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Shang Properties v. St.

Francis Development Corporation

GR No. 190706; July 21, 2014

FACTS: Respondent domestic corporation is engaged in the real where the defendant, by imitative devices on the general
estate business and is the developer of the St. Francis Square appearance of the goods, misleads prospective purchasers into
Commercial Center (built sometime in 1992). buying his merchandise under the impression that they are
It filed separate complaints against petitioners before the IPO - buying that of his competitors. [In other words], the defendant
BLA, namely: gives his goods the general appearance of the goods of his
(a) IPV Case an intellectual property violation case competitor with the intention of deceiving the public that the
for unfair competition, false or fraudulent declaration, goods are those of his competitor.
and damages arising from petitioners use and filing of The true test of unfair competition has thus been whether the
applications for the registration of the marks THE ST. acts of the defendant have the intent of deceiving or are
FRANCIS TOWERS and THE ST. FRANCIS calculated to deceive the ordinary buyer making his purchases
SHANGRI-LA PLACE,; and under the ordinary conditions of the particular trade to which
(b) St. Francis Towers IP Case an inter partes case the controversy relates. Based on the foregoing, it is therefore
opposing the petitioners application for registration of essential to prove the existence of fraud, or the intent to
the mark THE ST. FRANCIS TOWERS for use relative deceive, actual or probable, determined through a judicious
to the latters business, particularly the construction of scrutiny of the factual circumstances attendant to a particular
permanent buildings or structures for residential and case.
office purposes; and
(c) St. Francis Shangri-La IP Case an inter partes Here, the Court finds the element of fraud to be wanting; hence,
case opposing the petitioners application for there can be no unfair competition. The CAs contrary
registration of the mark THE ST. FRANCIS SHANGRI- conclusion was faultily premised on its impression that
LA PLACE,. respondent had the right to the exclusive use of the mark ST.
FRANCIS, for which the latter had purportedly established
Respondent alleged that it has used the mark ST. FRANCIS to considerable goodwill. What the CA appears to have
identify its numerous property development projects located at disregarded or been mistaken in its disquisition, however, is the
Ortigas Center, such as the aforementioned St. Francis Square geographically descriptive nature of the mark ST. FRANCIS
Commercial Center, a shopping mall called the St. Francis which thus bars its exclusive appropriability, unless a secondary
Square, and a mixed-use realty project plan that includes the meaning is acquired.
St. Francis Towers. Respondent added that as a result of its
continuous use of the mark ST. FRANCIS in its real estate As deftly explained in the U.S. case of Great Southern Bank v.
business, it has gained substantial goodwill with the public that First Southern Bank: [d]escriptive geographical terms are in
consumers and traders closely identify the said mark with its the public domain in the sense that every seller should
property development projects. Accordingly, respondent have the right to inform customers of the geographical
claimed that petitioners could not have the mark THE ST. origin of his goods. A geographically descriptive term is any
FRANCIS TOWERS registered in their names, and that noun or adjective that designates geographical location and
petitioners use of the marks THE ST. FRANCIS TOWERS and would tend to be regarded by buyers as descriptive of the
THE ST. FRANCIS SHANGRI-LA PLACE in their own real geographic location of origin of the goods or services. A
estate development projects constitutes unfair competition as geographically descriptive term can indicate any
well as false or fraudulent declaration. geographic location on earth, such as continents, nations,
regions, states, cities, streets and addresses, areas of cities,
Petitioners denied committing unfair competition and false or rivers, and any other location referred to by a recognized name.
fraudulent declaration, maintaining that they could register the In order to determine whether or not the geographic term in
mark THE ST. FRANCIS TOWERS and THE ST. FRANCIS question is descriptively used, the following question is relevant:
SHANGRI-LA PLACE under their names. They contended that (1) Is the mark the name of the place or region from which
respondent is barred from claiming ownership and exclusive use the goods actually come? If the answer is yes, then the
of the mark ST. FRANCIS because the same is geographically geographic term is probably used in a descriptive sense,
descriptive of the goods or services for which it is intended to be and secondary meaning is required for protection.
used. This is because respondents as well as petitioners real Secondary meaning is established when a descriptive mark no
estate development projects are located along the streets longer causes the public to associate the goods with a particular
bearing the name St. Francis, particularly, St. Francis Avenue place, but to associate the goods with a particular source. In
and St. Francis Street (now known as Bank Drive), both within other words, it is not enough that a geographically-descriptive
the vicinity of the Ortigas Center. mark partakes of the name of a place known generally to the
public to be denied registration as it is also necessary to show
ISSUE: Whether or not petitioners are guilty of unfair that the public would make a goods/place association
competition in using the marks THE ST. FRANCIS TOWERS that is, to believe that the goods for which the mark is sought
and THE ST. FRANCIS SHANGRI-LA PLACE. to be registered originate in that place. However, where there is
no genuine issue that the geographical significance of a term
RULING: NO. The unfair competition concept refers to the is its primary significance and where the geographical place
the passing off (or palming off) or attempting to pass off upon is neither obscure nor remote, a public association of the
the public of the goods or business of one person as the goods or goods with the place may ordinarily be presumed from the
business of another with the end and probable effect of fact that the applicants own goods come from the
deceiving the public. Passing off (or palming off) takes place geographical place named in the mark.