G.R. No. 184850 October 20, 2010
4-1999-005393, also for the mark "VESPA," for use on air
E.Y. INDUSTRIAL SALES, INC. and ENGRACIO YAP,
Petitioners,
vs.
SHEN DAR ELECTRICITY AND MACHINERY CO., LTD.,
Respondent.
DECISION
VELASCO, JR., J.:
The Case
This Petition for Review on Certiorari under Rule 45 seeks to
nullify and reverse the February 21, 2008 Decision1 and the
October 6, 2008 Resolution2 rendered by the Court of Appeals
(CA) in CA-G.R. SP No. 99356 entitled Shen Dar Electricity and
Machinery Co., Ltd. v. E.Y. Industrial Sales, Inc. and Engracio
Yap.
The assailed decision reversed the Decision dated May 25,
20073 issued by the Director General of the Intellectual
Property Office (IPO) in Inter Partes Case No. 14-2004-00084.
The IPO Director General upheld Certificate of Registration
(COR) No. 4-1999-005393 issued by the IPO for the trademark
"VESPA" in favor of petitioner E.Y. Industrial Sales, Inc. (EYIS),
but ordered the cancellation of COR No. 4-1997-121492, also
for the trademark "VESPA," issued in favor of respondent Shen
Dar Electricity and Machinery Co., Ltd. (Shen Dar). The
Decision of the IPO Director General, in effect, affirmed the
Decision dated May 29, 20064 issued by the Director of the
Bureau of Legal Affairs (BLA) of the IPO.
The Facts
EYIS is a domestic corporation engaged in the production,
distribution and sale of air compressors and other industrial
tools and equipment.5 Petitioner Engracio Yap is the Chairman
of the Board of Directors of EYIS.6
Respondent Shen Dar is a Taiwan-based foreign corporation
engaged in the manufacture of air compressors.7
Both companies claimed to have the right to register the
trademark "VESPA" for air compressors.
From 1997 to 2004, EYIS imported air compressors from Shen
Dar through sales contracts. In the Sales Contract dated April
20, 2002,8 for example, Shen Dar would supply EYIS in one (1)
year with 24 to 30 units of 40-ft. containers worth of air
compressors identified in the Packing/Weight Lists simply as
SD-23, SD-29, SD-31, SD-32, SD-39, SD-67 and SD-68. In the
corresponding Bill of Ladings, the items were described merely
as air compressors.9 There is no documentary evidence to
show that such air compressors were marked "VESPA."
On June 9, 1997, Shen Dar filed Trademark Application Serial
No. 4-1997-121492 with the IPO for the mark "VESPA, Chinese
Characters and Device" for use on air compressors and welding
machines.10
On July 28, 1999, EYIS filed Trademark Application Serial No.
compressors.11 On January 18, 2004, the IPO issued COR No.
4-1999-005393 in favor of EYIS.12 Thereafter, on February 8,
2007, Shen Dar was also issued COR No. 4-1997-121492.13
In the meantime, on June 21, 2004, Shen Dar filed a Petition
for Cancellation of EYIS’ COR with the BLA.14 In the Petition,
Shen Dar primarily argued that the issuance of the COR in
favor of EYIS violated Section 123.1 paragraphs (d), (e) and
(f) of Republic Act No. (RA) 8293, otherwise known as the
Intellectual Property Code (IP Code), having first filed an
application for the mark. Shen Dar further alleged that EYIS
was a mere distributor of air compressors bearing the mark
"VESPA" which it imported from Shen Dar. Shen Dar also
argued that it had prior and exclusive right to the use and
registration of the mark "VESPA" in the Philippines under the
provisions of the Paris Convention.15
In its Answer, EYIS and Yap denied the claim of Shen Dar to
be the true owners of the mark "VESPA" being the sole
assembler and fabricator of air compressors since the early
1990s. They further alleged that the air compressors that Shen
Dar allegedly supplied them bore the mark "SD" for Shen Dar
and not "VESPA." Moreover, EYIS argued that Shen Dar, not
being the owner of the mark, could not seek protection from
the provisions of the Paris Convention or the IP Code.16
Thereafter, the Director of the BLA issued its Decision dated
May 29, 2006 in favor of EYIS and against Shen Dar, the
dispositive portion of which reads:
WHEREFORE, premises considered, the Petition for
Cancellation is, as it is hereby, DENIED. Consequently,
Certificate of Registration No. 4-1999-[005393] for the mark
"VESPA" granted in the name of E.Y. Industrial Sales, Inc. on 9
January 2007 is hereby upheld.
Let the filewrapper of VESPA subject matter of this case be
forwarded to the Administrative, Financial and Human
Resource Development Services Bureau for issuance and
appropriate action in accordance with this DECISION and a
copy thereof furnished to the Bureau of Trademarks for
information and update of its records.
SO ORDERED.17
Shen Dar appealed the decision of the BLA Director to the
Director General of the IPO. In the appeal, Shen Dar raised the
following issues:
1. Whether the BLA Director erred in ruling that Shen
Dar failed to present evidence;
2. Whether the registration of EYIS’ application was
proper considering that Shen Dar was the first to file
an application for the mark; and
3. Whether the BLA Director correctly ruled that EYIS
is the true owner of the mark.18
Later, the IPO Director General issued a Decision dated May
25, 2007 upholding the COR issued in favor of EYIS while
cancelling the COR of Shen Dar, the dispositive portion of
which reads:
WHEREFORE, premises considered, the appeal is DENIED.
Certificate of Registration No. 4-1999-005393 for the mark
VESPA for air compressor issued in favor of Appellee is hereby
upheld. Consequently, Certificate of Registration No. 4-1997-
121492 for the mark VESPA, Chinese Characters & Device for
goods air compressor and spot welding machine issued in
favor of Appellant is hereby ordered cancelled.
Let a copy of this Decision as well as the records of this case
be furnished and returned to the Director of Bureau of Legal
Affairs for appropriate action. Further, let also the Directors of
the Bureau of Trademarks, the Administrative, Financial and
Human Resources Development Services Bureau, and the
Documentation, Information and Technology Transfer Bureau
be furnished a copy of this Decision for information, guidance,
and records purposes.19
Shen Dar appealed the above decision of the IPO Director
General to the CA where Shen Dar raised the following issues:
1. Whether Shen Dar is guilty of forum shopping;
2. Whether the first-to-file rule applies to the instant
case;
3. Whether Shen Dar presented evidence of actual
use;
4. Whether EYIS is the true owner of the mark
"VESPA";
5. Whether the IPO Director General erred in
cancelling Shen Dar’s COR No. 4-1997-121492
without a petition for cancellation; and
6. Whether Shen Dar sustained damages.20
In the assailed decision, the CA reversed the IPO Director
General and ruled in favor of Shen Dar. The dispositive portion
states:
WHEREFORE, premises considered, the petition is GRANTED.
Consequently, the assailed decision of the Director General of
the Intellectual Property Office dated May 25, 2007 is hereby
REVERSED and SET ASIDE. In lieu thereof, a new one is
entered: a) ordering the cancellation of Certificate of
Registration No. 4-1999-005393 issued on January 19, 2004
for the trademark VESPA in favor of E.Y. Industrial Sales, Inc.;
b) ordering the restoration of the validity of Certificate of
Registration No. 4-1997-121492 for the trademark VESPA in
favor of Shen Dar Electricity and Machinery Co., Ltd. No
pronouncement as to costs.
SO ORDERED.21
In ruling for Shen Dar, the CA ruled that, despite the fact that
Shen Dar did not formally offer its evidence before the BLA,
such evidence was properly attached to the Petition for
Cancellation. As such, Shen Dar’s evidence may be properly
considered. The CA also enunciated that the IPO failed to
properly apply the provisions of Sec. 123.1(d) of RA 8293,
which prohibits the registration of a trademark in favor of a
party when there is an earlier filed application for the same
mark. The CA further ruled that Shen Dar should be considered
to have prior use of the mark based on the statements made
by the parties in their respective Declarations of Actual Use.
The CA added that EYIS is a mere importer of the air
compressors with the mark "VESPA" as may be gleaned from
its receipts which indicated that EYIS is an importer,
wholesaler and retailer, and therefore, cannot be considered
an owner of the mark.22
EYIS filed a motion for reconsideration of the assailed decision
which the CA denied in the assailed resolution.
Hence, the instant appeal.
Issues
EYIS and Yap raise the following issues in their petition:
A. Whether the Director General of the IPO correctly
upheld the rights of Petitioners over the trademark
VESPA.
B. Whether the Director General of the IPO can,
under the circumstances, order the cancellation of
Respondent’s certificate of registration for VESPA,
which has been fraudulently obtained and erroneously
issued.
C. Whether the Honorable Court of Appeals was
justified in reversing the findings of fact of the IPO,
which affirm the rights of Petitioner EYIS over the
trademark VESPA and when such findings are
supported by the evidence on record.
D. Whether this Honorable Court may review
questions of fact considering that the findings of the
Court of Appeals and the IPO are in conflict and the
conclusions of the appellee court are contradicted by
the evidence on record.23
The Ruling of the Court
The appeal is meritorious.
First Issue:
Whether this Court may review the questions of fact
presented
Petitioners raise the factual issue of who the true owner of the
mark is. As a general rule, this Court is not a trier of facts.
However, such rule is subject to exceptions.
In New City Builders, Inc. v. National Labor Relations
Commission,24 the Court ruled that:
We are very much aware that the rule to the effect that this constitute the entire evidence for the parties subject to
Court is not a trier of facts admits of exceptions. As we have applicable rules.
stated in Insular Life Assurance Company, Ltd. vs. CA:
The CA concluded that Shen Dar needed not formally offer its
[i]t is a settled rule that in the exercise of the Supreme Court’s evidence but merely needed to attach its evidence to its
power of review, the Court is not a trier of facts and does not position paper with the proper markings,26 which it did in this
normally undertake the re-examination of the evidence case.
presented by the contending parties during the trial of the case
considering that the findings of facts of the CA are conclusive The IP Code provides under its Sec. 10.3 that the Director
and binding on the Court. However, the Court had recognized General of the IPO shall establish the procedure for the
several exceptions to this rule, to wit: (1) when the findings application for the registration of a trademark, as well as the
are grounded entirely on speculation, surmises or conjectures; opposition to it:
(2) when the inference made is manifestly mistaken, absurd or
impossible; (3) when there is grave abuse of discretion; (4)
Section 10. The Bureau of Legal Affairs.¾The Bureau of Legal
when the judgment is based on a misapprehension of facts;
Affairs shall have the following functions:
(5) when the findings of facts are conflicting; (6) when in
making its findings the Court of Appeals went beyond the
issues of the case, or its findings are contrary to the xxxx
admissions of both the appellant and the appellee; (7) when
the findings are contrary to the trial court; (8) when the 10.3. The Director General may by Regulations establish the
findings are conclusions without citation of specific evidence on procedure to govern the implementation of this Section.
which they are based; (9) when the facts set forth in the
petition as well as in the petitioner’s main and reply briefs are
Thus, the Director General issued Office Order No. 79, Series
not disputed by the respondent; (10) when the findings of fact
of 2005 amending the regulations on Inter Partes Proceedings,
are premised on the supposed absence of evidence and
Sec. 12.1 of which provides:
contradicted by the evidence on record; and (11) when the
Court of Appeals manifestly overlooked certain relevant facts
not disputed by the parties, which, if properly considered, Section 12. Evidence for the Parties¾
would justify a different conclusion. (Emphasis supplied.)
12.1. The verified petition or opposition, reply if any, duly
In the instant case, the records will show that the IPO and the marked affidavits of the witnesses, and the documents
CA made differing conclusions on the issue of ownership based submitted, shall constitute the entire evidence for the
on the evidence presented by the parties. Hence, this issue petitioner or opposer. The verified answer, rejoinder if any,
may be the subject of this Court’s review. and the duly marked affidavits and documents submitted shall
constitute the evidence for the respondent. Affidavits,
documents and other evidence not submitted and duly marked
Second Issue:
in accordance with the preceding sections shall not be
admitted as evidence.
Whether evidence presented before the BLA must be
formally offered
The preceding sections referred to in the above provision refer
to Secs. 7.1, 8.1 and 9 which, in turn, provide:
Preliminarily, it must be noted that the BLA ruled that Shen
Dar failed to adduce evidence in support of its allegations as
Section 7. Filing of Petition or Opposition¾
required under Office Order No. 79, Series of 2005,
Amendments to the Regulations on Inter Partes Proceedings,
having failed to formally offer its evidence during the 7.1. The petition or opposition, together with the affidavits of
proceedings before it. The BLA ruled: witnesses and originals of the documents and other
requirements, shall be filed with the Bureau, provided, that in
case of public documents, certified copies shall be allowed in
At the outset, we note petitioner’s failure to adduce any
lieu of the originals. The Bureau shall check if the petition or
evidence in support of its allegations in the Petition for
opposition is in due form as provided in the Regulations
Cancellation. Petitioner did not file nor submit its marked
particularly Rule 3, Section 3; Rule 4, Section 2; Rule 5,
evidence as required in this Bureau’s Order No. 2006-157
Section 3; Rule 6, Section 9; Rule 7, Sections 3 and 5; Rule 8,
dated 25 January 2006 in compliance with Office Order No. 79,
Sections 3 and 4. For petition for cancellation of layout design
Series of 2005, Amendments to the Regulations on Inter Partes
(topography) of integrated circuits, Rule 3, Section 3 applies as
Proceedings.25 x x x
to the form and requirements. The affidavits, documents and
other evidence shall be marked consecutively as "Exhibits"
In reversing such finding, the CA cited Sec. 2.4 of BLA beginning with the letter "A".
Memorandum Circular No. 03, Series of 2005, which states:
Section 8. Answer¾
Section 2.4. In all cases, failure to file the documentary
evidences in accordance with Sections 7 and 8 of the rules on
8.1. Within three (3) working days from receipt of the petition
summary proceedings shall be construed as a waiver on the
or opposition, the Bureau shall issue an order for the
part of the parties. In such a case, the original petition,
respondent to file an answer together with the affidavits of
opposition, answer and the supporting documents therein shall
witnesses and originals of documents, and at the same time
shall notify all parties required to be notified in the IP Code
and these Regulations, provided, that in case of public
documents, certified true copies may be submitted in lieu of
the originals. The affidavits and documents shall be marked
consecutively as "Exhibits" beginning with the number "1".
Section 9. Petition or Opposition and Answer must be
verified¾ Subject to Rules 7 and 8 of these regulations, the
petition or opposition and the answer must be verified.
Otherwise, the same shall not be considered as having been
filed.
In other words, as long as the petition is verified and the
pieces of evidence consisting of the affidavits of the witnesses
and the original of other documentary evidence are attached
to the petition and properly marked in accordance with Secs.
7.1 and 8.1 abovementioned, these shall be considered as the
evidence of the petitioner. There is no requirement under the
abovementioned rules that the evidence of the parties must be
formally offered to the BLA.
In any case, as a quasi-judicial agency and as stated in Rule 2,
Sec. 5 of the Regulations on Inter Partes Proceedings, the BLA
is not bound by technical rules of procedure. The evidence
attached to the petition may, therefore, be properly considered
in the resolution of the case.
Third Issue:
Whether the IPO Director General can
validly cancel Shen Dar’s Certificate of Registration
In his Decision, the IPO Director General stated that, despite
the fact that the instant case was for the cancellation of the
COR issued in favor of EYIS, the interests of justice dictate,
and in view of its findings, that the COR of Shen Dar must be
cancelled. The Director General explained:
Accordingly, while the instant case involves a petition to cancel
the registration of the Appellee’s trademark VESPA, the
interest of justice requires that Certificate of Registration No.
4-1997-121492 be cancelled. While the normal course of
proceedings should have been the filing of a petition for
cancellation of Certificate of Registration No. 4-1997-121492,
that would involve critical facts and issues that have already
been resolved in this case. To allow the Applicant to still
maintain in the Trademark Registry Certificate of Registration
No. 4-1997-121492 would nullify the exclusive rights of
Appellee as the true and registered owner of the mark VESPA
and defeat the purpose of the trademark registration system.27
Shen Dar challenges the propriety of such cancellation on the
ground that there was no petition for cancellation as required
under Sec. 151 of RA 8293.
Office Order No. 79, Series of 2005, provides under its Sec. 5
that:
Section 5. Rules of Procedure to be followed in the conduct of
hearing of Inter Partes cases.¾The rules of procedure herein
contained primarily apply in the conduct of hearing of Inter
Partes cases. The Rules of Court may be applied suppletorily.
The Bureau shall not be bound by strict technical rules of
procedure and evidence but may adopt, in the absence of any
applicable rule herein, such mode of proceedings which is
consistent with the requirements of fair play and conducive to
the just, speedy and inexpensive disposition of cases, and
which will give the Bureau the greatest possibility to focus on
the contentious issues before it. (Emphasis supplied.)
The above rule reflects the oft-repeated legal principle that
quasi-judicial and administrative bodies are not bound by
technical rules of procedure. Such principle, however, is
tempered by fundamental evidentiary rules, including due
process. Thus, we ruled in Aya-ay, Sr. v. Arpaphil Shipping
Corp.:28
That administrative quasi-judicial bodies like the NLRC are not
bound by technical rules of procedure in the adjudication of
cases does not mean that the basic rules on proving
allegations should be entirely dispensed with. A party alleging
a critical fact must still support his allegation with substantial
evidence. Any decision based on unsubstantiated allegation
cannot stand as it will offend due process.
x x x The liberality of procedure in administrative actions is
subject to limitations imposed by basic requirements of due
process. As this Court said in Ang Tibay v. CIR, the provision
for flexibility in administrative procedure "does not go so far as
to justify orders without a basis in evidence having rational
probative value." More specifically, as held in Uichico v. NLRC:
It is true that administrative and quasi-judicial bodies like the
NLRC are not bound by the technical rules of procedure in the
adjudication of cases. However, this procedural rule should not
be construed as a license to disregard certain fundamental
evidentiary rules.
This was later reiterated in Lepanto Consolidated Mining
Company v. Dumapis:29
While it is true that administrative or quasi-judicial bodies like
the NLRC are not bound by the technical rules of procedure in
the adjudication of cases, this procedural rule should not be
construed as a license to disregard certain fundamental
evidentiary rules. The evidence presented must at least have a
modicum of admissibility for it to have probative value. Not
only must there be some evidence to support a finding or
conclusion, but the evidence must be substantial. Substantial
evidence is more than a mere scintilla. It means such relevant
evidence as a reasonable mind might accept as adequate to
support a conclusion. Thus, even though technical rules of
evidence are not strictly complied with before the LA and the
NLRC, their decision must be based on evidence that must, at
the very least, be substantial.
The fact that no petition for cancellation was filed against the
COR issued to Shen Dar does not preclude the cancellation of
Shen Dar’s COR. It must be emphasized that, during the
hearing for the cancellation of EYIS’ COR before the BLA, Shen
Dar tried to establish that it, not EYIS, was the true owner of
the mark "VESPA" and, thus, entitled to have it registered.
Shen Dar had more than sufficient opportunity to present its
evidence and argue its case, and it did. It was given its day in
court and its right to due process was respected. The IPO
Director General’s disregard of the procedure for the
cancellation of a registered mark was a valid exercise of his
discretion.
Fourth Issue:
Whether the factual findings of the IPO are binding on the CA
Next, petitioners challenge the CA’s reversal of the factual
findings of the BLA that Shen Dar and not EYIS is the prior
user and, therefore, true owner of the mark. In arguing its
position, petitioners cite numerous rulings of this Court where
it was enunciated that the factual findings of administrative
bodies are given great weight if not conclusive upon the courts
when supported by substantial evidence.
We agree with petitioners that the general rule in this
jurisdiction is that the factual findings of administrative bodies
deserve utmost respect when supported by evidence.
However, such general rule is subject to exceptions.
In Fuentes v. Court of Appeals,30 the Court established the rule
of conclusiveness of factual findings of the CA as follows:
Jurisprudence teaches us that "(a)s a rule, the jurisdiction of
this Court in cases brought to it from the Court of Appeals x x
x is limited to the review and revision of errors of law allegedly
committed by the appellate court, as its findings of fact are
deemed conclusive. As such this Court is not duty-bound to
analyze and weigh all over again the evidence already
considered in the proceedings below. This rule, however, is not
without exceptions." The findings of fact of the Court of
Appeals, which are as a general rule deemed conclusive, may
admit of review by this Court:
(1) when the factual findings of the Court of Appeals
and the trial court are contradictory;
(2) when the findings are grounded entirely on
speculation, surmises, or conjectures;
(3) when the inference made by the Court of Appeals
from its findings of fact is manifestly mistaken,
absurd, or impossible;
(4) when there is grave abuse of discretion in the
appreciation of facts;
(5) when the appellate court, in making its findings,
goes beyond the issues of the case, and such findings
are contrary to the admissions of both appellant and
appellee;
(6) when the judgment of the Court of Appeals is
premised on a misapprehension of facts;
(7) when the Court of Appeals fails to notice certain
relevant facts which, if properly considered, will justify
a different conclusion;
(8) when the findings of fact are themselves
conflicting;
(9) when the findings of fact are conclusions without
citation of the specific evidence on which they are
based; and
(10) when the findings of fact of the Court of Appeals
are premised on the absence of evidence but such
findings are contradicted by the evidence on record.
(Emphasis supplied.)
Thereafter, in Villaflor v. Court of Appeals,31 this Court applied
the above principle to factual findings of quasi-judicial bodies,
to wit:
Proceeding by analogy, the exceptions to the rule on
conclusiveness of factual findings of the Court of Appeals,
enumerated in Fuentes vs. Court of Appeals, can also be
applied to those of quasi-judicial bodies x x x. (Emphasis
supplied.)
Here, the CA identified certain material facts that were
allegedly overlooked by the BLA and the IPO Director General
which it opined, when correctly appreciated, would alter the
result of the case. An examination of the IPO Decisions,
however, would show that no such evidence was overlooked.
First, as to the date of first use of the mark by the parties, the
CA stated:
To begin with, when respondents-appellees filed its application
for registration of the VESPA trademark on July 28, 1999, they
stated under oath, as found in their DECLARATION OF ACTUAL
USE, that their first use of the mark was on December 22,
1998. On the other hand, [Shen Dar] in its application dated
June 09, 1997 stated, likewise under oath in their
DECLARATION OF ACTUAL USE, that its first use of the mark
was in June 1996. This cannot be made any clearer. [Shen
Dar] was not only the first to file an application for registration
but likewise first to use said registrable mark.32
Evidently, the CA anchors its finding that Shen Dar was the
first to use the mark on the statements of the parties in their
respective Declarations of Actual Use. Such conclusion is
premature at best. While a Declaration of Actual Use is a
notarized document, hence, a public document, it is not
conclusive as to the fact of first use of a mark. The declaration
must be accompanied by proof of actual use as of the date
claimed. In a declaration of actual use, the applicant must,
therefore, present evidence of such actual use.
The BLA ruled on the same issue, as follows:
More importantly, the private respondent’s prior adoption and
continuous use of the mark ‘VESPA’ on air compressors is
bolstered by numerous documentary evidence consisting of
sales invoices issued in the name of E.Y. Industrial and Bill of
Lading (Exhibits ‘4’ to ‘375’). Sales Invoice No. 12075 dated
March 27, 1995 antedates petitioner’s date of first use on
January 1, 1997 indicated in its trademark application filed on
June 9, 1997 as well as the date of first use in June of 1996 as
indicated in the Declaration of Actual Use submitted on
December 3, 2001 (Exhibit ‘385’). The use by respondent
registrant in the concept of owner is shown by commercial
documents, sales invoices unambiguously describing the goods
as "VESPA" air compressors. Private respondents have sold the
air compressors bearing the "VESPA" to various locations in the
Philippines, as far as Mindanao and the Visayas since the early
1990’s. We carefully inspected the evidence consisting of three
hundred seventy-one (371) invoices and shipment documents
which show that VESPA air compressors were sold not only in
Manila, but to locations such as Iloilo City, Cebu City,
Dumaguete City, Zamboanga City, Cagayan de Oro City, Davao
City, to name a few. There is no doubt that it is through
private respondents’ efforts that the mark "VESPA" used on air
compressors has gained business goodwill and reputation in
the Philippines for which it has validly acquired trademark
rights. Respondent E.Y. Industrial’s right has been preserved
until the passage of RA 8293 which entitles it to register the
same.33
Comparatively, the BLA’s findings were founded upon the
evidence presented by the parties. An example of such
evidence is Invoice No. 12075 dated March 29, 1995 34 where
EYIS sold four units of VESPA air compressors to Veteran Paint
Trade Center. Shen Dar failed to rebut such evidence. The
truth, as supported by the evidence on record, is that EYIS
was first to use the mark.
Moreover, the discrepancy in the date provided in the
Declaration of Actual Use filed by EYIS and the proof
submitted was appropriately considered by the BLA, ruling as
follows:
On the contrary, respondent EY Industrial was able to prove
the use of the mark "VESPA" on the concept of an owner as
early as 1991. Although Respondent E.Y. indicated in its
trademark application that its first use was in December 22,
1998, it was able to prove by clear and positive evidence of
use prior to such date.
In Chuang Te v. Ng Kian-Guiab and Director of Patents, L-
23791, 23 November 1966, the High Court clarified: Where an
applicant for registration of a trademark states under oath the
date of his earliest use, and later on he wishes to carry back
his first date of use to an earlier date, he then takes on the
greater burden of presenting "clear and convincing evidence"
of adoption and use as of that earlier date. (B.R. Baker Co. vs.
Lebrow Bros., 150 F. 2d 580.)35
The CA further found that EYIS is not a manufacturer of air
compressors but merely imports and sells them as a
wholesaler and retailer. The CA reasoned:
Conversely, a careful perusal of appellees’ own submitted
receipts shows that it is not manufacturer but an importer,
wholesaler and retailer. This fact is corroborated by the
testimony of a former employee of appellees. Admittedly too,
appellees are importing air compressors from [Shen Dar] from
1997 to 2004. These matters, lend credence to [Shen Dar’s]
claim that the letters SD followed by a number inscribed in the
air compressor is only to describe its type, manufacturer
business name and capacity. The VESPA mark is in the sticker
which is attached to the air compressors. The ruling of the
Supreme Court, in the case of UNNO Commercial Enterprises,
Inc. vs. General Milling Corporation et al., is quite enlightening,
thus We quote:
"The term owner does not include the importer of the goods
bearing the trademark, trade name, service mark, or other
mark of ownership, unless such importer is actually the owner
thereof in the country from which the goods are imported.
Thus, this Court, has on several occasions ruled that where the
applicant’s alleged ownership is not shown in any notarial
document and the applicant appears to be merely an importer
or distributor of the merchandise covered by said trademark,
its application cannot be granted."36
This is a non sequitur. It does not follow. The fact that EYIS
described itself in its sales invoice as an importer, wholesaler
and retailer does not preclude its being a manufacturer. Sec.
237 of the National Internal Revenue Code states:
Section 237. Issuance of Receipts or Sales or Commercial
Invoices.¾All persons subject to an internal revenue tax shall,
for each sale and transfer of merchandise or for services
rendered valued at Twenty-five pesos (P25.00) or more, issue
duly registered receipts or sale or commercial invoices,
prepared at least in duplicate, showing the date of transaction,
quantity, unit cost and description of merchandise or nature of
service: Provided, however, That where the receipt is issued to
cover payment made as rentals, commissions, compensation
or fees, receipts or invoices shall be issued which shall show
the name, business style, if any, and address of the purchaser,
customer or client.
The original of each receipt or invoice shall be issued to the
purchaser, customer or client at the time the transaction is
effected, who, if engaged in business or in the exercise of
profession, shall keep and preserve the same in his place of
business for a period of three (3) years from the close of the
taxable year in which such invoice or receipt was issued, while
the duplicate shall be kept and preserved by the issuer, also in
his place of business, for a like period.
The Commissioner may, in meritorious cases, exempt any
person subject to an internal revenue tax from compliance with
the provisions of this Section. (Emphasis supplied.)
Correlatively, in Revenue Memorandum No. 16-2003 dated
May 20, 2003, the Bureau of Internal Revenue defined a Sales
Invoice and identified its required information as follows:
Sales Invoices (SI)/Cash Invoice (CI) – is written account of
goods sold or services rendered and the prices charged
therefor used in the ordinary course of business evidencing
sale and transfer or agreement to sell or transfer of goods and
services. It contains the same information found in the Official
Receipt.
Official Receipt (OR) – is a receipt issued for the payment of
services rendered or goods sold. It contains the following
information:
a. Business name and address;
b. Taxpayer Identification Number;
c. Name of printer (BIR Permit No.) with inclusive
serial number of booklets and date of issuance of
receipts.
There is no requirement that a sales invoice should accurately
state the nature of all the businesses of the seller. There is no
legal ground to state that EYIS’ "declaration" in its sales
invoices that it is an importer, wholesaler and retailer is
restrictive and would preclude its being a manufacturer.
From the above findings, there was no justifiable reason for
the CA to disregard the factual findings of the IPO. The rulings
of the IPO Director General and the BLA Director were
supported by clear and convincing evidence. The facts cited by
the CA and Shen Dar do not justify a different conclusion from
that of the IPO. Hence, the findings of the BLA Director and
the IPO Director General must be deemed as conclusive on the
CA.
Fifth Issue:
Whether EYIS is the true owner of the mark "VESPA"
In any event, given the length of time already invested by the
parties in the instant case, this Court must write finis to the
instant controversy by determining, once and for all, the true
owner of the mark "VESPA" based on the evidence presented.
RA 8293 espouses the "first-to-file" rule as stated under Sec.
123.1(d) which states:
Section 123. Registrability. - 123.1. A mark cannot be
registered if it:
xxxx
(d) Is identical with a registered mark belonging to a different
proprietor or a mark with an earlier filing or priority date, in
respect of:
(i) The same goods or services, or
(ii) Closely related goods or services, or
(iii) If it nearly resembles such a mark as to be likely
to deceive or cause confusion. (Emphasis supplied.)
Under this provision, the registration of a mark is prevented
with the filing of an earlier application for registration. This
must not, however, be interpreted to mean that ownership
should be based upon an earlier filing date. While RA 8293
removed the previous requirement of proof of actual use prior
to the filing of an application for registration of a mark, proof
of prior and continuous use is necessary to establish ownership
of a mark. Such ownership constitutes sufficient evidence to
oppose the registration of a mark.
Sec. 134 of the IP Code provides that "any person who
believes that he would be damaged by the registration of a
mark x x x" may file an opposition to the application. The term
"any person" encompasses the true owner of the mark¾the
prior and continuous user.
Notably, the Court has ruled that the prior and continuous use
of a mark may even overcome the presumptive ownership of
the registrant and be held as the owner of the mark. As aptly
stated by the Court in Shangri-la International Hotel
Management, Ltd. v. Developers Group of Companies, Inc.:37
Registration, without more, does not confer upon the
registrant an absolute right to the registered mark. The
certificate of registration is merely a prima facie proof that the
registrant is the owner of the registered mark or trade name.
Evidence of prior and continuous use of the mark or trade
name by another can overcome the presumptive ownership of
the registrant and may very well entitle the former to be
declared owner in an appropriate case.
xxxx
Ownership of a mark or trade name may be acquired not
necessarily by registration but by adoption and use in trade or
commerce. As between actual use of a mark without
registration, and registration of the mark without actual use
thereof, the former prevails over the latter. For a rule widely
accepted and firmly entrenched, because it has come down
through the years, is that actual use in commerce or business
is a pre-requisite to the acquisition of the right of ownership.
xxxx
By itself, registration is not a mode of acquiring ownership.
When the applicant is not the owner of the trademark being
applied for, he has no right to apply for registration of the
same. Registration merely creates a prima facie presumption
of the validity of the registration, of the registrant’s ownership
of the trademark and of the exclusive right to the use thereof.
Such presumption, just like the presumptive regularity in the
performance of official functions, is rebuttable and must give
way to evidence to the contrary.
Here, the incontrovertible truth, as established by the evidence
submitted by the parties, is that EYIS is the prior user of the
mark. The exhaustive discussion on the matter made by the
BLA sufficiently addresses the issue:
Based on the evidence, Respondent E.Y. Industrial is a
legitimate corporation engaged in buying, importing, selling,
industrial machineries and tools, manufacturing, among others
since its incorporation in 1988. (Exhibit "1"). Indeed private
respondents have submitted photographs (Exhibit "376",
"377", "378", "379") showing an assembly line of its
manufacturing or assembly process.1avvphi1
More importantly, the private respondent’s prior adoption and
continuous use of the mark "VESPA" on air compressors is
bolstered by numerous documentary evidence consisting of
sales invoices issued in the name of respondent EY Industrial
and Bills of Lading. (Exhibits "4" to "375"). Sales Invoice No.
12075 dated March 27, 1995 antedates petitioner’s date of first
use in January 1, 1997 indicated in its trademark application
filed in June 9, 1997 as well as the date of first use in June of
1996 as indicated in the Declaration of Actual Use submitted
on December 3, 2001 (Exhibit "385"). The use by respondent-
registrant in the concept of owner is shown by commercial
documents, sales invoices unambiguously describing the goods
as "VESPA" air compressors. Private respondents have sold the
air compressors bearing the "VESPA" to various locations in the
Philippines, as far as Mindanao and the Visayas since the early
1990’s. We carefully inspected the evidence consisting of three
hundred seventy one (371) invoices and shipment documents
which show that "VESPA" air compressors were sold not only in
Manila, but to locations such as Iloilo City, Cebu City,
Dumaguete City, Zamboanga City, Cagayan de Oro City, Davao
City to name a few. There is no doubt that it is through private
respondents’ efforts that the mark "VESPA" used on air
compressors has gained business goodwill and reputation in
the Philippines for which it has validly acquired trademark
rights. Respondent EY Industrial’s right has been preserved
until the passage of RA 8293 which entitles it to register the
same. x x x38
On the other hand, Shen Dar failed to refute the evidence cited
by the BLA in its decision. More importantly, Shen Dar failed to
present sufficient evidence to prove its own prior use of the
mark "VESPA." We cite with approval the ruling of the BLA:
[Shen Dar] avers that it is the true and rightful owner of the
trademark "VESPA" used on air compressors. The thrust of
[Shen Dar’s] argument is that respondent E.Y. Industrial Sales,
Inc. is a mere distributor of the "VESPA" air compressors. We
disagree.
This conclusion is belied by the evidence. We have gone over
each and every document attached as Annexes "A", "A" 1-48
which consist of Bill of Lading and Packing Weight List. Not
one of these documents referred to a "VESPA" air compressor.
Instead, it simply describes the goods plainly as air
compressors which is type "SD" and not "VESPA". More
importantly, the earliest date reflected on the Bill of Lading
was on May 5, 1997. (Annex – "A"-1). [Shen Dar] also
attached as Annex "B" a purported Sales Contract with
respondent EY Industrial Sales dated April 20, 2002.
Surprisingly, nowhere in the document does it state that
respondent EY Industrial agreed to sell "VESPA" air
compressors. The document only mentions air compressors
which if genuine merely bolsters respondent Engracio Yap’s
contention that [Shen Dar] approached them if it could sell the
"Shen Dar" or "SD" air compressor. (Exhibit "386") In its
position paper, [Shen Dar] merely mentions of Bill of Lading
constituting respondent as consignee in 1993 but never
submitted the same for consideration of this Bureau. The
document is also not signed by [Shen Dar]. The agreement
was not even drafted in the letterhead of either [Shen Dar] nor
[sic] respondent – registrant. Our only conclusion is that [Shen
Dar] was not able to prove to be the owner of the VESPA mark
by appropriation. Neither was it able to prove actual
commercial use in the Philippines of the mark VESPA prior to
its filing of a trademark application in 9 June 1997.39
As such, EYIS must be considered as the prior and continuous
user of the mark "VESPA" and its true owner. Hence, EYIS is
entitled to the registration of the mark in its name.
WHEREFORE, the petition is hereby GRANTED. The CA’s
February 21, 2008 Decision and October 6, 2008 Resolution in
CA-G.R. SP No. 99356 are hereby REVERSED and SET ASIDE.
The Decision dated May 25, 2007 issued by the IPO Director
General in Inter Partes Case No. 14-2004-00084 and the
Decision dated May 29, 2006 of the BLA Director of the IPO
are hereby REINSTATED.
No costs.
SO ORDERED.
Facts:
 EY Industrial Sales is a domestic corporation engaged
in the production, distribution and sale of air
compressors.
 Shen Dar is a Taiwan-based foreign corporation
engaged in the manufacture of compressors.
 From 1997-2004, EY Industrial imported air
compressors from Shen Dar.
 In 1997, Shen Dar filed a Trademark Application with
the Intellectual Property Office (IPO) for the mark
“Vespa” for the use of air compressors. It was
approved in 2007.
 In 1999, EY Industrial filed a Trademark Application
also for the mark “VESPA” for the use of air
compressors. It was approved in 2004.
 Shen Dar filed a Petition for Cancellation of the
Industrial’s EYES COR with the Bureau of Legal Affairs
contending that: a. there was a violation of Section
123.1 (D) of the Intellectual Property Code which
provides that: A mark cannot be registered if it is
identical to a mark with an earlier filing or priority
date. b. EY Industrial is only a distributor of the air
compressors
 On the other hand, EY Industrial alleged that it is the
sole assembler and fabricator of VESPA air
compressors since the early 1990s and that Shen Dar
supplied them air compressors with the mark “SD”
and not “VESPA”
Issues:
1. Who between EY Industrial and Shen Dar is entitled to the
trademark “VESPA”. EY INDUSTRIAL SALES
2. WON the Bureau of Legal Affairs has the power to cancel
the application of Shen Dar even if it is Shen Dar who filed the
case? YES
Held:
1st: EY INDUSTRIAL has the right to the trademark.
Based on the evidence, EYIS owns the “VESPA” trademark; it
has prior use, as shown by various sales invoices.
Ownership of a mark or trade name may be acquired not
necessarily by registration but by adoption and use in trade or
commerce. As between actual use of a mark without
registration, and registration of the mark without actual use
thereof, the former prevails over the latter.
For a rule widely accepted and firmly entrenched, because it
has come down through the years, is that actual use in
commerce or business is a pre-requisite to the acquisition of
the right of ownership. It is non sequitur to hold that porque
EYIS is a distributor, it is no longer the owner.
FIRST-TO-FILE RULE
Under Section 123.1 of IPO provision, the registration of a
mark is prevented with the filing of an earlier application for
registration.

This must not, however, be interpreted to mean that

ownership should be based upon an earlier filing date. While
RA 8293 (IPC) removed the previous requirement of proof of
actual use prior to the filing of an application for registration of
a mark, proof of prior and continuous use is necessary to
establish ownership of a mark. Such ownership constitutes
sufficient evidence to oppose the registration of a mark.

When we talk about trademark, we are just talking about the

mark. It does not include the product. Shen Dar is the
manufacturer of the product, but they did not name the
product as VESPA. It was EY that named the VESPA, and used
the VESPA, even though they were only the distributors. 
It was
EY that actually used the trademark through the use of
receipts, and other documents.

The first to file rule – According to the SC that Shen Dar filed
under the old IPC where prior use is the one applied. 


2nd: BLA has the power to cancel the application.

Shen Dar challenges the propriety of such cancellation on the

ground that there was no petition for cancellation as required
under Sec. 151 of RA 8293.

The IPO Director General stated that, despite the fact that the
instant case was for the cancellation of the COR issued in favor
of EYIS, the interests of justice dictate, and in view of its
findings, that the COR of Shen Dar must be cancelled.

The above rule reflects the oft-repeated legal principle that

quasi-judicial and administrative bodies are not bound by
technical rules of procedure. Such principle, however, is
tempered by fundamental evidentiary rules, including due
process.

The fact that no petition for cancellation was filed against the
COR issued to Shen Dar does not preclude the cancellation of
Shen Dar’s COR. It must be emphasized that, during the
hearing for the cancellation of EYIS’ COR before the BLA, Shen
Dar tried to establish that it, not EYIS, was the true owner of
the mark “VESPA” and, thus, entitled to have it
registered. Shen Dar had more than sufficient opportunity to
present its evidence and argue its case, and it did. It was
given its day in court and its right to due process was
respected. The IPO Director General’s disregard of the
procedure for the cancellation of a registered mark was a valid
exercise of his discretion.

Remember, EY’s application was the one granted, and it is

Shen Dar’s application that was cancelled. 
It does not mean
that even you were the one who filed, it your application
cannot be cancelled. The BLA, who has jurisdiction over the
case, were able to determine that it is Shen Dar’s trademark
that should not have been issued with registration, even it is
the plaintiff
G.R. No. 120900 July 20, 2000
CANON KABUSHIKI KAISHA, petitioner,
vs.
COURT OF APPEALS and NSR RUBBER CORPORATION,
respondents.
GONZAGA-REYES, J.:
Before us is a petition for review that seeks to set aside the
Decision1 dated February 21, 1995 of the Court of Appeals in
CA-GR SP No. 30203, entitled "Canon Kabushiki Kaisha vs. NSR
Rubber Corporation" and its Resolution dated June 27, 1995
denying the motion for reconsideration of herein petitioner
Canon Kabushiki Kaisha (petitioner).
On January 15, 1985, private respondent NSR Rubber
Corporation (private respondent) filed an application for
registration of the mark CANON for sandals in the Bureau of
Patents, Trademarks, and Technology Transfer (BPTTT). A
Verified Notice of Opposition was filed by petitioner, a foreign
corporation duly organized and existing under the laws of
Japan, alleging that it will be damaged by the registration of
the trademark CANON in the name of private respondent. The
case was docketed as Inter Partes Case No. 3043.
Petitioner moved to declare private respondent in default for
its failure to file its answer within the prescribed period. The
BPTTT then declared private respondent in default and allowed
petitioner to present its evidence ex-parte.
Based on the records, the evidence presented by petitioner
consisted of its certificates of registration for the mark CANON
in various countries covering goods belonging to class 2
(paints, chemical products, toner, and dye stuff). Petitioner
also submitted in evidence its Philippine Trademark
Registration No. 39398, showing its ownership over the
trademark CANON also under class 2.
On November 10, 1992, the BPTTT issued its decision
dismissing the opposition of petitioner and giving due course
to private respondent's application for the registration of the
trademark CANON. On February 16, 1993, petitioner appealed
the decision of the BPTTT with public respondent Court of
Appeals that eventually affirmed the decision of BPTTT. Hence,
this petition for review.
Petitioner anchors this instant petition on these grounds:
A) PETITIONER IS ENTITLED TO EXCLUSIVE USE OF
THE MARK CANON BECAUSE IT IS ITS TRADEMARK
AND IS USED ALSO FOR FOOTWEAR.
B) TO ALLOW PRIVATE RESPONDENT TO REGISTER
CANON FOR FOOTWEAR IS TO PREVENT
PETITIONER FROM USING CANON FOR VARIOUS
KINDS OF FOOTWEAR, WHEN IN FACT, PETITIONER
HAS EARLIER USED SAID MARK FOR SAID GOODS.
C) PETITIONER IS ALSO ENTITLED TO THE RIGHT
TO EXCLUSIVELY USE CANON TO PREVENT
CONFUSION OF BUSINESS.
D) PETITIONER IS ALSO ENTITLED TO THE
EXCLUSIVE USE OF CANON BECAUSE IT FORMS
PART OF ITS CORPORATE NAME, PROTECTED BY
THE PARIS CONVENTION.2
The BPTTT and the Court of Appeals share the opinion that the
trademark "CANON" as used by petitioner for its paints,
chemical products, toner, and dyestuff, can be used by private
respondent for its sandals because the products of these two
parties are dissimilar. Petitioner protests the appropriation of
the mark CANON by private respondent on the ground that
petitioner has used and continues to use the trademark
CANON on its wide range of goods worldwide. Allegedly, the
corporate name or tradename of petitioner is also used as its
trademark on diverse goods including footwear and other
related products like shoe polisher and polishing agents. To
lend credence to its claim, petitioner points out that it has
branched out in its business based on the various goods
carrying its trademark CANON3 , including footwear which
petitioner contends covers sandals, the goods for which private
respondent sought to register the mark CANON. For petitioner,
the fact alone that its trademark CANON is carried by its other
products like footwear, shoe polisher and polishing agents
should have precluded the BPTTT from giving due course to
the application of private respondent.
We find the arguments of petitioner to be unmeritorious.
Ordinarily, the ownership of a trademark or tradename is a
property right that the owner is entitled to protect4 as
mandated by the Trademark Law.5 However, when a
trademark is used by a party for a product in which the other
party does not deal, the use of the same trademark on the
latter's product cannot be validly objected to.6
A review of the records shows that with the order of the
BPTTT declaring private respondent in default for failure to file
its answer, petitioner had every opportunity to present ex-
parte all of its evidence to prove that its certificates of
registration for the trademark CANON cover footwear. The
certificates of registration for the trademark CANON in other
countries and in the Philippines as presented by petitioner,
clearly showed that said certificates of registration cover goods
belonging to class 2 (paints, chemical products, toner,
dyestuff). On this basis, the BPTTT correctly ruled that since
the certificate of registration of petitioner for the trademark
CANON covers class 2 (paints, chemical products, toner,
dyestuff), private respondent can use the trademark CANON
for its goods classified as class 25 (sandals). Clearly, there is a
world of difference between the paints, chemical products,
toner, and dyestuff of petitioner and the sandals of private
respondent.
Petitioner counters that notwithstanding the dissimilarity of the
products of the parties, the trademark owner is entitled to
protection when the use of by the junior user "forestalls the
normal expansion of his business".7 Petitioner's opposition to
the registration of its trademark CANON by private respondent
rests upon petitioner's insistence that it would be precluded
from using the mark CANON for various kinds of footwear,
when in fact it has earlier used said mark for said goods.
Stretching this argument, petitioner claims that it is possible
that the public could presume that petitioner would also
produce a wide variety of footwear considering the diversity of
its products marketed worldwide.
We do not agree. Even in this instant petition, except for its
bare assertions, petitioner failed to attach evidence that would
convince this Court that petitioner has also embarked in the
production of footwear products. We quote with approval the
observation of the Court of Appeals that:
"The herein petitioner has not made known that it
intends to venture into the business of producing
sandals. This is clearly shown in its Trademark
Principal Register (Exhibit "U") where the products of
the said petitioner had been clearly and specifically
described as "Chemical products, dyestuffs, pigments,
toner developing preparation, shoe polisher, polishing
agent". It would be taxing one's credibility to aver at
this point that the production of sandals could be
considered as a possible "natural or normal
expansion" of its business operation".8
In Faberge, Incorporated vs. Intermediate Appellate Court,9
the Director of patents allowed the junior user to use the
trademark of the senior user on the ground that the briefs
manufactured by the junior user, the product for which the
trademark BRUTE was sought to be registered, was unrelated
and non-competing with the products of the senior user
consisting of after shave lotion, shaving cream, deodorant,
talcum powder, and toilet soap. The senior user vehemently
objected and claimed that it was expanding its trademark to
briefs and argued that permitting the junior user to register
the same trademark would allow the latter to invade the senior
user's exclusive domain. In sustaining the Director of Patents,
this Court said that since "(the senior user) has not ventured in
the production of briefs, an item which is not listed in its
certificate of registration, (the senior user), cannot and should
not be allowed to feign that (the junior user) had invaded (the
senior user's) exclusive domain."10 We reiterated the principle
that the certificate of registration confers upon the trademark
owner the exclusive right to use its own symbol only to those
goods specified in the certificate, subject to the conditions and
limitations stated therein.11 Thus, the exclusive right of
petitioner in this case to use the trademark CANON is limited
to the products covered by its certificate of registration.
Petitioner further argues that the alleged diversity of its
products all over the world makes it plausible that the public
might be misled into thinking that there is some supposed
connection between private respondent's goods and petitioner.
Petitioner is apprehensive that there could be confusion as to
the origin of the goods, as well as confusion of business, if
private respondent is allowed to register the mark CANON. In
such a case, petitioner would allegedly be immensely
prejudiced if private respondent would be permitted to take "a
free ride on, and reap the advantages of, the goodwill and
reputation of petitioner Canon".12 In support of the foregoing
arguments, petitioner invokes the rulings in Sta. Ana vs.
Maliwat13 , Ang vs. Teodoro14 and Converse Rubber
Corporation vs. Universal Rubber Products, Inc.15 .
The likelihood of confusion of goods or business is a relative
concept, to be determined only according to the particular, and
sometimes peculiar, circumstances of each case.16 Indeed, in
trademark law cases, even more than in other litigation,
precedent must be studied in the light of the facts of the
particular case.17 Contrary to petitioner's supposition, the facts
of this case will show that the cases of Sta. Ana vs. Maliwat,,
Ang vs. Teodoro and Converse Rubber Corporation vs.
Universal Rubber Products, Inc. are hardly in point. The just
cited cases involved goods that were confusingly similar, if not
identical, as in the case of Converse Rubber Corporation vs.
Universal Rubber Products, Inc. Here, the products involved
are so unrelated that the public will not be misled that there is
the slightest nexus between petitioner and the goods of
private respondent.
In cases of confusion of business or origin, the question that
usually arises is whether the respective goods or services of
the senior user and the junior user are so related as to likely
cause confusion of business or origin, and thereby render the
trademark or tradenames confusingly similar.18 Goods are
related when they belong to the same class or have the same
descriptive properties; when they possess the same physical
attributes or essential characteristics with reference to their
form, composition, texture or quality.19 They may also be
related because they serve the same purpose or are sold in
grocery stores.20
Thus, in Esso Standard Eastern, Inc. vs. Court of Appeals, this
Court ruled that the petroleum products on which the
petitioner therein used the trademark ESSO, and the product
of respondent, cigarettes are "so foreign to each other as to
make it unlikely that purchasers would think that petitioner is
the manufacturer of respondent's goods"21 . Moreover, the
fact that the goods involved therein flow through different
channels of trade highlighted their dissimilarity, a factor
explained in this wise:
"The products of each party move along and are
disposed through different channels of distribution.
The (petitioner's) products are distributed principally
through gasoline service and lubrication stations,
automotive shops and hardware stores. On the other
hand, the (respondent's) cigarettes are sold in sari-
sari stores, grocery store, and other small distributor
outlets. (Respondnet's) cigarettes are even peddled in
the streets while (petitioner's) 'gasul' burners are not.
Finally, there is a marked distinction between oil and
tobacco, as well as between petroleum and
cigarettes. Evidently, in kind and nature the products
of (respondent) and of (petitioner) are poles
apart."22
Undoubtedly, the paints, chemical products, toner and dyestuff
of petitioner that carry the trademark CANON are unrelated to
sandals, the product of private respondent. We agree with the
BPTTT, following the Esso doctrine, when it noted that the two
classes of products in this case flow through different trade
channels. The products of petitioner are sold through special
chemical stores or distributors while the products of private
respondent are sold in grocery stores, sari-sari stores and
department stores.23 Thus, the evident disparity of the
products of the parties in the case at bar renders unfounded
the apprehension of petitioner that confusion of business or
origin might occur if private respondent is allowed to use the
mark CANON.
In its bid to bar the registration of private respondent of the
mark CANON, petitioner invokes the protective mantle of the
Paris Convention. Petitioner asserts that it has the exclusive
right to the mark CANON because it forms part of its corporate
name or tradename, protected by Article 8 of the Paris
Convention, to wit:
"A tradename shall be protected in all the countries of
the Union without the obligation of filing or
registration, whether or not it forms part of a
trademark."
Public respondents BPTTT and the Court of Appeals allegedly
committed an oversight when they required petitioner to prove
that its mark is a well-known mark at the time the application
of private respondent was filed. Petitioner questions the
applicability of the guidelines embodied in the Memorandum of
then Minister of Trade and Industry Roberto Ongpin (Ongpin)
dated October 25, 1983 which according to petitioner
implements Article 6bis of the Paris Convention, the provision
referring to the protection of trademarks. The memorandum
reads:
"a) the mark must be internationally known;
b) the subject of the right must be a trademark, not a
patent or copyright or anything else;
c) the mark must be for use in the same or similar
class of goods;
d) the person claiming must be the owner of the
mark."
According to petitioner, it should not be required to prove that
its trademark is well-known and that the products are not
similar as required by the quoted memorandum. Petitioner
emphasizes that the guidelines in the memorandum of Ongpin
implement Article 6bis of the Paris Convention, the provision
for the protection of trademarks, not tradenames. Article 6bis
of the Paris Convention states:
(1) The countries of the Union undertake, either
administratively if their legislation so permits, or at
the request of an interested party, to refuse or to
cancel the registration and to prohibit the use of a
trademark which constitutes a reproduction, imitation
or translation, liable to create confusion, of a mark
considered by the competent authority of the country
of registration or use to be well-known in that country
as being already the mark of a person entitled to the
benefits of the present Convention and used for
identical or similar goods. These provisions shall also
apply when the essential part of the mark constitutes
a reproduction of any such well-known mark or an
imitation liable to create confusion therewith.
(2) A period of at least five years from the date of
registration shall be allowed for seeking the
cancellation of such a mark. The countries of the
Union may provide for a period within which the
prohibition of use must be sought.
(3) No time limit shall be fixed for seeking the
cancellation or the prohibition of the use of marks or
used in bad faith."
Petitioner insists that what it seeks is the protection of Article 8
of the Paris Convention, the provision that pertains to the
protection of tradenames. Petitioner believes that the
appropriate memorandum to consider is that issued by the
then Minister of Trade and Industry, Luis Villafuerte, directing
the Director of patents to:
"reject all pending applications for Philippine
registration of signature and other world famous
trademarks by applicants other than the original
owners or users."
As far as petitioner is concerned, the fact that its tradename is
at risk would call for the protection granted by Article 8 of the
Paris Convention. Petitioner calls attention to the fact that
Article 8, even as embodied in par. 6, sec. 37 of RA 166,
mentions no requirement of similarity of goods. Petitioner
claims that the reason there is no mention of such a
requirement, is "because there is a difference between the
referent of the name and that of the mark"24 and that "since
Art. 8 protects the tradename in the countries of the Union,
such as Japan and the Philippines, Petitioner's tradename
should be protected here."25
We cannot uphold petitioner's position.
The term "trademark" is defined by RA 166, the Trademark
Law, as including "any word, name, symbol, emblem, sign or
device or any combination thereof adopted and used by a
manufacturer or merchant to identify his goods and distinguish
them for those manufactured, sold or dealt in by others."26
Tradename is defined by the same law as including "individual
names and surnames, firm names, tradenames, devices or
words used by manufacturers, industrialists, merchants,
agriculturists, and others to identify their business, vocations,
or occupations; the names or titles lawfully adopted and used
by natural or juridical persons, unions, and any manufacturing,
industrial, commercial, agricultural or other organizations
engaged in trade or commerce."27 Simply put, a trade name
refers to the business and its goodwill; a trademark refers to
the goods.28
The Convention of Paris for the Protection of Industrial
Property, otherwise known as the Paris Convention, of which
both the Philippines and Japan, the country of petitioner, are
signatories29 , is a multilateral treaty that seeks to protect
industrial property consisting of patents, utility models,
industrial designs, trademarks, service marks, trade names and
indications of source or appellations of origin, and at the same
time aims to repress unfair competition.30 We agree with
public respondents that the controlling doctrine with respect to
the applicability of Article 8 of the Paris Convention is that
established in Kabushi Kaisha Isetan vs. Intermediate Appellate
Court.31 As pointed out by the BPTTT:
"Regarding the applicability of Article 8 of the Paris
Convention, this Office believes that there is no
automatic protection afforded an entity whose
tradename is alleged to have been infringed through
the use of that name as a trademark by a local entity.
In Kabushiki Kaisha Isetan vs. The Intermediate
Appellate Court, et. al., G.R. No. 75420, 15 November
1991, the Honorable Supreme Court held that:
 'The Paris Convention for the Protection of
Industrial Property does not automatically
exclude all countries of the world which have
signed it from using a tradename which
happens to be used in one country. To
illustrate – if a taxicab or bus company in a
town in the United Kingdom or India
happens to use the tradename "Rapid
Transportation", it does not necessarily
follow that "Rapid" can no longer be
registered in Uganda, Fiji, or the Philippines.
This office is not unmindful that in the Treaty of Paris
for the Protection of Intellectual Property regarding
well-known marks and possible application thereof in
this case. Petitioner, as this office sees it, is trying to
seek refuge under its protective mantle, claiming that
the subject mark is well known in this country at the
time the then application of NSR Rubber was filed.
However, the then Minister of Trade and Industry, the
Hon. Roberto V. Ongpin, issued a memorandum
dated 25 October 1983 to the Director of Patents, a
set of guidelines in the implementation of Article 6bis
(sic) of the Treaty of Paris. These conditions are:
a) the mark must be internationally known;
b) the subject of the right must be a
trademark, not a patent or copyright or
anything else;
c) the mark must be for use in the same or
similar kinds of goods; and
d) the person claiming must be the owner of
the mark (The Parties Convention
Commentary on the Paris Convention. Article
by Dr. Bogsch, Director General of the World
Intellectual Property Organization, Geneva,
Switzerland, 1985)'
From the set of facts found in the records, it is ruled
that the Petitioner failed to comply with the third
requirement of the said memorandum that is the
mark must be for use in the same or similar kinds of
goods. The Petitioner is using the mark "CANON" for
products belonging to class 2 (paints, chemical
products) while the Respondent is using the same
mark for sandals (class 25). Hence, Petitioner's
contention that its mark is well-known at the time the
Respondent filed its application for the same mark
should fail. "32
Petitioner assails the application of the case of Kabushi Kaisha
Isetan vs. Intermediate Appellate Court to this case. Petitioner
points out that in the case of Kabushi Kaisha Isetan vs.
Intermediate Appellate Court, petitioner therein was found to
have never at all conducted its business in the Philippines
unlike herein petitioner who has extensively conducted its
business here and also had its trademark registered in this
country. Hence, petitioner submits that this factual difference
renders inapplicable our ruling in the case of Kabushi Kaisha
Isetan vs. Intermediate Appellate Court that Article 8 of the
Paris Convention does not automatically extend protection to a
tradename that is in danger of being infringed in a country
that is also a signatory to said treaty. This contention deserves
scant consideration. Suffice it to say that the just quoted
pronouncement in the case of Kabushi Kaisha Isetan vs.
Intermediate Appellate Court, was made independent of the
factual finding that petitioner in said case had not conducted
its business in this country.
WHEREFORE, in view of the foregoing, the instant petition
for review on certiorari is DENIED for lack of merit.
SO ORDERED.
FACTS: NSR Rubber Corp., filed an application for registration
of the mark CANON for sandals (Class 25) in the Bureau of
Patents, Trademarks, and Technology Transfer (BPTTT). The
application was opposed by Canon Kabushiki Kaisha (CKK), a
foreign corp. under the laws of Japan.
NSR was declared in default upon motion of CKK. CKK
presented as its evidence certificates of registration for the
mark CANON in various countries and in the Philippines
covering goods belonging to Class 2 (paints, chemical
products, toner and dyestuff).
Ruling of the BPTTT: denied the opposition of CKK and granted
the application of NSR Rubber Corp.
CA: affirmed
Both lower courts ruled that there is a dissimilarity between
the products of CKK and NSR, i.e. CKK: paints, chemical
products, toner and dyestuff; while NSR: sandals
ISSUE/S:
1. WON CKK trademark is violated. NO.
2. WON CKK can exclusively use ‘CANON’ as protected by the
Paris Convention. NO.
RULING:
Ordinarily, the ownership of a trademark or tradename is a
property right that the owner is entitled to protect as
mandated by the Trademark Law. However, when a trademark
is used by a party for a product in which the other party does
not deal, the use of the same trademark on the latter’s product
cannot be validly objected to.
The certificates of registration for the trademark CANON in
other countries and in the Philippines clearly showed that said
certificates cover goods belonging to class 2 (paints, chemical
products, toner, dyestuff). As such, NSR t can use the
trademark CANON for its goods classified as class 25 (sandals).
Clearly, there is a world of difference between the paints,
chemical products, toner, and dyestuff and sandals.
The certificate of registration confers upon the trademark
owner the exclusive right to use its own symbol only to those
goods specified in the certificate, subject to the conditions and
limitations stated therein. Thus, the exclusive right of CKK to
use the trademark CANON is limited to the products covered
by its certificate of registration.
The likelihood of confusion of goods or business is a relative
concept, to be determined only according to the particular, and
sometimes peculiar, circumstances of each case. Indeed, in
trademark law cases, even more than in other litigation,
precedent must be studied in the light of the facts of the
particular case.

Here, the products involved are so unrelated that the public

will not be misled that there is the slightest nexus between
petitioner and the goods of private respondent.

Goods are related when they belong to the same class or have
the same descriptive properties; when they possess the same
physical attributes or essential characteristics with reference to
their form, composition, texture or quality. They may also be
related because they serve the same purpose or are sold in
grocery stores.

Here, the paints, chemical products, toner and dyestuff of CKK

that carry the trademark CANON are unrelated to sandals, the
product of NSR. The two classes of products in this case flow
through different trade channels. The products of CKK are sold
through special chemical stores or distributors while the
products of NSR are sold in grocery stores, sari-sari stores and
department stores.

A tradename refers to the business and its goodwill while a

trademark refers to the goods.

Regarding the applicability of Article 8 of the Paris Convention

(“A tradename shall be protected in all the countries of the
Union without the obligation of filing or registration, whether
or not it forms part of a trademark.), there is no automatic
protection afforded an entity whose tradename is alleged to
have been infringed through the use of that name as a
trademark by a local entity. However, the then Minister of
Trade and Industry, the Hon. Roberto V. Ongpin, issued a
memorandum dated 25 October 1983 to the Director of
Patents, a set of guidelines in the implementation of Article
6bis (sic) of the Treaty of Paris.

These conditions are:

1.) the mark must be internationally known;
2.) the subject of the right must be a trademark, not a patent
or copyright or anything else;
3.) the mark must be for use in the same or similar kinds of
goods; and
4.) the person claiming must be the owner of the mark

CKK failed to comply with the third requirement of the said

memorandum. CKK is using the mark “CANON” for products
belonging to class 2 (paints, chemical products) while NSR is
using the same mark for sandals (class 25).