which were manufactured by
SmithKline, were imported directly from abroad and not
purchased through the local SmithKline, the authorized
Philippine distributor of these products.
The NBI subsequently filed a complaint against
Rodriguez for violation of Section 4 (in relation to
Sections 3 and 5) of Republic Act No. 8203, also known
as the Special Law on Counterfeit Drugs (SLCD), with
the Office of the Provincial Prosecutor in San Fernando,
Pampanga. The section prohibits the sale of counterfeit
drugs, which under Section 3(b)(3), includes "an
unregistered imported drug product." The term
"unregistered" signifies the lack of registration with the
Bureau of Patent, Trademark and Technology Transfer
of a trademark, tradename or other identification mark
of a drug in the name of a natural or juridical person,
the process of which is governed under Part III of the
Intellectual Property Code.
In this case, there is no doubt that the subject seized
drugs are identical in content with their Philippineregistered counterparts. There is no claim that they
were adulterated in any way or mislabeled at least.
Their classification as "counterfeit" is based solely on
the fact that they were imported from abroad and not
purchased from the Philippine-registered owner of the
patent or trademark of the drugs.
During preliminary investigation, Rodriguez challenged
the constitutionality of the SLCD. However, Assistant
Provincial Prosecutor Celerina C. Pineda skirted the
challenge and issued a Resolution dated 17 August
2001 recommending that Rodriguez be charged with
violation of Section 4(a) of the SLCD. The
recommendation
was
approved
by
Provincial
Prosecutor
Jesus
Y.
Manarang
approved
the
recommendation.3
Hence, the present Petition for Prohibition questing the
RTC-Guagua Pampanga and the Provincial Prosecutor
to desist from further prosecuting Rodriguez, and that
Sections 3(b)(3), 4 and 5 of the SLCD be declared
unconstitutional. In gist, Rodriguez asserts that the
challenged provisions contravene three provisions of
the Constitution. The first is the equal protection clause
of the Bill of Rights. The two other provisions are
Section 11, Article XIII, which mandates that the State
make "essential goods, health and other social services
available to all the people at affordable cost;" and
Section 15, Article II, which states that it is the policy of
the State "to protect and promote the right to health of
the people and instill health consciousness among
them."
Through its Resolution dated 15 October 2001, the
Court issued a temporary restraining order enjoining
the RTC from proceeding with the trial against
Rodriguez, and the BFAD, the NBI and Glaxo Smithkline
from prosecuting the petitioners.4
Glaxo Smithkline and the Office of the Solicitor General
(OSG) have opposed the petition, the latter in behalf of
public respondents RTC, Provincial Prosecutor and
Bureau of Food and Drugs (BFAD). On the constitutional
issue, Glaxo Smithkline asserts the rule that the SLCD
is presumed constitutional, arguing that both Section
15, Article II and Section 11, Article XIII "are not selfexecuting provisions, the disregard of which can give
rise to a cause of action in the courts." It adds that
Section 11, Article XIII in particular cannot be work "to
the oppression and unlawful of the property rights of
the legitimate manufacturers, importers or distributors,
who take pains in having imported drug products
registered before the BFAD." Glaxo Smithkline further
claims that the SLCD does not in fact conflict with the
aforementioned constitutional provisions and in fact
are in accord with constitutional precepts in favor of
the peoples right to health.
The Office of the Solicitor General casts the question as
one of policy wisdom of the law that is, beyond the
interference of the judiciary.5 Again, the presumption of
constitutionality of statutes is invoked, and the
assertion is made that there is no clear and
unequivocal breach of the Constitution presented by
the SLCD.
II.
The constitutional aspect of this petition raises
obviously interesting questions. However, such
questions have in fact been mooted with the passage
in 2008 of Republic Act No. 9502, also known as the
"Universally Accessible Cheaper and Quality Medicines
Act of 2008".6
Section 7 of Rep. Act No. 9502 amends Section 72 of
the Intellectual Property Code in that the later law
unequivocally grants third persons the right to import
drugs or medicines whose patent were registered in
the Philippines by the owner of the product:
Sec. 7. Section 72 of Republic Act No. 8293, otherwise
known as the Intellectual Property Code of the
Philippines, is hereby amended to read as follows:
"Sec. 72. Limitations of Patent Rights. The owner of a
patent has no right to prevent third parties from
performing, without his authorization, the acts referred
to in Section 71 hereof in the following circumstances:
"72.1. Using a patented product which has been put on
the market in the Philippines by the owner of the
Republic
of
the
Philippines
SUPREME
COURT
Manila
THIRD DIVISION
G.R. No. 179127
December 24, 2008
IN-N-OUT
BURGER,
INC., petitioner,
vs.
SEHWANI, INCORPORATED AND/OR BENITAS
FRITES, INC., respondents.
DECISION
CHICO-NAZARIO, J.:
This is a Petition for Review on Certiorari under Rule 45
of the Rules of Court, seeking to reverse the
Decision1dated 18 July 2006 rendered by the Court of
Appeals in CA-G.R. SP No. 92785, which reversed the
Decision2dated 23 December 2005 of the Director
General of the Intellectual Property Office (IPO) in
Appeal No. 10-05-01. The Court of Appeals, in its
assailed Decision, decreed that the IPO Director of
Legal Affairs and the IPO Director General do not have
jurisdiction over cases involving unfair competition.
Petitioner IN-N-OUT BURGER, INC., a business entity
incorporated under the laws of California, United States
(US) of America, which is a signatory to the Convention
of Paris on Protection of Industrial Property and the
Agreement on Trade Related Aspects of Intellectual
Property Rights (TRIPS). Petitioner is engaged mainly in
the restaurant business, but it has never engaged in
business in the Philippines. 3
Respondents Sehwani, Incorporated and Benita Frites,
Inc. are corporations organized in the Philippines.4
On 2 June 1997, petitioner filed trademark and service
mark applications with the Bureau of Trademarks (BOT)
of the IPO for "IN-N-OUT" and "IN-N-OUT Burger &
Arrow Design." Petitioner later found out, through the
Official Action Papers issued by the IPO on 31 May
2000, that respondent Sehwani, Incorporated had
already obtained Trademark Registration for the mark
"IN N OUT (the inside of the letter "O" formed like a
star)."5 By virtue of a licensing agreement, Benita
Frites, Inc. was able to use the registered mark of
respondent Sehwani, Incorporated.
Petitioner eventually filed on 4 June 2001 before the
Bureau of Legal Affairs (BLA) of the IPO an
administrative complaint against respondents for unfair
competition and cancellation of trademark registration.
Petitioner averred in its complaint that it is the owner
of the trade name IN-N-OUT and the following
trademarks: (1) "IN-N-OUT"; (2) "IN-N-OUT Burger &
Arrow Design"; and (3) "IN-N-OUT Burger Logo." These
trademarks are registered with the Trademark Office of
the US and in various parts of the world, are
internationally
well-known,
and
have
become
distinctive of its business and goods through its long
and exclusive commercial use.6 Petitioner pointed out
that its internationally well-known trademarks and the
mark of the respondents are all registered for the
restaurant business and are clearly identical and
confusingly similar. Petitioner claimed that respondents
are making it appear that their goods and services are
those of the petitioner, thus, misleading ordinary and
unsuspecting consumers that they are purchasing
petitioners products.7
Following the filing of its complaint, petitioner sent on
18 October 2000 a demand letter directing respondent
Sehwani, Incorporated to cease and desist from
claiming ownership of the mark "IN-N-OUT" and to
voluntarily cancel its trademark registration. In a letter-
Blake
(Sgd.)
Petition
in
light
of
attendant
exceptional
circumstances.
The parties and their counsel, however, are once again
warned against taking procedural rules lightly. It will do
them well to remember that the Courts have taken a
stricter stance against the disregard of procedural
rules, especially in connection with the submission of
the certificate against forum shopping, and it will not
hesitate to dismiss a Petition for non-compliance
therewith in the absence of justifiable circumstances.
The Jurisdiction of the IPO
The Court now proceeds to resolve an important issue
which arose from the Court of Appeals Decision dated
18 July 2006 in CA-G.R. SP No. 92785. In the aforestated Decision, the Court of Appeals adjudged that the
IPO Director for Legal Affairs and the IPO Director
General had no jurisdiction over the administrative
proceedings below to rule on issue of unfair
competition, because Section 163 of the Intellectual
Property Code confers jurisdiction over particular
provisions in the law on trademarks on regular courts
exclusively. According to the said provision:
Section 163. Jurisdiction of Court.All actions under
Sections 150, 155, 164, and 166 to 169 shall be
brought before the proper courts with appropriate
jurisdiction under existing laws.
The provisions referred to in Section 163 are: Section
150 on License Contracts; Section 155 on Remedies on
Infringement; Section 164 on Notice of Filing Suit Given
to the Director; Section 166 on Goods Bearing
Infringing Marks or Trade Names; Section 167 on
Collective Marks; Section 168 on Unfair Competition,
Rights, Regulation and Remedies; and Section 169 on
False Designations of Origin, False Description or
Representation.
The Court disagrees with the Court of Appeals.
Section 10 of the Intellectual Property Code specifically
identifies the functions of the Bureau of Legal Affairs,
thus:
Section 10. The Bureau of Legal Affairs.The Bureau of
Legal Affairs shall have the following functions:
10.1 Hear and decide opposition to the application
for
registration
of
marks; cancellation
of
trademarks; subject to the provisions of Section 64,
cancellation of patents and utility models, and
industrial designs; and petitions for compulsory
licensing of patents;
10.2
(a) Exercise
original
jurisdiction
in
administrative complaints for violations of laws
involving intellectual property rights; Provided,
That its jurisdiction is limited to complaints
where the total damages claimed are not less
than
Two
hundred
thousand
pesos
(P200,000): Provided, futher, That availment of
the provisional remedies may be granted in
accordance with the Rules of Court. The Director of
Legal Affairs shall have the power to hold and punish
for contempt all those who disregard orders or writs
issued in the course of the proceedings.
(b) After formal investigation, the Director for Legal
Affairs may impose one (1) or more of the following
administrative penalties:
(i) The issuance of a cease and desist order which shall
specify the acts that the respondent shall cease and
desist from and shall require him to submit a
compliance report within a reasonable time which shall
be fixed in the order;
xxxx
[Respondents] use of IN-N-OUT BURGER in busineses
signages reveals fraudulent intent to deceive
purchasers. Exhibit "GG," which shows the business
establishment of [respondents] illustrates the imitation
of [petitioners] corporate name IN-N-OUT and signage
IN-N-OUT BURGER. Even the Director noticed it and
held:
"We also note that In-N-Out Burger is likewise,
[petitioners] corporate name. It has used the "IN-NOUT" Burger name in its restaurant business in Baldwin
Park, California in the United States of America since
1948. Thus it has the exclusive right to use the
tradenems "In-N-Out" Burger in the Philippines and the
respondents are unlawfully using and appropriating
the same."
The Office cannot give credence to the [respondents]
claim of good faith and that they have openly and
continuously used the subject mark since 1982 and is
(sic) in the process of expanding its business. They
contend that assuming that there is value in the
foreign registrations presented as evidence by the
[petitioner], the purported exclusive right to the use of
the subject mark based on such foreign registrations is
not essential to a right of action for unfair competition.
[Respondents] also claim that actual or probable
deception and confusion on the part of customers by
reason of respondents practices must always appear,
and in the present case, the BLA has found none. This
Office finds the arguments untenable.
In contrast, the [respondents] have the burden of
evidence to prove that they do not have fraudulent
intent in using the mark IN-N-OUT. To prove their good
faith, [respondents] could have easily offered evidence
of use of their registered trademark, which they
claimed to be using as early as 1982, but did not.
[Respondents] also failed to explain why they are using
the marks of [petitioner] particularly DOUBLE DOUBLE,
and the mark IN-N-OUT Burger and Arrow Design. Even
in their listing of menus, [respondents] used
[Appellants] marks of DOUBLE DOUBLE and IN-N-OUT
Burger and Arrow Design. In addition, in the wrappers
and receptacles being used by the [respondents] which
also contained the marks of the [petitioner], there is no
notice in such wrappers and receptacles that the
hamburger and French fries are products of the
[respondents]. Furthermore, the receipts issued by the
[respondents] even indicate "representing IN-N-OUT."
These acts cannot be considered acts in good faith. 47
Administrative proceedings are governed by the
"substantial evidence rule." A finding of guilt in an
administrative case would have to be sustained for as
long as it is supported by substantial evidence that the
respondent has committed acts stated in the complaint
or formal charge. As defined, substantial evidence is
such relevant evidence as a reasonable mind may
accept as adequate to support a conclusion. 48 As
recounted by the IPO Director General in his decision,
there is more than enough substantial evidence to
support his finding that respondents are guilty of unfair
competition.
With such finding, the award of damages in favor of
petitioner is but proper. This is in accordance with
Section 168.4 of the Intellectual Property Code, which
provides that the remedies under Sections 156, 157
and 161 for infringement shall apply mutatis