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G.R. No.


March 31, 2006

SHANGRI-LA INTERNATIONAL HOTEL MANAGEMENT, LTD., SHANGRILA PROPERTIES, IN ., MA!ATI SHANGRI-LA HOTEL " RESORT, IN ., AND !#O! PHILIPPINES PROPERTIES, IN ., Petitioners, vs. DE$ELOPERS GRO#P O% OMPANIES, IN ., Respondent. DECISION GAR IA, J.: In this petition for review under Rule 45 of the Rules of Court, petitioners Shangri !a International "otel #anage$ent, !td. %S!I"#&, et al. assail and see' to set aside the De(ision dated #a) *5, +,,-* of the Court of .ppeals %C.& in C. /.R. C0 No. 5--5* and its Resolution+ of Septe$1er *5, +,,- whi(h effe(tivel) affir$ed with $odifi(ation an earlier de(ision of the Regional 2rial Court %R2C& of 3ue4on Cit) in Civil Case No. 3 5* 6478, an a(tion for infringe$ent and da$ages, thereat (o$$en(ed 1) respondent Developers /roup of Co$panies, In(. %D/CI& against the herein petitioners. 2he fa(ts9 .t the (ore of the (ontrovers) are the :Shangri !a: $ar' and :S: logo. Respondent D/CI (lai$s ownership of said $ar' and logo in the Philippines on the strength of its prior use thereof within the (ountr). .s D/CI stresses at ever) turn, it filed on O(to1er *6, *56+ with the ;ureau of Patents, 2rade$ar's and 2e(hnolog) 2ransfer %;P222& pursuant to Se(tions + and 4 of Repu1li( .(t %R.& No. *88,- as a$ended, an appli(ation for registration (overing the su1<e(t $ar' and logo. On #a) -*, *56-, the ;P222 issued in favor of D/CI the (orresponding (ertifi(ate of registration therefor, i.e., Registration No. -*5,4. Sin(e then, D/CI started using the :Shangri !a: $ar' and :S: logo in its restaurant 1usiness. On the other hand, the =uo' fa$il) owns and operates a (hain of hotels with interest in hotels and hotel related transa(tions sin(e *585. .s far 1a(' as *58+, it adopted the na$e :Shangri !a: as part of the (orporate na$es of all (o$panies organi4ed under the aegis of the =uo' /roup of Co$panies %the =uo' /roup&. 2he =uo' /roup has used the na$e :Shangri !a: in all Shangri !a hotels and hotel related esta1lish$ents around the world whi(h the =uo' >a$il) owned. 2o (entrali4e the operations of all Shangri la hotels and the ownership of the :Shangri !a: $ar' and :S: logo, the =uo' /roup had in(orporated in "ong =ong and Singapore, a$ong other pla(es, several (o$panies that for$ part of the Shangri !a International "otel #anage$ent !td. /roup of Co$panies. EDS. Shangri !a "otel and Resort, In(., and #a'ati Shangri !a "otel and Resort, In(. were in(orporated in the Philippines 1eginning *567 to own and operate the two %+& hotels put up 1) the =uo' /roup in #andalu)ong and #a'ati, #etro #anila.

>ro$ the re(ords. In(. to wit9 2he logo whi(h is shaped li'e a :S: represents the uniAuel) . pra)ing for the registration of the sa$e $ar' and logo in their own na$es. hotel organi4ations. and in other allied fields in the Philippines. !ee gave the following e@planation for the logo. the :Shangri !a: $ar' and :S: logo have 1een used (onsistentl) and (ontinuousl) 1) all Shangri !a hotels and (o$panies in their paraphernalia. andDor travel $aga4ines widel) (ir(ulated around the world. 1usiness for$s. too. e$1odies 1oth $odernit) and sophisti(ation in 1alan(e and thought.. and =uo' Philippine Properties. displa)s and re(eipts. ?illia$ !ee. -5+5. and in fa(t registered. 3 5* 6478 and eventuall) raffled to .sean ar(hite(tural stru(tures as well as 'eep to the legendar) Shangri la the$e with the $ountains on top 1eing refle(ted on waters 1elow and the (onne(ting (entre Bsi(C line serving as the hori4on. Shangri !a Properties. al1eit the) advertised their hotels a1road sin(e *57+ in nu$erous 1usiness. It is prin(ipall) upon the foregoing fa(tual 1a('drop that respondent D/CI filed a (o$plaint for Infringe$ent and Da$ages with the R2C of 3ue4on Cit) against the herein petitioners S!I"#.. Gntil *567 or *566. do('eted as Civil Case No. In(. the petitioners filed with the . #r. 2he (o$plaint with pra)er for in<un(tive relief and da$ages alleged that D/CI has.P222 a petition. su(h as stationeries. do('eted as Inter Partes Case No. operated and $anaged 1) the aforesaid S!I"# /roup of Co$panies adopted and used the distin(tive lettering of the na$e :Shangri !a: as part of their trade na$es. #a'ati Shangri !a "otel H Resort.ll hotels owned. -*45. 2he =uo' /roup andDor petitioner S!I"# (aused the registration of. stri'ing definitive design. $enus. the :Shangri !a: $ar' and :S: logo in the patent offi(es in different (ountries around the world. 2his logo. a (ertain #r. tour operators. to (on(eptuali4e and design the logo of the Shangri !a hotels. pra)ing for the (an(ellation of the registration of the :Shangri !a: $ar' and :S: logo issued to respondent D/CI on the ground that the sa$e were illegall) and fraudulentl) o1tained and appropriated for the latterFs restaurant 1usiness. On Eune +*. envelopes.. for the last eight %6& )ears. news. In(. 2he). 2he) also filed in the sa$e offi(e Inter Partes Case No. whi(h is a 1old. During the laun(hing of the st)li4ed :S: !ogo in >e1ruar) *575. the petitioners did not operate an) esta1lish$ent in the Philippines.. tour pro$otion organi4ations. *566. $aintained reservations and 1oo'ing agents in airline (o$panies. 1een the prior . Sin(e *575 and up to the present.ran(h 55 of said (ourt. all readil) availa1le in Philippine $aga4ines and newsstands. it appears that Shangri !a "otel Singapore (o$$issioned a Singaporean design artist.

P222 to suspend further pro(eedings in said inter partes (ase and to await the final out(o$e of the $ain (ase. No. and /. li$iting itself to the (ore issue of whether. invo'ing in this respe(t the penden() of its infringe$ent (ase 1efore the trial (ourt. 1ut nonetheless ordered the .$ong other things. entitled Developers /roup of Co$panies. the) point to the Paris Convention for the Prote(tion of Industrial Propert) as affording se(urit) and prote(tion to S!I"#Fs e@(lusive right to said $ar' and logo. respondent D/CI filed a si$ilar $otion in that (ase. **46.s D/CI alleged in its (o$plaint. et al.R. et al.ppeals. President and Chair$an of D/CIFs . this witness testified that9 . S!I"#. In this regard. adding that the legal and 1enefi(ial ownership thereof pertained to S!I"# and that the =uo' /roup and its related (o$panies had 1een using this $ar' and logo sin(e #ar(h *58+ for all their (orporate na$es and affairs.ppeals. .R. the Court. *.e@(lusive user in the Philippines of the $ar' and logo in Auestion and the registered owner thereof for its restaurant and allied servi(es.R.. . whi(h were a((ordingl) (onsolidated. In(. if not identi(al. #eanwhile. vs. et al. entitled Shangri !a International "otel #anage$ent !2D.P222. 2he preli$inar) in<un(tion issue ulti$atel) rea(hed the Court in /.ppeals. 3 5* 6478. despite the petitionersF institution of Inter Partes Case No. et al.*. 2he partiesF respe(tive $otions to suspend pro(eedings also rea(hed the Court via their respe(tive petitions in /. vs. trial on the $erits of the infringe$ent (ase pro(eeded. *55-. et al. No. In(. the trial (ourt issued a ?rit of Preli$inar) In<un(tion en<oining the petitioners fro$ using the su1<e(t $ar' and logo. -*45 1efore the .nswer with Counter(lai$. the Court nullified the writ of preli$inar) in<un(tion issued 1) the trial (ourt and dire(ted it to pro(eed with the $ain (ase and de(ide it with deli1erate dispat(h. Pending trial on the $erits of Civil Case No. Court of . +. Court of . D/CI sought to prohi1it the petitioners. the internationall) 'nown and spe(iall) designed :Shangri !a: $ar' and :S: logo for all the hotels in their hotel (hain.. in pro$oting and advertising their hotel and other allied pro<e(ts then under (onstru(tion in the (ountr).((ordingl). Presented as D/CIFs lone witness was Ra$on S)hunliong.. the petitioners filed with the (ourt a $otion to suspend pro(eedings on a((ount of the penden() 1efore the . herein respondent D/CI :(an file a su1seAuent a(tion for infringe$ent with the regular (ourts of <usti(e in (onne(tion with the sa$e registered $ar'.. 2he) further (lai$ed having used. Court of . sin(e late *575. with its $ar' and :S: logo. as defendants a Auo. vs. ***56.. ?hile trial was in progress. In their . -*45 for the (an(ellation of D/CIFs (ertifi(ate of registration. In a de(ision4 dated #ar(h 6.: ruled in the affir$ative. No. >or its part. the petitioners a((used D/CI of appropriating and illegall) using the :Shangri !a: $ar' and :S: logo. fro$ using the :Shangri !a: $ar' and :S: logo in their hotels in the Philippines. . had 1een using a $ar' and logo (onfusingl) si$ilar.oard of Dire(tors.P222 of Inter Partes Case No.456entitled Developers /roup of Co$panies. In a (onsolidated de(ision5 dated Eune +*.+.

"e had traveled widel) around . or an) (op). hospital. *56+. of hotels and restaurants:. assignees and other persons a(ting under their authorit) and with their per$ission. respondent D/CI a$ended its .alintawa'. D/CI filed an appli(ation for trade$ar' registration of the $ar' :S". reprodu(tion or (olora1le i$itation . li(ensees. on the postulate that petitionersF.C a& Gpholding the validit) of the registration of the servi(e $ar' :Shangri la: and :S !ogo: in the na$e of BrespondentCI 1& De(laring BpetitionersFC use of said $ar' and logo as infringe$ent of BrespondentFsC right theretoI (& Ordering BpetitionersC. On said date. On O(to1er *5.P222. or 1oth. again prior to the alleged (reation date of the $ar' and logo. and ad$itted 'nowing the Shangri !a "otel in "ong =ong as earl) as . with interest in lu$1er.N/RI !.N/RI !. 2he :S logo: was one of two %+& designs given to hi$ in De(e$1er *56+. 4. *558 rendering <udg$ent for D/CI. $ore parti(ularl) petitioner S!I"#Fs. -. their representatives. to per$anentl) (ease and desist fro$ using andDor (ontinuing to use said $ar' and logo. +. 2he unna$ed artist supposedl) produ(ed the two designs after a1out two or three da)s fro$ the ti$e he %S)hunliong& gave the idea of the design he had in $ind.: Respondent D/CI o1tained Certifi(ate of Registration No.*. agents. -*5. or 1efore the un'nown sign1oard artist supposedl) (reated the :Shangri !a: and :S: designs. (a$e out with its de(ision8 on #ar(h 6.sia prior to *56+. !ogo: with the . 2he restaurant now 'nown as :Shangri !a >inest Chinese Cuisine: was for$erl) 'nown as the :Carva<al Restaurant: until De(e$1er *56+. s(ri11led on a pie(e of paper 1) a <eepne) sign1oard artist with an offi(e so$ewhere in .ugust *56+. et al. >INES2 C"INESE CGISINE. 'nown and operating under the st)le and na$e of :S". "e is a 1usiness$an. trading and restaurant 1usinesses 1ut onl) the restaurant 1usiness 1ears the na$e :Shangri !a: and uses the sa$e and the :S logo: as servi(e $ar's. as follows9 ?"ERE>ORE. D/CI was in(orporated with the pri$ar) purpose of :owning or operating. when respondent too' over said restaurant 1usiness. <udg$ent is here1) rendered in favor of Brespondent D/CIC and against BS!I"#.4 for the :Shangri !a: $ar' and :S: logo. *56+. hotel. >INES2 C"INESE CGISINE H S. On O(to1er *6. use of the $ar' and logo in dispute (onstitutes an infringe$ent of D/CIFs right thereto. Eventuall). 5. the trial (ourt.rti(les of In(orporation to refle(t the na$e of its restaurant.

. Court of . Sin(e the =uo' /roup does not have proof of a(tual use in (o$$er(e in the Philippines %in a((ordan(e with Se(tion + of R. .. whereat their re(ourse was do('eted as C..l1eit the =uo' /roup used the $ar' and logo sin(e *58+. 2he use of the $ar' or logo in (o$$er(e through the 1oo'ings $ade 1) travel agen(ies is unavailing sin(e the =uo' /roup did not esta1lish an) 1ran(h or regional offi(e in the Philippines.ppeals.R. /.. -*5. the C....ureau of Patents. *88 Costs against BpetitionersC. v. 2rade$ar's and 2e(hnolog) 2ransfer for his infor$ation and appropriate a(tion in a((ordan(e with the provisions of Se(tion +5.7 affir$ed that of the lower (ourt with the $odifi(ation of deleting the award of attorne)Fs fees.-.C6... as attorne)Fs fee and e@penses of litigation. respondent has a right to the $ar' and logo 1) virtue of its prior use in the Philippines and the issuan(e of Certifi(ate of Registration No. <ointl) and severall). the petitioners went on appeal to the C.. in the pro$otion. .. -. to inde$nif) BrespondentC in the a$ounts of P+. On the other hand. 5--5*.thereof. +...C 2herefro$.5 +. B?ords in 1ra('ets added..4. o1<e(ts. *88&...(t No. as reiterated in Philip #orris. SP No. SO ORDERED. No. the eviden(e presented shows that the 1ul' use of the tradena$e was a1road and not in the Philippines %until *567&. . advertise$ents or other $aterials 1earing said $ar' and logo in their possession andDor under their (ontrolI and e& Ordering BpetitionersC. (ontrolled or $anaged 1) the =uo' /roup.s it were.. . I. P5. 2he appellate (ourt predi(ated its affir$ator) a(tion on the strength or interpla) of the following pre$ises9 *.. the =uo' /roup was not engaged in (o$$er(e in the Philippines inas$u(h as the 1oo'ings were $ade through travel agents not owned.s stated at the threshold hereof.. Repu1li( .. advertise$ent. it (annot (lai$ ownership of the $ar' and logo in a((ordan(e with the holding in =a1ushi =aisha Isetan v.. in its assailed De(ision of #a) *5. !et a (op) of this De(ision 1e (ertified to the Dire(tor. signs. as a(tual and (o$pensator) da$ages.. In(. $aterials and paraphernalia used 1) the$ andDor destro) an) and all prints. rendition of their hotel and allied pro<e(ts and servi(es or in an) other $anner whatsoeverI d& Ordering BpetitionersC to re$ove said $ar' and logo fro$ an) pre$ises. .

?hether the C. the issues upon whi(h this (ase hinges are9 *. and in failing to award relief in favor of the petitionersI and 6. No. No.4. . $u(h less registrationI -. +. R. ?hether the C. ?hether the C. erred in holding that S!I"# did not have the right to legall) own the :Shangri !a: $ar' and :S: logo 1) virtue of and despite their ownership 1) the =uo' /roupI 8. *88 still reAuires use in (o$$er(e in the Philippines. Petitioners then $oved for a re(onsideration.-. na$el)9 *. the old trade$ar' law. ?hether the C. the Auestion on the e@(lusive right over the $ar' and logo would still depend on a(tual use in (o$$er(e in the Philippines. erred in finding that respondentFs supposed use of the identi(al :Shangri !a: $ar' and :S: logo of the petitioners was not evident 1ad faith and (an a(tuall) ripen into ownership. ?hether the C.. *88. ?hether the C.((ordingl).. that respondent D/CI (alls our attention to. su(h as Paris Convention. erred in ruling that petitionersF use of the $ar' and logo (onstitutes a(tiona1le infringe$entI 7. ?hile the Paris Convention prote(ts internationall) 'nown $ar's. 2here are two preli$inar) issues.. whi(h $otion was denied 1) the C. ?hether petitioners should 1e prohi1ited fro$ (ontinuing their use of the $ar' and logo in Auestion.*. erred in overloo'ing petitionersF widespread prior use of the :Shangri !a: $ar' and :S: logo in their operationsI 4. ?hether the (ertifi(ation against foru$ shopping su1$itted on 1ehalf of the petitioners is suffi(ientI . erred in awarding da$ages in favor of respondent despite the a1sen(e of an) eviden(e to support the sa$e... and on the pre$ise that international agree$ents.s for$ulated 1) the petitioners. . erred in finding that respondent had the right to file an appli(ation for registration of the :Shangri !a: $ar' and :S: logo although respondent never had an) prior a(tual (o$$er(ial use thereofI +. in its eAuall) assailed Resolution of Septe$1er *5. $ust )ield to a $uni(ipal law. ?hether the C. erred in refusing to (onsider that petitioners are entitled to prote(tion under 1oth R. and the Paris Convention for the Prote(tion of Industrial Propert)I 5. however.

for and in 1ehalf of a (orporation.. 2hese issues will 1e dealt with as we go through the Auestions raised 1) the petitioners one 1) one. Se(tion 5 of the Rules of Court (on(erning the (ertifi(ation against foru$ shopping does not reAuire an) (onsular (ertifi(ation if the petitioner is a foreign entit).en<a$in J. 2o respondent. It points out that in a petition for review under Rule 45 of the Rules of Court. the Dire(torFs Certifi(ate e@e(uted 1) #r.*+ #oreover. Rule 7. e$1od)ing the 1oard resolution whi(h authori4es . CA. the Auestions that $a) properl) 1e inAuired into are stri(tl) (ir(u$s(ri1ed 1) the e@press li$itation that :the petition shall raise onl) Auestions of law whi(h $ust 1e distin(tl) set forth. Ph)si(al a(ts. #adhu Ra$a Chandra Rao. li'e the signing of do(u$ents. to 1anish an) lingering dou1t. !er$a on 1ehalf and as (ounsel of the petitioners was insuffi(ient.. we find the instant petition for$all) and su1stantiall) sound. Nonetheless.+.?e do not.authenti(ating the Dire(torFs Certifi(ate authori4ing . ?hether the issues posed 1) petitioners are purel) fa(tual in nature hen(e i$proper for resolution in the instant petition for review on (ertiorari.. to wit9 an insuffi(ient (ertifi(ation against foru$ shopping and raising pure Auestions of fa(t. Respondent further alleged that sin(e petitioner S!I"# is a foreign entit) 1ased in "ong =ong. !er$a to a(t for S!I"# and e@e(ute the (ertifi(ation against foru$ shopping. PetitionersF first argu$ent is that the respondent had no right to file an appli(ation for registration of the :Shangri !a: $ar' and :S: logo 1e(ause it did not have prior a(tual (o$$er(ial use thereof. respondent alleged that the (ertifi(ation against foru$ shopping signed 1) . find that the issues involved in this petition (onsist purel) of Auestions of fa(t. !er$a to e@e(ute the (ertifi(ation against foru$ shopping. On 1oth (ounts. In its Co$$ent. 1) a spe(ifi(all) authori4ed law)er who has personal 'nowledge of the fa(ts reAuired to 1e dis(losed in su(h do(u$ent. D/CI (lai$s that the present petition for review should 1e dis$issed outright for (ertain pro(edural defe(ts. should (ontain the authenti(ation 1) a (onsular offi(er of the Philippines in "ong =ong. 2he reason for this is that a (orporation (an onl) e@er(ise its powers through its 1oard of dire(tors andDor its dul) authori4ed offi(ers and agents. In National Steel Corporation .. however.4. su(h an argu$ent raises a Auestion of fa(t that was alread) resolved 1) the R2C and (on(urred in 1) the C. and that he was not dul) authori4ed to e@e(ute su(h do(u$ent.** the Court has ruled that the (ertifi(ation on non foru$ shopping $a) 1e signed.:*. petitioner S!I"# furnished this Court with a (onsular (ertifi(ation dated O(to1er +5. (an 1e perfor$ed onl) 1) natural persons dul) authori4ed for the purpose. !ee . Respondent also atta('s the present petition as one that raises pure Auestions of fa( together with petitionersF $anifestation of >e1ruar) 5. +.

and the presu$ption of regularit) in the perfor$an(e of offi(ial fun(tions in the issuan(e thereof. the registrantFs ownership of the $ar'.-3(. 2he (ertifi(ate of registration is $erel) a prima facie proof that the registrant is the owner of the registered $ar' or trade na$e..or . Registration.o-. it involves resolving whether a (ertifi(ate of registration of a $ar'. @@@ BE$phasis suppliedC1avvphil.a &'+. Registration in the Prin(ipal Register is . or. Eviden(e of prior and (ontinuous use of the $ar' or trade na$e 1) another (an over(o$e the presu$ptive ownership of the registrant and $a) ver) well entitle the for$er to 1e de(lared owner in an appropriate (ase.a+. *557. a4+'r r'3. It further entails answering the Auestion of whether prior a(tual use is reAuired 1efore there $a) 1e a valid registration of a $ar'.*8 . and his right to the e@(lusive use thereof. hen(e.*4 . . are suffi(ient to esta1lish prior a(tual use 1) the registrant.4or ca-c'. It (annot 1e (onstrued as 1eing a fa(tual finding that there was prior use of the $ar' and logo 1efore registration. 1e(ause it has (o$e down through the )ears. >or a rule widel) a((epted and fir$l) entren(hed.o.+'/ +o +h' ac+)a. the for$er prevails over the latter. Se(ondl).>irst off. it $ust have 1een a(tuall) used in (o$$er(e and servi(e for not less than two $onths in the Philippines prior to the filing of an appli(ation for its registration.o-. Se(tion + of said law reAuires that 1efore a trade$ar' (an 1e registered..s 1etween a(tual use of a $ar' without registration.. In the (onte@t of this (ase. #a(ag1a.o. R. all that the R2C found was that respondent was the prior user and registrant of the su1<e(t $ar' and logo in the Philippines. the trial (ourtFs finding on :prior use: (an onl) 1e interpreted to $ean that respondent used the su1<e(t $ar' and logo in the (ountr) 1efore the petitioners did. 2a'en in proper (onte@t.of the validit) of the registration. *88. the root of ownership of a trade$ar' is a(tual use in (o$$er(e. whi(h *a1 2' co-+'(+'/ +hro)3h o&&o(. the law in for(e at the ti$e of respondentFs appli(ation for registration of trade$ar'.-+'r4'r'-c' &roc''/..ñet Ownership of a $ar' or trade na$e $a) 1e a(Auired not ne(essaril) 1) registration 1ut 1) adoption and use in trade or (o$$er(e. the Auestion raised is not purel) fa(tual in nature. No. .*.(+ra+. is that a(tual use in (o$$er(e or 1usiness is a pre reAuisite to the a(Auisition of the right of ownership. without $ore. as a$ended.+.o. does not (onfer upon the registrant an a1solute right to the registered $ar'.. and registration of the $ar' without a(tual use thereof. whi(h was in effe(t up to De(e$1er -*. @ @ @ +. Registration in the Prin(ipal Register gives rise to a &r'()*&+. as (atalogued 1) the Court in !oren4ana v. o0-'r of the trade$ar' and pro(eedings therein pass on the issue of ownership.*5 are9 *.+.$ong the effe(ts of registration of a $ar'. Gnder the provisions of the for$er trade$ar' law.

?hen the inferen(e $ade is $anifestl) $ista'en. noted e@(eptions thereto.?hile the present law on trade$ar's*7 has dispensed with the reAuire$ent of prior a(tual use at the ti$e of registration. ?hen the <udg$ent is 1ased on a $isapprehension of fa(tsI+8 4. $u(h less registration. *56+ with the . the law in for(e at the ti$e of registration $ust 1e applied.+. what with the fa(t that its ver) own witness testified otherwise in the trial (ourt. he has no right to appl) for registration of the sa$e. . respondentFs own witness. and thereunder it was held that as a (ondition pre(edent to registration of trade$ar'. of the registrantFs ownership of the trade$ar' and of the e@(lusive right to the use thereof.P222. the registration is void. a1surd or i$possi1leI+4 +.hen(e 1e)ond the s(ope of a petition for review. <ust li'e the presu$ptive regularit) in the perfor$an(e of offi(ial fun(tions. *56+& the respondent filed its appli(ation for trade$ar' registration of the :Shangri !a: $ar' and :S: logo.nd these are na$ing 1ut a few of the re(ogni4ed e@(eptions to the rule. trade na$e or servi(e $ar'.) itself.+* 2his was two and a half $onths after the filing of the respondentFs trade$ar' appli(ation on O(to1er *6. respondent was not using these in the Philippines (o$$er(iall). Registration $erel) (reates a prima facie presu$ption of the validit) of the registration. however. ?hen the fa(ts set forth in the petition as well as in the petitionerFs $ain and repl) 1riefs are not disputed 1) the respondent.+.+6 . ?hen the appli(ant is not the owner of the trade$ar' 1eing applied for. ?hen there is grave a1use of dis(retionI+5 -. Ra$on S)hunliong. testified that a <eepne) sign1oard artist allegedl) (o$$issioned to (reate the $ar' and logo su1$itted his designs onl) in De(e$1er *56+.++ Respondent (annot now (lai$ 1efore the Court that the (ertifi(ate of registration itself is proof that the two $onth prior use reAuire$ent was (o$plied with. ?hen the findings of fa(t are (onfli(tingI+7 and 5.nd 1e(ause at the ti$e %O(to1er *6.*6 2rade$ar' is a (reation of use and therefore a(tual use is a pre reAuisite to e@(lusive ownership and its registration with the Philippine Patent Offi(e is a $ere ad$inistrative (onfir$ation of the e@isten(e of su(h right. "ere. It was also onl) in De(e$1er *56+ when the respondentFs restaurant was opened for 1usiness. . Petitioners also argue that the respondentFs use of the :Shangri !a: $ar' and :S: logo was in evident 1ad faith and (annot therefore ripen into ownership. . not legal. ?hile the respondent is (orre(t in sa)ing that a finding of 1ad faith is fa(tual. is re1utta1le and $ust give wa) to eviden(e to the (ontrar). there are.$ong these e@(eptions are9 *.*5 . registration is not a $ode of a(Auiring ownership. the sa$e $ust have 1een in a(tual use in the Philippines 1efore the filing of the appli(ation for registration. Su(h presu$ption.

/ood faith is reAuired in .-. 2he devise loo's li'e a $odified Old English print. inspired 1) the novel. to whi(h we are in full a((ord9 @ @ @ ?hen a trade$ar' (op)(at adopts the word portion of anotherFs trade$ar' as his own. found that the respondentFs president and (hair$an of the 1oard. in the ver) ne@t paragraph. +.t an) rate.+5 Let.s (orre(tl) o1served 1) the petitioners. $ali(ious and in 1ad faith. 2he word :Shangri la: refers to a %a& re$ote 1eautiful i$aginar) pla(e where life approa(hes perfe(tion or %1& i$aginar) $ountain land depi(ted as a utopia in the novel !ost "ori4on 1) Ea$es "ilton. 1ut also $anifestl) $ista'en or a1surd. despite the pre(eding ad$ission that the $ar' and logo $ust have 1een (opied. >urther$ore. are not un(o$$on.. had 1een a guest at the petitionersF hotel 1efore he (aused the registration of the $ar' and logo. 2he S logo is. the C. the respondent had to (hoose e@a(tl) the sa$e $ar' and logo as that of the petitioners. 1oth adopted the $ar' for their 1usiness to (on<ure BaC pla(e of 1eaut) and pleasure. It is then repla(ed 1) the (ertaint) that the adoption was deli1erate.-.Priorit) is of no avail to the 1ad faith plaintiff. it is ludi(rous to 1elieve that the parties would (o$e up with the e@a(t sa$e lettering for the word :Shangri !a: and the e@a(t sa$e logo to 1oot. itself. if there was no intent to ta'e advantage of the goodwill of petitionersF $ar' and logo. *56+& esta1lishes BpetitionersFC allegation that he got the idea there.-+ One who has i$itated the trade$ar' of another (annot 1ring an a(tion for infringe$ent. $a'es it out to 1e. and sur$ised that he $ust have (opied the idea there9 Did #r. he (opies also the logo portion of the trade$ar'.-* It is trul) diffi(ult to understand wh). there $a) still 1e so$e dou1t that the adoption is intentional. 2o <u$p fro$ a re(ognition of the fa(t that the $ar' and logo $ust have 1een (opied to a rationali4ation for the possi1ilit) that 1oth the petitioners and the respondent (oin(identall) (hose the sa$e na$e and logo is not onl) (ontradi(tor). in its De(ision of #a) *5. Ra$on S)hunliong.ut if he (opies not onl) the word 1ut also the wordFs e@a(t font and lettering st)le and in addition. the slightest dou1t vanishes. . Ra$on S)hunliong. 2he !ost "ori4on was a well read and popular novel written in *578. 1e(ause he would 1e (o$ing to (ourt with un(lean hands. not unusual. li'ewise. 1ut is o1viousl) a s)$1ol with oriental or . . It is not i$possi1le that the parties.sian overtones. the :S: logo appears nothing li'e the :Old English: print that the C. parti(ularl) against the true owner of the $ar'.2he C. . BrespondentFsC President (op) the $ar' and devise fro$ one of BpetitionersFC hotel %=owloon Shangri la& a1roadK 2he $ere fa(t that he was a visitor of BpetitionersFC hotel a1road at one ti$e %Septe$1er +7. tries to $a'e it appear that the adoption of the sa$e $ar' and logo (ould have 1een (oin(idental9 2he word or na$e :Shangri la: and the S logo. of the $illions of ter$s and (o$1ination of letters and designs availa1le.-.

.1 . trade na$es and servi(e $ar'sI how a(Auired. or Se(tion *5* of R... (orporations. is not whether there had 1een widespread prior use.. (orporations. ?hat are r'3..)(' .order to ensure that a se(ond user $a) not $erel) ta'e advantage of the goodwill esta1lished 1) the true owner. to rule that their worldwide use of the $ar' and logo in dispute (ould not have (onferred upon the$ an) right thereto.'(( +ha. 2hat said trade$ar's trade na$es. 2his point is further 1olstered 1) the fa(t that under either Se(tion *7 of R. partnerships or asso(iations do$i(iled in an) foreign (ountr) $a) 1e registered in a((ordan(e with the provisions of this . 2rade$ar's. No. . erred in overloo'ing petitionersF widespread prior use of the :Shangri !a: $ar' and :S: logo in their operations.. further. Respondent D/CI also re1u'es the ne@t issue raised 1) the petitioners as 1eing purel) fa(tual in nature. partnerships or asso(iations do$i(iled in the Philippines and 1) persons. *88.(t9 Provided.:-8 2o petitionersF $ind. No.+0o *o-+h( . however.&&. 2his is (learl) a Auestion whi(h is legal in nature.. . as a$ended.P222 for the (an(ellation of respondentFs registration. with a (ertified true (op) of the foreign law translated into the English language.(+ra2. Se(tion + . whether the C.*&r'((. na$el). R. that petitioners had prior widespread use of the $ar' and logo a1road9 2here is.. an . whi(h would have 1een fa(tual. :B2Che Court of . no ti$e li$it is fi@ed for the (an(ellation of $ar's registered or used in 1ad faith. 2he Auestion.nd provided. O0-'r(h. It has alread) 1een esta1lished in the two (ourts 1elow. it was error for the C..-4 2his is pre(isel) wh) petitioners had filed an inter partes (ase 1efore the . 2hat the (ountr) of whi(h the appli(ant for registration is a (iti4en grants 1) law su1stantiall) si$ilar privileges to (iti4ens of the Philippines. to 1e sure.ppeals did note petitionersF use of the $ar' and logo 1ut held that su(h use did not (onfer to the$ ownership or e@(lusive right to use the$ in the Philippines.5' *a(( o4 &roo4 that petitioner S!I"# and its related (o$panies a1road used the na$e and logo for one purpose or another @ @ @. trade na$es and servi(e $ar's o0-'/ 1) persons. and su(h fa(t is offi(iall) (ertified. under whi(h this (ase was heard and de(ided provides9 Se(tion +.gain.& of trade$ar's. the pro(eedings on whi(h were suspended pending resolution of the instant (ase. and admitted by the respondent's president himself... 1ut whether that prior use entitles the petitioners to use the $ar' and logo in the Philippines. this is a legal Auestion whi(h is well worth delving into. or .-'( 1efore the ti$e the appli(ations for registration are filed9 .**'rc' a-/ ('r5.. or servi(e $ar's are ac+)a. 1) the govern$ent of the foreign (ountr) to the /overn$ent of the Repu1li( of the Philippines.n)one who lawfull) produ(es or deals in $er(handise of an) 'ind or who engages in .'.c'( -o+ .rti(le 8bis%-& of the Paris Convention. No.-5 BE$phasis suppliedC In respondentFs own words.+h' Ph. *88.

No. of whi(h D/CIFs president was full) lawful 1usiness. ?hat is worse. are not $utuall) e@(lusive. or a servi(e$ar' -o+ (o a&&ro&r.dditionall). Gnder Se(tion + .. *88 defines the ter$s as follows9 . "en(e. .. *88.. in 1usiness.. Se(tion -6 of R. one $ust 1e the owner thereof and $ust have a(tuall) used the $ar' in (o$$er(e in the Philippines for + $onths prior to the appli(ation for registration. indeed li'el). of the sa$e law sets out to define how one goes a1out a(Auiring ownership thereof. one $a) 1e an owner of a $ar' due to a(tual use thereof 1ut not )et have the right to register su(h ownership here due to failure to use it within the Philippines for two $onths.. to distinguish his $er(handise. neither did respondent D/CI. sin(e the latter also failed to fulfill the + $onth a(tual use reAuire$ent. 1usiness or servi(es of others. 1usiness or servi(e fro$ the $er(handise. of R. on the other hand. )(' thereof in $anufa(ture or trade. it is signifi(ant to note that Se(tion + . >or it to have 1een the owner. the C.. and in the servi(e rendered. 1) ac+)a. while Se(tion + provides for what is registrable. sets out how ownership is a(Auired...d$ittedl). al1eit a1road. 2he ownership or possession of a trade$ar'. trade na$e. heretofore or hereafter appropriated. ?hile the petitioners $a) not have Aualified under Se(tion + of R. . as in this se(tion provided.a+'/ 21 a-o+h'r.. Se(tion + . Gnder Se(tion +. It is (o$$on. instead of using the$ as a trade$ar' or servi(e $ar'. D/CI was not even the owner of the $ar'.. what the C. was not a$iss in sa)ing that the law reAuires the a(tual use in (o$$er(e of the said trade na$e and :S: logo in the Philippines.t the ti$e of respondent D/CIFs registration of the $ar'. No. or who renders an) lawful servi(e in (o$$er(e.e. that the na$e of a (orporation or 1usiness is also a trade na$e. in order to register a trade$ar'. the sa$e was alread) 1eing used 1) the petitioners. trade$ar' or servi(e $ar'. It is respondentFs (ontention that sin(e the petitioners adopted the :Shangri !a: $ar' and :S: logo as a $ere (orporate na$e or as the na$e of their hotels. it is understanda1le for that (ourt to rule in respondentFs favor. a trade na$e. *88 as a registrant. *88. servi(e $ar'. it is (lear that a(tual use in (o$$er(e is also the test of ownership 1ut the provision went further 1) sa)ing that the $ar' $ust not have 1een so appropriated 1) another. failed to per(eive is that there is a (ru(ial differen(e 1etween the aforeAuoted Se(tion + and Se(tion + . Se(tion + . used& 1) so$eone else. (onsistent with its finding that the 1ul' of the petitionersF eviden(e shows that the alleged use of the Shangri !a trade na$e was done a1road and not in the Philippines. does not reAuire that the a(tual use of a trade$ar' $ust 1e within the Philippines. Gnfortunatel). as a$ended. the $ar' $ust not have 1een alread) appropriated %i. then su(h na$e and logo are not trade$ar's. BE$phasis suppliedC . 2hese are two distin(t (on(epts.. 2he two (on(epts of (orporate na$e or 1usiness na$e and trade$ar' or servi(e $ar'. "en(e. No. $a) appropriate to his e@(lusive use a trade$ar'. Sin(e :ownership: of the trade$ar' is reAuired for registration. shall 1e re(ogni4ed and prote(ted in the sa$e $anner and to the sa$e e@tent as are other propert) rights 'nown to this law. under R. >or. No. however.

a04).+. 2he apparent (onfli(t 1etween the two %+& was settled 1) the Supre$e Court in this wise :>ollowing universal a(Auies(en(e and (o$it). unions.'(. $er(hants. Repu1li( . is identi(al with or (onfusingl) si$ilar to or (onstitutes a translation of a $ar' that is sought to 1e registered or is a(tuall) registered.'( .. &'r(o-(. unless the (ontrar) is plainl) apparent fro$ the (onte@t 2he ter$ :trade na$e: in(ludes individual na$es and surna$es..o. trade na$es. petition for the (an(ellation thereof. *566. (.-3 +h' r'8). *88 still applies..(+. and in the a1sen(e of a retroa(tivit) (lause.. R. whether or not registered. -a*'(. the IPC onl) too' effe(t on Eanuar) *. ?ords and ter$s defined and (onstrued In the (onstru(tion of this .. )(' . while the Philippines was alread) a signator) to the Paris Convention.(h +h'* 4ro* +h' ('r5.)/'( 0.&a.r'*'-+ o4 ac+)a.+h' Ph. No.(. It goes without sa)ing that the sa$e runs afoul to Repu1li( .o-a. e$1le$. sold or dealt in 1) others.1 a/o&+'/ a-/ )('/ 21 -a+)ra. li(ensed or doing 1usiness in the Philippines. or 6)r.*. and an) $anufa(turing. /'(. agri(ultural or other organi4ations engaged in trade or (o$$er(e. industrial.(t. (o$$er(ial.a0 o.-c+.c. -6.-c.. s)$1ol.(t No.+ho)+ . fro$ the 1road definitions Auoted a1ove.(+. 2he ter$ :servi(e $ar': $eans a $ar' used in the sale or advertising of servi(es to identif) the s'r5.-3). sign or devi(e or an) (o$1ination thereof adopted and used 1) a $anufa(turer or $er(hant to identif) his goods and distinguish the$ fro$ those $anufa(tured. the petitioners (an 1e (onsidered as having used the :Shangri !a: na$e and :S: logo as a tradena$e and servi(e $ar'. oppose registration.-+'r-a+.3-a+. a-/ /.&&.Se(.-3.-7 " na$e. had not erred in ruling that9 2he Paris Convention $andates that prote(tion should 1e afforded to internationall) 'nown $ar's as signator) to the Paris Convention. the C.+a+.(t No. 2he new Intelle(tual Propert) Code %IPC&. devi(es or words used 1) $anufa(turers. industrialists. sue for unfair (o$petition& in(lude persons whose internationall) well 'nown $ar'. a3r''*'-+ inas$u(h as the apparent (lash is 1eing de(ided 1) a $uni(ipal .+h' *ar7(.5' 4'a+)r'( o4 ra/. *88./.(.+ra/'*ar7( r'3ar/. fir$ na$es. without regard as to whether the foreign (orporation is registered.+. vo(ations or o((upationsI the -a*'( or +. undou1tedl) shows the fir$ resolve of the Philippines to o1serve and follow the Paris Convention 1) in(orporating the relevant portions of the Convention su(h that persons who $a) Auestion a $ar' %that is. o)r *)-.o or o+h'r a/5'r+.. . charac+'r -a*'(.o3a-(. 2he ter$ :trade $ar': in(ludes an) word. whi(h reAuires the a(tual use in (o$$er(e in the Philippines of the su1<e(t $ar' or devise.a-/ /.-6 Gnder the prevailing law and <urispruden(e at the ti$e. BE$phasis suppliedC Clearl). +. agri(ulturists.-'( *)(+ ()2or/.-a+' a.c'( o4 o-' &'r(o. (1*2o. and others to identif) their 1usiness.c'( o4 o+h'r( a-/ . 6+5-.

p. p.:4. Pu1li( International !aw. 6 Sessions 5-I Paras. the petitioners (annot (lai$ prote(tion under the Paris Convention.((ordingl). Peters. Nevertheless. +. rules of international law are given a standing eAual. it is evident that the petitioners (annot 1e guilt) of infringe$ent..ppeals dated #a) *5. Gnder the do(trine of in(orporation as applied in $ost (ountries. .. +.-.. >ourth ed. *574.8.. $anager and operator of the su1<e(t $ar' and logo.&. as well as 1ad faith in the respondentFs registration of the $ar'. *558 are here1) SE2 . 3 5* 6478 is ordered DIS#ISSED. *88 did not reAuire the part) see'ing relief to 1e the owner of the $ar' 1ut :an) person who 1elieves that he is or will 1e da$aged 1) the registration of a $ar' or trade na$e.and Septe$1er *5. not superior. *57* Ed. . .esides. *8&. ?ithal. /reat .SIDE. It would 1e a great in<usti(e to ad<udge the petitioners guilt) of infringing a $ar' when the) are a(tuall) the originator and (reator thereof.:-5 BE$phasis suppliedC ConseAuentl). SO ORDERED.N2ED. 2he assailed De(ision and Resolution of the Court of . and the De(ision of the Regional 2rial Court of 3ue4on Cit) dated #ar(h 6. ?"ERE>ORE. with the dou1le infir$it) of la(' of two $onth prior use. R. +.. No. "igh Court of Eudi(iar) of S(otland. the (o$plaint for infringe$ent in Civil Case No. respe(tivel).. *5.tri1unal %#ortensen vs. International !aw and ?orld Organi4ation.ritain. the instant petition is /R. to national legislative ena(t$ents %Salonga and Lap. Nor (an the petitionersF separate personalities fro$ their $other (orporation 1e an o1sta(le in the enfor(e$ent of their rights as part of the =uo' /roup of Co$panies and as offi(ial repositor). the fa(t that international law has 1een $ade part of the law of the land does not 1) an) $eans i$pl) the pri$a() of international law over national law in the $uni(ipal sphere..