SC: Trademark applications with prior knowledge should be denied

The Supreme Court ruled that when an entity has prior use, creation, or registration of a trademark and the applicant has knowledge of said use, creation, or registration, the trademark application may not be registered due to bad faith and should be denied.

In a 10-page decision promulgated in January, the SC Second Division denied a petition that sought to assail the decision of the Court of Appeals, which in turn affirmed the decision of the Intellectual Property Office of the Philippines—Office of the Director General (IPOPHL-ODG).

The IPOPHL-ODG had affirmed the decision of the IPOPHL-Bureau of Legal Affairs (IOPHL-BLA) that rejected petitioner Manuel Zulueta’s application for registration of trademark for the mark “CYMA & LOGO.”

According to the Court, Zulueta said he conceptualized the Greek restaurant “Cyma” and invited Raoul Goco to help make the menu.

The Cyma Boracay Restaurant was then launched in December 2005.

Zulueta and Goco formed a partnership called the “Cyma Greek Taverna Company” or the Cyma Partnership in 2006. In September 2006, Zulueta filed for a trademark of Cyma.

According to Zulueta, while he was away, Goco and his sister, Anna Goco, issued an allegedly fraudulent deed of assignment where he supposedly assigned all his partnership interests to Anna Goco in consideration of P500,000.

In March 2007, five months after Zulueta’s trademark application, the Cyma partnership filed its own trademark application for “Cyma Greek Taverna.”

The IPOPHL-BLA in December 2007 then approved the Cyma Partnership’s Trademark application. Zulueta said he failed to oppose the approval as he had been unaware that it existed.

In its ruling on the case, the Supreme Court said the “first-to-file” rule — wherein a registered mark with an earlier filing generally bars the future registration of an identical or similar mark — should not be interpreted to mean that the first application should be granted.

“In this relation, it should be emphasized that trademark controversies must be scrutinized according to their peculiar circumstances, such that jurisprudential precedents should only be made to apply if they are specifically in point,” the Court said.

According to the Court, a trademark application is unregistrable due to the attendance of bad faith on the part of the applicant and should be denied if it is found that:

• an entity has prior use, creation, and or registration of a trademark
• the applicant has knowledge of the said prior use, creation, or registration.

“Applying the foregoing in the instant case, the Court notes that although it was not categorically stated, the IPOPHL's factual findings show that Zulueta's trademark application was made in bad faith,” it said.

Meanwhile, the Court said that the Cyma mark was conceived for the use of the Cyma partnership.

“Even if the Court were to believe Zulueta's version of story - i.e., that it had been him and not Goco who had conceived the Cyma mark - it is clear from Zulueta's own narration that the mark had been conceived for the exclusive use of the partnership and its sister company,” it said.

“As opined by the court a quo, only Cyma Partnership had used the Cyma trademark in its commercial dealings, and Zulueta had never used the same in his individual capacity,” it added.

Meanwhile, the Court said that Zulueta’s rights to the Cyma Partnership should be determined in a proper separate proceeding. — DVM, GMA Integrated News