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

-Nature: y Petition for review under Rule 45 of the Rules of Court o 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: y 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 y On 31 May 1983, BPTTT issued in favor of DGCI, Registration No. 31904 y DGCI has used the S logo since then y 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) y In February 1975, William Lee, a Singaporean design artist commissioned to design the logo of Shangri-La hotels, launched the stylized S logo y SLIHM has used the name Shangri-La and the S logo since then y 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 y 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 y 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 y 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 y On 8 March 1996, RTC ruled in favor of DGCI y Therefrom, SLIHM went on appeal to the CA, but the affirmed the lower court s decision with the modification of deleting the award of attorney s fees o SLIHM moved a motion for reconsideration, but was also denied -Issue: y What constitutes trademark ownership? -Decision: y Petition is granted and the assailed decision and resolution of the CA is set aside o SC ruled in favor of SLIHM -Ratio

RA No. 166 (law in force at the time of DGCI s application) o The root of ownership of a trademark is actual use in commerce o 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 o The certificate of registration is merely a prima facie proof that the registrant is the owner of the registered mark or trade name o 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 o 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 o That was two-and-a-half months after the filing of the respondent s trademark application o Ramon Synhunliong has been a guest at SLIHM s 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 o But Section 2-A sets out how ownership is acquired o 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 o 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

y y

o 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 o The conflict was settled by the Supreme Court: o "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) o 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 o 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)