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KABUSHI KAISHA ISETAN v. IAC

FACTS:

The petitioner, Kabushi Kaisha Isetan, is a foreign corporation from Japan and the owner of the trademark "Isetan" and the "Young Leaves Design." They first used the trademark in 1936 and have registered it in Japan covering more than 34 classes of goods. On the other hand, the private respondent, Isetann Department Store, is a domestic corporation in the Philippines that used the word "Isetann" as part of its corporate name and on its products, particularly on shirts. They registered their trademarks with the Philippine Patent Office and the Bureau of Domestic Trade. The petitioner filed petitions for the cancellation of the private respondent's trademarks, alleging that they are identical to their own trademarks and that the private respondent's use of a similar corporate name was intended to benefit from the petitioner's goodwill and reputation. The petitioner also invoked the Paris Convention for the Protection of Industrial Property. The petition for cancellation was filed with the Philippine Patent Office and the Securities and Exchange Commission (SEC). The SEC initially granted the petition for cancellation, but on reconsideration, they reversed their decision. The Director of Patents also rendered a decision stating that the petitioner failed to prove a case for cancellation.

The petitioner, Isetan Company Limited, filed a petition for the cancellation of a certificate of supplemental registration issued to the respondent, Isetann Department Store, Inc. & Flower Design. The Director of Patents dismissed the petition, and the petitioner appealed to the Intermediate Appellate Court (now Court of Appeals). However, the appeal was dismissed by the Court of Appeals due to late filing. The petitioner's motion for reconsideration was also denied. The petitioner then filed a petition for review with the Supreme Court, which was initially dismissed but later given due course. However, the Supreme Court dismissed the petition again, stating that there were no equitable considerations to justify the relaxation of technical rules. Both the Court of Appeals' decision and the Director of Patents' decision had become final and executory. The petitioner's claims of substantial justice were declined, and it was reiterated that actual use in commerce in the Philippines is a prerequisite for the acquisition of ownership over a trademark or tradename.

ISSUES:

  1. Whether the petitioner complied with the requirement of actual use in commerce in the Philippines for the acquisition of ownership over a trademark or tradename.

  2. Whether the petitioner has the right to the remedy it seeks despite not having conducted any business, promoted its tradename or trademark, and having no business goodwill in the Philippines.

  3. Whether the petitioner has the right to use the trademark "Isetan" in the Philippines.

  4. Whether the trademark "Isetan" is well-known internationally.

  5. Whether the petitioner engaged in promotional activities in the Philippines.

  6. Whether the appellate court acquired jurisdiction over the appeal filed by the petitioner.

  7. Whether the filing of the appeal within the reglementary period is mandatory and jurisdictional.

RULING:

  1. The petitioner did not comply with the requirement of actual use in commerce in the Philippines for the acquisition of ownership over a trademark or tradename.

  2. The petitioner does not have the right to the remedy it seeks as it has not conducted any business, promoted its tradename or trademark, and has no business goodwill in the Philippines.

  3. The petition is dismissed. The respondent has the exclusive right to use the trademark "Isetan" in the Philippines. The trademark is not well-known internationally and the petitioner did not engage in promotional activities in the Philippines. The findings of facts of the Director of Patents are conclusive, as long as they are supported by substantial evidence.

  4. The appellate court did not acquire jurisdiction over the appeal filed by the petitioner because it was filed out of time.

  5. The filing of the appeal within the reglementary period is mandatory and jurisdictional. Compliance with this period is considered indispensable to prevent delays and ensure the orderly and speedy discharge of judicial business. Failure to comply with the reglementary period renders the judgment final and executory and deprives the appellate court of jurisdiction over the appeal.

PRINCIPLES:

  • Actual use in commerce in the Philippines is a pre-requisite to the acquisition of ownership over a trademark or tradename.

  • Adoption alone of a trademark does not give exclusive right thereto. Exclusive right of use can only be acquired through actual use in commerce.

  • Prior registration does not grant exclusive use of a trademark unless it is used in commerce.

  • The Trademark Law requires actual commercial use of the mark prior to its registration.

  • The findings of facts of the Director of Patents are conclusive as long as they are supported by substantial evidence.

  • The territoriality principle applies in trademark cases, where the right to use a trademark is limited to the territory where the business is carried on.

  • Mere origination or adoption of a tradename without actual use in the market does not give exclusive right to its use.

  • The right to appeal is not a natural right or part of due process but a statutory privilege that must be exercised in accordance with the provisions of the law.

  • Compliance with the reglementary period for appeal is considered mandatory and jurisdictional.

  • The perfection of an appeal within the reglementary period is not a mere technicality but mandatory and jurisdictional.