THIRD DIVISION
[ G.R. No. 264919-21, May 20, 2024 ]
GLORIA MARIS SHARK'S FIN RESTAURANT, INC., PETITIONER, VS. PACIFICO Q. LIM, RESPONDENT.
SINGH, J.:
Before the Court is a Petition for Review on Certiorari[1] under Rule 45 of the Rules of Court filed by petitioner Gloria Maris Shark's Fin Restaurant, Inc. (Gloria Maris), assailing the Decision,[2] dated March 18, 2022, and the Resolution,[3] dated December 19, 2022, of the Court of Appeals (CA) in CA G.R. SP Nos. 162466, 162467 and 162468. The assailed Decision reversed the separate Decisions, all dated August 6, 2019, issued by the Office of the Director General (ODG) of the Intellectual Property Office (IPO) in Appeal Nos. 14-2012-0009,[4] 14-2012-0010,[5] and 14-2012-0011.[6] The assailed Decision reinstated the separate Decisions, all dated February 23, 2012, of the Bureau of Legal Affairs (BLA) of the IPO in Decision Nos. 2012-32,7 2012- 33,[8] and 2012-34.[9]
The Facts
Respondent Pacifico Q. Lim (Lim) is engaged in construction, as well as in the restaurant business. He avers that prior to the establishment of Gloria Maris, he already concocted the name "Gloria Maris Shark's Fin Restaurant." He further claims that he had already thought of the logo, which shall be a fin of a shark enclosed in a plate of irregular shape.[10]
Thus, in 1993, Lim allegedly offered a proposal to the owners of a restaurant located on the premises of the Cultural Center of the Philippines (CCP), which, as Lim claimed, was about to go out of business.[11]
After several meetings, "Gloriamaris Shark's Fin Restaurant Inc." was registered with the Securities and Exchange Commission (SEC) on January 26, 1994,[12] by the following incorporators: Dominador B. Menguito (Menguito), Pedro 0. Manalo, Lorenzo Q. Dy, Edmundo L. Tan, and respondent Lim.[13]
Gloria Maris avers that a graphic artist was hired to submit a sample drawing of the Gloria Maris trademark. After the approval of the said trademark, the Board of Directors entrusted to Lim the trademark's registration with the IPO.[14]
However, it was only in 2005 or more than 10 years after Gloria Maris' registration with the SEC, that three trademarks were registered with the IPO: "GLORIA MARIS WOK SHOP & DESIGN" on August 28, 2005,[15] "GLORIA MARIS DIMSUM KITCHEN WITH LOGO AND DESIGN" on August 28, 2005,[16] and "GLORIA MARIS SHARK'S FIN RESTAURANT AND LOGO" on October 31, 2005.[17] All these trademarks, however, were registered in the name of Lim as the owner.
Thereafter, Lim ventured into franchising where he was able to franchise the concept of Gloria Maris restaurant to several companies.[18]
Gloria Maris allegedly discovered, that contrary to what they had thought, the registration of the trademark entrusted to Lim was registered in his own name and after he had left the company.[19]
On December 4, 2009, Gloria Maris filed separate petitions to cancel Trademark Registration Nos. 4-2004-009149,[20] 4-2004-009150,[21] and 4- 2004-009151.[22]
The Ruling of the BLA-IPO
On February 23, 2012, the BLA-IPO issued three separate Decisions dismissing Gloria Maris' petitions for cancellation:
Rodriguez narrated that in 1993, Lim expressed to him his idea and concept for the Gloria Maris restaurant's theme and design. Thereafter, Lim instructed Rodriguez to create a design to be used as a logo of Gloria Maris. They discussed the drawing and design which centered on the image of a shark's fin in a plate of an irregular shape.[27]
On the contrary, no evidence was adduced by Gloria Maris that it authorized Lim to register the Gloria Maris trademark on its behalf. Moreover, the BLA-IPO found that after the challenged trademarks were published in the IPO Gazette, neither Gloria Maris nor any of its officials opposed the trademark application filed by Lim.[28]
Gloria Maris filed three separate Appeals with the ODG, dated April 20, 2012.[29]
On August 6, 2019, the ODG issued three separate Decisions reversing the Decisions of the BLA-IPO:
Appeal No. 14-2012-0010 Appeal No. 14-2012-0011
In all, the ODG found that Lim's subsequent registration and use of "Gloria Maris" is unlawful.[35]
On March 18, 2022, the CA reversed the Decisions of the ODG and reinstated the Decisions of the BLA-IPO. The dispositive portion reads as follows:
Second. The documents submitted by Gloria Maris, i.e., its version of the trademark of "Gloria Maris," the photographs of said trademark as used in its restaurant chains, its Articles of Incorporation, and the affidavit of Menguito, are insufficient to overcome Lim's prima facie ownership of the subject trademarks. Hence, the CA found that the ODG erred in ordering the cancellation of the Certificates of Registration.[38]
Lastly, the CA found that Gloria Maris is barred by laches from enforcing its alleged right over the name "Gloria Maris." It is apparent that Gloria Maris had been aware that Lim has been using the name "Gloria Maris," and yet only filed the Petition for Cancellation years thereafter.[39]
In its Resolution,[40] dated December 19, 2022, the CA denied Gloria Maris' Motion for Reconsideration for lack of merit.
Thus, Gloria Maris filed the present Petition for Review on Certiorari under Rule 45 of the Rules of Court.
The Issue
Whether the CA committed any error in reversing the Decisions of the ODG and reinstating the Decisions of the BLA-IPO.
The Ruling of the Court
In its Petition, Gloria Maris asserts that the later use and registration by Lim is unlawful.[41] Gloria Maris insists that Lim is not the owner of the "Gloria Maris" mark and trade name.[42] Finally, it claims that it is not estopped from asking for the cancellation of Lim's registrations since the subject trademarks were obtained in bad faith.[43]
In his Comment,[44] Lim maintains that he is the owner of the trademarks. He echoes the ruling of the CA that the evidence adduced by Gloria Maris failed to overcome the presumption that he is the prima facie owner of the trademarks.[45] Moreover, laches had set in against Gloria Maris.[46]
Gloria Maris, in its Reply,[47] counters that Lim's registration is only prima facie evidence of his ownership of the registered trademarks. Hence, the said trademarks may still be canceled since these were made in bad faith. Therefore, Gloria Maris is not estopped from assailing its validity.[48]
Gloria Maris further argues that the evidence that it presented constituted substantial evidence to establish that it owns the trademark "Gloria Maris."[49]
The Petition is meritorious.
Before delving into the merits, the Court notes that the apparently confusing similarity between Gloria Maris' trade name and the trademarks registered by Lim is not at issue in this case, as aptly determined by the ODG.[50] The sole issue in this case is the propriety of Lim's registration of the subject marks.
As a general rule, a petition for review on certiorari filed under Rule 45 of the Rules of Court should only and strictly involve questions of law. However, intellectual property disputes, especially when it comes to trademarks, are highly factual in nature and require a review of the evidence presented by the parties. Moreover, among the exceptions to the rule is when, as in the present case, the findings of the ODG and the CA are conflicting.[51]
In relation to this, proceedings before the IPO are administrative in nature. Therefore, they are governed by the principles and doctrines of the law on administrative adjudication.[52] Consequently, the quantum of proof required in intellectual property cases is substantial evidence, or evidence a reasonable mind might accept as adequate to support a conclusion. Furthermore, administrative agencies are not bound by the technical rules of procedure that are usually applicable in courts of law.[53] Indeed, the primordial purpose of the rules of procedure is to facilitate the attainment of justice, rather than its frustration. It should never be used to defeat the substantive rights of any party.[54]
On appeal before the ODG, Gloria Maris submitted, among others, its Bureau of Internal Revenue Certificate of Registration under the name of "Gloriamaris Shark's Fin Restaurant," the registration date of which is dated March 17, 1997.
It bears to stress that "Gloriamaris Shark's Fin Restaurant Inc." was incorporated in 1994. It is, likewise, not disputed that Lim was among its incorporators.[55]
Given the foregoing, the Court rules that based on the evidence on record, Gloria Maris was able to prove through substantial evidence that it has been using the name "Gloria Maris" in the conduct of its business, years before Lim's registration and, more importantly, Lim knew about it.
Lim, however, claims that prior to the incorporation of Gloria Maris, he had already thought of the name "Gloria Maris." To establish his allegation, he offered as proof the Affidavit of Rodriguez.
However, the Court agrees with the ODG that nothing in Rodriguez's Affidavit establishes that it was Lim who concocted the name "Gloria Maris." If at all, Rodriguez's Affidavit actually reveals that there was already an existing restaurant in the area of the CCP to be transformed into a Chinese restaurant and to be called Gloria Maris.[56] The pertinent portions of Rodriguez's Affidavit read:
Therefore, even assuming that the Court does not admit the evidence submitted by Gloria Maris which were presented for the first time on appeal, the Court is still left with the Certificate of Registration to rely on. It is worth repeating that Gloria Maris was incorporated in 1994. Since its incorporation, it has been using the name "Gloria Maris" for its fine-dining Chinese restaurant.[58] It was only more than 10 years thereafter when Lim registered the questioned trademarks. As will be further discussed later, several circumstances clearly show that Lim registered the subject marks in bad faith, with prior active knowledge of its long-term use by Gloria Maris.
A trademark registered in bad faith is considered as unfair competition under the IP Code:
Similarly, the Court in Ecole de Cuisine Manille, Inc. v. Renaud Cointreau & Cie[61] upheld the CA's finding of bad faith when it noted that petitioner had been fully aware of the respondent's prior use of the marks because its directress had trained in the respondent's culinary school in Paris, France.[62]
In Emzee Foods, Inc. v. Elarfoods, lnc.,[63] the Court held that the petitioner's officers acted in bad faith since its president and incorporators were former employees of the respondent corporation. Clearly, they had knowledge of the subject trademarks which had been consistently and continuously used by the latter since 1989.[64]
In Cymar International, Inc. v. Farling Industrial Co., Ltd.,[65] Cymar was found to be in bad faith since at the time of the filing of the application, Cymar knew fully well of Farling's history of use of the mark:
More importantly, Section 151 of the IP Code expressly states that the registration of a mark may be canceled at any time if, among others, the registration was obtained fraudulently or is contrary to the provisions of the IP Code.
In the present case, laches cannot run against Gloria Maris. As earlier explained, Lim unlawfully registered the subject trademarks. Moreover, Glora Maris was not less remiss in protecting its right, proof of which are the proceedings a quo, which has finally reached this Court.
ACCORDINGLY, the Petition for Review on Certiorari filed by petitioner Gloria Maris Shark's Fin Restaurant, Inc. is GRANTED. The Decision dated March 18, 2022, and the Resolution, dated December 19, 2022, of the Court of Appeals in CA-G.R. SP Nos. 162466, 162467 and 162468 are REVERSED.
Consequently, the following Certificates of Registration in the name of Pacifico Q. Lim are ordered CANCELLED:
SO ORDERED.
Caguioa and Gaerlan, JJ., concur.
Inting and Dimaampao, JJ., see separate concurring opinion.
[1] Rollo, pp. 37-76.
[2] Id. at 9-30. Penned by Associate Justice Alfredo D. Ampuan and concurred in by Associate Justices Pedro B. Corales and Jennifer Joy C. Ong of the Sixteenth Division, Court of Appeals, Manila.
[3] Id. at 32-33. Penned by Associate Justice Alfredo D. Ampuan and concurred in by Associate Justices Pedro B. Corales and Jennifer Joy C. Ong of the Former Sixteenth Division, Court of Appeals, Manila.
[4] Id. at 1143-1154. Penned by Director General Josephine R. Santiago.
[5] Id. at 1155-1166. Penned by Director General Josephine R. Santiago.
[6] Id. at 1167-1178. Penned by Director General Josephine R. Santiago.
[7] Id. at 1120-1130. Penned by Director IV Nathaniel S. Arevalo.
[8] Id. at 1132-1142. Penned by Director IV Nathaniel S. Arevalo.
[9] Id. at 1109-1118. Penned by Director IV Nathaniel S. Arevalo.
[10] Id. at 1123, BLA Decision in Decision No. 2012-32.
[11] Id. at 1124.
[12] Id. at 118, SEC Registration.
[13] Id. at I 121.
[14] Id.
[15] Id. at 319-324, IPO Registration No. 4-2004-009149.
[16] Id. at 325-330, IPO Registration No. 4-2004-009150.
[17] Id. at 314-318, IPO Registration No. 4-2004-009151.
[18] Id. at 1125, BLA Decision in Decision No. 2012-32.
[19] Id. at 1121.
[20] Id. at 1109, BLA Decision in Decision No. 2012-34.
[21] Id. at 1120, BLA Decision in Decision No. 2012-32.
[22] Id. at 1132, BLA Decision in Decision No. 2012-33.
[23] Id. at 1130.
[24] Id. at 1142.
[25] Id. at 1118.
[26] Id. at 1116; 1127; 1139.
[27] Id. at 1117; 1128-1129; 1140-1141.
[28] Id. at 1118; 1129; 1141.
[29] Id. at 19.
[30] Id. at 1153-1154.
[31] Id. at 1165-1166.
[32] Id. at 1177-1178.
[33] Id. at 1150-1151; 1162-1163; 1174-1175.
[34] Id. at 1151; 1163; 1173.
[35] Id. at 1152;1164;1174.
[36] Id. at 29-30.
[37] Id. at 25.
[38] Id. at 26-27.
[39] Id. at 28-29.
[40] Id. at 32-33.
[41] Id. at 54-63, Petition for Review on Certiorari.
[42] Id. at 63-71.
[43] Id. at 72-75.
[44] Id. at 1423-1439.
[45] Id. at 1432-1437.
[46] Id. at 1437-1438.
[47] Id. at 1614-1633.
[48] Id. at 1615.
[49] Id. at 1622-1631.
[50] Id. at 1151; 1163; 1173.
[51] Lim v. See, G.R. No. 193569, January 25, 2023 [Per J. J. Lopez, Second Division].
[52] Cymar International, Inc. v. Farting Industrial Co., ltd., G.R. Nos. 177974, 206121, 219072 & 228802, August 17, 2022 [Per J. Gaerlan, Third Division].
[53] Id.
[54] Birkenstock Orthopaedie GmbH and Co. KG v. Phil. Shoe Expo Marketing Corp., 721 Phil 867, 875 (2013) [Per J. Perlas-Bernabe, Second Division].
[55] Rollo,pp.1109-1111; 1120-1122; 1132-1143.
[56] Id. at 1151; 1163; 1173.
[57] Id. at 1117; 1128-1129; 1140-1141.
[58] Id. at 1150-1151; 1163; 1174-1175.
[59] 520 Phil. 935 (2006) [Per J. Garcia, Second Division].
[60] Id. at 956-957.
[61] 710 Phil. 305 (2013) [Per J. Perlas-Bernabe, Second Division].
[62] Id. at 314-315.
[63] G.R. No. 220558, February 17, 2021 [Per J. Gaerlan, First Division].
[64] Id.
[65] G.R. Nos. 177974 et al., August 17, 2022 [Per J. Gaerlan, Third Division].
[66] Id.
[67] Lim v. See, G.R. No. 193569, January 25, 2023 [Per J. J. Lopez, Second Division].
[68] Rollo, pp. 1111; 1122; 1134.
[69] INTELL. PROP. CODE, sec. 151(b).
[70] See Zuneca Pharmaceutical v. Natrapharm, Inc., 882 Phil. 278, 339 (2020) [Per J. Caguioa, En Banc].
[71] See Ebancuel v. Acierto, G.R. No. 214540, July 28, 2021 [Per J. Gaerlan, Second Division].
INTING, J.:
The case stemmed from the certificates of registration issued to respondent Pacifico Q. Lim (respondent), i.e., Trademark Registration Nos. 4-2004-009149, 4-2004-009150, and 4-2004-009151, were cancelled. The trademarks were "GLORIA MARIS WOK SHOP & DESIGN" registered on August 28, 2005, "GLORIA MARIS DIMSUM KITCHEN WITH LOGO AND DESIGN" registered on August 28, 2005, and "GLORIA MARIS SHARK'S FIN RESTAURANT AND LOGO" registered on October 31, 2005 (subject trademarks).
The factual antecedents of the present case are as follows:
Records reveal that as early as 1992, Copper Kettle Cafeteria Specialist, a single proprietorship owned by Dominador B. Menguito (Dominador), was operating a restaurant named Gloriamaris Seafood Restaurant in CCP Complex, Roxas Boulevard, Manila.[1] Thereafter, in September 1993, Dominador switched the concept of his restaurant from continental dining to Chinese cuisine.[2] Pursuant to a Joint Venture Agreement[3] executed by Dominador and Pedro O. Manalo (Manalo), on behalf of Bennie B. Cuason and two others and for himself, Dominador agreed to form a corporation with them and undertook to transfer title and possession of the assets of his restaurant, valued at PHP 2.5 million, to the said corporation as his capital contribution.
On January 26, 1994, Gloriamaris Shark's Fin Restaurant, Inc. (petitioner) was registered with the Securities and Exchange Commission by the following incorporators: Menguito, Manalo, Lorenzo Q. Dy, Edmundo L. Tan, and respondent.[4]
Petitioner alleged that it hired a graphic artist to submit a sample drawing of the Gloria Maris trademark. The trademark, consisting of the words "Gloria Maris" with a shark's fin enclosed in an eared circle (Gloria Maris trademark) was approved by the incorporators. Thereafter, petitioner's Board of Directors entrusted the registration of the trademark with Lim. From then on, petitioner used this trademark in its operations. To bolster its contention, petitioner submitted photographs of this trademark as used by it. Petitioner's stockholders assumed that the trademark had been registered in its name but instead discovered that Lim registered the trademark in his own name.[5]
In his Answer, respondent denied having been entrusted by petitioner with the registration of the trademark. According to respondent, he never committed fraud because the trademark is his creation and thus, his intellectual property.[6] He declared that the name "Gloria Maris Shark's Fin Restaurant," the idea of a fine-dining Chinese restaurant, the theme/ambience and logo (a fin of shark enclosed in a plate of irregular shape) were concocted and planned by him. [7] He submitted an Affidavit [8] executed by Joey Rodriguez, the interior designer he commissioned to draw the logo in 1993.
In the assailed Decision dated March 18, 2022, the Court of Appeals (CA) ruled, among others, that the evidence submitted by petitioner, i.e., image of the Gloria Maris trademark, its Articles of Incorporation, photographs, and Affidavit executed by Dominador, failed to overcome respondent's prima facie ownership of the subject trademarks.[9] Lastly, the CA ruled that petitioner was barred by laches from enforcing its right over the name "Gloria Maris."[10]
I agree with the CA's ruling that the evidence submitted by petitioner does not constitute substantial evidence of prior use of the trademark. Prior use of a trademark means use in commerce. As aptly held by the CA, "[o]ne may make advertisements, issue circulars, distribute price list on certain goods, but these alone will not inure to the claim of ownership of the mark until the goods bearing the mark are sold to the public. Accordingly, receipts, sales invoices, and testimonies of witnesses as customers, or orders of buyers, best prove the actual use of a mark in trade and commerce during a certain period of time."
Nonetheless, these documents constitute sufficient evidence that the trade name "Gloriamaris," or its variation "Gloria Maris" belongs to petitioner and was not coined by respondent.
Section 165 of Republic Act No. 8293 is pertinent to the case at bar, viz.:
Consequently, laches finds no application in the present case.
The principle of laches is "based on the grounds of public policy in order to maintain peace in the society and equity in order to avoid recognizing a right when to do so would result in a clearly unfair situation"[11] Being an equitable doctrine, laches cannot be used to protect actions attended by bad faith as doing so would result to manifest wrong or injustice.
What is more, it is settled that the elements of laches[12] must be proved positively.[13] Here, respondent did not raise the defense of laches in his Verified Answer, much less prove the elements thereof.
Lastly, I share the same reservations made by Associate Justice Japar B. Dimaampao on the ponencia's declaration that "a trademark registered in bad faith is considered as unfair competition."
Respondent, and other defendants those similarly situated, would be denied of their right to due process if they'll be found guilty of unfair competition ipso facto, which carries with it the imposition the criminal penalty of imprisonment, in a case that stemmed from a petition for cancellation if they 're found to have registered an intellectual property in bad faith. Even though this might not have been the Court's intention, this declaration can be easily taken out of context.
[1] Rollo, p. 21.
[2] Id. at 24.
[3] Id. at 229-240.
[4] Id. at 118, 124.
[5] Id. at 108-109.
[6] Id. at 727-728.
[7] Id. at 730.
[8] Id. at 739-740.
[9] Id. at 26-27.
[10] Id. at 28-29.
[11] Department of Education, Culture and Sports v. Heirs of Banguilan, G.R. No. 230399, June 20, 2018.
[12] The elements of Iaches are: (1) conduct on the part of the defendant, or of one under whom he claims, giving rise to the situation of which the complaint seeks a remedy; (2) delay in asserting the complainant's rights, the complainant having had knowledge or notice of the defendant's conduct as having been afforded an opportunity to institute a suit; (3) lack of knowledge or notice
on the part of the defendant that the complainant would assert the right in which he bases his suit; and (4) injury or prejudice to the defer!dant in the event relief is accorded to the complainant, or the suit is not held barred. Santos 1,: Santos, 418 Phil. 681, 692 (2001).
[13] Pineda v. Heirs of Guevara, 544 Phil 554 (2007).
SEPARATE CONCURRING OPINION
DIMAAMPAO, J.:
I concur in the cancellation of the Certificates of Registration of the Gloria Maris trademarks under the name of Pacifico Q. Lim (respondent).
However, I would like to express my reservations and expound on the legal significance of the ponencia's statement that the registration of a trademark in bad faith is considered as unfair competition. The pertinent portion of the Decision reads:
The ponencia itself notes that bad faith in the context of trademark registration is defined under case law as knowledge by the registrant of the prior creation, use and/or registration by another of an identical or similar trademark.[2] The remedy provided by the Intellectual Property Code (IP Code) in such cases is found under Section 151 thereof, which allows the filing of a petition to cancel a registration of a mark at any time with the Bureau of Legal Affairs (BLA) of the Intellectual Property Office.
In contrast, unfair competition was described by the Court as follows:
Respondent Pacifico Q. Lim (Lim) is engaged in construction, as well as in the restaurant business. He avers that prior to the establishment of Gloria Maris, he already concocted the name "Gloria Maris Shark's Fin Restaurant." He further claims that he had already thought of the logo, which shall be a fin of a shark enclosed in a plate of irregular shape.[10]
Thus, in 1993, Lim allegedly offered a proposal to the owners of a restaurant located on the premises of the Cultural Center of the Philippines (CCP), which, as Lim claimed, was about to go out of business.[11]
After several meetings, "Gloriamaris Shark's Fin Restaurant Inc." was registered with the Securities and Exchange Commission (SEC) on January 26, 1994,[12] by the following incorporators: Dominador B. Menguito (Menguito), Pedro 0. Manalo, Lorenzo Q. Dy, Edmundo L. Tan, and respondent Lim.[13]
Gloria Maris avers that a graphic artist was hired to submit a sample drawing of the Gloria Maris trademark. After the approval of the said trademark, the Board of Directors entrusted to Lim the trademark's registration with the IPO.[14]
However, it was only in 2005 or more than 10 years after Gloria Maris' registration with the SEC, that three trademarks were registered with the IPO: "GLORIA MARIS WOK SHOP & DESIGN" on August 28, 2005,[15] "GLORIA MARIS DIMSUM KITCHEN WITH LOGO AND DESIGN" on August 28, 2005,[16] and "GLORIA MARIS SHARK'S FIN RESTAURANT AND LOGO" on October 31, 2005.[17] All these trademarks, however, were registered in the name of Lim as the owner.
Thereafter, Lim ventured into franchising where he was able to franchise the concept of Gloria Maris restaurant to several companies.[18]
Gloria Maris allegedly discovered, that contrary to what they had thought, the registration of the trademark entrusted to Lim was registered in his own name and after he had left the company.[19]
On December 4, 2009, Gloria Maris filed separate petitions to cancel Trademark Registration Nos. 4-2004-009149,[20] 4-2004-009150,[21] and 4- 2004-009151.[22]
On February 23, 2012, the BLA-IPO issued three separate Decisions dismissing Gloria Maris' petitions for cancellation:
Decision No. 2012-32
WHEREFORE, premises considered, the instant Petition for Cancellation is hereby DISMISSED. Let the filewrapper of Certificate of Registration No. 4-2004-009150 be returned, together with a copy of this Decision, to the Bureau of Trademarks for information and propriate action.
SO ORDERED.[23]
Decision No. 2012-33
WHEREFORE, premises considered, the instant Petition for Cancellation is hereby DISMISSED. Let the filewrapper of Certificate of Registration No. 4-2004-009151 be returned, together with a copy of this Decision, to the Bureau of Trademarks for information and propriate action.
SO ORDERED.[24]
Decision No. 2012-34
WHEREFORE, premises considered, the instant Petition for Cancellation is hereby DISMISSED. Let the filewrapper of Certificate of Registration No. 4-2004-009149 be returned, together with a copy of this Decision, to the Bureau of Trademarks for information and propriate action.Relying on the evidence presented by Lim, as well as the prima facie presumption as the registered owner, the BLA-IPO found that the marks were coined or created by Lim prior to Gloria Maris' SEC registration.[26] Particularly, Lim's claim was corroborated by the Affidavit of Joey Rodriguez (Rodriguez), the graphic artist hired by Lim.
SO ORDERED.[25]
Rodriguez narrated that in 1993, Lim expressed to him his idea and concept for the Gloria Maris restaurant's theme and design. Thereafter, Lim instructed Rodriguez to create a design to be used as a logo of Gloria Maris. They discussed the drawing and design which centered on the image of a shark's fin in a plate of an irregular shape.[27]
On the contrary, no evidence was adduced by Gloria Maris that it authorized Lim to register the Gloria Maris trademark on its behalf. Moreover, the BLA-IPO found that after the challenged trademarks were published in the IPO Gazette, neither Gloria Maris nor any of its officials opposed the trademark application filed by Lim.[28]
Gloria Maris filed three separate Appeals with the ODG, dated April 20, 2012.[29]
The Ruling of the ODG
On August 6, 2019, the ODG issued three separate Decisions reversing the Decisions of the BLA-IPO:
Appeal No. 14-2012-0009
Wherefore, premises considered, the appeal is hereby GRANTED. The decision of the Director dismissing the Appellant's petition to cancel the registration of GLORIA MARJS WOK SHOP AND DESIGN is hereby set aside. Accordingly, Certificate of Registration No. 4-2004-009149 for GLORIA MARIS WOK SHOP AND DESIGN is hereby ordered cancelled.
Let a copy of this decision and the records be furnished and returned to the Director of the Bureau of Legal Affairs for appropriate action. Further, let also the Director of the Bureau of Trademarks and the library of the Documentation, Information and Technology Transfer Bureau be furnished a copy of this decision for information, guidance, and records purposes.[30]
Wherefore, premises considered, the appeal is hereby GRANTED. The decision of the Director dismissing the Appellant's petition to cancel the registration of GLORIA MARIS SHARK'S FIN RESTAURANT AND LOGO is hereby set aside.
Accordingly, Certificate of Registration No. 4-2004-009151 for GLORIA MARIS SHARK'S FIN RESTAURANT AND LOGO is hereby ordered cancelled. Let a copy of this decision and the records be furnished and returned to the Director of the Bureau of Legal Affairs for appropriate action. Further, let also the Director of the Bureau of Trademarks and the library of the Documentation, Information and Technology Transfer Bureau be furnished a copy of this decision for information, guidance, and records purposes.[31]
Wherefore, premises considered, the appeal is hereby GRANTED. The decision of the Director dismissing the Appellant's petition to cancel the registration of GLORIA MARIS DIMSUM KITCHEN WITH LOGO is hereby set aside. Accordingly, Certificate of Registration No. 4-2004- 009150 for GLORIA MARIS DIMSUM KITCHEN WITH LOGO 1s hereby ordered cancelled. Let a copy of this decision and the records be furnished and returned to the Director of the Bureau of Legal Affairs for appropriate action. Further, let also the Director of the Bureau of Trademarks and the library of the Documentation, Info1mation and Technology Transfer Bureau be furnished a copy of this decision for information, guidance, and records purposes.[32]The ODG ruled that while Rodriguez was allegedly hired by Lim, nothing in his Affidavit categorically stated that it was Lim who coined or created the name "Gloria Maris."[34]
In ruling in favor of Gloria Maris, the ODG found, among others, that Gloria Maris has been using the name "Gloria Maris" as part of its corporate name and as the identity of its business. In fact, it has been using "Gloria Maris" for more than 10 years prior to Lim's registration.[33]
In all, the ODG found that Lim's subsequent registration and use of "Gloria Maris" is unlawful.[35]
The Ruling of the CA
On March 18, 2022, the CA reversed the Decisions of the ODG and reinstated the Decisions of the BLA-IPO. The dispositive portion reads as follows:
WHEREFORE, the instant consolidated Petitions for Review are GRANTED. The assailed Decisions dated [August 6,] 2019, issued by the Office of the Director General of the Intellectual Property Office (ODG IPO) in Appeal Nos. 14-2012-0009, 14-2012-0011, and 14-2012-0010, are REVERSED AND SET ASIDE. The separate Decisions dated [February 23,] 2012 rendered by the Bureau of Legal Affairs of the Intellectual Property Office (BLA-IPO) are REINSTATED.First. The CA ruled that Lim's right to speedy disposition of cases was not violated. Lim failed to adduce proof that the unjustified postponements were deliberately obtained by Gloria Maris. Nor was it proven that the proceedings were tainted with vexatious, capricious, and oppressive delays.[37]
SO ORDERED.[36] (Emphasis in the original)
Second. The documents submitted by Gloria Maris, i.e., its version of the trademark of "Gloria Maris," the photographs of said trademark as used in its restaurant chains, its Articles of Incorporation, and the affidavit of Menguito, are insufficient to overcome Lim's prima facie ownership of the subject trademarks. Hence, the CA found that the ODG erred in ordering the cancellation of the Certificates of Registration.[38]
Lastly, the CA found that Gloria Maris is barred by laches from enforcing its alleged right over the name "Gloria Maris." It is apparent that Gloria Maris had been aware that Lim has been using the name "Gloria Maris," and yet only filed the Petition for Cancellation years thereafter.[39]
In its Resolution,[40] dated December 19, 2022, the CA denied Gloria Maris' Motion for Reconsideration for lack of merit.
Thus, Gloria Maris filed the present Petition for Review on Certiorari under Rule 45 of the Rules of Court.
Whether the CA committed any error in reversing the Decisions of the ODG and reinstating the Decisions of the BLA-IPO.
In its Petition, Gloria Maris asserts that the later use and registration by Lim is unlawful.[41] Gloria Maris insists that Lim is not the owner of the "Gloria Maris" mark and trade name.[42] Finally, it claims that it is not estopped from asking for the cancellation of Lim's registrations since the subject trademarks were obtained in bad faith.[43]
In his Comment,[44] Lim maintains that he is the owner of the trademarks. He echoes the ruling of the CA that the evidence adduced by Gloria Maris failed to overcome the presumption that he is the prima facie owner of the trademarks.[45] Moreover, laches had set in against Gloria Maris.[46]
Gloria Maris, in its Reply,[47] counters that Lim's registration is only prima facie evidence of his ownership of the registered trademarks. Hence, the said trademarks may still be canceled since these were made in bad faith. Therefore, Gloria Maris is not estopped from assailing its validity.[48]
Gloria Maris further argues that the evidence that it presented constituted substantial evidence to establish that it owns the trademark "Gloria Maris."[49]
The Petition is meritorious.
Before delving into the merits, the Court notes that the apparently confusing similarity between Gloria Maris' trade name and the trademarks registered by Lim is not at issue in this case, as aptly determined by the ODG.[50] The sole issue in this case is the propriety of Lim's registration of the subject marks.
As a general rule, a petition for review on certiorari filed under Rule 45 of the Rules of Court should only and strictly involve questions of law. However, intellectual property disputes, especially when it comes to trademarks, are highly factual in nature and require a review of the evidence presented by the parties. Moreover, among the exceptions to the rule is when, as in the present case, the findings of the ODG and the CA are conflicting.[51]
In relation to this, proceedings before the IPO are administrative in nature. Therefore, they are governed by the principles and doctrines of the law on administrative adjudication.[52] Consequently, the quantum of proof required in intellectual property cases is substantial evidence, or evidence a reasonable mind might accept as adequate to support a conclusion. Furthermore, administrative agencies are not bound by the technical rules of procedure that are usually applicable in courts of law.[53] Indeed, the primordial purpose of the rules of procedure is to facilitate the attainment of justice, rather than its frustration. It should never be used to defeat the substantive rights of any party.[54]
On appeal before the ODG, Gloria Maris submitted, among others, its Bureau of Internal Revenue Certificate of Registration under the name of "Gloriamaris Shark's Fin Restaurant," the registration date of which is dated March 17, 1997.
It bears to stress that "Gloriamaris Shark's Fin Restaurant Inc." was incorporated in 1994. It is, likewise, not disputed that Lim was among its incorporators.[55]
Given the foregoing, the Court rules that based on the evidence on record, Gloria Maris was able to prove through substantial evidence that it has been using the name "Gloria Maris" in the conduct of its business, years before Lim's registration and, more importantly, Lim knew about it.
Lim, however, claims that prior to the incorporation of Gloria Maris, he had already thought of the name "Gloria Maris." To establish his allegation, he offered as proof the Affidavit of Rodriguez.
However, the Court agrees with the ODG that nothing in Rodriguez's Affidavit establishes that it was Lim who concocted the name "Gloria Maris." If at all, Rodriguez's Affidavit actually reveals that there was already an existing restaurant in the area of the CCP to be transformed into a Chinese restaurant and to be called Gloria Maris.[56] The pertinent portions of Rodriguez's Affidavit read:
3. Sometime in 1993, Engineer Pacifico Q. Lim engaged my services to design, and renovate a restaurant in the area of the [CCP]. I learned from Mr. Pacifico Lim that the p[l]anned restaurant is a fine-dining chinese restaurant to be known as 'Gloria Maris Shark's Fin Restaurant[.']
4. The task/work I performed for the project was the interior design of the restaurant.
In that connection, I often held meetings with Engineer Pacifico Q. Lim to talk about the project. Engineer Pacifico Q. Lim expressed to me his ideas and the concept he wanted for the theme and design of Gloria Maris Restaurant. We would have discussions, and after I give my inputs, Engineer Pacifico Q. Lim and I would make adjustments on the design of [the] interior of the restaurant. In short, Engineer Pacifico Q. Lim laid down the ideas and concept, and [I] interpreted them, and externalized them in the proper drawings/plans. Of course, my design drawings and plans were subject to the approval of Engineer Pacifico Q. Lim
5. After Engineer Pacifico Q. Lim and I finished the interior of the restaurant, he discussed to me the design of the signage and logo of the restaurant. I likewise handled the designing of the logo in accordance with the idea and concept of Engineer Pacifico Lim, subject to consultation and his approval.
6. After several discussions, and consultations with Engineer Pacifico Q. Lim, he instructed me to use in the logo of Gloria Marisd [sic] the image of a 'shark's fin[.'] Engineer Pacifico Q. Lim gave me a draft of a drawing/image of a 'shark's fin[.'] Thereafter, I drafted a design/drawing of the proposed logo of Gloria Maris containing the image of a 'sharek's [sic] fin' in a plate of an irregular shape. My initial submission was not immediately approved by Engineer Pacifico Q. Lim, so we sat down and discussed the revisions needed. Right in our meeting, Engineer Pacifico Q. Lim commented on the design of the logo, and I immediately noted and made a rough draft of the logo, based on the inputs of Engineer Pacifico Q. Lim.
Ultimately after our discussion, Engineer Pacifico Q. Lim approved the design of the logo that would be used in the restaurant of Gloria Maris. Engineer Pacifico Q. Lim approved the logo of Gloria Maris which included an image of a shark's fin, with various marks/shorts lines surrounding it, all of which were contained in a plate shaped somewhat like a square but with variations.Since there was already a plan for a Chinese restaurant to be named "Gloria Maris" and to be renovated at the CCP area when Lim engaged the services of Rodrigez, Lim's claim that he thought of the name beggars belief.
7. All the time that I was working on the project, I was only talking to, and consulting Engineer Pacifico Q. Lim All the designs, plans, drawings, and the logo design made were completed upon discussion/consultation and approval of Engineer Pacifico Q. Lim.[57] (Emphasis supplied)
Therefore, even assuming that the Court does not admit the evidence submitted by Gloria Maris which were presented for the first time on appeal, the Court is still left with the Certificate of Registration to rely on. It is worth repeating that Gloria Maris was incorporated in 1994. Since its incorporation, it has been using the name "Gloria Maris" for its fine-dining Chinese restaurant.[58] It was only more than 10 years thereafter when Lim registered the questioned trademarks. As will be further discussed later, several circumstances clearly show that Lim registered the subject marks in bad faith, with prior active knowledge of its long-term use by Gloria Maris.
A trademark registered in bad faith is considered as unfair competition under the IP Code:
SEC. 168. Unfair Competition, Rights, Regulation and Remedies. 168.2. Any person who shall employ deception or any other means contrary to good faith by which he shall pass off the goods manufactured by him or in which he deals, or his business, or services for those of the one having established such goodwill, or who shall commit any acts calculated to produce said result, shall be guilty of unfair competition, and shall be subject to an action therefor.Thus, in Shangri-La International Hotel Management, Ltd. v. Developers Group of Companies, Inc.,[59] the respondent was found to be in bad faith when it appropriated and registered the "Shangri-La" mark, having the exact same lettering and logo design, after having been found that the respondent's president had previously stayed as a guest at the petitioner's hotel in Kowloon.[60]
Similarly, the Court in Ecole de Cuisine Manille, Inc. v. Renaud Cointreau & Cie[61] upheld the CA's finding of bad faith when it noted that petitioner had been fully aware of the respondent's prior use of the marks because its directress had trained in the respondent's culinary school in Paris, France.[62]
In Emzee Foods, Inc. v. Elarfoods, lnc.,[63] the Court held that the petitioner's officers acted in bad faith since its president and incorporators were former employees of the respondent corporation. Clearly, they had knowledge of the subject trademarks which had been consistently and continuously used by the latter since 1989.[64]
In Cymar International, Inc. v. Farling Industrial Co., Ltd.,[65] Cymar was found to be in bad faith since at the time of the filing of the application, Cymar knew fully well of Farling's history of use of the mark:
Given the timing and circumstances of Cymar 's applications, it is obvious that they were filed with full knowledge of Farting 's history of use of the FARLIN mark, and therefore, in bad faith. Moreover, by representing itself as the prior user of the FARLIN mark, even with full knowledge of its distributorship relation with the actual prior user, Cymar deliberately made a false claim in its trademark applications, which amounts to fraud.[66] (Emphasis supplied)Thus, bad faith in the context of trademark registration means that the applicant or registrant has knowledge of prior creation, use and/or registration by another of an identical or similar trademark.[67]
In the present case, the following circumstances establish that Lim's registration of the subject trademarks was done in bad faith:It has been held that fraud and bad faith, in terms of trademark, go hand in-hand. In simple words, there is no distinction between these concepts since one necessarily presupposes the existence of the other.[70]
First. Lim registered the subject trademarks, with full knowledge that the mark and the name "Gloria Maris" is being used by petitioner Gloria Maris for more than 10 years.
Second. Lim not only knew of Gloria Maris' use of the mark and name, but he was precisely an incorporator and a director of the company. He even insisted that he remain as a shareholder of Gloria Maris even after registering the said trademarks and offering, by himself, for franchise the concept of the restaurant Gloria Maris to other companies.[68]
Third. It was bad faith on Lim's part to reap the fruits of the goodwill built by the Gloria Maris brand when he registered the subject marks in his own name. Obviously, it was the corporation as a whole that built and established the brand "Gloria Maris."
Consequently, the trademarks registered by Lim which bear the name "Gloria Maris" have been unlawfully registered.
A certificate of registration may be canceled if, among others, it was fraudulently made:
SEC. 151. Cancellation. - 151.1. A petition to cancel a registration of a mark under this Act may be filed with the Bureau of Legal Affairs by any person who believes that he is or will be damaged by the registration of a mark under this Act as follows:
(b) At any time, if the registered mark becomes the generic name for the goods or services, or a portion thereof, for which it is registered, or has been abandoned, or its registration was obtained fraudulently or contrary to the provisions of this Act, or if the registered mark is being used by, or with the permission of, the registrant so as to misrepresent the source of the goods or services on or in connection with which the mark is used. If the registered mark becomes the generic name for less than all of the goods or services for which it is registered, a petition to cancel the registration for only those goods or services may be filed. A registered mark shall not be deemed to be the generic name of goods or services solely because such mark is also used as a name of or to identify a unique product or service. The primary significance of the registered mark to the relevant public rather than purchaser motivation shall be the test for determining whether the registered mark has become the generic name of goods or services on or in connection with which it has been used.[69] (Emphasis supplied)
Finally, Lim claims that Gloria Maris is barred by laches.Laches is an equitable doctrine, the application of which is evaluated by fair considerations. As such, it cannot be used to defeat justice, or to condone fraud.[71]
The Court disagrees.
More importantly, Section 151 of the IP Code expressly states that the registration of a mark may be canceled at any time if, among others, the registration was obtained fraudulently or is contrary to the provisions of the IP Code.
In the present case, laches cannot run against Gloria Maris. As earlier explained, Lim unlawfully registered the subject trademarks. Moreover, Glora Maris was not less remiss in protecting its right, proof of which are the proceedings a quo, which has finally reached this Court.
ACCORDINGLY, the Petition for Review on Certiorari filed by petitioner Gloria Maris Shark's Fin Restaurant, Inc. is GRANTED. The Decision dated March 18, 2022, and the Resolution, dated December 19, 2022, of the Court of Appeals in CA-G.R. SP Nos. 162466, 162467 and 162468 are REVERSED.
Consequently, the following Certificates of Registration in the name of Pacifico Q. Lim are ordered CANCELLED:
1. Certificate of Registration No. 4-2004-009149 for GLORIA MARIS WOK SHOP AND DESIGN;Let a copy of this Decision be furnished to the Director of the Bureau of Legal Affairs for appropriate action. Let the Director of the Bureau of Trademarks and the Library of the Documentation, Information and Technology Transfer Bureau be furnished a copy of this Decision as well.
2. Certificate of Registration No. 4-2004-009150 for GLORIA MARIS DIMSUM KITCHEN WITH LOGO; and
3. Certificate of Registration No. 4-2004-009151 for GLORIA MARIS SHARK'S FIN RESTAURANT AND LOGO.
SO ORDERED.
Caguioa and Gaerlan, JJ., concur.
Inting and Dimaampao, JJ., see separate concurring opinion.
[1] Rollo, pp. 37-76.
[2] Id. at 9-30. Penned by Associate Justice Alfredo D. Ampuan and concurred in by Associate Justices Pedro B. Corales and Jennifer Joy C. Ong of the Sixteenth Division, Court of Appeals, Manila.
[3] Id. at 32-33. Penned by Associate Justice Alfredo D. Ampuan and concurred in by Associate Justices Pedro B. Corales and Jennifer Joy C. Ong of the Former Sixteenth Division, Court of Appeals, Manila.
[4] Id. at 1143-1154. Penned by Director General Josephine R. Santiago.
[5] Id. at 1155-1166. Penned by Director General Josephine R. Santiago.
[6] Id. at 1167-1178. Penned by Director General Josephine R. Santiago.
[7] Id. at 1120-1130. Penned by Director IV Nathaniel S. Arevalo.
[8] Id. at 1132-1142. Penned by Director IV Nathaniel S. Arevalo.
[9] Id. at 1109-1118. Penned by Director IV Nathaniel S. Arevalo.
[10] Id. at 1123, BLA Decision in Decision No. 2012-32.
[11] Id. at 1124.
[12] Id. at 118, SEC Registration.
[13] Id. at I 121.
[14] Id.
[15] Id. at 319-324, IPO Registration No. 4-2004-009149.
[16] Id. at 325-330, IPO Registration No. 4-2004-009150.
[17] Id. at 314-318, IPO Registration No. 4-2004-009151.
[18] Id. at 1125, BLA Decision in Decision No. 2012-32.
[19] Id. at 1121.
[20] Id. at 1109, BLA Decision in Decision No. 2012-34.
[21] Id. at 1120, BLA Decision in Decision No. 2012-32.
[22] Id. at 1132, BLA Decision in Decision No. 2012-33.
[23] Id. at 1130.
[24] Id. at 1142.
[25] Id. at 1118.
[26] Id. at 1116; 1127; 1139.
[27] Id. at 1117; 1128-1129; 1140-1141.
[28] Id. at 1118; 1129; 1141.
[29] Id. at 19.
[30] Id. at 1153-1154.
[31] Id. at 1165-1166.
[32] Id. at 1177-1178.
[33] Id. at 1150-1151; 1162-1163; 1174-1175.
[34] Id. at 1151; 1163; 1173.
[35] Id. at 1152;1164;1174.
[36] Id. at 29-30.
[37] Id. at 25.
[38] Id. at 26-27.
[39] Id. at 28-29.
[40] Id. at 32-33.
[41] Id. at 54-63, Petition for Review on Certiorari.
[42] Id. at 63-71.
[43] Id. at 72-75.
[44] Id. at 1423-1439.
[45] Id. at 1432-1437.
[46] Id. at 1437-1438.
[47] Id. at 1614-1633.
[48] Id. at 1615.
[49] Id. at 1622-1631.
[50] Id. at 1151; 1163; 1173.
[51] Lim v. See, G.R. No. 193569, January 25, 2023 [Per J. J. Lopez, Second Division].
[52] Cymar International, Inc. v. Farting Industrial Co., ltd., G.R. Nos. 177974, 206121, 219072 & 228802, August 17, 2022 [Per J. Gaerlan, Third Division].
[53] Id.
[54] Birkenstock Orthopaedie GmbH and Co. KG v. Phil. Shoe Expo Marketing Corp., 721 Phil 867, 875 (2013) [Per J. Perlas-Bernabe, Second Division].
[55] Rollo,pp.1109-1111; 1120-1122; 1132-1143.
[56] Id. at 1151; 1163; 1173.
[57] Id. at 1117; 1128-1129; 1140-1141.
[58] Id. at 1150-1151; 1163; 1174-1175.
[59] 520 Phil. 935 (2006) [Per J. Garcia, Second Division].
[60] Id. at 956-957.
[61] 710 Phil. 305 (2013) [Per J. Perlas-Bernabe, Second Division].
[62] Id. at 314-315.
[63] G.R. No. 220558, February 17, 2021 [Per J. Gaerlan, First Division].
[64] Id.
[65] G.R. Nos. 177974 et al., August 17, 2022 [Per J. Gaerlan, Third Division].
[66] Id.
[67] Lim v. See, G.R. No. 193569, January 25, 2023 [Per J. J. Lopez, Second Division].
[68] Rollo, pp. 1111; 1122; 1134.
[69] INTELL. PROP. CODE, sec. 151(b).
[70] See Zuneca Pharmaceutical v. Natrapharm, Inc., 882 Phil. 278, 339 (2020) [Per J. Caguioa, En Banc].
[71] See Ebancuel v. Acierto, G.R. No. 214540, July 28, 2021 [Per J. Gaerlan, Second Division].
SEPARATE CONCURRING OPINION
INTING, J.:
The case stemmed from the certificates of registration issued to respondent Pacifico Q. Lim (respondent), i.e., Trademark Registration Nos. 4-2004-009149, 4-2004-009150, and 4-2004-009151, were cancelled. The trademarks were "GLORIA MARIS WOK SHOP & DESIGN" registered on August 28, 2005, "GLORIA MARIS DIMSUM KITCHEN WITH LOGO AND DESIGN" registered on August 28, 2005, and "GLORIA MARIS SHARK'S FIN RESTAURANT AND LOGO" registered on October 31, 2005 (subject trademarks).
The factual antecedents of the present case are as follows:
Records reveal that as early as 1992, Copper Kettle Cafeteria Specialist, a single proprietorship owned by Dominador B. Menguito (Dominador), was operating a restaurant named Gloriamaris Seafood Restaurant in CCP Complex, Roxas Boulevard, Manila.[1] Thereafter, in September 1993, Dominador switched the concept of his restaurant from continental dining to Chinese cuisine.[2] Pursuant to a Joint Venture Agreement[3] executed by Dominador and Pedro O. Manalo (Manalo), on behalf of Bennie B. Cuason and two others and for himself, Dominador agreed to form a corporation with them and undertook to transfer title and possession of the assets of his restaurant, valued at PHP 2.5 million, to the said corporation as his capital contribution.
On January 26, 1994, Gloriamaris Shark's Fin Restaurant, Inc. (petitioner) was registered with the Securities and Exchange Commission by the following incorporators: Menguito, Manalo, Lorenzo Q. Dy, Edmundo L. Tan, and respondent.[4]
Petitioner alleged that it hired a graphic artist to submit a sample drawing of the Gloria Maris trademark. The trademark, consisting of the words "Gloria Maris" with a shark's fin enclosed in an eared circle (Gloria Maris trademark) was approved by the incorporators. Thereafter, petitioner's Board of Directors entrusted the registration of the trademark with Lim. From then on, petitioner used this trademark in its operations. To bolster its contention, petitioner submitted photographs of this trademark as used by it. Petitioner's stockholders assumed that the trademark had been registered in its name but instead discovered that Lim registered the trademark in his own name.[5]
In his Answer, respondent denied having been entrusted by petitioner with the registration of the trademark. According to respondent, he never committed fraud because the trademark is his creation and thus, his intellectual property.[6] He declared that the name "Gloria Maris Shark's Fin Restaurant," the idea of a fine-dining Chinese restaurant, the theme/ambience and logo (a fin of shark enclosed in a plate of irregular shape) were concocted and planned by him. [7] He submitted an Affidavit [8] executed by Joey Rodriguez, the interior designer he commissioned to draw the logo in 1993.
In the assailed Decision dated March 18, 2022, the Court of Appeals (CA) ruled, among others, that the evidence submitted by petitioner, i.e., image of the Gloria Maris trademark, its Articles of Incorporation, photographs, and Affidavit executed by Dominador, failed to overcome respondent's prima facie ownership of the subject trademarks.[9] Lastly, the CA ruled that petitioner was barred by laches from enforcing its right over the name "Gloria Maris."[10]
I agree with the CA's ruling that the evidence submitted by petitioner does not constitute substantial evidence of prior use of the trademark. Prior use of a trademark means use in commerce. As aptly held by the CA, "[o]ne may make advertisements, issue circulars, distribute price list on certain goods, but these alone will not inure to the claim of ownership of the mark until the goods bearing the mark are sold to the public. Accordingly, receipts, sales invoices, and testimonies of witnesses as customers, or orders of buyers, best prove the actual use of a mark in trade and commerce during a certain period of time."
Nonetheless, these documents constitute sufficient evidence that the trade name "Gloriamaris," or its variation "Gloria Maris" belongs to petitioner and was not coined by respondent.
Section 165 of Republic Act No. 8293 is pertinent to the case at bar, viz.:
SECTION 165. Trade Names or Business Names. - ...Evidently, respondent's use of petitioner's trade name in the subject trademarks is unlawful. Moreover, respondent, being one of petitioner's incorporators, cannot claim good faith in using petitioner's trade name in the subject trademarks. Hence, I concur with the ponencia's ruling that respondent's registration of the subject marks was attended by bad faith.
165.2. (a) Notwithstanding any laws or regulations providing for any obligation to register trade names, such names shall be protected, even prior to or without registration, against any unlawful act committed by third parties.
(b) In particula,; any subsequent use of the trade name by a third party, whether as a trade name or a mark or collective mark, or any such use of a similar trade name or mark, likely to mislead the public, shall be deemed unlawful.
165.3. The remedies provided for in Sections 153 to 156 and Sections 166 and 167 shall apply mutatis mutandis. (Emphasis supplied)
Consequently, laches finds no application in the present case.
The principle of laches is "based on the grounds of public policy in order to maintain peace in the society and equity in order to avoid recognizing a right when to do so would result in a clearly unfair situation"[11] Being an equitable doctrine, laches cannot be used to protect actions attended by bad faith as doing so would result to manifest wrong or injustice.
What is more, it is settled that the elements of laches[12] must be proved positively.[13] Here, respondent did not raise the defense of laches in his Verified Answer, much less prove the elements thereof.
Lastly, I share the same reservations made by Associate Justice Japar B. Dimaampao on the ponencia's declaration that "a trademark registered in bad faith is considered as unfair competition."
Respondent, and other defendants those similarly situated, would be denied of their right to due process if they'll be found guilty of unfair competition ipso facto, which carries with it the imposition the criminal penalty of imprisonment, in a case that stemmed from a petition for cancellation if they 're found to have registered an intellectual property in bad faith. Even though this might not have been the Court's intention, this declaration can be easily taken out of context.
[1] Rollo, p. 21.
[2] Id. at 24.
[3] Id. at 229-240.
[4] Id. at 118, 124.
[5] Id. at 108-109.
[6] Id. at 727-728.
[7] Id. at 730.
[8] Id. at 739-740.
[9] Id. at 26-27.
[10] Id. at 28-29.
[11] Department of Education, Culture and Sports v. Heirs of Banguilan, G.R. No. 230399, June 20, 2018.
[12] The elements of Iaches are: (1) conduct on the part of the defendant, or of one under whom he claims, giving rise to the situation of which the complaint seeks a remedy; (2) delay in asserting the complainant's rights, the complainant having had knowledge or notice of the defendant's conduct as having been afforded an opportunity to institute a suit; (3) lack of knowledge or notice
on the part of the defendant that the complainant would assert the right in which he bases his suit; and (4) injury or prejudice to the defer!dant in the event relief is accorded to the complainant, or the suit is not held barred. Santos 1,: Santos, 418 Phil. 681, 692 (2001).
[13] Pineda v. Heirs of Guevara, 544 Phil 554 (2007).
DIMAAMPAO, J.:
I concur in the cancellation of the Certificates of Registration of the Gloria Maris trademarks under the name of Pacifico Q. Lim (respondent).
However, I would like to express my reservations and expound on the legal significance of the ponencia's statement that the registration of a trademark in bad faith is considered as unfair competition. The pertinent portion of the Decision reads:
Since there was already a plan for a Chinese restaurant to be named "Gloria Maris" and to be renovated at the CCP area when Lim engaged the services of Rodrig[u]ez, Lim 's claim that he thought of the name beggars belief.
Therefore, even assuming that the Court does not admit the evidence submitted by Gloria Maris which were presented for the first time on appeal, the Court is still left with the Ce1iificate of Registration to rely on. It is worth repeating that Gloria Maris was incorporated in 1994. Since its incorporation, it has been using the name "Gloria Maris" for its fine-dining Chinese restaurant. It was only more than 10 years thereafter when Lim registered the questioned trademarks. As will be further discussed later, several circumstances clearly show that Lim registered the subject marks in bad faith, with prior active knowledge of its long-term use by Gloria Maris.
A trademark registered in bad faith is considered as unfair competition under the IP Code:
In my humble view, the distinctions between the registration of a trademark in bad faith and the commission of unfair competition are well settled and must not be blurred.SEC. 168. Unfair Competition, Rights, Regulation and Remedies.
168.2. Any person who shall employ deception or any other means contrary to good faith by which he shall pass off the goods manufactured by him or in which he deals, or his business, or services for those of the one having established such goodwill, or who shall commit any acts calculated to produce said result, shall be guilty of unfair competition, and shall be subject to an action therefor.[1] (Underscoring supplied.)
The ponencia itself notes that bad faith in the context of trademark registration is defined under case law as knowledge by the registrant of the prior creation, use and/or registration by another of an identical or similar trademark.[2] The remedy provided by the Intellectual Property Code (IP Code) in such cases is found under Section 151 thereof, which allows the filing of a petition to cancel a registration of a mark at any time with the Bureau of Legal Affairs (BLA) of the Intellectual Property Office.
In contrast, unfair competition was described by the Court as follows:
Unfair competition is defined as the passing off (or palming off) or attempting to pass off upon the public of the goods or business of one person as the goods or business of another with the end and probable effect of deceiving the public. This takes place where the defendant gives his goods the general appearance of the goods of his competitor with the intention of deceiving the public that the goods are those of his competitor.[3]The penalty, in tum, is provided under Section 170 of the IP Code, which states:
Penalties. - Independent of the civil and administrative sanctions imposed by law, a criminal penalty of imprisonment from two (2) years to five (5) years and a fine ranging from Fifty thousand pesos (P50,000) to Two hundred thousand pesos (P200,000), shall be imposed on any person who is found guilty of committing any of the acts mentioned in Section 155, Section 168 and Subsection 169.1.Consistent with the above disquisitions, the following pronouncements of the Court in Zuneca Pharmaceutical v. Natrapharm, Inc.[4] recognizes that the two infractions are indeed separate, albeit sharing the element of bad faith viz.:
To emphasize, the presence of bad faith alone renders void the trademark registrations. Accordingly, it follows as a matter of consequence that a mark registered in bad faith shall be cancelled by the IPO or the courts, as the case may be, after the appropriate proceedings.Taking these nuances into account, the aforecited statement of the ponencia should not be interpreted to mean that registration of a trademark in bad faith ipso facto translates to a finding of unfair competition, and vice versa. Lest it be misconstrued, acknowledging these differences does not mean that the two violations should now be deemed mutually exclusive, such that the imposition of liability for one prevents a similar ruling vis-a-vis the other. Instead, this only accentuates the legal notion that each infraction must be analyzed according to the specific provision applicable thereto--a postulation which is supported by the final disposition of the controversy.
This concept of bad faith, however, does not only exist in registrations. To the mind of the Court, the definition of bad faith as knowledge of prior creation, use and/or registration by another of an identical or similar trademark is also applicable in the use of trademarks without the benefit of registration. Accordingly, such bad faith use is also appropriately punished in the IP Code as can be seen in its unfair competition provisions.[5] (Underscoring supplied.)
Here, the factual antecedents demonstrate that the petitions before the BLA were filed for the purpose of cancelling of Trademark Registration Nos. 4-2004-009149, 4-2004-009150, and 4-2004-009151.[6] Verily, the issue in this dispute was solely confined to the "propriety of [respondent's] registration of the subject marks."[7] The discussion on unfair competition thus appears to be a surplusage since respondent was not accused of passing of any goods or business of another with the end and probable effect of deceiving the public the parties, after all, are laying their respective claim to the same marks of the same business. In short, respondent was not referred to as a competitor of Gloria Maris Shark's Fin Restaurant, Inc. in this case.
Apropos, the ultimate remedy granted, which in my view was correctly accorded, is confined to the cancellation of the certificates under respondent's name.[8] No relief addressing any supposed commission of unfair competition was awarded, consistent with the fact that such specific violation does not appear to have been raised as an issue in the present proceedings.
Upon the foregoing disquisitions, I submit that the declaration that "a trademark registered in bad faith is considered as unfair competition"[9] should not be regarded as a doctrinal pronouncement, given that the same was not necessary for the complete resolution of the instant controversy. As earlier intimated, nonetheless, I reiterate my concurrence in the result of the case.
All told, I vote for the grant of the Petition for Review on Certiorari.
[1] Ponencia, pp. 10-11.
[2] Id. at 11-12, citing Lim v. See, G.R. No. 193569, January 25, 2023 [Per J. J. Lopez, Second Division].
[3] Co v. Spouses Yeung, G.R. No. 212705 (Resolution), September 10, 2014 [Per J. Perlas-Bernabe, Fir Division]. G.R. No. 211850, September 8, 2020 [Per J. Caguioa, En Banc].
[5] Id.
[6] Ponencia, p. 3.
[7] Id. at
[8] Id. at 13-14.
[9] Id. at 11.