IPL 134 Trademarks

Prof. Vicente B. Amador Senior Partner Sycip Salazar Hernandez & Gatmaitan

Acquisition of marks by Registration SECTION 122. How Marks are Acquired. - The rights in a mark shall be acquired through registration made validly in accordance with the provisions of this law. (Sec. 2-A, R A. No. 166a)

Maintaining trademark rights through actual use 124.2.The applicant or the registrant shall file a declaration of actual use of the mark with evidence to that effect, as prescribed by the Regulations within three (3) years from the filing date of the application. Otherwise, the application shall be refused or the mark shall be removed from the Register by the Director. 124.3.One (1) application may relate to several goods and/or services, whether they belong to one (l) class or to several classes of the Nice Classification.

Developers Group of Companies, Inc. vs. Shangri-la International Hotel Management, Inc. et. al. CA- G. R. CV No. 53351 Developers is the registered owner of the mark Shangri-La and S Logo in the Philippines under Regn. No. 31904 issued on May 31, 1983, which it started using in 1982. SIHM is the beneficial owner of the Shangri-La and the S Logo, which it started using in 1962 as part of its corporate name and as a mark for its hotels starting in 1975. It claims that this mark is internationally well-known and is protected under the Paris Convention.

1. Issue: Real Party in Interest? “SLIHM is not the owner of the Shangri-la hotels, but through a licensing agreement, operates the same hotels. Logically, a member of a group of companies cannot claim ownership over the alleged properties of its mother company or any member of the conglomeration, which has distinct and separate personality of its own. Thus, defendant SLIM cannot claim to legally own the subject Shangri-la trademark and S-logo by virtue of the alleged ownership of the same by Kuok Group.”

2. Issue: Is there trademark infringement? “Granting that Kuok’s use of the Shangri-law tradename and S-Logo since 1962 benefits defendant-appellant SLIHM as a member of the conglomerate, the same is not the actual use required under Republic Act No. 166. The law requires the actual use in commerce of the said tradename and S-Logo in the Philippines. The bulk of defendants-appellants’ evidence show that the alleged use of the Shangri-la tradename was done abroad and not in the Philippines. The name Shangri-la was only actually used in the Philippines when the hotels with the same name were constructed in 1987. Defendants-appellants’ actual use in commerce of the subject tradename and S-logo in the Philippines commenced only in 1987.

The alleged defendants-appellants’ publication of advertisement worldwide is unavailing. To reiterate the Supreme Court ruling – Such right grows out of their actual use. Adoption is not use. One may make advertisements, issue circulars, give out price lists on certain goods; but these alone would not give exclusive right of use.” If this case is decided under the IP Code, will the outcome be different?

Secondary meaning or acquired distinctiveness may be gained only with respect to marks under paragraphs (j),(k) and (l) Precedents on Secondary Meaning • Phil. Nut Industry Inc. vs. Standard Brands Inc., GR L-23035, July 31, 1975; PLANTERS trademark • Ang vs. Teodoro, GR No. L-48226, December 14, 194; ANG TIBAY trademark

Sec. 123.2. As regards signs or devices mentioned in paragraphs (j), (k), and (l), nothing shall prevent the registration of any such sign or device which has become distinctive in relation to the goods for which registration is requested as a result of the use that have been made of it in commerce in the Philippines.

The Office may accept as prima facie evidence that the mark has become distinctive, as used in connection with the applicant's goods or services in commerce, proof of substantially exclusive and continuous use thereof by the applicant in commerce in the Philippines for five (5) years before the date on which the claim of distinctiveness is made.

SOCIETE DES PRODUITS NESTLE, S.A. and NESTLE PHILIPPINES, INC. vs. COURT OF APPEALS and CFC CORPORATION, G.R. No. 112012. April 4, 2001. Nestle’s Marks: MASTER ROAST and MASTER BLEND." CFC’s Marks: "FLAVOR MASTER" Nestle filed notice of opposition to CFC’s application for FLAVOR MASTER CFC argued that its trademark, FLAVOR MASTER, is not confusingly similar with the former's trademarks, MASTER ROAST and MASTER BLEND. 1. MASTER is either a generic or descriptive word Other words used with the trademarks are very different from each other — in meaning, spelling, pronunciation, and sound.

Bureau of Patents denied CFC’s trademark application, but CA reversed its decision and ruled in favor of CFC. CA held that the physical discrepancies between appellant CFC's and appellee's respective logos are so ostensible that the casual purchaser cannot likely mistake one for the other. Supreme Court reversed the CA: 1. The Court of Appeals applied some judicial precedents which are not on all fours with this case. 2. In infringement or trademark cases in the Philippines, no set rules can be deduced in ascertaining whether one trademark is confusingly similar to or is a colorable imitation of another. Each case must be decided on its own merits.

3. The cases cited by the Court of Appeals to justify the application of the totality or holistic test to this case are inapplicable, the factual circumstances being substantially different. BIOFERIN and BUFFERIN for pains caused headaches and colds are spelled and pronounced differently and are prescribed by physicians ALACTA for goods under Class 6 for pharmaceutical and nutritional preparation is distinguishable from ALASKA for goods under Class 47 for food ingredients. The latter does not require prescription. 4. "The determination of whether two trademarks are indeed confusingly similar must be taken from the viewpoint of the ordinary purchasers who are, in general, undiscerningly rash in buying the more common and less expensive household products like coffee, and are therefore less inclined to closely examine specific details of similarities and dissimilarities between competing products."

5. MASTER is the dominant feature of opposer's mark. MASTER is printed predominantly on the label and emphasized in TV, radio and printed advertising materials with personalities like Robert Jaworski and Atty. Ric Puno Jr., who are given the titles Master of the Game and Master of the Talk Show. 6. In addition, the word "MASTER" is neither a generic nor a descriptive term. As such, said term can not be invalidated as a trademark and, therefore, may be legally protected. Rather, the term "MASTER" is a suggestive term brought about by the advertising scheme of Nestle. 7. The term "MASTER", therefore, has acquired a certain connotation to mean the coffee products MASTER ROAST and MASTER BLEND produced by Nestle. As such, the use by CFC of the term "MASTER" in the trademark for its coffee product FLAVOR MASTER is likely to cause confusion or mistake or even to deceive the ordinary purchasers.

Territorial character of trademarks •Philip Morris Inc. et. al. vs. Fortune Tobacco Corp., July 16, 1993 “[T]here is no proof whatsoever that any of plaintiff’s products which they seek to protect from any adverse effect of the trademark applied for by defendant, is in actual use and available for commercial purposes anywhere in the Philippines.*** In assailing the justification arrived at by respondent court when it recalled the writ of preliminary injunction, petitioners are of the impression that actual use of their trademarks in Philippine

commercial dealings is not an indispensable element under Article 2 of the Paris Convention in that: (2) …no condition as to the possession of a domiciled or establishment in the country where protection is claimed may be required of persons entitled to the benefits of the Union for the enjoyment of any industrial property rights. Yet petitioner’s perception along this line is nonetheless resolved by Sections 2 and 2-A of the Trademark Law which speaks about the necessity of actual commercial use of the trademark in the local forum: …

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. … Under the doctrine of incorporation as applied in most countries, rules of international law are given a standing equal, if not superior, to national legislative enactments.”

• But see Section 123(e) * * * In determining whether a mark is well known, account shall be taken of the knowledge of the relevant sector of the public, rather than of the public at large, including knowledge in the Philippines which has been obtained as a result of the promotion of the mark; “Through advertisement, a well-established and well-earned reputation may be gained in countries where the trademark owner has itself no established business connection. Goodwill may thus be seen to be much less confined

territorially than say, a hundred or fifty years ago. It is no longer true that a trademark of itself cannot travel to markets where there is no article to wear the badge and no trader to offer the article. Advertisement of trademark is geared toward promotion of use of the marked article and the attraction of potential buyers and users; by fixing the identity of the marked article in the public mind, it prepares the way for growth in such commerce whether the commerce be handled by the trademark owner itself or by its licensees or independent traders.”

See also: SECTION 3. International Conventions and Reciprocity. - Any person who is a national or who is domiciled or has a real and effective industrial establishment in a country which is a party to any convention, treaty or agreement relating to intellectual property rights or the repression of unfair competition, to which the Philippines is also a party, or extends reciprocal rights to nationals of the

Philippines by law, shall be entitled to benefits to the extent necessary to give effect to any provision of such convention, treaty or reciprocal law, in addition to the rights to which any owner of an intellectual property right is otherwise entitled by this Act. (n)

Essential Steps to Protection •Actual use in commerce •Application process • early filing date or priority date • Examination process • conflict with other marks applied for or m registered or with prior users of the trademark

How to Obtain Protection • Actual use in commerce • Application for registration The old Trademark Law followed an actual use system, while the IP Code followed a hybrid filing-actual use system While actual use was required for at least two months before application under old TM law, the IP Code allows application without use and requires it only within three years from filing date

SECTION 124. Requirements of Application. - 124.1. The application for the registration of the mark shall be in Filipino or in English and shall contain the following: (a) A request for registration; (b) The name and address of the applicant; (c) The name of a State of which the applicant is a national or where he has domicile; and the name of a State in which the applicant has a real and effective industrial or commercial establishment, if any;

(d) Where the applicant is a juridical entity, the law under which it is organized and existing; (e) The appointment of an agent or representative, if the applicant is not domiciled in the Philippines; (f) Where the applicant claims the priority of an earlier application, an indication of: i) The name of the State with whose national office the earlier application was filed or if filed with an office other than a national office, the name of that office, ii) The date on which the earlier application was filed, and

iii) Where available, the application number of the earlier application; (g) Where the applicant claims color as a distinctive feature of the mark, a statement to that effect as well as the name or names of the color or colors claimed and an indication, in respect of each color, of the principal parts of the mark which are in that color; (h) Where the mark is a three-dimensional mark, a statement to that effect;

(i) One or more reproductions of the mark, as prescribed in the Regulations; (j) A transliteration or translation of the mark or of some parts of the mark, as prescribed in the Regulations; (k) The names of the goods or services for which the registration is sought, grouped according to the classes of the Nice Classification, together with the number of the class of the said Classification to which each group of goods or services belongs; and

(l) A signature by, or other self-identification of, the applicant or his representative. 124.2. The applicant or the registrant shall file a declaration of actual use of the mark with evidence to that effect, as prescribed by the Regulations within three (3) years from the filing date of the application. Otherwise, the application shall be refused or the mark shall be removed from the Register by the Director.

124.3. One (1) application may relate to several goods and/or services, whether they belong to one (l) class or to several classes of the Nice Classification. 124.4. If during the examination of the application, the Office finds factual basis to reasonably doubt the veracity of any indication or element in the application, it may require the applicant to submit sufficient evidence to remove the doubt. (Sec. 5, R.A. No. 166a)

Why is the filing date important?
SECTION 127. Filing Date – determines the right of priority of the application, the examination and publication so it is important to comply with the requirements for a filing date under this provision Question: ABC filed an application for trademark DEF with the IP Office on 1/1/04 claiming the priority date of its US application filed with the USPTO on 6/1/03. Is the applicant entitled to a priority date of 6/1/03.

SECTION 131. Priority Right. - 131.1. An application for registration of a mark filed in the Philippines by a person referred to in Section 3, and who previously duly filed an application for registration of the same mark in one of those countries, shall be considered as filed as of the day the application was first filed in the foreign country. 131.2.No registration of a mark in the Philippines by a person described in this section shall be granted until such mark has been registered in the country of origin of the applicant.

Limitation on right to sue 131.3.Nothing in this section shall entitle the owner of a registration granted under this section to sue for acts committed prior to the date on which his mark was registered in this country: Provided, That, notwithstanding the foregoing, the owner of a wellknown mark as defined in Section 123.1(e) of this Act, that is not registered in the Philippines, may, against an identical or confusingly similar mark, oppose its registration, or petition the cancellation of its registration or sue for unfair competition, without prejudice to availing himself of other remedies provided for under the law.

When a first foreign application is withdrawn 131.4.In like manner and subject to the same conditions and requirements, the right provided in this section may be based upon a subsequent regularly filed application in the same foreign country: Provided, That any foreign application filed prior to such subsequent application has been withdrawn, abandoned, or otherwise disposed of, without having been laid open to public inspection and without leaving any rights outstanding, and has not served, nor thereafter shall serve, as a basis for claiming a right of priority. (Sec. 37, R.A. No. 166a)

SECTION 128. Single Registration for Goods and/or Services- Where goods and/or services belonging to several classes of the Nice classification have been included in one (1) application, such application shall result in one registration.

• Declaration of use within three years from filing date must provide evidence of actual use on specific products and registration will mention only such products SECTION 130.Signature and Other Means of SelfIdentification. •hand-written signature, printed or stamped signature •communications made by telefacsimile accepted followed by original within thirty days

No attestation, notarization, authentication, legalization or other certification of any signature or other means of self-identification referred to in the preceding paragraphs, will be required, except, where the signature concerns the surrender of a registration

SECTION 132.Application Number and Filing Date are given when the filing requirements are met SECTION 133. Examination and Publication – examination on the issue of registrability, and if approved the trademark application will be published in the Official Gazette

SECTION 126. Disclaimers. The Office may allow or require the applicant to disclaim an unregistrable component of an otherwise registrable mark but such disclaimer shall not prejudice or affect the applicant's or owner's rights then existing or thereafter arising in the disclaimed matter, nor such shall disclaimer prejudice or affect the applicant's or owner's right on another application of later date if the disclaimed matter became distinctive of the applicant's or owner's goods, business or services. (Sec. 13, R.A. No. 166a)

Conflict with rival applicants or users •What are the rights of a prior user of a trademark vis a vis the registered owner but junior user of an identical mark? •TRIPS Agreement says that “the rights [of a registered owner] shall not prejudice any existing prior rights.” •Section 236. Preservation of Existing Rights. Nothing herein shall adversely affect the rights on the enforcement of rights in patents, utility models,

industrial designs, marks and works, acquired in good faith prior to the effective date of this Act. (n) •Pursuant to TRIPS, the IP Code makes rights to trademarks available on the basis of use •Under Section 124.2, the applicant or the registrant shall file a declaration of actual use of the mark with evidence to that effect, as prescribed by the Regulations within three (3) years from the filing date of the application. Otherwise, the application shall be refused or the mark shall be removed from the Register by the Director.

The only possible exception may be well-known trademarks, which may bar other applications “whether or not it is registered here”

Question: ABC filed an application for trademark DEF with the IP Office on 6/1/04 claiming the priority date of its US application filed with the USPTO on 1/1/04. The IP Office granted the registration when ABC filed its certificate of registration from the USPTO. ABC then sued XYZ for trademark infringement for acts committed for the preceding 4 years during which it used the mark. Will the action prosper? Will your answer be the same if DEF is a well-known mark?