General Garments Corp. v. Director of Patents
REITERATIONFacts
The Antecedents: General Garments Corporation (petitioner) is the owner of the trademark "Puritan" for men's wear, registered on November 15, 1962. Puritan Sportswear Corporation (respondent), a foreign corporation from Pennsylvania, USA, filed a petition on March 9, 1964, seeking the cancellation of petitioner's trademark. Respondent alleged ownership and prior use of the same trademark in the Philippines on similar goods, non-abandonment, and fraudulent registration by petitioner in violation of Sections 17(c) and 4(d) of Republic Act No. 166 (Trademark Law). Procedural History: Petitioner moved to dismiss the cancellation petition, raising the sole issue of whether a foreign corporation, not licensed to do business in the Philippines, has the legal capacity to maintain such a suit. The Director of Patents denied the motion to dismiss on August 6, 1964, and a subsequent motion for reconsideration was also denied on March 5, 1965. The Petition: Petitioner filed the instant petition for review, challenging the resolutions of the Director of Patents.
Issue(s)
Whether a foreign corporation not licensed to do business in the Philippines has the legal capacity to maintain a suit for cancellation of a trademark registration. Whether Section 37 of the Trademark Law precludes respondent from availing of the benefits of the law.
Ruling
The petition is dismissed, and the resolution of the Director of Patents dated August 6, 1964, is affirmed.
Ratio Decidendi
On the legal capacity of a foreign corporation to file a cancellation petition: The Court held that respondent, a foreign corporation, is a juridical person and possesses the legal capacity to file a petition for cancellation of a trademark. While Section 69 of the Corporation Law requires a license for foreign corporations to maintain suits for the recovery of debts, claims, or demands arising from business transacted in the Philippines, this prohibition does not extend to actions aimed at protecting its property rights, such as its trademark. The Court cited Western Equipment & Supply Co. v. Reyes, 51 Phil. 115, which established that a foreign corporation, even if unlicensed and not doing business in the Philippines, has a legal right to maintain an action to protect its reputation, corporate name, and goodwill. The purpose of such a suit is to protect its property right in rem, which can be asserted in any court globally, irrespective of whether it transacts business locally. The action for cancellation under Section 17 of the Trademark Law is distinct from suits for debt recovery and is aimed at preventing confusion or deception among purchasers, thereby protecting both the trademark owner and the public. The Court clarified that the exception for isolated transactions, as established in Marshall-Wells Co. v. Elser & Co., 46 Phil. 70, is relevant in that the action here is not to enforce contractual rights from local business but to protect an existing right. On the applicability of Section 37 of the Trademark Law: The Court found that Section 37, which grants benefits to foreign registrants based on international conventions, was not a bar to respondent's petition. This provision was intended to operate only when the Philippines becomes a party to such conventions. However, the Court noted that even without Section 37, foreign corporations are accorded benefits under the Trademark Law, such as the right to register trademarks under Section 2, provided reciprocal privileges are granted to Philippine citizens. The Court emphasized that the right to register or protect a trademark is not solely dependent on international treaties but is also governed by domestic law, which provides for the registration of trademarks owned by foreign entities. The Court reiterated that the primary purpose of trademark law is to prevent confusion and deception, a goal that extends to protecting foreign entities with prior use or established goodwill in the Philippines, regardless of their local business licensing status.
Main Doctrine
A foreign corporation, even if not licensed to do business in the Philippines, has the legal capacity to file a petition for cancellation of a trademark registration in the Philippine Patent Office, provided the action is not for the recovery of a debt, claim, or demand arising from business transacted in the Philippines, but rather to protect its corporate name, goodwill, and property rights in its trademark.