FACTS:

The case involves a dispute over the ownership and use of the "Shangri-La" mark and "S" logo in the Philippines. Respondent Developers Group of Companies, Inc. (DGCI) claims ownership of the mark and logo based on its prior use and registration with the Bureau of Patents, Trademarks, and Technology Transfer (BPTTT). The petitioners, Shangri-La International Hotel Management, Ltd. (SLIHM) and its related companies, assert that they have been using the mark and logo in their hotels worldwide. DGCI filed a complaint for infringement and damages against the petitioners, alleging that they have been using a confusingly similar mark and logo in their hotels in the Philippines. The trial court ruled in favor of DGCI, declaring the petitioners' use of the mark and logo as infringement and ordering them to permanently cease and desist from using it, remove it from their premises, and pay damages and attorney's fees. The petitioners appealed to the Court of Appeals (CA), which affirmed the decision of the trial court, deleting only the award of attorney's fees. The petitioners raised several issues, including whether the respondent had the right to file an application for registration despite lacking prior actual commercial use of the mark and logo, whether the respondent's use of the mark and logo was in bad faith, and whether the petitioners should be prohibited from continuing their use of the mark and logo. The Supreme Court found the petition to be sound on both procedural grounds.

ISSUES:

1. Whether there is sufficient certification against forum shopping.

2. Whether the petition raises purely questions of fact.

3. Whether the prior actual use of a trademark is a requirement for registration.

4. Whether the respondent's trademark registration is valid despite not meeting the requirement of prior actual use.

5. Whether the respondent's use of the trademark was in bad faith.

6. Whether the petitioners' prior widespread use of the "Shangri-La" mark and "S" logo entitles them to use the mark and logo in the Philippines.

7. Whether the actual use of a trademark must be within the Philippines in order to acquire ownership.

8. Whether the petitioners can be considered as having used the "Shangri-La" name and "S" logo as a tradename and service mark.

9. Whether the petitioners can claim protection under the Paris Convention.

10. Whether the separate personalities of the petitioners from their mother corporation can be an obstacle in the enforcement of their rights.

RULING:

1. The certification against forum shopping is sufficient. The certification may be signed by a specifically authorized lawyer who has personal knowledge of the facts required to be disclosed. A corporation can only exercise its powers through its board of directors and/or its duly authorized officers and agents. Physical acts, like the signing of documents, can be performed only by natural persons duly authorized for the purpose. Rule 7, Section 5 of the Rules of Court concerning certification against forum shopping does not require any consular certification if the petitioner is a foreign entity.

2. The petition does not raise purely questions of fact. The issues involved in the petition include resolving whether a certificate of registration of a mark, and the presumption of regularity in the performance of official functions in the issuance thereof, are sufficient to establish prior actual use by the registrant. It also entails answering the question of whether prior actual use is required before there may be a valid registration of a mark.

3. Yes, the prior actual use of a trademark is a requirement for registration.

4. No, the respondent's trademark registration is void since it did not have prior actual use of the trademark before filing the application for registration.

5. Yes, the respondent's use of the trademark was in bad faith.

6. The Court ruled that the petitioners' prior widespread use of the "Shangri-La" mark and "S" logo abroad does not automatically entitle them to use the mark and logo in the Philippines. The Court held that the question of entitlement to use the mark and logo in the Philippines is a legal question that must be determined based on the applicable laws.

7. The Court held that actual use of a trademark does not necessarily have to be within the Philippines in order to acquire ownership. While Section 2 of R.A. No. 166 requires actual use in commerce in the Philippines for registration purposes, Section 2-A provides that ownership of a trademark may be acquired through actual use in commerce, regardless of whether it was used within or outside the Philippines. Therefore, actual use outside the Philippines may still establish ownership of a trademark, although it may not qualify for registration in the Philippines.

8. The petitioners can be considered as having used the "Shangri-La" name and "S" logo as a tradename and service mark.

9. The petitioners cannot claim protection under the Paris Convention.

10. The separate personalities of the petitioners from their mother corporation are not an obstacle in the enforcement of their rights.

PRINCIPLES:

• A corporation can only exercise its powers through its board of directors and/or its duly authorized officers and agents.

• The certification against forum shopping may be signed by a specifically authorized lawyer who has personal knowledge of the facts required to be disclosed.

• Rule 7, Section 5 of the Rules of Court concerning certification against forum shopping does not require any consular certification if the petitioner is a foreign entity.

• Registration of a mark does not confer upon the registrant an absolute right to the registered mark, but is merely a prima facie proof of ownership.

• Ownership of a mark may be acquired through actual use in commerce or business. Actual use prevails over registration without actual use.

• Registration is not a mode of acquiring ownership of a trademark.

• Actual use is a pre-requisite to exclusive ownership of a trademark.

• Registration creates a prima facie presumption of validity and ownership but can be rebutted by evidence.

• Bad faith can render a trademark registration void.

• A plaintiff who has imitated the trademark of another cannot bring an action for infringement.

• Good faith is required for the registration and use of a trademark. A second user cannot take advantage of the goodwill established by the true owner.

• Where a trademark has been registered or used in bad faith, there is no time limit for its cancellation.

• Ownership of a trademark may be acquired through actual use in commerce, regardless of whether it was used within or outside the Philippines.

• Actual use of a trademark in commerce in the Philippines for 2 months is required for registration purposes under Section 2 of R.A. No. 166.

• The concepts of corporate name or business name and trademark or service mark are not mutually exclusive.

• Protection should be afforded to internationally known marks as mandated by the Paris Convention.

• The prevailing law at the time, R.A. No. 166, requires actual use in commerce in the Philippines of the subject mark or devise.

• International law, while incorporated into the law of the land, does not have primacy over national law in the municipal sphere.

• Lack of two-month prior use and bad faith in the registration of the mark are infirmities that prevent the petitioners from being guilty of infringement.

• The separate personalities of entities within a corporate group do not obstruct the enforcement of their rights.

• Any person who believes that they will be damaged by the registration of a mark or trade name can seek relief, regardless of ownership of the mark.