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Trademark pirates will now have a harder time
misappropriating internationally well-known marks. A
common practice by unscrupulous individuals is to search
for popular or up-and-coming brands and to register
trademarks associated with such brands in their own name
ahead of the rightful owners.
They
then coerce sizeable royalties for licensing the mark to
the rightful owner or demand a hefty fee for the
assignment of the registration back to the rightful
owner.
While
the pirating of such internationally well-known marks
may be avoided if the trademark owners register their
marks in the Philippines early on, they face the problem
of proving actual use of their marks in Philippine
commerce—a requirement for maintaining a trademark
registration—when they have not yet expanded the market
for their goods or services to the Philippines.
However,
the Supreme Court (SC) recently held that an
internationally well-known mark is protected against
unauthorized users even if it has not been registered
nor used in the
Philippines.
In its
October 15, 2007 decision, the Third Division of the SC
upheld the decision of the Intellectual Property Office
(IPO) that the marks “IN-N-OUT,” “IN-N-OUT Burger and
Arrow Design” and “IN-N-OUT Burger Logo” are
internationally well-known marks, even if they have not
been registered with the IPO nor used in Philippine
commerce.
The
marks are owned by In-N-Out Burger Inc., a US-based
hamburger fast-food chain which is presently not doing
business in the Philippines. The decision affirmed
In-N-Out Burger Inc.’s exclusive rights over the use of
the said marks and denied a local fast-food operator’s
claim of ownership based on prior registration.
In
upholding the marks’ internationally well-known status,
the Supreme Court cited In-N-Out Burger Inc.’s numerous
trademark registrations for the said marks in various
countries around the world as well as their
comprehensive advertisements worldwide in magazines and
newspapers. The SC also mentioned the burger chain’s
tremendous following among famous celebrities, citing
videotapes that were presented of such celebrities
mentioning In-N-Out burgers in the course of their
interviews.
The
controversy began sometime in June 1997 when In-N-Out
Burger Inc. applied for registration of its trademark
“IN-N-OUT Burger & Arrow Design” and service mark
“IN-N-OUT” in the Philippines.
In the
course of its application, In-N-Out Burger Inc.
discovered that Sehwani Inc. had obtained a registration
for the mark “IN-N-OUT” in 1993 for restaurant services
without its authority.
Since
Sehwani Inc. refused to heed In-N-Out Burger Inc.’s
demands to desist from claiming ownership over the
“IN-N-OUT” mark, In-N-Out Burger Inc. filed an
administrative complaint with the IPO’s Bureau of Legal
Affairs (BLA) against Sehwani Inc. and Benita’s Frites
Inc., Sehwani Inc.’s trademark licensee and the operator
of a restaurant in Pasig City bearing In-N-Out Burger
Inc.’s marks, for violation of intellectual property
rights.
After
trial, the BLA ordered the cancellation of Sehwani
Inc.’s registration for the mark “IN-N-OUT.” Sehwani
Inc. and Benita’s Frites Inc.’s appeals to the IPO
Director General and, thereafter, to the Court of
Appeals were both denied.
On
appeal to the Supreme Court, Sehwani Inc. and Benita’s
Frites Inc. raised as an issue In-N-Out Burger Inc.’s
legal capacity to sue since it is not doing business in
the
Philippines
and its marks are not registered nor used in the
Philippines.
In
ruling for In-N-Out Burger Inc., the SC held that
In-N-Out Burger Inc. has legal capacity to sue since its
causes of action are anchored under Articles 6bis and 8
of the Convention of Paris for the Protection of
Industrial Property, otherwise known as the Paris
Convention, to which both the US and the Philippines are
signatories.
Article
6bis, which governs the protection of well-known
trademarks, requires that the trademark sought to be
protected is “well-known” in the country where
protection is sought.
The
Supreme Court held that the power to determine whether a
trademark is “well-known” lies in the “competent
authority of the registration or use,” which in the
Philippines is the IPO and which correctly found that
the marks of In-N-Out Burger Inc. are internationally
well-known.
The
Supreme Court went on to explain that the fact that
In-N-Out Burger Inc.’s marks were not registered or used
in the Philippines is of no moment since the scope of
protection afforded by Article 6bis of the Paris
Convention has been expanded in the 1999 Joint
Resolution Concerning Provisions on the Protection of
Well-Known Marks, wherein the World Intellectual
Property Organization General Assembly and the Paris
Union agreed to a nonbinding recommendation that a
well-known mark should be protected in a country even if
the mark is neither registered nor used in that country.
This
declaration of the Supreme Court is unprecedented in the
protection of internationally well-known marks in the
Philippines.
While
the foregoing pronouncement by the Supreme Court may not
necessarily lead to fewer registrations of
internationally well-known marks in the name of dubious
individuals since it is possible that some trademark
examiners may not be aware of the international status
of certain marks, it will likely serve as a deterrent
against the future piracy of internationally well-known
marks.
****
Atty. Bienvenido I. Somera Jr. is a senior partner at
the Villaraza & Angangco Law Offices (web site:
www.cvclaw.com), where he is the Monitor of the
Intellectual Property Department. Atty. Somera is the
Chairman of the Intellectual Property Association of the
Philippines. His areas of expertise are intellectual
property law and litigation. |
