La Estrella Distillery v. Director of Patents
REITERATIONFacts
The Antecedents: La Estrella Distillery, Inc. (La Estrella) and Cheng Chiong & Foo U. Ching Company (Cheng Chiong) were holders of Supplemental Registration label trademarks. Cheng Chiong filed a petition for the cancellation of La Estrella's label trademark registration No. SR-13 before the Patent Office, alleging that La Estrella's label was not a valid trademark, was common to the trade, and was used by other manufacturers, thus causing prejudice and damage to Cheng Chiong. Procedural History: The Director of Patents dismissed Cheng Chiong's petition, finding that the label trademarks of both parties were distinctly different and that no damage could result to Cheng Chiong from La Estrella's registration. La Estrella, despite the favorable outcome, moved for reconsideration, seeking to have the Director's finding of dissimilarity removed and replaced with a pronouncement of similarity, arguing this issue was not raised. The Director denied the motion for reconsideration. The Appeal: La Estrella appealed to the Supreme Court, reiterating its contention that the Director of Patents erred in making a pronouncement on the dissimilarity of the labels, which it claimed was not an issue raised by the parties. La Estrella did not question the dispositive portion of the decision, which favored it.
Issue(s)
Whether the Director of Patents erred in making a pronouncement that the label trademarks of La Estrella and Cheng Chiong are dissimilar, despite La Estrella's claim that this issue was not raised. Whether proof of damage is a necessary element in a petition for cancellation of a trademark registration.
Ruling
The Supreme Court dismissed the petition for review, affirming the decision of the Director of Patents. The Court found no error in the Director's reasoning or conclusion, upholding the dismissal of the petition for cancellation.
Ratio Decidendi
On Issue 1: The Supreme Court held that the issue of similarity or dissimilarity of the label trademarks was, in fact, central to the case presented and decided in the Patent Office. The pleadings and evidence presented by both parties, including the submission of numerous labels by Cheng Chiong to show common usage and La Estrella's counter-evidence to establish distinctiveness, clearly indicate that the dissimilarity of the marks was the core of the dispute. The Director of Patents was therefore justified in examining and making a finding on this matter to properly resolve the petition for cancellation and the subsequent motion for reconsideration. On Issue 2: The Court reiterated that under Section 19-A of Republic Act No. 166, a petitioner for cancellation must not only establish grounds for cancellation, such as the mark being common to the trade or incapable of distinguishing the registrant's goods, but must also clearly establish that they will be damaged by the continued registration of the mark. The Director of Patents correctly reasoned that damage would only arise if the marks were similar; hence, the determination of dissimilarity was a necessary step to conclude that no damage would result to Cheng Chiong, thereby justifying the dismissal of the cancellation petition. The Court found no error in the Director's application of this principle.
Main Doctrine
In proceedings for the cancellation of a trademark registration under Section 19-A of Republic Act No. 166, a petitioner must establish not only that the registrant was not entitled to the registration or that the mark was not used, but crucially, that the petitioner will be damaged by the continued registration of the mark. The determination of similarity or dissimilarity between competing trademarks is essential to ascertain whether such damage exists.