-Shangri-La v. Developers Group of Companies, Inc.

-Nature: Petition for review under Rule 45 of the Rules of Court Petitioners Shangri-La International Hotel Management, Ltd. (SLIHM) assail to set aside Court of Appeals (CA) decision on 15 May 2003 and resolution on 15 September 2003

-Facts: On 18 October 1982, Developers Group of Companies, Inc. (DGCI) filed with the Bureau of Patents, Trademarks, and Technology Transfer (BPTTT) for registration covering the Shangri-La mark and S logo On 31 May 1983, BPTTT issued in favor of DGCI, Registration No. 31904 DGCI has used the S logo since then But as far back as 1962, the Kuok Group of Companies has adopted the name Shangri-La in all Shangri-La hotels and hotel-related establishments worldwide (SLIHM) In February 1975, William Lee, a Singaporean design artist commissioned to design the logo of Shangri-La hotels, launched the stylized S logo SLIHM has used the name Shangri-La and the S logo since then Shangri-La Hotel and Resort, Inc. was incorporated in the RP beginning 1987 when the Kuok Group put up two hotels in Mandaluyong and Makati On 21 June 1988, SLIHM filed with the BPTTT a petition, praying for the cancellation of the Registration No. 31904 and for the registration of the mark and logo in their own name DGCI filed a complaint for Infringement and Damages with the RTC of Quezon City against SLIHM because they have been using the mark and the logo for the last eight years SLIHM pointed to the Paris Convention for the Protection of Industrial Property and further claimed that they have used the mark and logo since 1975 On 8 March 1996, RTC ruled in favor of DGCI Therefrom, SLIHM went on appeal to the CA, but the affirmed the lower courts decision with the modification of deleting the award of attorneys fees SLIHM moved a motion for reconsideration, but was also denied

-Issue: What constitutes trademark ownership?

-Decision: Petition is granted and the assailed decision and resolution of the CA is set aside SC ruled in favor of SLIHM

-Ratio RA No. 166 (law in force at the time of DGCIs application) The root of ownership of a trademark is actual use in commerce Section 2 of RA No. 166 requires that before a trademark can be registered, it must have been actually used in commerce and service for not less than two months in the Philippines prior to the filing of an application for its registration Moreover, registration 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 In other words, registration is not a mode of acquiring ownership The actual use in commerce or business is a pre-requisite to the acquisition of the right of ownership

In his testimony, Ramon Synhunliong, stated that the alleged jeepney signboard artist commissioned to create the mark and logo submitted his design only in December 1982 That was two-and-a-half months after the filing of the respondents trademark application Ramon Synhunliong has been a guest at SLIHMs hotel before causing the registration of the trademark, which gave rise to the allegation that he must have copied the idea there

Section 2 of RA No. 166 provides for what is registerable, containing the clause actually in use in commerce in services not less than two months in the Philippines But Section 2-A sets out how ownership is acquired Under Section 2-A it states: The actual use in commerce is the test of ownership The mark must not have been so appropriated by another Whether or not the actual use of the trademark is in the Philippines DGCI did not fulfill the requirements of ownership under Section 2-A

International Law The Paris Convention mandates that protection should be afforded to internationally known marks as signatory to the Paris Convention, without regard as to whether the foreign corporation is registered, licensed or doing business in the Philippines The said convention runs afoul to Republic Act No. 166, which requires the actual use in commerce in the Philippines of the subject mark or devise The conflict was settled by the Supreme Court: "Following universal acquiescence and comity, our municipal law on trademarks regarding the requirement of actual use in the Philippines must subordinate an international agreement inasmuch as the apparent clash is being decided by a municipal tribunal (Mortensen vs. Peters, Great Britain, High Court of Judiciary of Scotland, 1906, 8 Sessions 93; Paras, International Law and World Organization, 1971 Ed., p. 20) Withal, the fact that international law has been made part of the law of the land does not by any means imply the primacy of international law over national law in the municipal sphere Under the doctrine of incorporation as applied in most countries, rules of international law are given a standing equal, not superior, to national legislative enactments (Salonga and Yap, Public International Law, Fourth ed., 1974, p. 16)

CASE DIGEST: COMPAIA GENERAL DE TABACOS DE FILIPINAS vs. ALHAMBRA CIGAR AND CIGARETTE MANUFACTURING CO.FACTS:

It is admitted that plaintiffs trade name as evidenced by the certificate issued under the Spanish regime, consists solely of the words La Flor de la Isabela. Plaintiff does not claim that the word Isabela has been registered by it as a trade name or that it has a title from any source conferring on it the exclusive right to use that word.

Defendant began the manufacture of cigarettes, offering them to the public in packages on the front side of each of which appeared the words Alhambra Isabelas.

Action is brought to enjoin the defendant from using the word Isabelas.

The exclusive right to use this name, plaintiff claim arises from two causes: First, the contraction of the phrase La Flor de la Isabela into the word Isabela by popular expression and use; and second, the use for more than twenty years of the word Isabela.

Judgment was for plaintiff and defendant appealed.

ISSUE:

Whether defendants use of the word Alhambra Isabela is an infringement to the use of trade name.

HELD:

The statute prohibits the registration of a trade name when the trade name represents the geographical place of production or origin of the products or goods to which the trade name refers, or when it is merely the name, quality or description of the merchandise with respect to which the trade name is to be used. In such cases, therefore, no trade name can exist.

The two claims of the plaintiff are identical; for, there could have been no contraction brought about by popular expression except after long lapse of time. The contraction of the phrase in to the word would create no rights, there being no registration, unless it resulted from long use.

The opinion of the plaintiff must fail. It shows that in not a single instance in the history of the plaintiff corporation, so far as is disclosed by the record, has a package of its cigarettes gone into the market, either at wholesale or retail with the word Isabela alone on the package as a separate or distinct word or name.

Even admitting that the word Isabela may have been appropriable by plaintiff as a trade name at the time it began to use it, the evidence showing that it had been exclusively appropriated by the plaintiff would have to be very strong to establish the fact of appropriation and the right to exclusive use. The law as it stands and has stood since the Royal Decree of 1888 prohibits the use of a geographical name as a trade name.

The judgment appealed from is reversed.