REPUBLIC OF THE PHILIPPINES

COURT OF APPEALS
MANILA

CROSS INSURANCE INC. CA-G.R. SP No.1 09467

and BLUE CROSS HEALTII CAS
IN(~., Members:
Petitioner-Appellants,
R[~YI~S, u., .I., Chairperson
- v(~rsus - prn{LAS-BERNABF~, E., and
YBANEZ, E., lX
BLUE CROSS and HLJJE SlnI~LD
ASSOCIA'IION, Promulgated:
Respondent-Appellee. 1 •• 1-1.',1 LU 11
_..~_W~':'4_7 .-
x------- ------------------------- ------x

DECISION

RF:YES, .8.,

THE CASE

Before the Court is a Petition for Review under Rule 43 of the Rules
of Court assailing Decision' dated 28 December 2007 of the Intellectual
Property Office (IPO) in ]PC No. 3779 the dispositive portion of which
reads:

"WIIEREFORr~, premises considered, the Petition for

Cancellation filed by petitioner, Blue Cross Insurance, Inc. and
Blue Cross Health Care, Inc. is, as it is hereby, IJENIED.
Trademark Certificate of Registration No. 35780 issued in the
name of respondent-registrant, Blue Cross and Blue Shield
Association stands. Considering however, that said trademark
is valid for a period of twenty years or until 22 July 2006, the
same has already lapsed as of 23 July 2006., unless renewed by

1 Rollo, pp. 69-8.5

CA-G.R. SP No. 109467 Page 2
DECISION

the registrant

Let the filewrapper oft'Bl.Ul! CROSS" subject matter of

this case be forwarded to the Bureau of Trademarks for
appropriate action.

SO OR I)ERI<I).

Makati City, 28 December 20()7.'~'2

The Resolution dated 03 March 2009' denying petitioner-appellants'

motion for reconsideration as well as the Order dated 26 June 20094
dismissing their appeal are also assailed in this petition.

THE FACTS

The factual background of the case is as follows:

On April 30, 1992 petitioner-appellants Blue Cross Insurance, Inc.

and Blue Cross Health Care, Inc. filed a Petition for Cancellation' seeking
the cancellation of Certificate of Registration No. 35780 of the service mark
"BLUE CROSS" for distribution of hospital care on pre- payment financing
basis issued in the name of respondents-appellee Blue Cross and Blue Shield
Association".

In their petition for cancellation, herein petitioner-appellants alleged

that: on July 21, 1986 Blue Cross Insurance, Inc. was registered as a
business name with the Bureau of Domestic Trade, Department of Trade and
Industry (D'TI); that its certificate of registration of business name was
renewed on August 22, 1991; that as early as June 25, 1986 Blue Cross
Insurance, Inc. had adopted and commercially used the mark "Blue Cross"
as part of its corporate name/trade name; that to address the public demand
for health care maintenance services, the incorporators of Blue Cross
Insurance, Inc. formed Blue Cross Health Care, Inc. which was registered
with the Securities and Exchange Commission (SEC) on .July 22, 1987 and
registered as a business name with the [)'1'I on August 25, 1987; that Blue
Cross Health Care, Inc. continued to commercially use the mark "131,lJ[~
CROSS" as part of its corporate name/trade name since its registration with
theDTI on July 22, 1987 up to the present; that by virtue of their prior
') Jd.,p.85
:) ta, Pl'. 88-9()
4 Id., pp. 93-94
5 Jd',l'p.140-146
6 Jd.,p.U5
CA-G.R. SP No. 109467 Page 3
DECISION

adoption and commercial usc of the mark "BLUE CROSS", Blue Cross
Insurance, Inc. and Blue Cross Health Care, Inc. had the exclusive title to,
and interest in the said service mark or trade name.

In their Amended Answer", respondent-appellee Blue Cross and Blue

Shield Association raised, by way of affirmative and/or special defenses
that: its predecessor-in-interest, the American Hospital Association, was
already the owner of the mark "Blue Cross" which was registered in the
Philippines on August 27, 1959 under Certificate of Registration No. 7619;
that on February 5, 1952 the respondent-appellee obtained United States
patent and Trademark Office service mark registration number 554,488 for
the mark BLUE CROSS which registration was valid for 20 years or until
February 5, 1972; that registration number 554,488 was renewed for
another 10 years or until February 5, 1992; that on July 22, 1986 it was
granted a new Certificate of Registration No. 35780 by the Patents Office for
the said service mark; that during the fifty (50) years that it has been used,
the service mark "BLUE CROSS" has achieved goodwill, fame and
favorable reputation worldwide; that the use by Blue Cross Insurance, inc.
and Blue Cross Health Care, Inc. of the said service mark was without the
consent and authorization of the respondent-appellee; and that on March 26,
1992 it had filed a Petition with the SEC for the cancellation of the service
name "HI JJE CROSS" from the corporate name of Blue Cross Insurance,
Inc. and Blue Cross Health Care, Inc.

On 28 December 2007, Hon. Estrellita B. Abelardo, the Director of

the Bureau of Legal Affairs, IPO, rendered the assailed Decision" denying
the petitioner-appellant's petition for cancellation. ']'he Director held that
the validity of Certificate of Registration No. 35780 which was issued on
July 22, 1985 enjoys the presumption of validity. The IPQ ruled that while
Certificate of Registration No. 7619 (which was registered in the Philippines
on August 27, 1959) had lapsed on August 27, 1979, the respondent-
appellee's continued usc of the mark "BLU[~ CROSS" preserved its
trademark rights. Finally, that the respondent-appellee's use of the mark
"BLUE CROSS" precedes that of herein petitioner-appellants, and that the
respondent-appellee's trademarks rights were acquired by it even previous to
petitioner-appellants' usc of it from 1987 and years thereafter.

As stated elsewhere, on March 3, 2009 the Director of the Bureau of

Legal Affairs, lPO issued a Resolution" denying petitioners-appellants'
Motion for Reconsideration:

7 Id., pp. 232 ..240

Rid., pp. 69-85
9 Id., pp. 88-90
CA-G.R. SP No. 109467 Page 4
DECISION

"WIIEREFORE, premises considered, Motion for

Reconsideration filed by petitioners, Blue Cross, Insurance, Inc.
and Blue Cross health Care, Inc. is, as it is hereby, DENIED.

Let the filewrapper of "BLUE CROS be forwarded to

the Bureau of Trademarks for the appropriate action.

SO ORDERED.

Makati City, 03 March 2009"10

On June 26, 2009 Adrian S. Cristobal, Jr., the Director General of the
IPO issued an Order" dismissing the appeal on the ground that it was filed
out of time. The dispositive portion reads:

"WHEIU~F()RE, the instant appeal is hereby dismissed

for the reason discussed above.

SO ORDT~R[~D.

26 June 2009, Mak ati City"12

Hence, on ] 0 July 2009 this petition for review was filed.

In a Resolution" dated 24 August 2009, this Court dismissed the

petition for violation of Rule 45 of the Rules of Civil Procedure. After a
consideration of the petitioners-appellants' motion for reconsideration as
well as the respondent-appellee's comment thereto, the COUli granted the
petitioners-appellants' motion for reconsideration (Resolution dated 16
November 2009)14.

On 2] December 2009 the respondent-appellee filed its Comment".

No reply was filed by the petitioner-appellants, thus, in a Resolution" dated
February 26, 2010, the parties were directed to file memoranda within thirty
(30) days from notice. Only the respondent-appellee filed a memorandum".

The petitioner-appellants were thus deemed to have waived the

submission of the memorandum and referred the petition to the Philippine
10 TtL,p. 94
I I TtL,pp. 93-94
12 u;». 94
13 /d., pp. 123-12.5
14 TtL,pp. 284-285
15 u; pp. 292-303
16 Id., p. 304
17 TtL,pp. 307-325
CA-G.R.SP No. 109467 PageS
DECISION

Mediation Ccntcr-CA Unit Meantime, the proceedings in this petition were

suspended.

The mediation proceedings took place and Mediator Atty. Jose Jesus
G. Laure], the Appellate Court Mediator, submitted his report'" to the Court
stating therein that the parties were not able to reach settlement.

In a Resolution" dated January 27, 2011 the petition was deemed

submitted for decision sans memorandum by the petitioner-appellants".

THE ISSUES

Hence, the present petition raising the following issues:

I.

'HIE HONORABLE DIIU~CTOR (iENERAL OF THE

IN'fEIJJ~C'rUAI" PROPF~RTY OFlqC[~ COMMITTED
GRAVE ABUSE OF DISCRETION AMOlJNTING TO LACK
OR EX(~ESS OF JURISDICfJON IN NOT RULING UPON
]TIE MF~RITS 01" TIlE CASl~ AND MERELY DISMISSING
'1'11[<: SAME BASI~D ON A TECHNICALITY.

II.

THF~ FIONORABI jF~ DIRF~CTOR or,' 1'1IE BUREAU OF

LEGAL AFI,'AIRS OF 'rHE INIT~LLI':c:'rUAL PROPER'ry
OF'FICE COMMI'I"fEI) GRAVE~ ABUSE OF" DlSCRET'ION
AMOUNTING '1'0 LACK OR IN [~XCESS OF
JURISDICTION \VIIEN SHT~ FAILED '1'0 CONSIDER ]'H[~
RF~QlJIREMENT OT" USE AS EMBODn~D UNDER
SEC1'IONS 2 AND 2~A OF REPUBLIC ACT NO. 166, AS
AMEND[~D21.

The petitioner-appellants argue that dismissing the appeal on a mere

technicality without considering the merits of the case is grave abuse of
discretion; that the presumption of the validity of registration and
ownership of the mark "BLU[~ CROSS" was debunked by the numerous
evidence presented by the petitioner-appellants. They underscore that the

18 Id; p. 443
19 ld.,p. 444
20 Id; p: 444
21 Id.,p.45
CA~G.R. SP No. 109467 Page 6
DECISION

requirement of usc is the foremost clement, aside from registration, that

should have been considered as regards the validity of registration and
ownership of the said mark.".

TIllS COURT'S RULING

The petition is not impressed with merit.

Section 2 of the Uniform Rules on Appeal (Office Order no. ] 2, s.

2009) states that:

Section 2, Appeal to the Director General. The

decisions or final orders of the Bureau Director shall become
final and executory thirty (30) days after receipt of a copy
thereof by the parties unless, within the same period, a motion
for reconsideration is filed with the Bureau Director or an
appeal to the Director General has been perfected; Provided,
that only one (1) motion for reconsideration of the decision or
order of the Bureau Director shall he allowed; and, in case the
motion for reconsideration is denied, the appellant or
appellants bas/have the balance of the period prescribed
above within which to file the appeal. (Emphasis supplied)

When the petitioner-appellants received a copy of the Decision dated

28 December 2007 on 18 January 2008, they had until ] 7 February 2008
within which to file a motion for reconsideration. Since 17 February 2008
fell 011 a Sunday, the appeal should be filed on the ensuing working day, that
is, 18 February 2008. A total of thirty (30) complete days have been
consumed.

Thus, as correctly ruled by the IPO Director General, when the

petitioner-appellants received on 16 April 2009 the resolution denying their
motion for reconsideration, they only had one (1) day or until 17 April 2009
within which to file their appeal memorandum.

Consequently, their appeal memorandum which was filed on 18 May

2009 is far in excess of the 30-day period for perfecting an appeal. The IPO
Director General correctly dismissed the appeal outright as it was not filed
within the prescribed period. (Section 5 [b] ofthe Uniform Rules on Appeal)
"rhus, the 28 December 2007 Decision of Hon. Estrellita B. Abelardo, the
Director of the Bureau of Legal Affairs, IPO and the 03 March 2009

22 ld.,p. 47
CA-G.R. SP No.1 09467 Page 7
DECISION

Resolution of the the Director of the Bureau of Legal Affairs, fPO became
final and executory"

The factual milieu in the case of "Sehwani, Incorporated and/or

Benita's Frites, Inc. vs, IN-N-OUT' Burger, Inc."23,is on all fours with this
petition. In the Sehwani case, the Supreme Court held:

"The C0U11 has invariably of an

ruled that perfection
appeal within the statutory or reglementary period is not
only mandatory but also jurisdictional; failure to do so
renders the questioned decision/final order final and
executory, and deprives the appellate court of jurisdiction
to alter the judgment or final order, much less to entertain
the appeal. True, this rule had been relaxed but only in highly
meritorious cases to prevent a grave injustice from being done."
(Emphasissupplied)

Even on the merits, the petition sti II fails.

The petitioner-appellants underscore the need for actual use of the

subject service mark as a prerequisite, aside from registration, to the
acquisition of the right of ownership over it.

Against the evidence presented by the petitioners-appellants, the

respondent-appellee, aside from being a prior registrant, in fact presented
satisfactory proof of actual commercial use. These proofs" were correctly
appreciated, identified and stated in the assailed Decision. Along this point,
we adopt the findings and conclusion of LIon. Estrcllita Beltran-Abclardo,
ratiocinated in this wise:

"On the other hand, a perusal of the evidence show that

respondent-registrant's Certificate of Trademark Registration
No. 35780 was issued on July 22, 1985. By virtue of its
issuance, the registrant enjoys in its favor the presumption of
validity of registration and ownership over the mark "Blue
Cross". Section 20 provides:

'Section 20. Certificate ofregistration prima facie

evidence of validity ... A certificate of registration
of a mark or trade-name shall be prima facie
evidence of the validity of the registration, the
registrant's ownership of the mark or trade-

23 ('.R. No. 17IOJ3, October 1.5, 2007

24 Exhibit ••"1" to "J3", "1J" to "47", inclusive, "48" "49", and "WW"; Id., pp. 80-81
CA-G.R. SP No. 109467 PageS
D}:CISION

name, and of the registrant's exclusive right to usc

the same in connection with the goods, business or
services specified in the certi ficate, subject to any
conditions and limitations stated therein.'

In addition to this, petitioner's own evidence reveal that

prior to July 22, 1985, "Blue Cross" was already registered in
the name of American Hospital Association (Respondent-
registrant's predecessor-in-interest) under Certificate of
Registration No. 7916 issued in August 27, 1959 for
distribution of hospital case on a pre-payment financing basis.
This fact was contained in a certification by the Bureau of
Patents Trademarks and Technology Transfer Bureau, (BPTTT)
dated 27 May 1992. (Exhibit "I I"). The certification signed by
Rogelio Pulido, also disclosed that Registration No. 7619 had
lapsed on August 27, 1979. Thereafter, the "Blue Cross"mark
was registered under the name of Blue Cross and Blue Shield
Association 22 July 1986 under Registration No. 35780 (now
subject of this petition for cancellation).

In this regard, the rights of an owner of a mark is

maintained even if it fails to renew registration and will not be
prejudiced on account of one who attempts to register a mark
that does not belong to that person. The law provides:

'Section 16. l~ffect oj' Failure to Renew

registration. Mere failure to renew any registration
shall not affect the right of the registrant to apply
for and obtain a new registration under the
provisions of this Act, nor such failure entitle any
other person to register a mark or trade-name
unless he is entitled thereto in accordance with the
provisions of this Act.'

Preceding therefrom, even if the respondent-registrant

earlier registration of the Blue Cross mark lapsed after August
27, 1979, its continuous use preserves its trademark rights
which have been earlier acquired.

Moreover, respondent-registrant's use of the mark "Blue

Cross" precedes that of the petitioner. A certification signed by
Dr. Nimfa Concepcion (Exhibit "1 "), dated May 12, 1994
proves that Blue Cross and Shields cards were recognized and
honored as early as 1966. I ler testimony was used to prove that
CA-G.R. S» No.1 09467 Page 9
DECISION

that Blue Cross and Blue Shield cards were used by Filipinos
and Americans in the Philippines. Evidence consisting of an
actual Blue Cross Blue Shield card of respondent-registrant
through the testimony of one Veneranda P.I .orente (Exhibit
"2"). Health Benefits claim form and Overseas claim form was
offered in evidence to prove the use of the mark in the
Philippines (Exhibit "3", "4"). The same witness identified a
Subscribed Explanation of Benefits form (Exhibit "5")
containing the name St. Luke's which referred to St. Luke's
Hospital to prove that respondent-registrant's card was
recognized by a Philippine hospital.

Respondent-registrant also offered evidence of the

registrations it secured for its marks BLUF~ CROSS in countries
all over the world. (Exhibits "6" to 13"; "15" to "47').

The acquisition of rights to a trademark under the old law

may be through lawful, commercial use in the Philippines. The
law is clear and explicit on this point. The old Trademark I Jaw
provides:

"See. 2. What are registrable. - Trademarks,

tradenames, and service marks owned by persons,
corporations, partnerships or associations
domiciled in the Philippines. Provided, That said
Trademarks, tradenames, and service marks are
actually in use in commerce and services not less
than two months in the Philippines before the time
the applications for registrations 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 official 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.

Sec. 2 A Ownership of Trademarks, tradenames

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
CA-G.R. 81>No.1 09467 Page 10
DECISION

business, and 1fI the service rendered, may

appropriate to his exclusive use a trademark,
tradename or service-mark not so appropriated to
distinguish his merchandise, business or service
from the merchandise, business or service of the
others. The ownership of trademark, tradename or
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 the
laws.'

Applying the law, this Bureau finds that respondent-

registrant has shown its actual adoption, use and ownership of
the Blue Cross mark not only through registration, but through
the availability and usage of its card for medical insurance in
the Philippines. The use in commerce since 1966 proves that it
is the owner of the BLUE CROSS mark and is entitled to
secure registration for the same on the basis of the aforequoted
provisions of See. 2 and See. 2-A of the old Trademark law.

Inspitc of the Tact that petitioner was able to show

continuous use of the mark from 1987 and years thereafter, this
cannot defeat rcspondcnt-resgistrant's trademarks rights already
acquired previous to this period. Therefore, its petition must
necessarily fail.

The Supreme Court emphasizing unlimited choices of

trademarks in Teodoro Kalaw Ng Khe v. Lever Brothers Co.
(citing Kassman & Kessner, Inc. v. Rosenberg Bros. Co. 10F
(2d) (83 Phil. 947) held:

'Where doubt arises upon such a question, the court

is inclined to resolve the doubt against the
newcomer. The reason for this rule is that the field
from which a person may select a trademark is
unlimited, and hence there is no excuse for
impinging upon or even closely approaching the
mark of a business rival'".

In view of the foregoing, We affirm the findings of Hon. Estrellita B.

Abelardo, the Director of the Bureau of Legal Affairs, IPO as contained in
her Decision dated 28 December 2007 and Resolution dated 03 March
CA-G.R. SP No. 109467 Page 11
DECISION

2009, as well as Order dated 26 June 2009 of Director General Adrian S.

Cristobal of the I PO.

WHEREFORE, In VIew of the foregoing premises, the petition IS

hereby DISMISSED.

SO ORDERED.

CERTIFICATION

Pursuant to Article VIII, Section 13 of the Constitution, it is hereby

certi Iied that the conclusions in the above decision were reached in
consultation before the case was assigned to the writer of the opinion of the
Court.