31-33.docx

BIRKENSTOCK ORTHOPAEDIE GMBH AND CO. KG vs PHILIPPINE SHOE EXPO MARKETING CORPORATION, G.R. No. 194307. November 20, 2013 DOCTRINES:  Under Section 2 of RA 166, which is also the law governing the subject applications, in order to register a trademark, one must be the owner thereof and must have actually used the mark in commerce in the Philippines for two (2) months prior to the application for registration. Section 2-A of the same law sets out to define how one goes about acquiring ownership thereof. Under the same section, it is clear that actual use in commerce is also the test of ownership but the provision went further by saying that the mark must not have been so appropriated by another. Significantly, to be an owner, Section 2-A does not require that the actual use of a trademark must be within the Philippines. Thus, under RA 166, one may be an owner of a mark due to its actual use but may not yet have the right to register such ownership here due to the owner’s failure to use the same in the Philippines for two (2) months prior to registration.  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.  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. FACTS:  Petitioner Birkenstock, a corporation duly organized and existing under the laws of Germany applied for various trademark registrations before the Intellectual Property Office (IPO). However, the applications were suspended in view of the existing registration of the mark “BIRKENSTOCK AND DEVICE” under Registration No. 56334 dated October 21, 1993 in the name of Shoe Town International and Industrial Corporation, the predecessor-in-interest of respondent Philippine Shoe Expo Marketing Corporation.  On May 27, 1997, Birkinstock filed a petition (Cancellation Case) for cancellation of Registration No. 564334 on the ground that it is the lawful and rightful owner of the Birkenstock marks. During its pendency, however, respondent Philippine Shoe Expo or it predecessor-in-interest failed to file the required 10th Year Declaration of Actual Use (10th Year DAU) for Registration No. 56334 on or before October 21, 2004, thereby resulting the cancellation of such mark. Accordingly, the cancellation case was dismissed for being moot and academic thereby paving the way for the publication of the subject applications.

 In response, respondent Philippine Shoe Expo filed with the Bureau of Legal Affairs (BLA) of the IPO three separate verified notices of opposition to the subject applications docketed as Inter Partes Cases claiming, among others, it, together with its predecessor-in-interest, has been using the Birkenstock marks in the Philippines for more than 16 years through the mark “BIRKENSTOCK AND DEVICE”.  In its Decision, the BLA of the IPO sustained respondent’s opposition, thus ordering the rejection of the subject applications of Petitioner. Aggrieved, petitioner Birkinstock appealed to the IPO Director General whereby in its decision, the latter reversed and set aside the ruling of the BLA thus allowing the registration of the subject applications.  Finding the IPO Director General’s reversal of the BLA unacceptable, respondent Philippine Shoe Expo filed a petition for review with the Court of Appeals. In its decision dated June 25, 2010, the CA reversed and set aside the ruling of the IPO Director General and reinstated that of the BLA. The petitioner Birkenstock filed a Motion for Reconsideration but was denied by the CA.  Hence , this petition to the Supreme Court. ISSUE: 1. Whether or not the subject marks should be allowed registration in the name of the petitioner? RULING: 1. The court ruled in favour of the petitioner. Under Section 12 of Republic Act 166, it provides that, “Each certificate of registration shall remain in force for twenty years: Provided, that the registration under the provisions of this Act shall be cancelled by the Director, unless within one year following the fifth, tenth and fifteenth anniversaries of the date of issue of the certificate of registration, the registrant shall file in the Patent Office an affidavit showing that the mark or trade-name is still in use or showing that its non-use is due to special circumstance which excuse such non-use and is not due to any intention to abandon the same, and pay the required fee.” In the case at bar, 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”. 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. Such presumption, just like the presumptive regularity in the performance of official functions, is rebuttable and must give way to evidence to the contrary. Besides, petitioner has duly established its true and lawful ownership of the mark “BIRKENSTOCK”. It submitted evidence relating to the origin and history of “BIRKENSTOCK” and it use in commerce long before respondent was able to register the same here in the Philippines. Petitioner also submitted various certificates of registration of the mark “BIRKENSTOCK” in various countries and that it has used such mark in different countries worldwide, including the Philippines. PEST MANAGEMENT G.R. NO. 156041 ASSOCIATION OF THE

PHILIPPINES (PMAP), V. FERTILIZER AND PESTICIDE AUTHORITY (FPA), SECRETARY OF THE DEPARTMENT OF AGRICULTURE, FPA OFFICER- IN-CHARGE CESAR M. DRILON, AND FPA DEPUTY DIRECTOR DARIO C. SALUBARSE, Facts: The case commenced upon petitioners filing of a Petition For Declaratory Relief With Prayer For Issuance Of A Writ Of Preliminary Injunction And/Or Temporary Restraining Order with the RTC on January 4, 2002. Petitioner, a non-stock corporation duly organized and existing under the laws of the Philippines, is an association of pesticide handlers duly licensed by respondent Fertilizer and Pesticide Authority (FPA). It questioned the validity of Section 3.12 of the 1987 Pesticide Regulatory Policies and Implementing Guidelines, which provides thus: 3.12 Protection of Proprietary Data Data submitted to support the first full or conditional registration of a pesticide active ingredient in the Philippines will be granted proprietary protection for a period of seven years from the date of such registration. During this period subsequent registrants may rely on these data only with third party authorization or otherwise must submit their own data. Petitioner argued that the specific provision on the protection of the proprietary data in FPAs Pesticide Regulatory Policies and Implementing Guidelines is unlawful for going counter to the objectives of Presidential Decree No. 1144 (P.D. No. 1144); for exceeding the limits of delegated authority; and for encroaching on the exclusive jurisdiction of the Intellectual Property Office. On November 5, 2002, the RTC dismissed the petition for declaratory relief for lack of merit. The RTC held that the FPA did not exceed the limits of its delegated authority in issuing the aforecited Section 3.12 of the Guidelines granting protection to proprietary data x x x because the issuance of the aforecited Section was a valid exercise of its power to regulate, control and develop the pesticide industry under P.D. 1144[2] and the assailed provision does not encroach on one of the functions of the Intellectual Properly Office (IPO).[3] Dissatisfied with the RTC Decision, petitioner resorted to filing this petition for review on certiorari where the following issues are raised: Respondents, on the other hand, maintain that the provision on the protection of proprietary data in the FPA's Pesticide Regulatory Policies and Implementing Guidelines is valid and legal as it does not violate the objectives of P.D. No. 1144; the proprietary data are a substantial asset which must be protected; the protection for a limited number of years does not

constitute unlawful restraint of free trade; and such provision does not encroach upon the jurisdiction of the Intellectual Property Office. Respondents expound that since under P.D. No. 1144, the FPA is mandated to regulate, control and develop the pesticide industry, it was necessary to provide for such protection of proprietary data, otherwise, pesticide handlers will proliferate to the the detriment of the industry and the public since the inherent toxicity of pesticides are hazardous and are potential environmental contaminants. They also pointed out that the protection under the assailed Pesticide Regulatory Policies and Implementing Guidelines is warranted, considering that the development of proprietary data involves an investment of many years and large sums of money, thus, the data generated by an applicant in support of his application for registration are owned and proprietary to him. Moreover, since the protection accorded to the proprietary data is limited in time, then such protection is reasonable and does not constitute unlawful restraint of trade. Lastly, respondents emphasize that the provision on protection of proprietary data does not usurp the functions of the Intellectual Property Office (IPO) since a patent and data protection are two different matters. A patent prohibits all unlicensed making, using and selling of a particular product, while data protection accorded by the FPA merely prevents copying or unauthorized use of an applicant's data, but any other party may independently generate and use his own data. It is further argued that under Republic Act No. 8293 (R.A. No. 8293), the grant of power to the IPO to administer and implement State policies on intellectual property is not exclusionary as the IPO is even allowed to coordinate with other government agencies to formulate and implement plans and policies to strengthen the protection of intellectual property rights. Issues: I WHETHER OR NOT RESPONDENT FPA HAS ACTED BEYOND THE SCOPE OF ITS DELEGATED POWER WHEN IT GRANTED A SEVEN-YEAR PROPRIETARY PROTECTION TO DATA SUBMITTED TO SUPPORT THE FIRST FULL OR CONDITIONAL REGISTRATION OF A PESTICIDE INGREDIENT IN THE PHILIPPINES; II WHETHER OR NOT RESPONDENT FPA IS ENCROACHING ON THE EXCLUSIVE JURISDICTION OF THE INTELLECTUAL PROPERTY OFFICE (IPO) WHEN IT INCLUDED IN ITS PESTICIDE REGULATORY POLICIES AND IMPLEMENTING GUIDELINES THE SUBJECT SEVEN-YEAR PROPRIETARY DATA PROTECTION; III

WHETHER OR NOT SAID PROPRIETARY DATA PROTECTION IS AN UNLAWFUL RESTRAINT OF FREE TRADE; IV WHETHER OR NOT SAID PROPRIETARY DATA PROTECTION RUNS COUNTER TO THE OBJECTIVES OF P.D. NO. 1144; Ruling: The petition is devoid of merit. The law being implemented by the assailed Pesticide Regulatory Policies and Implementing Guidelines is P.D. No. 1144, entitled Creating the Fertilizer and Pesticide Authority and Abolishing the Fertilizer Industry Authority. As stated in the Preamble of said decree, there is an urgent need to create a technically-oriented government authority equipped with the required expertise to regulate, control and develop both the fertilizer and the pesticide industries. Verily, in this case, the Court acknowledges the experience and expertise of FPA officials who are best qualified to formulate ways and means of ensuring the quality and quantity of pesticides and handlers thereof that should enter the Philippine market, such as giving limited protection to proprietary data submitted by applicants for registration.The Court ascribes great value and will not disturb the FPA's determination that one way of attaining the purposes of its charter is by granting such protection, specially where there is nothing on record which shows that said administrative agency went beyond its delegated powers. Moreover, petitioner has not succeeded in convincing the Court that the provision in question has legal infirmities. There is no encroachment upon the powers of the IPO granted under R.A. No. 8293, otherwise known as the Intellectual Property Code of the Philippines. Section 5 thereof enumerates the functions of the IPO. Nowhere in said provision does it state nor can it be inferred that the law intended the IPO to have the exclusive authority to protect or promote intellectual property rights in the Philippines. On the contrary, paragraph (g) of said Section even provides that the IPO shall [c]oordinate with other government agencies and the private sector efforts to formulate and implement plans and policies to strengthen the protection of intellectual property rights in the country. Clearly, R.A. No. 8293 recognizes that efforts to fully protect intellectual property rights cannot be undertaken by the IPO alone. Other agencies

dealing with intellectual property rights are, therefore, not precluded from issuing policies, guidelines and regulations to give protection to such rights. There is also no evidence whatsoever to support petitioner's allegation that the grant of protection to proprietary data would result in restraining free trade. Petitioner did not adduce any reliable data to prove its bare allegation that the protection of proprietary data would unduly restrict trade on pesticides. Furthermore, as held in Association of Philippine Coconut Desiccators v. Philippine Coconut Authority,[6] despite the fact that our present Constitution enshrines free enterprise as a policy, it nonetheless reserves to the government the power to intervene whenever necessary to promote the general welfare. There can be no question that the unregulated use or proliferation of pesticides would be hazardous to our environment. Thus, in the aforecited case, the Court declared that free enterprise does not call for removal of protective regulations.[7] More recently, in Coconut Oil Refiners Association, Inc. v. Torres,[8] the Court held that [t]he mere fact that incentives and privileges are granted to certain enterprises to the exclusion of others does not render the issuance unconstitutional for espousing unfair competition. It must be clearly explained and proven by competent evidence just exactly how such protective regulation would result in the restraint of trade. In sum, the assailed provision in the 1987 Pesticide Regulatory Policies and Implementing Guidelines granting protection to proprietary data is well within the authority of the FPA to issue so as to carry out its purpose of controlling, regulating and developing the pesticide industry. COFFEE PARTNERS, INC. VS. SAN FRANCISCO COFFEE AND ROASTERY, INC. GR No. 169504, March 3, 2010 FACTS: The petitioner holds a business in maintaining coffee shops in the Philippines. It is registered with the Securities and Exchange Commission in January 2001. In its franchise agreement with Coffee Partners Ltd, it carries the trademark “San Francisco Coffee.” Respondent is engaged in the wholesale and retail sale of coffee that was registered in SEC in May 1995 under a registered business name of “San Francisco Coffee & Roastery, Inc.” It entered into a joint venture with Boyd Coffee USA to study coffee carts in malls.

When respondent learned that petitioner will open a coffee shop in Libis, Q.C. they sent a letter to the petitioner demanding them to stop using the name “San Francisco Coffee” as it causes confusion to the minds of the public. A complaint was also filed by respondents before the Bureau of Legal Affairs of the Intellectual Property Office for infringement and unfair competition with claims for damages. Petitioners contend that there are distinct differences in the appearance of their trademark and that respondent abandoned the use of their trademark when it joined venture with Boyd Coffee USA. The Bureau of Legal Affairs of the IPO held that petitioner’s trademark infringed on the respondent’s trade name as it registered its business name first with the DTI in 1995 while petitioner only registered its trademark in 2001. Furthermore, it ruled that the respondent did not abandon the use of its trade name upon its joint venture with Boyd Coffee USA since in order for abandonment to exist it must be permanent, intentional and voluntary. It also held that petitioner’s use of the trademark "SAN FRANCISCO COFFEE" will likely cause confusion because of the exact similarity in sound, spelling, pronunciation, and commercial impression of the words "SAN FRANCISCO" which is the dominant portion of respondent’s trade name and petitioner’s trademark. Upon appeal before the office of the Director General of the IPO, the decision of its legal affairs was reversed declaring there was no infringement. The Court of Appeals however set aside its decision and reinstated the IPO legal affairs’ decision. Petitioner contends that the respondent’s trade name is not registered therefore a suit for infringement is not available. ISSUE: Whether or not the petitioner’s use of the trademark "SAN FRANCISCO COFFEE" constitutes infringement of respondent’s trade name "SAN FRANCISCO COFFEE & ROASTERY, INC." even if the trade name is not registered with the Intellectual Property Office (IPO). HELD: Petition denied. Registration of a trademark before the IPO is no longer a requirement to file an action for infringement as provided in Section 165.2 of RA 8293. All that is required is that the trade name is previously used in trade or commerce in the Philippines. There is no showing that respondent abandoned the use of its trade name as it continues to embark to conduct research on retailing coffee, import and sell coffee machines as among the services for which the use of the business name has been registered. The court also laid down two tests to determine similarity and likelihood of confusion. The dominancy test focuses on similarity of the prevalent features of the trademarks that could cause deception and confusion that constitutes infringement. Exact duplication or imitation is not

required. The question is whether the use of the marks involved is likely to cause confusion or mistake in the mind of the public or to deceive consumers. the holistic test entails a consideration of the entirety of the marks as applied to the products, including the labels and packaging, in determining confusing similarity.15 The discerning eye of the observer must focus not only on the predominant words but also on the other features appearing on both marks in order that the observer may draw his conclusion whether one is confusingly similar to the other. Applying the dominancy test or the holistic test, petitioner’s "SAN FRANCISCO COFFEE" trademark is a clear infringement of respondent’s "SAN FRANCISCO COFFEE & ROASTERY, INC." trade name. The descriptive words "SANFRANCISCO COFFEE" are precisely the dominant features of respondent’s trade name. And because both are involved in coffee business there is always the high chance that the public will get confused of the source of the coffee sold by the petitioner. Respondent has acquired an exclusive right to the use of the trade name "SAN FRANCISCO COFFEE & ROASTERY,INC." since the registration of the business name with the DTI in 1995.