Key Takeaway: Registration, Not Use, Determines Trademark Ownership in the Philippines

Ma. Sharmaine R. Medina/Rackey Crystal Top Corporation v. Global Quest Ventures, Inc., G.R. No. 213815, February 08, 2021

In the bustling world of business, the value of a trademark cannot be overstated. It’s not just a logo or a name; it’s a symbol of trust and quality that customers associate with a brand. But what happens when two companies claim ownership over the same trademark? The case of Ma. Sharmaine R. Medina and Global Quest Ventures, Inc. sheds light on this issue, particularly highlighting how the legal landscape in the Philippines has shifted from recognizing trademark ownership based on use to emphasizing registration.

At the heart of this dispute was the trademark “Mr. Gulaman,” a name used for a gulaman jelly powder mix. Global Quest Ventures, Inc. (Global) claimed they had been using this mark since 2000, supported by a copyright registration from 1996. On the other hand, Ma. Sharmaine R. Medina (Medina) had registered the mark in 2006. The central legal question was whether Medina’s registration could be challenged by Global’s prior use and copyright ownership.

Legal Context: The Evolution of Trademark Law in the Philippines

Trademark law in the Philippines has undergone significant changes, particularly with the enactment of Republic Act No. 8293, also known as the Intellectual Property Code. Under this law, trademark ownership is acquired through registration, a departure from the previous regime where ownership was based on actual use.

A trademark is defined as “any visible sign capable of distinguishing the goods or services of an enterprise.” It’s a crucial aspect of intellectual property that helps consumers identify the source of goods or services. The Intellectual Property Code states that “the rights in a mark shall be acquired through registration made validly in accordance with the provisions of this law.”

However, this shift to a registration-based system does not mean that prior use is irrelevant. The prima facie presumption of ownership granted by a certificate of registration can be challenged if the registration was obtained fraudulently or if the mark was used in bad faith. This principle was clarified in the case of Zuneca Pharmaceutical v. Natrapharm, Inc., where the Supreme Court emphasized that while registration is key, bad faith or fraud can still lead to the cancellation of a trademark registration.

For example, imagine a small business owner who has been using a unique logo for years without registering it. If someone else registers that logo first, the business owner could still challenge the registration if they can prove the registrant acted in bad faith or used fraudulent means to obtain the registration.

Case Breakdown: The Journey of “Mr. Gulaman”

The story of “Mr. Gulaman” began with Benjamin Irao, Jr., who copyrighted the name and logo design in 1996. Global Quest Ventures, Inc. claimed they had been using this mark since 2000 and had a deed of assignment from Irao. However, in 2006, Ma. Sharmaine R. Medina registered the mark, leading to a legal battle over its ownership.

Global filed a petition to cancel Medina’s registration, arguing that she had copied their mark. The case moved through various levels of the Intellectual Property Office (IPO), with the Bureau of Legal Affairs (BLA-IPO) initially granting Global’s petition. Medina appealed, but the Office of the Director General and the Court of Appeals upheld the decision to cancel her registration.

The Supreme Court’s decision emphasized the importance of registration over prior use, stating, “At present, as expressed in the language of the provisions of the IP Code, prior use no longer determines the acquisition of ownership of a mark in light of the adoption of the rule that ownership of a mark is acquired through registration made validly in accordance with the provisions of the IP Code.”

Another crucial quote from the decision was, “The presumption of ownership accorded to a registrant must then necessarily yield to superior evidence of actual and real ownership of a trademark,” highlighting that while registration is key, it can be challenged with substantial evidence of bad faith or fraud.

The procedural journey included:

1. Global’s opposition to Medina’s trademark application in 2006.
2. The issuance of Medina’s certificate of registration in June 2006.
3. Global’s petition for cancellation of Medina’s registration in 2006.
4. The BLA-IPO’s decision to grant the petition in 2008.
5. Medina’s appeal to the Office of the Director General, which was denied in 2012.
6. The Court of Appeals’ affirmation of the IPO’s decision in 2013.
7. The Supreme Court’s final decision in 2021, upholding the cancellation of Medina’s registration.

Practical Implications: Navigating Trademark Ownership in the Philippines

This ruling underscores the importance of trademark registration for businesses in the Philippines. Even if a company has been using a mark for years, without registration, they may face challenges from others who register the mark first. Businesses should prioritize registering their trademarks to secure their legal rights.

However, the decision also serves as a reminder that registration is not an absolute shield. If a registration is obtained through fraud or bad faith, it can be challenged and potentially cancelled. Companies must ensure they are acting in good faith when seeking trademark registration.

Key Lessons:

• Register your trademarks to establish legal ownership.
• Be vigilant about monitoring trademark applications to prevent others from registering similar marks.
• If you believe a trademark was registered fraudulently, gather substantial evidence to challenge the registration.

Frequently Asked Questions

What is the difference between trademark and copyright?

Trademark protects signs that distinguish goods or services, while copyright protects original literary, artistic, and musical works.

Can a trademark be cancelled after registration?

Yes, a trademark can be cancelled if it was obtained fraudulently, becomes generic, or is abandoned.

How long does trademark registration last in the Philippines?

Trademark registration in the Philippines is valid for 10 years and can be renewed indefinitely.

What constitutes bad faith in trademark registration?

Bad faith in trademark registration involves knowing about prior use or registration of a similar mark by another and attempting to copy or use it.

What should I do if someone else registers my trademark?

You should gather evidence of your prior use and consult with a legal professional to challenge the registration on grounds of bad faith or fraud.

ASG Law specializes in Intellectual Property Law. Contact us or email hello@asglawpartners.com to schedule a consultation.