Chng v. Liu
REITERATIONFacts
The Antecedents: Petitioner Sy Chng filed a petition to cancel Certificate of Registration No. 10637 for the trademark LION and TIGER, issued to respondent Gaw Liu on December 12, 1963. Respondent Gaw Liu had applied for the registration on February 20, 1963, claiming use of the trademark on dyestuffs since 1956. Petitioner alleged prior use of the same trademark on aniline basic colors since 1952, accusing respondent of fraudulent appropriation and registration with full knowledge of petitioner's ownership. Procedural History: The Director of Patents, Tiburcio Evalle, ordered the cancellation of the registration. The Director found the evidence presented by petitioner Sy Chng to be more convincing than that of respondent Gaw Liu. The Director's decision was dated January 29, 1968. The Petition: Respondent Gaw Liu appealed the decision of the Director of Patents to the Supreme Court, seeking to set aside the order revoking his trademark registration. The Supreme Court affirmed the decision of the Director of Patents.
Issue(s)
Whether the findings of fact of the Director of Patents regarding priority of use are conclusive upon the Supreme Court. Whether the Director of Patents committed grave abuse of discretion in admitting the petitioner's evidence and failing to find that certain documents were altered.
Ruling
The Supreme Court affirmed the decision of the Director of Patents, ordering the cancellation of Certificate of Registration No. 10637 issued to Gaw Liu for the trademark LION & TIGER.
Ratio Decidendi
On Issue 1: The Supreme Court held that findings of fact by the Director of Patents are conclusive if supported by substantial evidence. Applying the rule from Chua Che v. Philippines Patent Office (G.R. No. L-18337), the Court emphasized that review is generally limited to questions of law. The Director's determination that Sy Chng had priority of use was based on a 'chain of circumstances' including the design, printing, and systematic preservation of mercantile records showing use since 1952. In contrast, Gaw Liu's evidence was described as weak and inconclusive, particularly since he failed to prove use in commerce prior to his application filing. Under Rule 173 of the Rules of Practice in Trademark Cases, since Gaw Liu could not prove an earlier date of use, he was limited to February 20, 1963, as his first use date. Thus, the Court found no reason to disturb the factual conclusion that Sy Chng was the prior owner and user of the trademark. On Issue 2: The Court rejected the allegation that the Director of Patents erred by not finding that Sy Chng altered invoices '3' and 'D-12'. It ruled that the Director was satisfied the goods were indeed Sy Chng's products and that the invoices were issued regularly in the ordinary course of business. The Court noted that Gaw Liu's claim of superimposition of letters was a mere conclusion based on speculation rather than evidence. Furthermore, Gaw Liu failed to dispute the appellee's refutation in a reply brief, suggesting a realization that the appellee's version was closer to the truth. The Court also noted the suspicious nature of Gaw Liu's possession of invoices belonging to a third party who refused to undergo cross-examination. Consequently, there was no showing of arbitrariness or grave abuse of discretion in the administrative body's evaluation of the documentary evidence.
Main Doctrine
The presumption of validity of a registered trademark is rebuttable, and the burden of proving invalidity rests upon the petitioner. However, where the petitioner successfully demonstrates prior and continuous use of the trademark, the burden shifts to the registrant to prove distinctiveness and exclusive use.