BIRKENSTOCK ORTHOPAEDIE GMBH AND CO.

KG (formerly BIRKENSTOCK
ORTHOPAEDIE GMBH)
vs.
PHILIPPINE SHOE EXPO MARKETING CORPORATION
G.R. No. 194307   November 20, 2013

FACTS:

Petitioner, a corporation duly organized and existing under the laws of Germany, applied
for various trademark registrations before the IPO. However, registration proceedings of the
subject applications were suspended in view of an existing registration of the mark
"BIRKENSTOCK AND DEVICE" in the name of Shoe Town International and Industrial
Corporation, the predecessor-in-interest of respondent Philippine Shoe Expo Marketing
Corporation. In this regard, petitioner filed a petition for cancellation of the registration on the
ground that it is the lawful and rightful owner of the Birkenstock marks (Cancellation Case). 

The aforesaid cancellation of the registration paved the way for the publication of the
subject applications in the IPO e-Gazett. In response, respondent filed three (3) separate verified
notices of oppositions to the subject applications claiming, inter alia, that: (a) it, together with its
predecessor-in-interest, has been using Birkenstock marks in the Philippines for more than 16
years through the mark "BIRKENSTOCK AND DEVICE"; (b) the marks covered by the subject
applications are identical to the one covered by the subject registration and thus, petitioner has no
right to the registration of such marks; (c) respondent’s predecessor-in-interest likewise obtained
a Certificate of Copyright Registration for the word "BIRKENSTOCK" ; (d) while respondent
and its predecessor-in-interest failed to file the 10th Year DAU, it continued the use of
"BIRKENSTOCK AND DEVICE" in lawful commerce; and (e) to record its continued
ownership and exclusive right to use the "BIRKENSTOCK" marks, it has filed as a " re-
application " of its old registration.

BLA of the IPO sustained respondent’s opposition, thus, ordering the rejection of the
subject applications. It ruled that the competing marks of the parties are confusingly similar since
they contained the word "BIRKENSTOCK" and are used on the same and related goods. It found
respondent and its predecessor-in-interest as the prior user and adopter of "BIRKENSTOCK" in
the Philippines. The BLA likewise opined that petitioner’s marks are not well -known in the
Philippines and internationally and that the various certificates of registration submitted by
petitioners were all photocopies and, therefore, not admissible as evidence.16
Aggrieved, petitioner appealed to the IPO Director General.

IPO Director General reversed and set aside the ruling of the BLA, thus allowing the
registration of the subject applications. He found that the evidence presented proved that
petitioner is the true and lawful owner and prior user of "BIRKENSTOCK" marks and thus,
entitled to the registration of the marks covered by the subject applications.
Finding the IPO Director General’s reversal of the BLA unacceptable, respondent filed a petition
for review with the CA.

The CA reversed and set aside the ruling of the IPO Director General and reinstated that
of the BLA. It disallowed the registration of the subject applications on the ground that the marks
covered by such applications "are confusingly similar, if not outright identical" with respondent’s
mark.

ISSUE:

Whether or not the subject marks should be allowed registration in the name of petitioner.
RULING: Yes.

Republic Act No. (RA) 166, the governing law for Registration No. 56334, requires the
filing of a DAU on specified periods. The aforementioned provision clearly reveals that failure to
file the DAU within the requisite period results in the automatic cancellation of registration of a
trademark. In turn, such failure is tantamount to the abandonment or withdrawal of any right or
interest the registrant has over his trademark.

In this case, respondent admitted that it failed to file the 10th Year DAU for Registration
No. 56334 within the requisite period, or on or before October 21, 2004. As a consequence, it
was deemed to have abandoned or withdrawn any right or interest over the mark
"BIRKENSTOCK." Neither can it invoke Section 236 of the IP Code which pertains to
intellectual property rights obtained under previous intellectual property laws, precisely because
it already lost any right or interest over the said mark.
Besides, petitioner has duly established its true and lawful ownership of the mark
"BIRKENSTOCK."

It must be emphasized that registration of a trademark, by itself, is not a mode of

acquiring ownership. If the applicant is not the owner of the trademark, he has no right to apply
for its registration. 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.
Clearly, it is not the application or registration of a trademark that vests ownership thereof, but it
is the ownership of a trademark that confers the right to register the same. A trademark is an
industrial property over which its owner is entitled to property rights which cannot be
appropriated by unscrupulous entities that, in one way or another, happen to register such
trademark ahead of its true and lawful owner. The presumption of ownership accorded to a
registrant must then necessarily yield to superior evidence of actual and real ownership of a
trademark.

In view of the foregoing circumstances, the Court finds the petitioner to be the true and
lawful owner of the mark "BIRKENSTOCK" and entitled to its registration, and that respondent
was in bad faith in having it registered in its name.