Asari Yoko Co. v. Boc
REITERATIONFacts
The Antecedents: This case concerns a dispute over the ownership and registration of the trade mark "RACE" and a related design, which is used for shirts and undershirts. Kee Boc, a Chinese citizen, filed an application to register this trade mark, claiming to be the first user in the Philippines since May 17, 1952. Asari Yoko Co., Ltd., a Japanese corporation, opposed this application, asserting its prior ownership and use of the same trade mark, which it had registered in Japan and previously in the Philippines. Procedural History: Kee Boc filed his application for the trade mark "RACE" and design on August 27, 1953. Asari Yoko Co., Ltd. opposed this application, arguing that it was the rightful owner due to prior registration and continuous use in the Philippines. Following a hearing, the Director of Patents ruled in favor of Kee Boc, finding him to be the first user and dismissing Asari Yoko Co., Ltd.'s opposition. This decision by the Director of Patents is the subject of the current review. The Petition: Asari Yoko Co., Ltd. filed this petition for review of the Director of Patents' decision. The petitioner contends that the Director erred in several key findings, including failing to prove prior registration in the Philippines before World War II, failing to establish satisfactory prior use in the Philippines before World War II, and incorrectly concluding that any prior rights were forfeited due to the war. Furthermore, the petitioner argues that the Director erred in holding that there could not have been use after World War II despite trade arrangements, that the petitioner would not be damaged by the registration, and crucially, that Kee Boc was the first user. The petition seeks to overturn the Director's decision and dismiss Kee Boc's application for registration.
Issue(s)
Whether the Director of Patents erred in holding that petitioner failed to prove registration in the Philippines of the subject trademark before World War II. Whether the Director of Patents erred in holding that petitioner failed to establish satisfactorily its claim of 'prior use' of the subject trademark in the Philippines before World War II. Whether the Director of Patents erred in holding that, granting prior use, petitioner's rights were forfeited by reason of the war. Whether the Director of Patents erred in holding that there could not have been use by petitioner of the subject trademark in trade or 'commerce' after the termination of hostilities in World War II, notwithstanding trade arrangements. Whether the Director of Patents erred in holding that petitioner would not be damaged by the registration of the trademark and design in favor of respondent Kee Boc. Whether the Director of Patents erred in holding that respondent Kee Boc is the 'first user' of the subject trademark in the Philippines. Whether the Director of Patents erred in dismissing the petitioner's opposition to the application of respondent Kee Boc for the registration of the trademark 'race' and design.
Ruling
The Supreme Court reversed the decision of the Director of Patents. It found that while prior registration in the Philippines was not sufficiently proven, the evidence conclusively established prior use of the trademark by the petitioner. The Court held that rights acquired through prior use were not forfeited due to the war and that lawful commerce with Japan, even before formal trade agreements, allowed for the use of the trademark. Consequently, the Court ruled that the petitioner would be damaged by the registration and dismissed Kee Boc's application.
Ratio Decidendi
On Issue 1 (Prior Registration): The Court agreed with the Director of Patents that the evidence of prior registration of the trademark in the Philippines before World War II had not been established by sufficient evidence. While some employees of the former Bureau of Commerce testified to seeing similar trademarks, they could not definitively confirm that a registered certificate was issued by the Director of Patents. On Issue 2 (Prior Use): The Court found the evidence of prior use by the oppositor (Asari) to be conclusive in favor of the petitioner. The facsimile of the trademark filed by the applicant (Kee Boc) was taken from a mark actually used on goods imported from Japan to the Philippines, which did not contain the inscriptions "REGISTERED TRADE MARK" and "Made in Occupied Japan" because these were covered by a pasted paper. The trademark sought to be registered belonged to Kojiro Asari, as shown by Japanese registration certificates, and was used on shirts and undershirts imported into the Philippines as early as 1949, with subsequent importations evidenced by shipping documents dated October 27, 1953, and September 11, 1953. Therefore, the Court found that the Director of Patents committed error in holding that petitioner failed to establish its claim of prior use. On Issue 3 (Forfeiture of Rights due to War): The Court found this assignment of error to be well-taken. There was no evidence that the trademark was confiscated by the United States under the Trading With The Enemy Act. Since it was not found that the trademark was registered in the Philippines by a Japanese before the war, it could not have been confiscated. The Court reasoned that a non-existent property or trademark cannot be confiscated. On Issue 4 (Use after WWII): The Court found merit in this assignment of error. Goods bearing the trademark had already entered the Philippines in 1949, prior to the trade agreement between the Supreme Commander for the Allied Powers (SCAP) and the Philippines (March 3, 1951). Japan was occupied by the United States since 1945, and given the existing commercial relations between the Philippines and the United States, the entry of goods from Occupied Japan was not illegal and constituted legitimate trade or commerce that could give rise to trademark rights. The Director of Patents' view that trade relations were not lawful was deemed too narrow. The Court emphasized that lawful entry of goods bearing the trademark since 1949 should entitle the owner to exclusive use rights, and modern commerce demands that depredations on legitimate trademarks should not be countenanced. On Issue 5 (Damage): The Court sustained this assignment of error. Based on the findings that the petitioner was the first user of the trademark in the Philippines, it would indeed be damaged by the registration of the trademark in the name of the applicant-respondent. On Issue 6 (First User): The Court found that the Director of Patents erred in holding respondent Kee Boc as the "first user" of the subject trademark in the Philippines, as the evidence established prior use by the petitioner. On Issue 7 (Dismissal of Opposition): Consequently, the Court found that the Director of Patents erred in dismissing the petitioner's opposition, as the petitioner had established its prior use and right to the trademark.
Main Doctrine
The Court held that while a trademark may be registered abroad, its protection in the Philippines hinges on actual use in commerce within the country. Rights acquired through prior use are not automatically lost due to war, especially if commercial relations are re-established and the mark continues to be used. The absence of a formal trade agreement between nations does not prevent the recognition of trademark rights if goods bearing the mark have lawfully entered Philippine commerce.