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Shangri-La International Hotel Management, Ltd. vs. Developers Group of Companies, Inc.

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486 SCRA 405, G.R. No. 159938 March 31, 2006

Intellectual Property Code; Trademarks; Section 2 of R.A. No. 166 which was in effect up to
December 31, 1997, 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.—Under the provisions of the former trademark law, R.A.
No. 166, as amended, which was in effect up to December 31, 1997, hence, the law in force at the time
of respondent’s application for registration of trademark, the root of ownership of a trademark is actual
use in commerce. Section 2 of said law 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.

Same; Same; Registration without more, does not confer upon the registrant an absolute right to
the registered mark.—Registration, without more, 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.

Same; Same; As between actual use of a mark without registration, and registration of the mark
without actual use thereof, the former prevails over the latter.—Ownership of a mark or trade name
may be acquired not necessarily by registration but by adoption and use in trade or commerce. As
between actual use of a mark without registration, and registration of the mark without actual use
thereof, the former prevails over the latter. For a rule widely accepted and firmly entrenched, because it
has come down through the years, is that actual use in commerce or business is a pre-requisite to the
acquisition of the right of ownership.

Same; Same; The present law on trademarks has dispensed with the requirement of prior use at
the time of registration.—While the present law on trademarks has dispensed with the requirement of
prior actual use at the time of registration, the law in force at the time of registration must be applied,
and thereunder it was held that as a condition precedent to registration of trademark, trade name or
service mark, the same must have been in actual use in the Philippines before the filing of the
application for registration. Trademark is a creation of use and therefore actual use is a pre-requisite to
exclusive ownership and its registration with the Philippine Patent Office is a mere administrative
confirmation of the existence of such right.

FACTS: Petitioner Shangri-La International Hotel Management (SHLIM) seeks to set aside a
decision rendered by the CA for a Infringement case against Developers Group of Companies (DGC)

regarding the Shangri-la Mark and the S Logo. Which the DGC claims ownership in the Philippines.
DGCI stressed that they filed with the Bureau of Patents, Trademarks and Technology Transfer for the
Logo in Oct. 1982. Which was later issued to to DGCI in May 1983. And since then DGCI started
using the Shangri-la mark and S logo on its restaurant business

On the other hand, the Kouk family owns and operates a chain of hotels since 1969. and had adopted
the name Shangri la as part of its corporate name since 1962 in all hotel and hotels related businesses it
has around the world. This includes its EDSA and Makati branches in the Philippines since 1987
Shangrila Singapore has commissioned someone to conceptualize and design the logo of the Shangrila
hotels and since 1975 has been using the logo consistently in all Shangri La htoels and companies

SHLIM and DGC have both used the registered the mark and logo in different patent offices in
different countries around the world..

on June 1988 SHLIM a petition to cancel the registration of the Shangrila Mark and S logo of the
DGC. They claim that they had not operated in the Philippines until 1987 but were actively advertising
since 1972 in all its businesses abroad. And was later sued by DGC for a complaint for Infringement
and Damages with the RTC.

ISSUE: WON

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