Birkenstock Orthopaedie v. Philippine Shoe Expo
REITERATIONFacts
The Antecedents: Petitioner, Birkenstock Orthopaedie GmbH & Co. KG, a German corporation, applied for the registration of several trademarks, including "BIRKENSTOCK" and variations thereof, for goods in Class 25 and Class 10. These applications were initially suspended due to an existing registration of the mark "BIRKENSTOCK AND DEVICE" (Registration No. 56334) held by Shoe Town International and Industrial Corporation, the predecessor-in-interest of respondent Philippine Shoe Expo Marketing Corporation. Petitioner filed a petition to cancel Registration No. 56334, asserting its ownership of the Birkenstock marks. However, the respondent and its predecessor failed to file the required 10th Year Declaration of Actual Use for Registration No. 56334, leading to its cancellation and the dismissal of the cancellation case as moot. Procedural History: Following the cancellation of Registration No. 56334, petitioner's trademark applications were published. Respondent filed oppositions, claiming prior use and ownership of the "BIRKENSTOCK" mark, citing its own registration and copyright. The Bureau of Legal Affairs (BLA) of the Intellectual Property Office (IPO) sustained the opposition, rejecting petitioner's applications, finding the marks confusingly similar and respondent to be the prior user. Petitioner appealed to the IPO Director General, who reversed the BLA's decision, allowing the registration of petitioner's marks. The Director General found that the cancellation of respondent's registration removed the basis for rejection and that petitioner was the true owner and prior user. Respondent then filed a petition for review with the Court of Appeals (CA). The Petition: The Court of Appeals reversed the IPO Director General's decision, reinstating the BLA's ruling and disallowing the registration of petitioner's marks. The CA found the marks confusingly similar and held that respondent's failure to file the 10th Year Declaration of Actual Use did not extinguish its ownership, as it presented evidence of continued use. The CA also agreed with respondent that petitioner's documentary evidence, being photocopies, were inadmissible. Aggrieved, petitioner filed this Petition for Review on Certiorari with the Supreme Court, arguing that its documentary evidence should have been admitted and that it is the true and lawful owner of the "BIRKENSTOCK" mark, entitled to registration, while respondent acted in bad faith.
Issue(s)
Whether the documentary evidence submitted by petitioner, consisting of photocopies, are admissible despite Section 8.1 of the Rules on Inter Partes Proceedings. Whether petitioner is the true and lawful owner of the "BIRKENSTOCK" mark and thus entitled to its registration. Whether respondent's failure to file the 10th Year Declaration of Actual Use (DAU) for its registered mark resulted in the abandonment of its rights.
Ruling
The petition is GRANTED. The Decision and Resolution of the Court of Appeals are REVERSED and SET ASIDE. The Decision of the IPO Director General allowing the registration of the subject applications is REINSTATED.
Ratio Decidendi
On the admissibility of petitioner's documentary evidence: The Court held that the rules of procedure are tools to facilitate justice and should not be used to frustrate it. While petitioner submitted photocopies, the IPO already possessed the originals in a related cancellation case. The IPO, as a quasi-judicial body, is not strictly bound by technical rules of procedure and evidence. Therefore, the IPO Director General's relaxation of the procedure by admitting the photocopies was a valid exercise of discretion in the interest of substantial justice, especially considering the merits of the case. The Court emphasized that technicalities should not defeat substantive rights and that parties should be afforded ample opportunity for a just determination of their cause. On the registration and ownership of "BIRKENSTOCK": The Court ruled that Republic Act No. 166 (RA 166), the governing law, requires actual use in commerce in the Philippines for two months prior to application for registration. Ownership is acquired by actual use, not by registration itself. Registration creates only a prima facie presumption of ownership, which is rebuttable. Petitioner established its true and lawful ownership of the "BIRKENSTOCK" mark by presenting evidence of its origin and use in commerce in Europe since 1774, its continuous use by subsequent generations, and its registration in various countries, including the Philippines. Respondent, on the other hand, failed to present conclusive evidence of ownership beyond its cancelled registration and sales invoices/advertisements. On respondent's failure to file the 10th Year Declaration of Actual Use (DAU): The Court reiterated that under RA 166, failure to file the DAU within the specified periods results in the automatic cancellation of trademark registration. Such failure is tantamount to abandonment or withdrawal of any right or interest the registrant has over the trademark. Respondent admitted its failure to file the 10th Year DAU for Registration No. 56334 on or before October 21, 2004. Consequently, it was deemed to have abandoned its right or interest over the mark "BIRKENSTOCK." The Court clarified that respondent could not invoke Section 236 of the Intellectual Property Code (IP Code) as it had already lost any right or interest over the mark due to abandonment.
Main Doctrine
Failure to file the Declaration of Actual Use (DAU) within the requisite period results in the automatic cancellation of trademark registration and is tantamount to abandonment of any right or interest over the mark. Ownership of a trademark is acquired by actual use in commerce, and registration merely creates a prima facie presumption of ownership which is rebuttable by superior evidence of actual and real ownership.