BIRKENSTOCK ORTHOPAEDIE GMBH AND CO.

KG vs PHILIPPINE SHOE EXPO

MARKETING CORPORATION,
G.R. No. 194307. November 20, 2013

DOCTRINES:
 Under Section 2 of RA 166, which is also the law governing the subject applications, in order to
register a trademark, one must be the owner thereof and must have actually used the mark in
commerce in the Philippines for two (2) months prior to the application for registration.
Section 2-A of the same law sets out to define how one goes about acquiring ownership thereof.
Under the same section, it is clear that actual use in commerce is also the test of ownership
but the provision went further by saying that the mark must not have been so appropriated by
another. Significantly, to be an owner, Section 2-A does not require that the actual use of a
trademark must be within the Philippines. Thus, under RA 166, one may be an owner of a
mark due to its actual use but may not yet have the right to register such ownership here due
to the owner’s failure to use the same in the Philippines for two (2) months prior to
registration.

 It must be emphasized that registration of a trademark, by itself, is not a mode of acquiring

ownership. If the applicant is not the owner of the trademark, he has no right to apply for its
registration. Registration merely creates a prima facie presumption of the validity of the
registration, of the registrant’s ownership of the trademark, and of the exclusive right to the
use thereof. Such presumption, just like the presumptive regularity in the performance of
official functions, is rebuttable and must give way to evidence to the contrary.

 It is not the application or registration of a trademark that vests ownership thereof, but it is
the ownership of a trademark that confers the right to register the same. A trademark is an
industrial property over which its owner is entitled to property rights which cannot be
appropriated by unscrupulous entities that, in one way or another, happen to register such
trademark ahead of its true and lawful owner. The presumption of ownership accorded to a
registrant must then necessarily yield to superior evidence of actual and real ownership of a
trademark.

FACTS:
 Petitioner Birkenstock, a corporation duly organized and existing under the laws of Germany
applied for various trademark registrations before the Intellectual Property Office (IPO).
However, the applications were suspended in view of the existing registration of the mark
“BIRKENSTOCK AND DEVICE” under Registration No. 56334 dated October 21, 1993 in the
name of Shoe Town International and Industrial Corporation, the predecessor-in-interest of
respondent Philippine Shoe Expo Marketing Corporation.

 On May 27, 1997, Birkinstock filed a petition (Cancellation Case) for cancellation of
Registration No. 564334 on the ground that it is the lawful and rightful owner of the
Birkenstock marks. During its pendency, however, respondent Philippine Shoe Expo or it
predecessor-in-interest failed to file the required 10th Year Declaration of Actual Use (10th
Year DAU) for Registration No. 56334 on or before October 21, 2004, thereby resulting the
cancellation of such mark. Accordingly, the cancellation case was dismissed for being moot and
academic thereby paving the way for the publication of the subject applications.
 In response, respondent Philippine Shoe Expo filed with the Bureau of Legal Affairs (BLA) of
the IPO three separate verified notices of opposition to the subject applications docketed as
Inter Partes Cases claiming, among others, it, together with its predecessor-in-interest, has
been using the Birkenstock marks in the Philippines for more than 16 years through the mark
“BIRKENSTOCK AND DEVICE”.

 In its Decision, the BLA of the IPO sustained respondent’s opposition, thus ordering the
rejection of the subject applications of Petitioner. Aggrieved, petitioner Birkinstock appealed
to the IPO Director General whereby in its decision, the latter reversed and set aside the
ruling of the BLA thus allowing the registration of the subject applications.

 Finding the IPO Director General’s reversal of the BLA unacceptable, respondent Philippine
Shoe Expo filed a petition for review with the Court of Appeals. In its decision dated June 25,
2010, the CA reversed and set aside the ruling of the IPO Director General and reinstated that
of the BLA. The petitioner Birkenstock filed a Motion for Reconsideration but was denied by
the CA.

 Hence , this petition to the Supreme Court.

ISSUE:
1. Whether or not the subject marks should be allowed registration in the name of the
petitioner?

RULING:
1. The court ruled in favour of the petitioner. Under Section 12 of Republic Act 166, it
provides that, “Each certificate of registration shall remain in force for twenty years:
Provided, that the registration under the provisions of this Act shall be cancelled by the
Director, unless within one year following the fifth, tenth and fifteenth anniversaries of
the date of issue of the certificate of registration, the registrant shall file in the Patent
Office an affidavit showing that the mark or trade-name is still in use or showing that its
non-use is due to special circumstance which excuse such non-use and is not due to any
intention to abandon the same, and pay the required fee.”

In the case at bar, respondent admitted that it failed to file the 10th Year DAU for
Registration No. 56334 within the requisite period, or on or before October 21, 2004. As a
consequence, it was deemed to have abandoned or withdrawn any right or interest over
the mark “BIRKENSTOCK”. It must be emphasized that registration of a trademark, by
itself, is not a mode of acquiring ownership. If the applicant is not the owner of the
trademark, he has no right to apply for its registration. Registration merely creates a
prima facie presumption of the validity of the registration. Such presumption, just like the
presumptive regularity in the performance of official functions, is rebuttable and must
give way to evidence to the contrary. Besides, petitioner has duly established its true and
lawful ownership of the mark “BIRKENSTOCK”. It submitted evidence relating to the
origin and history of “BIRKENSTOCK” and it use in commerce long before respondent was
able to register the same here in the Philippines. Petitioner also submitted various
certificates of registration of the mark “BIRKENSTOCK” in various countries and that it
has used such mark in different countries worldwide, including the Philippines.

PEST MANAGEMENT G.R. NO. 156041 ASSOCIATION OF THE

PHILIPPINES (PMAP), V. FERTILIZER AND PESTICIDE AUTHORITY (FPA), SECRETARY
OF THE DEPARTMENT OF AGRICULTURE, FPA OFFICER- IN-CHARGE CESAR M.
DRILON, AND FPA DEPUTY DIRECTOR DARIO C. SALUBARSE,

Facts: The case commenced upon petitioners filing of a Petition For Declaratory Relief
With Prayer For Issuance Of A Writ Of Preliminary Injunction And/Or Temporary Restraining
Order with the RTC on January 4, 2002. Petitioner, a non-stock corporation duly organized and
existing under the laws of the Philippines, is an association of pesticide handlers duly licensed by
respondent Fertilizer and Pesticide Authority (FPA). It questioned the validity of Section 3.12 of
the 1987 Pesticide Regulatory Policies and Implementing Guidelines, which provides thus:

3.12 Protection of Proprietary Data

Data submitted to support the first full or conditional registration of a

pesticide active ingredient in the Philippines will be granted proprietary protection
for a period of seven years from the date of such registration. During this period
subsequent registrants may rely on these data only with third party authorization
or otherwise must submit their own data.

Petitioner argued that the specific provision on the protection of the proprietary data
in FPAs Pesticide Regulatory Policies and Implementing Guidelines is unlawful for going
counter to the objectives of Presidential Decree No. 1144 (P.D. No. 1144); for exceeding the limits
of delegated authority; and for encroaching on the exclusive jurisdiction of the Intellectual
Property Office.

On November 5, 2002, the RTC dismissed the petition for declaratory relief for lack of
merit. The RTC held that the FPA did not exceed the limits of its delegated authority in issuing
the aforecited Section 3.12 of the Guidelines granting protection to proprietary data
x x x because the issuance of the aforecited Section was a valid exercise of its power to regulate,
control and develop the pesticide industry under P.D. 1144[2] and the assailed provision does not
encroach on one of the functions of the Intellectual Properly Office (IPO).[3]

Dissatisfied with the RTC Decision, petitioner resorted to filing this petition for review
on certiorari where the following issues are raised:

Respondents, on the other hand, maintain that the provision on the protection of
proprietary data in the FPA's Pesticide Regulatory Policies and Implementing Guidelines is valid
and legal as it does not violate the objectives of P.D. No. 1144; the proprietary data are a
substantial asset which must be protected; the protection for a limited number of years does not
constitute unlawful restraint of free trade; and such provision does not encroach upon the
jurisdiction of the Intellectual Property Office.

Respondents expound that since under P.D. No. 1144, the FPA is mandated to regulate,
control and develop the pesticide industry, it was necessary to provide for such protection of
proprietary data, otherwise, pesticide handlers will proliferate to the the detriment of the
industry and the public since the inherent toxicity of pesticides are hazardous and are potential
environmental contaminants.

They also pointed out that the protection under the assailed Pesticide Regulatory Policies
and Implementing Guidelines is warranted, considering that the development of proprietary
data involves an investment of many years and large sums of money, thus, the data generated by
an applicant in support of his application for registration are owned and proprietary to
him. Moreover, since the protection accorded to the proprietary data is limited in time, then such
protection is reasonable and does not constitute unlawful restraint of trade.

Lastly, respondents emphasize that the provision on protection of proprietary data does
not usurp the functions of the Intellectual Property Office (IPO) since a patent and data
protection are two different matters. A patent prohibits all unlicensed making, using and selling
of a particular product, while data protection accorded by the FPA merely prevents copying or
unauthorized use of an applicant's data, but any other party may independently generate and
use his own data. It is further argued that under Republic Act No. 8293 (R.A. No. 8293), the
grant of power to the IPO to administer and implement State policies on intellectual property is
not exclusionary as the IPO is even allowed to coordinate with other government agencies to
formulate and implement plans and policies to strengthen the protection of intellectual property
rights.

Issues:

I
WHETHER OR NOT RESPONDENT FPA HAS ACTED BEYOND THE
SCOPE OF ITS DELEGATED POWER WHEN IT GRANTED A SEVEN-YEAR
PROPRIETARY PROTECTION TO DATA SUBMITTED TO SUPPORT THE
FIRST FULL OR CONDITIONAL REGISTRATION OF A PESTICIDE
INGREDIENT IN THE PHILIPPINES;
II
WHETHER OR NOT RESPONDENT FPA IS ENCROACHING ON THE
EXCLUSIVE JURISDICTION OF THE INTELLECTUAL PROPERTY OFFICE
(IPO) WHEN IT INCLUDED IN ITS PESTICIDE REGULATORY POLICIES AND
IMPLEMENTING GUIDELINES THE SUBJECT SEVEN-YEAR PROPRIETARY
DATA PROTECTION;
III
 WHETHER OR NOT SAID PROPRIETARY DATA PROTECTION IS AN
UNLAWFUL RESTRAINT OF FREE TRADE;

IV
WHETHER OR NOT SAID PROPRIETARY DATA PROTECTION RUNS
COUNTER TO THE OBJECTIVES OF P.D. NO. 1144;

Ruling: The petition is devoid of merit.

The law being implemented by the assailed Pesticide Regulatory Policies and
Implementing Guidelines is P.D. No. 1144, entitled Creating the Fertilizer and Pesticide
Authority and Abolishing the Fertilizer Industry Authority. As stated in the Preamble of said
decree, there is an urgent need to create a technically-oriented government authority equipped
with the required expertise to regulate, control and develop both the fertilizer and the pesticide
industries.
Verily, in this case, the Court acknowledges the experience and expertise of FPA officials
who are best qualified to formulate ways and means of ensuring the quality and quantity of
pesticides and handlers thereof that should enter the Philippine market, such as giving limited
protection to proprietary data submitted by applicants for registration.The Court ascribes great
value and will not disturb the FPA's determination that one way of attaining the purposes of its
charter is by granting such protection, specially where there is nothing on record which shows
that said administrative agency went beyond its delegated powers.

Moreover, petitioner has not succeeded in convincing the Court that the provision in
question has legal infirmities.

There is no encroachment upon the powers of the IPO granted under R.A. No. 8293,
otherwise known as the Intellectual Property Code of the Philippines. Section 5 thereof
enumerates the functions of the IPO. Nowhere in said provision does it state nor can it be
inferred that the law intended the IPO to have the exclusive authority to protect or promote
intellectual property rights in the Philippines. On the contrary, paragraph (g) of said Section
even provides that the IPO shall [c]oordinate with other government agencies and the private
sector efforts to formulate and implement plans and policies to strengthen the protection of
intellectual property rights in the country. Clearly, R.A. No. 8293 recognizes that efforts to fully
protect intellectual property rights cannot be undertaken by the IPO alone. Other agencies
dealing with intellectual property rights are, therefore, not precluded from issuing policies,
guidelines and regulations to give protection to such rights.

There is also no evidence whatsoever to support petitioner's allegation that the grant of
protection to proprietary data would result in restraining free trade. Petitioner did not adduce
any reliable data to prove its bare allegation that the protection of proprietary data would
unduly restrict trade on pesticides. Furthermore, as held in Association of Philippine Coconut
Desiccators v. Philippine Coconut Authority,[6] despite the fact that our present Constitution
enshrines free enterprise as a policy, it nonetheless reserves to the government the power to
intervene whenever necessary to promote the general welfare. There can be no question that the
unregulated use or proliferation of pesticides would be hazardous to our environment. Thus, in
the aforecited case, the Court declared that free enterprise does not call for removal of protective
regulations.[7] More recently, in Coconut Oil Refiners Association, Inc. v. Torres,[8] the Court held
that [t]he mere fact that incentives and privileges are granted to certain enterprises to the
exclusion of others does not render the issuance unconstitutional for espousing unfair
competition. It must be clearly explained and proven by competent evidence just exactly how
such protective regulation would result in the restraint of trade.

In sum, the assailed provision in the 1987 Pesticide Regulatory Policies and Implementing
Guidelines granting protection to proprietary data is well within the authority of the FPA to
issue so as to carry out its purpose of controlling, regulating and developing the pesticide
industry.

COFFEE PARTNERS, INC. VS. SAN FRANCISCO COFFEE AND ROASTERY, INC.

GR No. 169504, March 3, 2010

FACTS:

The petitioner holds a business in maintaining coffee shops in the Philippines. It is registered
with the Securities and Exchange Commission in January 2001. In its franchise agreement with
Coffee Partners Ltd, it carries the trademark “San Francisco Coffee.” Respondent is engaged in
the wholesale and retail sale of coffee that was registered in SEC in May 1995 under a registered
business name of “San Francisco Coffee & Roastery, Inc.” It entered into a joint venture with
Boyd Coffee USA to study coffee carts in malls.
When respondent learned that petitioner will open a coffee shop in Libis, Q.C. they sent a letter
to the petitioner demanding them to stop using the name “San Francisco Coffee” as it causes
confusion to the minds of the public.

A complaint was also filed by respondents before the Bureau of Legal Affairs of the Intellectual
Property Office for infringement and unfair competition with claims for damages.

Petitioners contend that there are distinct differences in the appearance of their trademark and
that respondent abandoned the use of their trademark when it joined venture with Boyd Coffee
USA.

The Bureau of Legal Affairs of the IPO held that petitioner’s trademark infringed on the
respondent’s trade name as it registered its business name first with the DTI in 1995 while
petitioner only registered its trademark in 2001. Furthermore, it ruled that the respondent did
not abandon the use of its trade name upon its joint venture with Boyd Coffee USA since in order
for abandonment to exist it must be permanent, intentional and voluntary.

It also held that petitioner’s use of the trademark "SAN FRANCISCO COFFEE" will likely cause
confusion because of the exact similarity in sound, spelling, pronunciation, and commercial
impression of the words "SAN FRANCISCO" which is the dominant portion of respondent’s trade
name and petitioner’s trademark.

Upon appeal before the office of the Director General of the IPO, the decision of its legal affairs
was reversed declaring there was no infringement. The Court of Appeals however set aside its
decision and reinstated the IPO legal affairs’ decision.

Petitioner contends that the respondent’s trade name is not registered therefore a suit for
infringement is not available.

ISSUE:

Whether or not the petitioner’s use of the trademark "SAN FRANCISCO COFFEE" constitutes
infringement of respondent’s trade name "SAN FRANCISCO COFFEE & ROASTERY, INC."
even if the trade name is not registered with the Intellectual Property Office (IPO).

HELD:

Petition denied. Registration of a trademark before the IPO is no longer a requirement to file an
action for infringement as provided in Section 165.2 of RA 8293. All that is required is that the
trade name is previously used in trade or commerce in the Philippines. There is no showing that
respondent abandoned the use of its trade name as it continues to embark to conduct research on
retailing coffee, import and sell coffee machines as among the services for which the use of the
business name has been registered.

The court also laid down two tests to determine similarity and likelihood of confusion. The
dominancy test focuses on similarity of the prevalent features of the trademarks that could cause
deception and confusion that constitutes infringement. Exact duplication or imitation is not
required. The question is whether the use of the marks involved is likely to cause confusion or
mistake in the mind of the public or to deceive consumers. the holistic test entails a
consideration of the entirety of the marks as applied to the products, including the labels and
packaging, in determining confusing similarity.15 The discerning eye of the observer must focus
not only on the predominant words but also on the other features appearing on both marks in
order that the observer may draw his conclusion whether one is confusingly similar to the other.

Applying the dominancy test or the holistic test, petitioner’s "SAN FRANCISCO COFFEE"
trademark is a clear infringement of respondent’s "SAN FRANCISCO COFFEE & ROASTERY,
INC." trade name. The descriptive words "SANFRANCISCO COFFEE" are precisely the
dominant features of respondent’s trade name. And because both are involved in coffee business
there is always the high chance that the public will get confused of the source of the coffee sold
by the petitioner. Respondent has acquired an exclusive right to the use of the trade name "SAN
FRANCISCO COFFEE & ROASTERY,INC." since the registration of the business name with the
DTI in 1995.