~iPINTELLECTUAL PROPERTYPHILIPPINES

OFFICE OF THE DIRECTOR GENERAL

GIANNI VERSACE, S.p.A.,Appellant,

-versus-

WALLIELEE,Appellee.

"----------------------------------------,,

DECISION

Appeal No. 14-07-26

IPC No. 14-2006-00061Petition for CancellationReg. No. 4-1992-84792Date Issued: 03 May 2001Trademark: VERSUS

GIANNI VERSACE, S.p.A. ("Appellant") appeals the Decision No. 2007-42, dated30 March 2007, of the Director of the Bureau of Legal Affairs ("Director"). TheDirector denied the Appellant's petition to cancel the registration of the mark"VERSUS" issued in the name of WALLIE LEE ("Appellee").!

This case commenced when the Appellant filed on 10 April 2006 a "PETITIONFOR CANCELLATION" alleging the following:

1. The Appellee's registration of the mark VERSUS contravenes Sec. 123.1,subpar.(c) and (f) of Rep. Act No. 8293, also known as the IntellectualProperty Code of the Philippines ("IP Code")":

2. The Appellee's mark so resembles the Appellant's registered and still validmarks in the Philippines, namely, "VERSUS AND DEVICE"3 and "VERSUS &DEVICE"4 that, when applied to or used in connection with the Appellee'sgoods, will likely deceive or confused with the Appellant's goods;

3. The Appellee's use of VERSUS on goods that are similar, identical orclosely related to those produced by, originated from, or are under thesponsorship of the Appellant will mislead the public into believing that theAppellee's goods are also produced by, originated from, or are under thesponsorship of the Appellant;

4. The Appellant began using its marks in Italy in 1979, and elsewherearound the world in 1989, and that it has not abandoned such use;

5. The Appellant's marks are well-known and entitled to broad protection

Reg. No. 4-1992-84792, issued on 03 May 2001, covering the goods under Classes 18, 24 &.25 namely: shoes, sandals, slippers,boots, jeans, pants, t-shirts, polo shirts, briefs, shorts, socks, handkerchiefs, belts, jogging pants, sweatshirts, suits, coats,overcoats, topcoats, jackets, neckties, vests, handbags, overnight bags, travel bags, school bags, headband, wristband, scarf,wallet, blouses, ladies pants and shirts.

Took effect on 01Jan. 1998.

Under Reg. No. 4-1996-112722 issued on 04 July 2002 for goods under class 18.

4Under Reg. No. 4-1996-112721 issued on 12April 2002 for goods under class 9.

Republic of the PhilippinesINTELLECTUAL PROPERTY OFFICE

351 Sen. Gil Puyat Ave., Makati City 1200 Philippines • www.ipophil.gov.phtl>:.tATelephone: +632-7525450 to 65 • Facsimile: +632-8904862 • email: mail@ipophil.gov.ph

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under the IP Code, Art. 6bis of the Paris Convention for the Protection ofIndustrial Property ("Paris Convention"), and Art. 16 of the Agreement onTrade-Related Aspects of Intellectual Property Rights ("TRIPSAgreement") to which the Philippines and Italy are signatories; and

6. The registration of the Appellee's mark contravenes the IP Code, the ParisConvention and the TRIPS Agreement, hence, should be cancelledpursuant to Sec. 151.1 subpar. (a) and (b) of the IP Code.

The Appellee in his "ANSWER"s alleged the following:

1. The Appellee adopted and has been using the mark VERSUS in good faith,Reg. No. 4-1992-84792 having been issued in accordance with Rep. ActNo. 166, as amended, ("RA 166") and the Revised Rules of Practice inTrademark Cases;

2. Cert. of Reg. No. 4-1992-84792 was issued before the Appellant's Cert. ofReg. Nos. 4-1996-112722 and 4-1996-112721;

3. The Appellee's registered mark neither resembles or is confusingly similarto the Appellant's, otherwise, the Bureau of Trademarks would not haveapproved these registrations;

4. The Appellee's mark is registered for use on shoes, sandals, slippers,boots, jeans, pants, t-shirts, polo shirts, briefs, shorts, socks,handkerchiefs, belts, jogging pants, sweatshirts, suits, coats, overcoats,topcoats, jackets, neckties, vests, handbags, overnight bags, travel bags,school bags, headband, wristband, scarf, wallet, blouses, ladies pants, andshirts (classes 18,24, and 25) while the Appellant's mark is registered foruse on handbags, wallets, luggage, attache case, tote bags, briefcases, allpurpose sport bags, traveling trunks and carry-on bags, shoulder bag,garment bags for traveling, keycases, umbrellas, parasols and walkingsticks, whips, harnesses, and saddlery (class 18); and on glasses andsunglasses (class 9);

5. The Appellant is barred by prior judgment and/or estoppel to questionthe validity of Reg. No. 4-1992-84792 as the Appellant had previouslywithdrawn its opposition to the registration of the Appellee's mark inInter Partes Case No. 4209;

6. The Appellee is the first to use VERSUS and apply in 1992 for registrationin the Philippines and that any likelihood of confusion, deception ormistake between the goods of the parties should be resolved in his favor;

7. Reg. No. 4-1992-84792 does not violate the Paris Convention and theTRIPSAgreement;

8. The Appellee owns the mark VERSUS in the Philippines for use on goods

Filed on 08 Sept. 2006.

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falling under classes 18, 24, and 25 and under RA 166, and his earlier useand filing of a trademark application proscribed the Appellant'ssubsequent use of and filing of an application for VERSUS AND DEVICE;

9. The Appellant did not adduce clear and convincing proof that its mark iswell known internationally and in the Philippines as of 1992 when theAppellee adopted and started using VERSUS and when he filed histrademark application;

10. The earlier registration of the Appellee's mark proscribes the registrationof the Appellant's marks;

11. The Appellant's Exhibits "D" to "D14" and "E" to "E-l" are not supportedby duly certified copies of the alleged registrations and applications forregistrations while Exhibits "F" to "F-4"; "G" to "G-9"; "H" to "H-5"; "1" to "1­5"; "1" to "J-l"; and "K" to "K-l" are not properly certified as required bySees. 24 and 25 of Rule 132 of the Rules of Court;

12. The advertisements depicted in Exhibits "M-3" up to "M-39", inclusivewere made only in 2002 to 2005, long after the Appellee adopted andstarted using VERSUS in 1992; and

13. The decisions evidenced by Exhibits "N" to "N-6"; "0" to "0-3"; "P" to "P­42"; and "Q" to "Q-2" failed to comply with Sees. 24 and 25 of Rule 132 ofthe Rules of Court and they were issued long after the Appellee's Reg. No.4-1992-84792 was issued on 03 May 2001.

After the appropriate proceedings, the Director ruled that the Appellant failedto show that its mark is well-known. According to her, the Appellee has the legal rightto apply for the registration of the mark VERSUS when applied to goods under classes18, 24 and 25 as it was not registered in the Philippines nor was there any evidencethat it has been previously used by another. She also held that the Appellee was ableto submit evidence consisting of sales invoices to show continuous use of the mark inthe Philippines. Further, the Director also saw distinction between the parties' marks.

On 16 May 2007, the Appellant filed the instant appeal. It maintains that:

1. its marks are internationally famous or well-known and thus, protected underPhilippine laws and jurisprudence, the Paris Convention and the TRIPSAgreement;

2. the Appellee's mark is confusingly similar to its marks; and3. the Appellee obtained his trademark registration by fraud, hence, should be

cancelled pursuant to Sec. 151.1(b) of the IP Code.

The Appellee filed on 20 June 2007 its comment to the appeal, reiterating hiscontention that:

1. the Appellant failed to present substantial and admissible evidence that the markVERSUS is well-known internationally and in the Philippines;

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2. he has established ownership over the mark by virtue of his earlier use incommerce thereof;

3. his trademark application preceded the Appellant's by almost four (4) years;4. what should be cancelled are the Appellants' registrations; andS. the Appellant is barred by prior judgment and/or estopped from questioning the

issuance of Reg. No. 4-1992-84792 because it has previously withdrawn itsopposition thereto.

Records show that the Appellant submitted the following as its evidence:

1. An "AFFIDAVIT OF OWNERSHIP" executed by a legal officer of theAppellant:"

2. Copies of certificates of registration for the mark VERSUS and Deviceissued by this Office:"

3. Copies of certificates of registration for the mark VERSUS issued in Italy,China, and Malaysia:"

4. List of worldwide applications and registrations of the mark VERSUS andVERSUS and Device:"

5. An affidavit executed by one of the Appellant's executives certifying thesales made and advertising figures spent by the Appellant from 1999 to2004;10

6. An affidavit executed by the legal officer of the Appellant certifying theadvertisements made by the Appellant; 11 and

7. Copies of decisions issued by the intellectual property offices in Hondurasand Spain and the commercial court in Jakarta in favor of the Appellantconcerning disputes pertaining to the mark VERSUS.12

The Appellee's evidence on the other hand consists of the following:

1. Copies of documents from the filewrapper of Certificate of Registration No. 4­1992-84792/3

2. "AFFIDAVIT" of the Appellee:" and

3. Sales invoices showing the sale of goods bearing the mark VERSUS.1s

See Exh. "A" to "A-3".

See Exh. "B" to "B-2" and "C" to "C-2".

See Exh. "F" to "K", inclusive of sub-markings.

See Exh."0" and "E", inclusive of sub-markings.10

See Exh. "L", inclusive of sub-markings.

II See Exh. "M", inclusive of sub-marking.

12 See Exh. "N" to "Q", inclusive of sub-markings.

13 See Exh. "1" to "1-1".

14 See Exh, "2".

IS See Exh. "3" to "3-e".

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Since the Appellee's trademark application was filed under and governed byRA 166, the validity of Reg. No. 4-1992-84792 shall also be determined under theprovisions of that law. Sees. 2 and 2-A of RA 166 16 provide that:

"Sec.2. What are registrable.- Trade-marks, trade-names, and service-marksowned by persons, corporations, partnership or associations domiciled in thePhilippines and by persons, corporations, partnerships or associations domiciledin any foreign country may be registered in accordance with the provisions of thisAct: Provided, That said trade-marks, trade-names, or service-marks are actuallyin use in commerce and services not less than two months in the Philippinesbefore the time the applications for registration are filed: And provided, further,That the country of which the applicant for registration is a citizen grants by lawsubstantially similar privileges to citizens of the Philippines, and such fact isofficially certified, with a certified true copy of the foreign law translated into theEnglish language, by the government of the foreign country to the Government ofthe Republic of the Philippines."

"Sec.2-A. Ownership of trade-marks, trade-names and service-marks, howacquired.- Anyone who lawfully produces or deals in merchandise of any kind orwho engages in any lawful business, or who renders any lawful service incommerce, by actual use thereof in manufacture or trade, in business, and in theservice rendered, may appropriate to his exclusive use a trade-mark, a trade­name, or a service-mark not so appropriated by another, to distinguish hismerchandise, business or service from the merchandise, business, or service ofothers. The ownership or possession of a trade-mark, trade-name, service-mark,heretofore or hereafter appropriated, as in this section provided, shall berecognized and protected in the same manner and to the same extent as are otherproperty rights known to the laws."

Clearly, only the owner of a mark has the right to register it as a trademark.The certificate of registration serves only as a prima facie evidence of the validity ofthe registration and of the registrant's ownership of the mark and exclusive right touse it in connection with the goods or services and those that are related thereto asspecified in the certificate.'?

In this instance, the contending parties were able to register the mark VERSUSin their favor. It is the Appellant's contention, however, that the Appellee fraudulentlyobtained its trademark registration. Under Sec. 151.1(b) ofthe IP Code, it is provided,in part:

"SEC. 151. Cancellation.- 151.1. A petition to cancel a registration of a mark underthis Act may be filed with the Bureau of Legal Affairs by any person who believesthat he is or will be damaged by the registration of a mark under this Act asfollows:

x x x

(b) At any time, if the registered mark becomes the generic name for the goods orservices, or a portion thereof, for which it is registered, or has been abandoned, or

16 "AN ACT TO PROVIDE FOR THE REGISTRATION AND PROTECTION OF TRADEMARKS, TRADE-NAMES AND SERVICE-MARKS,

DEFINING UNFAIR COMPETITION AND FALSE MARKING AND PROVIDING REMEDIES AGAINST THE SAME, AND FOR OTHERPURPOSES".

17 Sec. 138 of the IP Code, formerly Sec. 20 of RA 166.

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its registration was obtained fraudulently or contrary to the provisions of this Actx x x"

The Appellant contends that the question of whether or not the registration ofthe trademarks was obtained through fraud and false representation becomesnecessary and important only when there is a finding of similarity between thecontesting trademarks; and, in order that proof of fraud might produce cancellation, itis necessary that it be coupled with a showing that the trademarks of the parties aresimilar and the maintenance of one would work damage to the other."

Are the competing marks confusingly similar?

The parties' respective marks are reproduced below for comparison.

VERSUSq~~-~~.

(Appellant's mark)

VERSUS(Appellee's mark)

Obviously, the marks are identical. The presence of the "device" in theAppellant's mark - the facsimile of the signature of the late international fashiondesigner Gianni Versace - is inconsequential.

Also, the competing marks are used on similar or closely related goods likehandbags, travelling bags and wallets, thus, readily give the impression andconnotation that these marks are one and the same. It is likely that the purchasingpublic would associate the products of the Appellant with those of the Appellee andvice-versa. Significantly, the Appellee himself, by seeking the cancellation of theAppellant's registrations, impliedly admitted that the competing marks areconfusingly similar."

Which trademark registration therefore, should remain in the TrademarkRegistry?

The essence of trademark registration is to give protection to the owners oftrademarks. The function of a trademark is to point out distinctly the origin orownership of the goods to which it is affixed; to secure to him, who has beeninstrumental in bringing into the market a superior article of merchandise, the fruit ofhis industry and skill; to assure the public that they are procuring the genuine article;to prevent fraud and imposition; and to protect the manufacturer against substitutionand sale of an inferior and different article as his product."

18 See MEMORANDUM ON APPEAL, page 20 citing the case of American Cyanamid Company vs. The Director of Patents and TiuChian, G. R. No. L-23954, 29 April 1977.

19 See COMMENT on Memorandum on Appeal, p.11.

20 Pribhdas J. Mirpuri v. Court of Appeals, G.R. No. 114508, 19 Nov. 1999, citing Etepha v. Director of Patents, supra, Gabriel V.

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This Office noted that VERSUS is a highly unusual mark. It can be consideredan arbitrary mark and therefore, highly distinctive. An arbitrary mark is a word orpicture that is in common linguistic use but which, when used in connection withcertain goods or services, neither suggests nor describes any quality or characteristicof those particular goods or services. An arbitrary mark is inherently distinctive andneed no proof of secondary meaning to be regarded as valid for registration or legalprotection".

Thus, the chances that it could have been mere coincidence that twoentrepreneurs, independent of each other, were able to coin identical marks foridentical, similar or closely related goods, is too good to be true. The field from whicha person may select a trademark is in fact, practically unlimited. The more logicalexplanation or inference therefore, is that one copied or appropriated the mark of theother especially if the apparent copycat fails to explain how he came up with thesimilar or identical mark. As held by the Supreme Court in American Wire & CableCompany v. Director a/Patents: 22

"Of course, as in all other cases of colorable imitations, the unansweredriddle is why, of the millions of terms and combinations of letters and designsavailable, the appellee had to choose those so closely similar to another'strademark if there was no intent to take advantage of the goodwill generated bythe other mark."

And to determine who is the copycat between parties, it is necessary toestablish who used the mark VERSUS first anywhere in the world and whether thisuse would have made it possible for the copycat to know the mark and appropriate itfor its own use and benefit. Thus, the issue of whether the Appellant's mark is well­known is relevant to this case.

In this regard, the Appellant submitted clear and convincing evidence that itused the mark VERSUS way ahead of the Appellee - in 1979 in Italy, and in 1989anywhere else in the world. The Appellee on the other hand claims to have first usedthe mark in the Philippines in 1992.

On the issue of whether the mark VERSUS is a well-known mark, this Officedisagrees with the findings of the Director.

It is emphasized that the Philippines is a signatory to international agreementson intellectual property such as the Paris Convention" and the TRIPS Agreement". Assignatory to these treaties, it is the obligation of the Philippines to comply in goodfaith with the provisions of these international agreements. Art. 6bis of the ParisConvention provides:

Perez,55 SCRA406 (1974).

21 Amador, Vicente B.,Trademarks Under The Intellectual Property Code, 1999, p. 28.

22 G.R. No. L-26557, 18 Feb. 1970.

23 The Paris Convention 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 sametime aims to repress unfair competition. It entered into force in the Philippines on 27 Sept. 1965.

24 Annex 1C to the World Trade Organization Agreement (WTOAgreement) which entered into force on 01Jan. 1995.

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"Article 6bis[Marks: Well-Known Marks]

"(1) The countries of the Union undertake, ex officio if their legislation so permits,or at the request of an interested party, to refuse or to cancel the registration, andto prohibit the use, of a trademark which constitutes a reproduction, an imitation,or a translation, liable to create confusion, of a mark considered by the competentauthority of the country of registration or use to be well known in that country asbeing already the mark of a person entitled to the benefits of this Convention andused for identical or similar goods. These provisions shall also apply when theessential part of the mark constitutes a reproduction of any such well-knownmark or an imitation liable to create confusion therewith.

"(2) A period of at least five years from the date of registration shall be allowedfor requesting the cancellation of such a mark. The countries of the Union mayprovide for a period within which the prohibition of use must be requested.

"(3) No time limit shall be fixed for requesting the cancellation or the prohibitionof the use of marks registered or used in bad faith."

On the other hand, Art. 16 of the TRIPSAgreement provides in part that:

"Article 16Rights Conferred

"1. The owner of a registered mark shall have the exclusive right to prevent allthird parties not having the owner's consent from using in the course of tradeidentical or similar signs for goods or services which are identical or similar tothose in respect of which the trademark is registered where such use wouldresult in a likelihood of confusion. In case of the use of an identical sign foridentical goods or services, a likelihood of confusion shall be presumed. Therights described above shall not prejudice any existing prior rights, nor shall theyaffect the possibility of Members making rights available on the basis of use."

"2. Article 6bis of the Paris Convention (1967) shall apply, mutatis mutandis, toservices. In determining whether a trademark is well-known, Members shall takeaccount of the knowledge of the trademark in the relevant sector of the public,including knowledge in the Member concerned which has been obtained as aresult of the promotion of the trademark. x x x"

In her decision, the Director cited the Memorandum dated 25 October 1983issued by then Minister of Trade Roberto V. Ongpin which states that:

"1. Whether the trademark under consideration is well-known in the Philippinesor is a mark already belonging to a person entitled to the benefits of theCONVENTION, this should be established, pursuant to Philippine Patent Officeprocedures in inter partes and ex parte cases, according to any of the followingcriteria or any combination thereof:

(a) a declaration by the Minister of Trade and Industry that thetrademark being considered is already well-known in the Philippinessuch that permission for its use by other than its original owner will

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constitute a reproduction, imitation, translation or other infringement;

(b) that the trademark is used in commerce internationally, supported byproof that goods bearing the trademark are sold on an international scale,advertisements, the establishment of factories, sales offices,distributorships, and the like, in different countries, including volume orother measure of international trade and commerce;

(c) that the trademark is duly registered in the industrial propertyoffice(s) of another country or countries, taking into consideration thedate of such registration;

(d) that the trademark has long been established and obtained goodwilland international consumer recognition as belonging to one owner orsource;

(e) that the trademark actually belongs to a party claiming ownership andhas the right to registration under the provisions of the aforestated PARISCONVENTION."

The current criteria in determining whether a mark is well known areprovided by Rule 102 of the Trademark Regulations, to wit:

"RULE 102. Criteria for determining whether a mark is well-known. - Indetermining whether a mark is well-known, the following criteria or anycombination thereof may be taken into account:

(a) the duration, extent and geographical area of any use of the mark, inparticular, the duration, extent and geographical area of any promotion ofthe mark, including advertising or publicity and the presentation, at fairsor exhibitions, of the goods and/or services to which the mark applies;

(b) the market share, in the Philippines and in other countries, of the goodsand/or services to which the mark applies;

(c) the degree of the inherent or acquired distinction of the mark;(d) the quality-image or reputation acquired by the mark;(e) the extent to which the mark has been registered in the world;(f) the exclusivity of registration attained by the mark in the world;(g) the extent to which the mark has been used in the world;(h) the exclusivity of use attained by the mark in the world;(i) the commercial value attributed to the mark in the world;m the record of successful protection of the rights in the mark;(k) the outcome of litigations dealing with the issue of whether the mark is a

well-known mark; and(I) the presence or absence of identical or similar marks validly registered

for or used on identical or similar goods or services and owned bypersons other than the person claiming that his mark is a well-knownmark."

The Appellant submitted in evidence that the mark VERSUS is a well-knownmark. It submitted a listing of countries worldwide showing the application andregistration of the trademark VERSUS, thereby, proving the international scale andgoodwill that has been generated by this mark. The countries include the BENELUX

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countries", Bolivia, Bulgaria, Canada, Chile, China, Colombia, Croatia, Czech Republic,Denmark, Egypt, Estonia, Finland, France, Germany, Great Britain, Greece, Hong Kong,Hungary, India, Indonesia, Iran, Ireland, Israel, Italy, Japan, Jordan, Kazakhstan,Kuwait, Latvia, Lebanon, Liechtenstein, Lithuania, Macao, Macedonia, Malaysia, Malta,Mexico, Monaco, Mongolia, Morocco, North Korea, Norway, Oman, Panama, Poland,Portugal, South Africa, Romania, Russia, Saudi Arabia, Serbia-Montenegro, Singapore,Slovakia, Slovenia, South Korea, Spain, Sudan, Sweden, Switzerland, Taiwan, Thailand,Turkey, United Arab Emirates, United Staes, Ukraine, Uruguay, Uzbekistan, Venezuela,Vietnam, Costa Rica, Peru, Brazil, Algeria, Argentina, Armenia, Austria, Bahrain,Belarus, Bosnia-Herzegovina, EI Salvador, Kenya, Qatar, Syria. Most of theseapplications and registration show that the Appellant has used or registered its markway ahead of the Appellee's registration in 2001 and his claim of use in 1992.

While the Appellee did not contest the contents of these documents, heobjected to their admission on the ground that there are no certified copies of theapplications and registrations and that these documents were not properly certified.There was nothing in the records that shows that the Director excluded these piecesof evidence. She even cited them in her decision. Moreover, a scrutiny of the recordsshows that the certificates of registrations are supporting documents to theallegations made by the Appellant's legal officer Massimiliano Caforio in an"AFFIDAVIT OF OWNERSHIP". This affidavit was duly authenticated and theAppellant did not object to its admission and the credibility of the Appellant's witnesswas not put in issue. The Appellee did not even present contrary evidence to disprovethe statements in the affidavit. Relevant is Sec. 5 of the Regulations on Inter PartesCases (as amended), which provides:

"Section 5. Rules ofProcedure to be followed in the conduct ofhearinq ofInter Partescases. - The rules of procedure herein contained primarily apply in the conduct ofhearing of Inter Partes cases. The Rules of Court may be applied suppletorily. TheBureau shall not be bound by strict technical rules of procedure and evidence butmay adopt, in the absence of any applicable rule herein, such mode of proceedingswhich 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 thegreatest possibility to focus on the contentious issues before it. "

The Appellant also submitted copies of the decisions issued by the intellectualproperty offices in Honduras and Spain and the commercial court in Jakarta,Indonesia which are both in favor of the Appellant and recognizing the status of themark VERSUS as a well-known mark. Moreover, the copies of worldwideadvertisements, sales figures and advertisement investment on the mark VERSUSsubmitted by the Appellant should be considered. While the existence of thesedocuments may have occurred after the Appellee's filing of his trademark application,these pieces of evidence are significant as these bolsters the standing of theAppellant's mark as a well-known mark.

Accordingly, this Office finds untenable the Appellee's argument that since he

25 Belgium, Netherlands and Luxemborg.

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was the first to use the mark in the Philippines, he has the superior right over themark VERSUS. While under RA 166, actual use in commerce in the Philippines is apre-requisite to the registration of a mark.i'Sec. 2-A of the law is also categorical as towho has the right to register a mark. As explained by the Supreme Court in Shangri­La International Hotel Management, Ltd; et al. v. Developers Group ofCompanies, Inc.:

"Section 2-A of the same law sets out to define how one goes about acquiringownership thereof. Under Section 2-A, it is clear that actual use in commerce is alsothe test of ownership but the provision went further by saying that the mark mustnot have been so appropriated by another. Additionally, it is significant to note thatSection 2-A does not require that the actual use of a trademark must be within thePhilippines. Hence, under R.A. No. 166, as amended, one may be an owner of a markdue to actual use thereof but not yet have the right to register such ownership heredue to failure to use it within the Philippines for two months.":"

This Office further noted the Appellee did not adduce evidence to prove itsclaim that he first used the mark in 1992. If he was using the mark as a true owner, hecould have easily submit evidence of ownership thereof - the factual considerations incoming up with the claimed mark, the efforts made to introduce such mark in hisbusiness, and other pertinent documents that would clearly indicate prior use andownership of the mark. The Appellee, however, failed in this aspect and merely reliedon four (4) sales invoices which are not even duly authenticated and whose earliestdate is only in 1995. And, as mentioned above, the Appellant even failed to explainhow he was able to come up with the mark VERSUS.

This Office therefore, finds credence in the Appellant's arguments, to wit:

"Since products bearing the Marks were marketed around the world, it ishighly possible that the Respondent-Registrant-Appellee had seen such goodsbearing the Marks, and decided to appropriate the 'VERSUS' mark for himself,without authorization from the Petitioner-Appellant which is a world-famousfashion company. Hence, via the promotion or advertising of Petitioner-Appellantof goods bearing its Mark, which are fairly well-known to its target public, i.e. thoseinvolved in the fashion industry, as well as fashion aficionados around the world, itis not far-fetched that Respondent-Registrant-Appellee, who is involved in thewearing apparel business could come to know of Petitioner-Appellant's Marksthrough the Appellant's promotional and advertising efforts,'?"

Lastly, there is no merit to the Appellant's claim that the Appellee is barred byprior judgment and/or estoppel from questioning the issuance of Certificate ofRegistration No. 4-1992-84792. The opposition to a registration and the petition forcancellation are alternative proceedings which a party may avail of according to hispurposes, needs, and predicarnents.F'Moreover, the opposition case cited by theAppellee" was not decided on the merits and such issues as confusing similarity andthe commission of fraudulent acts were not touched by that case. That opposition

26 See the case of Kabushi Kaisha Isetann v. The Intermediate Appellate Court, et aI, G.R. No. 75420,15 Nov. 1991.

27 G.R. No. 159938,31 Mar. 2006.

28 See MEMORANDUM ON APPEAL, p. 24.

29 See Clorox Company v. Director of Patents and Go Siu Gian, G. R. No. L-19531,10 Aug. 1967.

30 Inter Partes Case No. 4209.

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04;

case was terminated on the ground of the withdrawal by the Appellant to continuewith the opposition proceedings. This is an option which the Appellant is entitled to.It does not however, means, that the Appellant cannot anymore institute a petition forcancellation on the same subject mark. There is nothing in the law or in theRegulations on Inter Partes Cases that prevents the Appellant from instituting thiscase and seeks the cancellation of the Appellee's trademark registration.

To conclude, the intellectual property system was established to recognizecreativity and give incentives to innovations. Similarly, the trademark registrationsystem seeks to reward entrepreneurs and individuals who through their owninnovations were able to distinguish their goods or services by a visible sign thatdistinctly points out the origin and ownership of such goods or services. Theintellectual property system is not a haven for people who would take advantage ofthe intellectual creation of others, whether a local resident or a foreigner.

WHEREFORE, premises considered, the appeal is hereby GRANTED. TheCertificate of Registration No. 4-1992-84792 for the mark VERSUS issued in favor ofthe Appellee is hereby ordered CANCELLED.

Let a copy of this Decision as well as the records be furnished and returned tothe Director of Bureau of Legal Affairs for appropriate action. Further, let also theDirector of the Bureau of Trademarks and the library of the Documentation,Information and Technology Transfer Bureau be furnished a copy of this Decision forinformation, guidance, and records purposes.

SO ORDERED.

APR 2 1 2008 Makati City

A

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