FACTS:

Petitioner Birkenstock Orthopaedie GmbH & Co. KG, a corporation organized under the laws of Germany, applied for various trademark registrations before the Intellectual Property Office (IPO). The applications included the trademark "BIRKENSTOCK" and its variations, covering goods falling under different classes of the International Classification of Goods and Services. However, the registration proceedings were suspended due to an existing registration of the mark "BIRKENSTOCK AND DEVICE" in favor of respondent Philippine Shoe Expo Marketing Corporation. Petitioner filed a petition for cancellation of the said registration, which was ultimately cancelled due to respondent's failure to file the required 10th Year Declaration of Actual Use. Consequently, the subject applications were published in the IPO e-Gazette. Respondent filed oppositions to the applications, claiming that it has been using the "BIRKENSTOCK AND DEVICE" mark for more than 16 years and that petitioner has no right to register the marks. The Bureau of Legal Affairs (BLA) of the IPO ruled in favor of respondent, finding the marks confusingly similar and petitioner lacking evidence of actual use. However, the IPO Director General reversed the ruling and allowed the registration of the subject applications. The Court of Appeals (CA), on the other hand, reversed the decision of the IPO Director General and reinstated that of the BLA. Dissatisfied, petitioner filed a petition for review before the Supreme Court.

ISSUES:

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

RULING:

The petition is meritorious.

1. Registration and Ownership of "BIRKENSTOCK":

   • The Court found that the failure of the respondent to file the 10th Year Declaration of Actual Use (DAU) resulted in the automatic cancellation of the registration of the "BIRKENSTOCK" mark under Registration No. 56334, and as such, it was deemed to have abandoned any right or interest over the mark.

   • Petitioner was established as the true and lawful owner of the "BIRKENSTOCK" mark due to its historical use and international registration, superseding respondent's claims.

   • The IPO Director General's discretion in accepting petitioner's documentary evidence was upheld, emphasizing substantive justice over procedural technicalities.

PRINCIPLES:

1. Admissibility of Evidence: Rules of procedure are tools for justice and should be applied flexibly, especially in quasi-judicial and administrative bodies not bound by strict technical rules.

2. Trademark Registration and Ownership: Actual use in commerce defines ownership, and registration does not create ownership but presumption of validity. Failure to comply with procedural requirements (like DAU) results in the abandonment of rights over a trademark.

3. Good Faith in Registration: Proper intention and prior legitimate use in commerce are critical; otherwise, registration by another party can be declared in bad faith.