Isetan v. Intermediate Appellate Court
REITERATIONFacts
The Antecedents: Petitioner Kabushi Kaisha Isetan, a Japanese corporation, alleges it has used the trademark "Isetan" and the "Young Leaves Design" since 1936, with registrations in Japan for numerous classes of goods. It claims international expansion from 1936 to 1974. Private respondent, Isetann Department Store, Inc., a Philippine corporation, claims to have used the name "Isetann" and a related design on its products, particularly shirts, since January 1979. The private respondent registered its corporate name and logo in the Philippines in 1980. The core dispute revolves around the alleged similarity of the trademarks and corporate names, with the petitioner asserting that the private respondent's actions were intended to capitalize on the petitioner's established goodwill, causing irreparable damage. Procedural History: The petitioner filed applications for registration of its trademarks in the Philippines in October 1983. Subsequently, on November 28, 1980, the petitioner filed two petitions with the Philippine Patent Office seeking the cancellation of the private respondent's Certificates of Supplemental Registration, alleging infringement of its trademarks and corporate name. Concurrently, the petitioner filed a petition with the Securities and Exchange Commission (SEC) to cancel the private respondent's corporate name. The SEC initially reversed a hearing officer's decision favoring the private respondent, but later, on reconsideration, affirmed the denial of the cancellation petition, stating the petitioner's mark had not acquired goodwill in the Philippines. The Director of Patents, on January 24, 1986, dismissed the petitioner's cancellation petitions, finding no successful case made out for cancellation. The petitioner's motion for reconsideration was denied on April 2, 1986. An appeal to the Intermediate Appellate Court (IAC) was dismissed on June 2, 1986, for being filed out of time, and a subsequent motion for reconsideration was denied on July 11, 1986. The Petition: This case reaches the Supreme Court via a petition for review on certiorari seeking to set aside the decision of the Intermediate Appellate Court which dismissed the petitioner's appeal from the Director of Patents' decision, and the subsequent resolution denying reconsideration. The petitioner argues that its appeal was dismissed on a technicality (late filing) and that substantial justice would be served by reviewing the merits of its claim, invoking international conventions. The Supreme Court initially dismissed the petition for being filed late but later gave it due course on equitable grounds. However, upon further review, the Court reiterated its dismissal, emphasizing that both the appeal to the IAC and the petition to the Supreme Court were filed late, and that actual use in commerce within the Philippines is a prerequisite for trademark ownership, a condition the petitioner failed to meet.
Issue(s)
Whether the Intermediate Appellate Court erred in dismissing the appeal on the ground of late filing. Whether the petitioner acquired ownership and the right to exclusive use of the trademark "Isetan" and "Young Leaves Design" in the Philippines despite lack of actual use in commerce within the Philippines. Whether the petitioner is entitled to the cancellation of the private respondent's registrations and corporate name.
Ruling
The petition is DISMISSED. The Supreme Court reiterates its earlier resolution dismissing the petition on the ground that it was filed late, both in the Court of Appeals and with the Supreme Court itself. The decisions of the Patent Office and the Court of Appeals are upheld.
Ratio Decidendi
On the issue of late filing: The Court held that the perfection of an appeal within the time provided by law is jurisdictional, and failure to observe the period is fatal. The petitioner received the resolution denying its motion for reconsideration on July 17, 1986, and had until August 1, 1986, to file a petition for review with the Supreme Court. The petition was posted on August 2, 1986, making it late. The Court of Appeals correctly rejected the appeal on the sole ground of late filing. The right to appeal is a statutory privilege that must be exercised in accordance with law, and compliance with the reglementary period is mandatory and jurisdictional. The Court noted that the petition was "twice dead" due to late filing in both appellate courts. On the acquisition of trademark rights without actual use in commerce: The Court reiterated the fundamental principle of Philippine Trademark Law that actual use in commerce in the Philippines is a prerequisite to the acquisition of ownership over a trademark or tradename. Citing Republic Act No. 166, as amended, and jurisprudence such as Sterling Products International, Inc. v. Farbenfabriken Bayer Actiengesellschaft and Pagasa Industrial Corporation v. Court of Appeals, the Court emphasized that adoption alone is not sufficient; the right grows out of actual use. The petitioner's witnesses admitted that the company was not licensed to do business in the Philippines, its trademark was not registered under Philippine law, and it was not being used on products in trade, manufacture, or business in the Philippines. The Court found that the petitioner had never conducted any business in the Philippines, promoted its tradename or trademark, or established any business goodwill in the country. The advertising expenditures mentioned by the petitioner referred to advertising in Japan or other foreign places, not in the Philippines. Therefore, under the law, the petitioner had no right to the remedy it sought. On the entitlement to cancellation: Based on the lack of actual use in commerce in the Philippines, the petitioner failed to establish ownership and goodwill deserving of protection. The Court found that the private respondent had continuously used its name in commerce since 1979 and had established goodwill through extensive advertising. The principle of territoriality of trademark law was invoked, meaning that what is to be secured from unfair competition is the trade within a particular territory where the business is carried on and the goodwill has immediate value. The Paris Convention does not automatically exclude other countries from using a tradename used in one country if it is not internationally known or well-known in that territory under the specified conditions. Since the petitioner's mark was not used in commerce in the Philippines, it could not claim exclusive rights or seek cancellation of the respondent's registrations based on its foreign use or registration.
Main Doctrine
Actual use in commerce in the Philippines is a prerequisite to the acquisition of ownership over a trademark or tradename. Mere adoption or registration without actual use does not grant exclusive rights. Furthermore, the perfection of an appeal within the reglementary period is jurisdictional, and failure to comply is fatal.