~iP INTELLECTUAL PROPERTY PHILIPPINES

OFFICE OF THE DIRECTOR GENERAL

REYCO INDUSTRIAL SALES Appeal No. 14-07-51 CORPORATION,

Appellant, Inter Partes Case No. 14-2006-00175 Opposition to:

-versus- Trademark Application No. 4-2005-003543 Date Filed: 20 April 2005

MARVIN VILLAFLORES, Appellee. Trademark: TOMI & Design

x----------------------------------------x

DECISION

REYCO INDUSTRIAL SALES CORPORATION, ("Appellant") appeals Decision No. 2007-126, dated 31 August 2007, of the Director of the Bureau of Legal Affairs ("Director"), denying the Appellant's opposition to the registration of the mark "TOMI & Design" for use on oil seal, valve seal, and gaskets (full set overhauling, cylinder head) filed by MARVIN VILLAFLORES ("Appellee") on 20 April 2005.

Records show that the Appellee's trademark application was published for opposition on 27 October 2006 in the Intellectual Property Office E-Gazette for Trademarks. On 24 November 2006 the Appellant filed a "NOTICE OF OPPOSITION" alleging the following:

1. The ownership of a mark shall be acquired through registration thereof but such ownership may be rebutted by a showing that a claimant has actually used the mark in the industry long before the registrant has actually used the same;

2. The Appellant has the legal and beneficial right and ownership to use TOMI as it was the first to adopt and to use it in actual trade and commerce in the Philippines;

3. As the prior and continuing user of the mark, the registration thereof in favor ofthe Appellee violates Sec. 123.1 (e) of RA 8293 ("IP Code");

4. Sales invoices provide the best proof of actual sales of the trader's product in the country and of actual use for certain period of the trader's mark through these sales;

5. On 21 November 2006 the Appellant submitted and filed its "Declaration of Actual Use" ("DAU") with attachments that include

reyco 1vs. villaflorcs page 1 of 10

Republic of the Philippines INTELLECTUAL PROPERTY OFFICE

351 Sen. Gil Puvat Ave.. Makati City 1200 Philinnines « www.inoohil.zov.oh ~,,~I

1

sales invoices, photographs of promotional materials and actual products with the mark TOMI to show that it was actually in use in trade and commerce in the Philippines since 1996;

~ ! 6. On 22 November 2006 the Appellant submitted a "Supplemental

j• JI

I

II 1

Declaration of Actual Use" to bolster the fact that it has used, is using and will still use TOMI in its business;

7. Another convincing proof of use of a mark in commerce is the testimony of customers or the orders of buyers during a certain period which will also prove that TOMI is well-known in the automotive spare parts industry where the Appellant is an active participant;

8. The affidavits of the clients/customers show that they had been ij

dealing business with the Appellant for at least four (4) years, they 1 know the Appellant to be the owner of the mark TOMI, they know of

no other manufacturers/distributors of such brand and, they will not buy TOMI from other sellers;

9. As prior user of the mark, the Appellant has proprietary right to the claim and to the exclusion of others, including the Appellee;

10. Nearly three (3) years since the Appellee filed its trademark application, he has not filed a DAU;

11. It is baffling why the Appellee would choose to register the mark TOMI in three different occasions and under similar classes;

12. The Appellant has an application where the designated goods encompass all kinds of automotive spare parts while the designated goods in the Appellee's subject application, i.e, oil seal, valve seal and gaskets, fall under the larger category of automotive spare parts;

13. To allow the Appellee to use TOMI would result in confusion of goods in the minds of the buying public; and

14. The Appellant's reputation in the public that it sells good and quality products will be threatened by a competitor, the Appellee, who only banked on the goodwill brought by the appropriation of the mark TOMI and its business will suffer should it turn out that the Appellee's products are of inferior quality.

The Appellee filed his "ANSWER" on 13 March 2007 alleging the following:

Iji

I , reyco Ivs. villaflores page 2 of 10

,)/IIIj

I

1

I1

1. The Appellant being a mere seller and distributor of automotive spare parts does not earn the right to cause the application for registration of a trademark that it only deals with;

I I 2. The Appellant has no personality to oppose his application for the

registration of TOMI & Design which the latter is actually using for the automotive spare parts he caused to be manufactured in another country and imported to the Philippines for local sales;

3. He is the owner of the mark TOMI as evidenced by Cert. of Reg. No. 4-2004-006104 issued on 24 November 2006;

4. Sec. 122 of the IP Code provides that the rights in a mark shall be acquired through registration made validly in accordance with the provisions of the law while Sec. 138 states that a certificate of registration of a mark shall be prima facie evidence of the validity of

I the registration, the registrant's ownership of the mark and exclusive right to use it in connection with the goods or services and those thatj~ are related therein specified in the certificate;

i 5. The IP Code gave way to the change in the concept of ownership ofi

I trademarks, trade names, and service mark from "Actual Use Rule" or "First User-Owner Rule" to the "First-to-File Rule" or "First-Filer­Owner Rule";

6. The First-Filer-Owner Rule means that the exclusive right to use and register a mark shall be granted to the first one to file the application;

7. This new rule is the one being practiced worldwide because of the Agreement on Trade-Related Aspects of Intellectual Property Rights ("TRIPS Agreement") and its adoption is a commitment of the Philippines;

8. The Appellant admitted that the Appellee was the first one to file an application to register TOMI & Design and being the registrant and an actual user of TOMI has the better right to cause the registration of TOMI & Design;

9. Assuming that the Appellant is the first to use TOMI & Design, it cannot claim a better right against him who first filed an application to register this mark and much more was granted a certificate of registration for TOMI;

10. The Appellant has deafeningly been silent and invisible during all the time that he was using and spending so much money promoting and

I expanding the coverage of the mark here in the Philippines;

I reyeo1vs.villaflores

1 page 3 of 10

I

11. A perusal of the annexed sales invoices of the Appellant will show that these sales invoices were altered by inserting the word TOMI at the end of every item written on the sales invoices to make it appear that the mark has been carried by it;

12. The word TOMI which was intentionally and forcibly inserted at the end of every item written on sales invoices was only an after thought on the part of the Appellant motivated by a scheme to take away from him the right to register the mark TOMI & Design, a mark which the he spent money to promote and made known for its quality;

13. The insertion of the word TOMI on the annexed sales invoices of the Appellant is wanting in credibility and is done to mislead this Office to believe that it has been using TOMI when the truth of the matter is that the items reflected on the sales invoices could have been another brand that the Appellant is carrying for sale to the public;

14. This act of disregarding the mark TOMI in the issuance of its sales invoices manifests the Appellant's lack of concern over the mark for the reason that it never spent money to promote the mark but only profit for its distribution;

15. The attached sworn statements of the Appellant's alleged customers are self-serving and biased to the Appellant because the Appellant extends credit line to them and, hence, any favor it asked will definitely be given by them;

16. For him to be denied registration of TOMI & Design under Sec. 123.1 (e) of the IP Code, the mark must be identical with, or confusingly similar to or constitutes a translation of a mark which is considered by competent authority of the Philippines to be well-known internationally and in the Philippines; and

17. In the Philippines, TOMI & Design does not automatically brings to the mind of every Filipino an automotive spare parts or Reyco Industrial Sales Corporation, like when Filipinos speak of toothpaste the word that come out of their mouth is "Colgate".

The Appellant submitted the following as evidence:

1. Copy of the list of members of the Philippines Automotive Trader's Association; 1

1 Exhibit "A".

reyeo1vs. villaflores

page 4 of 10

J

I 2. Copies of the Appellant's trademark applications for TOMI filed on 26 July 2004 and 11 September 2006, respectively/

I 3. Photocopies of the print-outs of the "web page" of the Intellectual Property Office of the Philippines website, featuring "Trademark Search" showing information on the Appellee's trademark applications for TOMI filed on 09 July 2004, 04 October 2005, and 20 April 2005, respectively:"

4. Copy of the Declaration of Actual Use and Supplemental Declaration of Actual Use, including annexes thereto, filed by the Appellant on 21 November 2006 and 22 November 2006, respectively.tand

5. Affidavits of Appellant's customers executed on 21 November 2006.s

On the other hand, the Appellee's evidence consists of a copy of Cert. of Reg. No. 4-2004-006104.6

Subsequently, the Appellant attached to its Position Paper copies of sales invoices? and to its Supplemental Position Paper a copy of Decision No. 2007-55 of the Director in Inter Partes Case No. 14-2006-00144, dated 28 May 2007.8

After the appropriate proceedings, the Director denied the opposition and gave due course to the Appellees' trademark application. She held that trademark rights are acquired by a person who is the first to file an application for registration of the mark and that between the parties, it is the Appellee who first filed the application for the registration of TOMI & Design and that he was also granted Cert. of Reg. No. 4-2004-006104 for the mark TOMI. According to her, the Appellee enjoys priority in point of filing for the mark TOMI & Design and has given evidence of its use in commerce and, thus, enjoys a better right to the mark than the Appellant. She also ruled that the Appellant did not indicate that it has commercial transactions on an international scale and that TOMI is not a well-known mark.

On 12 November 2007 the Appellant filed an APPEAL MEMORANDUM alleging that the Director erred in ruling that trademark rights are acquired by a person who first filed an application for the registration of the mark. It maintains that the IP Code did not do away with the actual use rule and that as between actual use of a mark without registration and registration of the mark without actual use thereof, the former prevails over the latter. According to the Appellant, the Director's ruling is contrary to Decision No. 2007-55 which she issued on Inter Partes Case No. 14-2006-00144 entitled Bina's Auto Supply, Inc. vs. Marvin Villajlores.

z Exhibits "B" and "C". 1 Exhibits "0", "E" and "F".

j Exhibits "G" and "H". The annexes to these documents include copiesof sales invoices and affidavits of Appellant's customers. 5 Exhibits "I" to "Nil. 6 Exhibit "1".

7 Annexes "A" to "F" attached to the Appellant's position paper. K Annex "A" attached to the Appellant's Supplemental Position Paper.

reyeo1vs.villaflores page5 of 10

J j 1

II

The Appellant also claims that no single pleading was submitted by the Appellee that either contains or alleges that he filed a DAU with respect to his trademark application. Moreover, the Appellant argues that the Director should have considered the certification issued on 21 August 2007 by the Trademark Publication & Registry Division of the Bureau of Trademarks which states that Cert. of Reg. No.

~

i f1II j

4-2004-006104 was deemed canceled for failure of the Appellee to file a DAU within three (3) years from the filing of the trademark application. The certification was submitted by the Appellant in Inter Partes Case No. 14-2006-00189 which is a petition for cancellation of Cert. of Reg. No. 4-2004-006104 filed by the Appellant.

The Appellant attached to its APPEAL MEMORANDUM several sales invoices" dated from 1999 to 2005, and a copy of the aforementioned certification issued by the Trademark Publication and Registry Division on 21 August 2007. 10

On 11 December 2007 this Office issued an Order giving the Appellee thirty (30) days from receipt thereof to file his comment to the appeal. He did not file his

~ comment and the case was deemed submitted for decision. ,

I i

After a review of the records, this Office resolves to grant the appeal.

The parties do not dispute that the mark applied by the Appellee for registration is identical to the Appellant's mark and that both are used on similar goods. What is in contention is the ownership of the mark. The Appellee argued before the Director that the issue of ownership of a mark is settled by determining who was the first to apply for registration and not by finding out who was the first to use the mark in commerce.

In this regard, it should be emphasized that the IP Code does not mention the term or phrase "first-to-file rule" with respect to trademark registration. This "rule" is actually inferred from the text of Sec. 123.1(d) of the IP Code which states that a mark cannot be registered if it:

"[d) Is identical with a registered mark belonging to a different proprietor or a mark with an earlier filing or priority date, in respect of: Ci) The same goods or services, or [ii] Closely related goods or services, or

If it nearly resembles such a mark as to be likely to deceive or cause confusion;".

In this instance, the Director cited that the Appellee had already a registration for the mark TOMI, specifically, Cert. of Reg. No. 4-2004-006104, which stemmed from the Appellee's trademark application filed on 09 July 2004. However, the Appellant presented the certification issued by the Trademark Publication and Registry Division of the Bureau of Trademarks on 21 August 2007 which states the following:

9 Annexes "En to "N".

10 Annex "Q" 10 the APPEAL MEMORANDUM.

reyco 1vs.villaflores page (j of 10 I

I

1

iIII

j )

IIII

"THIS IS TO CERTIFY that as per records of our Office, Registrant MARVIN VILLAFLORES for the mark 'TOM!' [Registration No. 4-2004-006104 issued on March 18, 2006] did not file the required Declaration of Actual Use [DAU] within three (3) years from the filing date. Thus, said mark is DEEMED CANCELLED and subject for removal from the register."

The certification having been issued only on 21 August 2007, the Appellant could not have possibly submitted or attached it to his Opposition at the time it was filed in 2006. However, the Director in deciding the case should have considered that the Appellant had previously presented the same certification in Inter PartesCase No. 14-2006-00189 and thus, should have taken judicial notice of the fact of the cancellation and removal from the register of Cert. of Reg. No. 4-2004-006104. The BLA is a part of the government agency which is the primary repository of information on intellectual property matters, including the Trademark registry, such that the Director ought to know whether a trademark registration subject of or of critical importance to a case being heard by her bureau is still valid or existing. Aptly, the existence or validity of a trademark registration subject of or which could resolve an issue or determine the outcome of a case is a matter of judicial notice for cases heard by the Intellectual Property Office of the Philippines.

Thus, the Appellee's Cert. of Reg. No. 4-2004-006104 having been canceled, the Appellee has no more existing trademark registration or application that is earlier than the Appellant's trademark application. Accordingly, the Appellant's trademark application for TOMI filed on 26 July 2004 would now have a filing or a priority date earlier than the Appellee's still existing trademark applications, including the application subject of this case. Hence, pursuant to Sec. 123.1(d) of the IP Code, the Appellee's trademark application should be rejected.

j

This Office also finds that the records show that the Appellant had adduced evidence of its actual use in commerce in the Philippines of the mark TOMI as early as 1996 for automotive spare parts." The Appellant submitted the affidavits executed by its customers, namely, automotive spare parts retailers William Benfuetan, Angelito David, Jose Ong, Elvis Lim, Dexter Lim and Angelito Ngo. This Office noticed that the Director omitted these affidavits, marked as Exhibits "I" to "N" and attached to the copies of the Appellant's Notice of Opposition filed in the BLA, in the discussion of facts and issues in her decision. The affidavits of Benfuetan and David were also attached to the Appellant's DAD. While Benfuetan's and David's affidavits are photocopies, the others are originals.

The Appellee failed to submit contrary evidence to rebut or undermine the credibility and integrity of the contents in the aforementioned affidavits. In contrast, the Appellee did not submit evidence" that would bolster his position. He has not

12 Exhibits "G" to "N".

13 Aside from Cenificate of Registration No. 4-2004-006104, there is nothing on the record to show actual me of the mark TOMI by the Appellee.

ceyeo 1vs.villaflores page 7 of 10

1

Ij

I

shown any evidence to substantiate or support his claims, including his allegation that he had spent money to promote the mark TOMI.

In this regard, this Office emphasize that the essence of trademark registration is to give protection to the owners of trademarks. The function of a trademark is to point out distinctly the origin or ownership of the goods to which it is affixed; to secure to him, who has been instrumental in bringing into the market a superior article of merchandise, the fruit of his industry and skill; to assure the public that they are procuring the genuine article; to prevent fraud and imposition; and to protect the

IiI J

manufacturer against substitution and sale of an inferior and different article as his product." The main characteristic of a registrable trademark is, therefore, its distinctiveness. A trademark must be a visible sign capable of distinguishing the goods or services of an enterprise."

The Philippines implemented the TRIPS Agreement when the IP Code took into force and effect on 01 January 1998. Art. 15 of TRIPS Agreement reads:

~

,i "Section 2: Trademarks

iI 11j

j

Article 15 Protectable Subject Matter

"1. Any sign, or any combination of signs, capable of distinguishing the goods or services of one undertaking from those of other undertakings, shall be capable of constituting a trademark. Such signs, in particular words including personal names, letters, numerals, figurative elements and combinations of colours as well as any combination of such signs, shall be eligible for registration as trademarks. Where signs are not inherently capable of distinguishing the relevant goods or services, Members may make registrability depend on distinctiveness acquired through use. Members may require, as a condition of registration, that signs be visually perceptible.

1

"2. Paragraph 1 shall not be understood to prevent a Member from denying registration of a trademark on other grounds, provided that they do not derogate from the\ provisions of the Paris Convention (1967).

"3. Members may make registrability depend on use. However, actual use of a trademark shall not be a condition for filing an application for registration. An application shall not be refused solely on the ground that intended use has not taken place before the expiry of a period of three years from the date of application.

"4. The nature of the goods or services to which a trademark is to be applied shall in no case form an obstacle to registration of the trademark.

I

Ij

I tI 1i

I

"5. Members shall publish each trademark either before it is registered or promptly after it is registered and shall afford a reasonable opportunity for petitions to cancel the registration. In addition, Members may afford an opportunity for the registration of a trademark to be opposed."

Art. 16 (1) of the TRIPS Agreement states:

I' PribhdasJ Mirpuri v. COlJl1 otAppesls, G.R. No. 114508, 19 Nov. 1999.

15 Sec. 121.1 of the IP Code.

reyco1vs,villaflorcs page 8 of 10

Ii I

I

"Article 16 Rights Conferred

"1. The owner of a registered trademark shall have the exclusive right to prevent all third parties not having the owner's consent from using in the course of trade identical or similar signs for goods or services which are identical or similar to those in respect of which the trademark is registered where such use would result in a likelihood of confusion. In case of the use of an identical sign for identical goods or services, a likelihood of confusion shall be presumed. The rights described above shall not prejudice any existing prior rights, nor shall they affect the possibility of Members making rights available on the basis of use."

Significantly, the IP Code adopted the definition of the mark under RA 166, to wit:

"121.1. 'Mark' means any visible sign capable of distinguishing the goods (trademark) or services (service mark) of an enterprise and shall include a stamped or marked container of goods; (Sec. 38, R.A. No. 166a)." f

j~ and provides:

"SEC. 138. Certificates of Registration.-A certificate of registration of a mark shall be prima facie evidence of the validity of the registration, the registrant's ownership of the mark, and of the registrant's exclusive right to use the same in connection with the goods or services and those that are related thereto specified in the certificate." (Emphasis supplied)

From this legal backdrop it is plain that in this jurisdiction, it is not the registration per se that confers ownership of trademark; rather, it is ownership of the trademark that gives rise to the right to cause its registration and enjoy exclusive use thereof for the goods associated with it. The definition of the term "mark" implies that the right of registration belongs to the owner.

Thus, as this Office has consistently emphasized, the so-called "first-to-file rule" could not have been intended to justify the approval of a trademark application simply because it was the first application that was filed regardless of another's better or superior right to the mark applied for. The "rule" cannot be used to commit or perpetrate an unjust and unfair claim. A trademark is an industrial property and the owner thereof has property rights over it. The privilege of being issued a registration for its exclusive use, therefore, should be based on the concept of ownership. The IP Code implements the TRIPS Agreement and therefore, the idea of "registered owner" does not mean that ownership is established by mere registration but that registration establishes merely a presumptive right of ownership. That presumption of ownership yields to superior evidence of actual and real ownership of the trademark and to the TRIPS Agreement requirement that no existing prior rights shall be prejudiced. Thus, Sec. 134 of the IP Code provides in part that:

reyco1vs.villaflores page 9 of 10

\ i

"SEC. 134. Opposition.- Any person who believes that he would be damaged by the registration of a mark may, upon payment of the required fee and within thirty (30) days after the publication referred to in Subsection 133.2, file with the Office an opposition to the application.x x x "

The Appellant in filing the instant opposition has shown that the registration of the mark TOMI & Design in favor of the Appellee would damage its interest. The Appellant was the first one to use the mark in commerce and was responsible for bringing in goods and products bearing the subject mark into the consciousness of the buying public.

Further review of the records also reveal that contrary to the findings of the Director, the Appellee in fact did not file the required DAD. While the Director cited that the Appellee filed on 20 September 2006 his DAD 16

, a perusal of the document shows that the DAD was not executed by the Appellee but by a certain Delfin C. De1 Leon. De Leon even indicated in the document that he is the "applicant". There is

1 nothing on the records, however, that shows who Delfin C. De Leon is or whether he was duly authorized by the Appellee to execute the DAD in his favor. Accordingly, the Director should have been more careful in citing the aforementioned DAD. Had she judiciously examined this document, the more reason she could have been more conscious of the certification issued by the Trademark Publication and Registry Division of the Bureau of Trademarks on 21 August 2007. That there is no DAD filed by the Appellee is consistent with the issuance of the certification.

WHEREFORE, premises considered, the appeal is hereby GRANTED. The Trademark Application No. 4-2005-003543 for the mark TOMI & DESIGN filed by the Appellee is hereby REJECTED.

Let a copy of this Decision as well as the records be furnished and returned to the Director of Bureau of Legal Affairs for appropriate action. Further, let also the Director of the Bureau of Trademarks and the library of the Documentation, Information and Technology Transfer Bureau be furnished a copy of this Decision for information, guidance, and records purposes.

SO ORDERED.

~DEC 18 20DI Makati City

16 Decision No. 2007-126, dated 31 August 2007, page 14.

reyco1vs. villaflores

rage 10 of 10

\

•

'~iPINTELLECTUAL PROPERTY PHILIPPINES

OFFICE OF THE DIRECTOR GENERAL

REYCO INDUSTRIAL SALES APPEAL NO. 14-07-51 CORPORATION, IPC NO. 14-2006-000175

Petitioner-Appellant, Opposition to:

-versus- Application No. 4-2005-003543 Date Filed: 20 April 2005

MARVIN VILLAFLORES, Trademark: TOMI & DESIGN 'Respondent-Registrant-Appellee.

x----------------------------------------------x

NOTICE OF DECISION

DIRECTOR LENY B. RAZ Bureau of Legal Affairs Intellectual Property Office Makati City

MAGPUSAO ONG VARIAS EVANGELISTA IP PHILIPPINES LIBRARY & ASSOCIATES LAW OFFI Documentation, Information ~ ,/, ! Counsel for Appellee and Technology Transfer Bureau f'2j1lJ II Unit 206, Ablaza Building Intellectual Property Office 117 E, Rodriguez, Sr. Avenue, Makati City

ESTRELLITA BELTRAN-A.-Y.L,;o~.u.LoI~ _ Director, Bureau of Legal Affairs Intellectual Property Office Makati City

GREETINGS:

Please be informed that on 18 December 2008, the Office of the Director General rendered a Decision in the above-titled case (copy attached).

Makati City, 18 December 2008.

Very truly yours, CERTIFIED TRUE COPY:

~ Robert Nereo B. Samson

Attorney IV Office of the Director General Republic ofthe Ph~ .

INTELLECTUAL PROPERTY OFFICE

~IP INTELLECTUAL PROPERTY PHILIPPINES

OFFICE OF THE DIRECTOR GENERAL

REYCO INDUSTRIAL SALES Appeal No. 14-07-51 C<?RPORATION,

Appellant, Inter Partes Case No. 14-2006-00175 Opposition to:

-versus- Trademark Application No. 4-2005-003543 Date Filed: 20 April 2005

MARVIN VILLAFLORES, Appellee. Trademark: TOMI & Design

x----------------------------------------x

DECISION

REYCO INDUSTRIAL'SALES CORPORATION, ("Appellant") appeals Decision No. 2007-126, dated 31 August 2007, of the Director of the Bureau of Legal Affairs ("Director"), denying the Appellant's opposition to the registration of the mark "TOMI & Design" for use on oil seal, valve seal, and gaskets (full set overhauling, cylinder head) filed by MARVIN VILLAFLORES ("Appellee") on 20 April 2005.

Records show that the Appellee's trademark application was published for opposition on 27 October 2006 in the Intellectual Property Office E-Gazette. for Trademarks. On 24 November 2006 the Appellant filed a "NOTICE OF OPPOSITION" alleging the following:

1. The ownership of a mark shall be acquired through registration thereof but such ownership may be rebutted by a showing that a claimant has actually used the mark in the industry long before the registrant has actua~ly used the same;

2. The Appellant has the legal and beneficial right and ownership to use TOMI as it was the first to adopt and to use it in actual trade and commerce in the Philippines;

3. As the prior and continuing user of the mark, the registration thereof in favor of the Appellee violates Sec. 123.1 (e) of RA 8293 ("IP Code");

4. Sales invoices provide the best proof of actual sales of the trader's product in the country and of actual use for certain period of the trader's mark through these sales;

5. On 21 November 2006 the Appellant submitted and filed its "Declaration of Actual Use" ("DAU") with attachments that include

CERTIFIED TRUE COPY:

~ reyco1vs.villaflores page 1 of 10Robert Ncreo B. Samson

Republic of the Philippines Attorney IV INTELLECTUAL PROPERTY OFFICE

nffil""~ n.f thiPo nir.a.r-tr\r ri : ....""'_.. 1

sales invoices, photographs of promotional materials and actual products with the mark TOMI to show that it was actually in use in trade and commerce in the Philippines since 1996;

6. On 22 November 2006 the Appellant submitted a "Supplemental Declaration of Actual Use" to bolster the fact that it has used, is using and will still use TOMI in its business;

7. Another convincing proof of use of a mark in commerce is the testimony. of customers or the orders of buyers during a certain period which will also prove that TOMI is well-known in the automotive spare parts industry where the Appellant is an active participant;

8. The affidavits of the clients/customers show that they had been dealing business with the Appellant for at least four (4) years, they know the Appellant to be the owner of the mark TOMI, they know of no other manufacturers/distributors of such brand and, they will not buy TOMI from other sellers;

9. As prior user of the mark, the Appellant has proprietary right to the claim and to the exclusion of others, including the Appellee;

10. Nearly three (3) years since the Appellee filed its trademark application, he has not filed a DAU;

11. It is baffling why the Appellee would choose to register the mark TOMI in three different occasions and under similar classes;

12. The Appellant has an application where the designated goods encompass all kinds of automotive spare parts while the designated goods in the Appellee's subject application, i.e. oil seal, valve seal and gaskets, fall under the larger category of automotive spare parts;

13. To allow the Appellee to use TOMI would result in confusion of goods in the minds of the buying public; and

14. The Appellant's reputation in the public that it sells good and quality products will be threatened by a competitor, the Appellee, who only banked on the goodwill brought by the appropriation of the mark TOMI and its business will suffer should it turn out that the Appellee's products are of inferior quality.

The Appellee filed his "ANSWER" on 13 March 2007 alleging the following:

CERTIFIED TRUE COPY:, reyco1vs.villaflores

ff page 2 of 10

.1/Robert Nereo B. Samson

1. The Appellant being a mere seller and distributor of automotive spare parts does not earn the right to cause the application for registration of a trademark that it only deals with;

2. The Appellant has no personality to oppose his application for the registration of TOMI & Design which the latter is actually using for the automotive spare parts he caused to be manufactured in another country and imported to the Philippines for local sales;

3. He is the owner of the mark TOMI as evidenced by Cert. of Reg. No. 4-2004-006104 issued on 24 November 2006;

4. Sec. 122 of the IP Code provides that the rights in a mark shall be acquired through registration made validly in accordance with the provisions of the law while Sec. 138 states that a certificate of registration of a mark shall be prima facie evidence of the validity of the registration, the registrant's ownership of the mark and exclusive right to use it in connection with the goods or services and those that are related therein specified in the certificate;

5. The IP Code gave way to the change in the concept of ownership of trademarks, trade names, and service mark from "Actual Use Rule" or "First User-Owner Rule" to the "First-to-File Rule" or "First-Filer­Owner Rule";

6. The First-Filer-Owner Rule means that the exclusive right to use and register a mark shall be granted to the first one to file the application;

7. This new rule is the one being practiced worldwide because of the Agreement on Trade-Related Aspects of Intellectual Property Rights ("TRIPS Agreement") and its adoption is a commitment of the Philippines;

8. The Appellant admitted that the Appellee was the first one to file an application to register TOMI & Design and being the registrant and an actual user of TOMI has the better right to cause the registration of TOMI & Design;

9. Assuming that the Appellant is the first to use TOMI & Design, it cannot claim a better right against him who first filed an application to register this mark and much more was granted a certificate of registration for TOMI;

10. The Appellant has deafeningly been silent and invisible during all the time that he was using and spending so much money promoting and expanding the coverage of the mark here in the Philippines;

reyeo1vs.villaflores CERTIFIED TRUE COPY: page 3 of 10

~ J

11. A perusal of the annexed sales invoices of the Appellant will show that these sales invoices were altered by inserting the word TOMI at the end of every item written on the sales invoices to make it appear that the mark has been carried by it;

12. The word TOMI which was intentionally and forcibly inserted at the· end of every item written on sales invoices was only an after thought on the part of the Appellant motivated by a scheme to take away from him the right to register the mark TOMI & Design, a mark which the he spent money to promote and made known for its quality;

13. The insertion of the word TOMI on the annexed sales invoices of the Appellant is wanting in credibility and is done to mislead this Office to believe that it has been using TOMI when the truth of the matter is that the items reflected on the sales invoices could have been another brand that the Appellant is carrying for sale to the public;

14. This act of disregarding the mark TOMI in the issuance of its sales invoices manifests the Appellant's lack of concern over the mark for the reason that it never spent money to promote the mark but only profit for its distribution;

15. The attached sworn statements of the Appellant's alleged customers are self-serving and biased to the Appellant because the Appellant extends credit line to them and, hence, any favor it asked will definitely be given by them;

16. For him to be denied registration of TOMI & Design under Sec. 123.1 (e) of the IP Code, the mark must be identical with, or confusingly similar to or constitutes a translation of a mark which is considered by competent authority of the Philippines to be well-known internationally and in the Philippines; and

17. In the Philippines, TOMI & Design does not automatically brings to the mind, of every Filipino an automotive spare parts or Reyco Industrial Sales Corporation, like when Filipinos speak of toothpaste the word that come out oftheir mouth is "Colgate".

The Appellant submitted the following as evidence:

1. Copy of the list of members of the Philippines Automotive Trader's Association; 1

I Exhibit "A".

CERTIFIED TRUE COPY: reyeo t vs.villaflores

~ page 4 of 10

,JjRobert Nereo B. Samson '!nrnpv IV

2. Copies of the Appellant's trademark applications for TOMI filed on 26 July 2004 and 11 September 2006, respectively.'

3. Photocopies of the print-outs of the "web page" of the Intellectual Property Office of the Philippines website, featuring "Trademark Search" showing information on the Appellee's trademark applications for TOMI filed on 09 July 2004,04 October 2005, and 20 April 2005, respectively."

4. Copy of the Declaration of Actual Use and Supplemental Declaration of Actual Use, including annexes thereto, filed by the Appellant on 21 November 2006 and 22 November 2006, respectlvely.'and

5. Affidavits of Appellant's customers executed on 21 November 2006. 5

On the other hand, the Appellee's evidence consists of a copy of Cert. of Reg. . No. 4-2004-006104.6

Subsequently, the Appellant attached to its Position Paper copies of sales invoices" and to its Supplemental Position Paper a copy of Decision No. 2007-55 of the Director in Inter Partes Case No. 14-2006-00144, dated 28 May 2007. 8

After the appropriate proceedings, the Director denied the opposition and gave due course to the Appellees' trademark application. She held that trademark rights are acquired by a person who is the first to file an application for registration of the mark and that between the parties, it is the Appellee who first filed the application for the registration of TOMI & Design and that he was also granted Cert. of Reg. No. 4-2004-006104 for the mark TOMl. According to her, the Appellee enjoys priority in point of filing for the mark TOMI & Design and has given evidence of its use in commerce and, thus, enjoys a better right to the mark than the Appellant. She also ruled that the Appellant did not indicate that it has commercial transactions on an international scale and that TOMI is not a well-known mark.

On 12 November 2007 the Appellant filed an APPEAL MEMORANDUM alleging that the Director erred in ruling that trademark rights are acquired by a person who first filed an application for the registration of the mark. It maintains that the IP Code did not do away with the actual use rule and that as between actual use of a mark without registration and registration of the mark without actual use thereof, the former prevails over the latter. According to the Appellant, the Director's ruling is contrary to Decision No. 2007-55 which she issued on Inter Partes Case No. 14-2006-00144 entitled Bina'sAuto Supply, Inc. vs. Marvin Villaflores.

2 Exhibits "B" and "C". J Exhibits "D", "E" and "F". 4 Exhibits "G" and "H". The annexes to these documents include copies of sales invoices and affidavits of Appellant's customers. 5 Exhibits "I" to "N". 6 Exhibit "I". 7 Annexes "A" to "P" attached 10 the Appellant's position paper. 8 Annex "A" attached to the Appellant's Supplemental Position Paper.

CERTIFIED TRUE COPY:

~ reyeo1vs.villaflores

page 5 of 10

Robert Ncrco B. Samson

__

The Appellant also claims that no single pleading was submitted by the Appellee that either contains or alleges that he filed a DAU with respect to his trademark application. Moreover, the Appellant argues that the Director should have considered the certification issued on 21 August 2007 by the Trademark Publication & Registry Division of the Bureau of Trademarks which states that Cert. of Reg. No. 4-2004-006104 was deemed canceled for failure of the Appellee to file a DAU within three (3) years from the filing of the trademark application. The certification was submitted by the Appellant in Inter Partes Case No. 14-2006-00189 which is a petition for cancellation ofCert. of Reg. No. 4-2004-006104 filed by the Appellant.

The Appellant attached to its APPEAL MEMORANDUM several sales invoices? dated from 1999 to 2005, and a copy of the aforementioned certification issued by the Trademark Publication and Registry Division on 21 August 2007.10

. On 11 December 2007 this Office issued an Order giving the Appellee thirty (30) days from receipt thereof to file his comment to the appeal. He did not file his comment and the case was deemed submitted for decision.

After a review of the records, this Office resolves to grant the appeal.

The parties do not dispute that the mark applied by the Appellee for registration is identical to the Appellant's mark and that both are used on similar goods. What is in contention is the ownership of the mark. The Appellee argued before the Director that the issue of ownership of a mark is settled by determining who was the first to apply for registration and not by finding out who was the first to use the mark in commerce.

In this regard, it should be emphasized that the IP Code does not mention the term or phrase "first-to-file rule" with respect to trademark registration. This "rule" is actually inferred from the text of Sec. 123.1(d) of the IP Code which states that a mark cannot be registered if it:

"(d) Is identical with a registered mark belonging to a different proprietor or a mark with an earlier filing or priority date, in respect of: (i) The same goods or services, or [ii] Closely related goods or services, or If it nearly resembles such a mark as to be likely to deceive or cause confusion;".

In this instance, the Director cited that the Appellee had already a registration for the mark TOMI, specifically, Cert. of Reg. No. 4-2004-006104, which stemmed from the Appellee's trademark application filed on 09 July 2004. However, the Appellant presented the certification issued by the Trademark Publication and Registry Division of the Bureau of Trademarks on 21 August 2007 which states the following:

9 Annexes "E" to "N". . 10 Annex "Q" 10 the APPEAL MEMORANDUM.

reyco 1vs.villaflores CERTIFIED TRUE COPY. page 6 of 10

.~ RAhf3.lot l\.T............ r>.. n C" •• ~._ AJ/

"THIS IS TO CERTIFY that as per records of our Office, Registrant MARVIN VILLAFLORES for the mark'TOMI' [Registration No. 4-2004-006104 issued on March 18, 2006] did not file the required Declaration of Actual Use [DAU] within three (3) years from the filing date. Thus, said mark is DEEMED CANCELLED and subject for removal from the register."

The certification having been issued only on 21 August 2007, the Appellant could not have possibly submitted or attached it to his Opposition at the time it was filed in 2006. However, the Director in deciding the case should have considered that the Appellant had previously presented the same certification in Inter Partes Case No. 14-2006-00189 and thus, should have taken judicial notice of the fact of the cancellation and removal from the register of Cert. of Reg. No. 4-2004-006104. The BLA is a part of the government agency which is the primary repository of information on intellectual property matters, including the Trademark registry, such that the Director ought to know whether a trademark registration subject of or of critical importance to a case being heard by her bureau is still valid or existing. Aptly, the existence or validity of a trademark registration subject of or which could resolve an issue or determine the outcome of a case is a matter of judicial notice for cases heard by the Intellectual Property Office of the Philippines.

Thus, the Appellee's Cert. of Reg. No. 4-2004-006104 having been canceled, the Appellee has no more existing trademark registration or application that is earlier than the Appellant's trademark application. Accordingly, the Appellant's trademark application for TOMI filed on 26 July 2004 would now have a filing or a priority date earlier than the Appellee's still existing trademark applications, including the application subject of this case. Hence, pursuant to Sec. 123.1(d) of the IP Code, the Appellee's trademark application should be rejected.

This Office also finds that the records show that the Appellant had adduced evidence of its actual use in commerce in the Philippines of the mark TOMI as early as 1996 for automotive spare parts." The Appellant submitted the affidavits executed by its customers, namely, automotive spare parts retailers William Benfuetan, Angelito David, Jose Ong, Elvis Lim, Dexter Lim and Angelito Ngo. This Office noticed that the Director omitted these affidavits, marked as Exhibits ''I'' to /IN" and attached to the copies of the Appellant's Notice of Opposition filed in the BLA, in the discussion of facts and issues in her decision. The affidavits of Benfuetan and David were also attached to the Appellant's DAD. While Benfuetan's and David's affidavits are photocopies, the others are originals.

The Appellee failed to submit contrary evidence to rebut or undermine the credibility and integrity of the contents in the aforementioned affidavits. In contrast, the Appellee did not submit evidence" that would bolster his position. He has not

12 Exhibits "G" to "N". u Aside from Certificate of Registration No. 4-2004-006104, there is nothing on the record to show actualuse of the mark TOMI by the Appellee.

reyco1vs,villafloresCERTIFIED TRUE COPY: page7 of 10

~

shown any evidence to substantiate or support his claims, including his allegation that he had spent money to promote the mark TOMI.

In this regard, this Office emphasize that the essence of trademark registration is to give protection to the owners of trademarks. The function of a trademark is to point out distinctly the origin or ownership of the goods to which it is affixed; to secure to him, who has been instrumental in bringing into the market a superior article of merchandise, the fruit of his industry and skill; to assure the public that they are procuring the genuine article; to prevent fraud and imposition; and to protect the manufacturer against substitution and sale of an inferior and different article as his product." The main characteristic of a registrable trademark is, therefore, its distinctiveness; A trademark must be a visible sign capable of distinguishing the goods or services of an enterprise."

The Philippines implemented the TRIPSAgreement when the IP Code took into force and effect on 01 January 1998. Art. 15 of TRIPS Agreement reads:

"Section 2: Trademarks

Article 15 Protectable Subject Matter

"1. Any sign, or any combination of signs, capable of distinguishing the goods or services of one undertaking from those of other undertakings, shall be capable of constituting a trademark. Such signs, in particular words including personal names, letters, numerals, figurative elements and combinations of colours as well as any combination of such signs, shall be eligible for registration as trademarks. Where signs are not inherently capable of distinguishing the relevant goods or services, Members may make registrability depend on distinctiveness acquired through use. Members may require, as a condition of registration, that signs be visually perceptible.

"2. Paragraph 1 shall not be understood to prevent a Member from denying registration of a trademark on other grounds, provided that they do not derogate from the provisions of the Paris Convention (1967).

"3. Members may make registrability depend on use. However, actual use of a trademark shall not be a condition for filing an application for registration. An application shall not be refused solely on the ground that intended use has not taken place before the expiry of a period of three years from the date of application.

"4. The nature of the goods or services to which a trademark is to be applied shall in no case form an obstacle to registration ofthe trademark.

"5. Members shall publish each trademark either before it is registered or promptly after it is registered and shall afford a reasonable opportunity for petitions to cancel the registration. In addition, Members may afford an opportunity for the registration of a trademark to be opposed."

Art. 16 (1) of the TRIPS Agreement states:

14 Pribhdss J Mirpuri v. CourtofAppeals, G.R. No. 114508, 19 Nov. 1999. IS Sec. 121.1 of the IP Code.

reyco1vs.villaflaresCERTIFIED TRUE COPY: page 8 of 10

~,

__

I

"Article 16 Rights Conferred

"1. The owner of a registered trademark shall have the exclusive right to prevent all third parties not having the owner's consent from using in the course of trade identical or similar signs for goods or services which are identical or similar to those in respect of which the trademark is registered where such use would result in a likelihood of confusion. In case of the use of an identical sign for identical goods or services, a likelihood of confusion shall be presumed. The rights described above shall not prejudice any existing prior rights, nor shall they affect the possibility of Members making rights available on the basis of use."

Significantly, the IP Code adopted the definition of the mark under RA 166, to'wit:

"121.1. 'Mark' means any visible sign capable of distinguishing the goods (trademark) or services (service mark) of an enterprise and shall include a stamped or marked container of goods; (Sec. 38, R.A. No. 166a)."

and provides:

"SEC. 138. Certificates of Registration.-A certificate of registration of a mark shall be prima facie evidence of the validity of the registration, the registrant's ownership of the mark, and of the registrant's exclusive right to use the same in connection with the goods or services and those that are related thereto specified in the certificate." (Emphasis supplied) .

From this legal backdrop it is plain that in this jurisdiction, it is not the registration per se that confers ownership of trademark; rather, it is ownership of the trademark that gives rise to the right to cause its registration and enjoy exclusive use thereof for the goods associated with it. The definition of the term "mark" implies that the right of registration belongs to the owner.

Thus, as this Office has consistently emphasized, the so-called "first-to-file rule" could not have been intended to justify the approval of a trademark application simply because it was the first application that was filed regardless of another's better or superior right to the mark applied for. The "rule" cannot be used to commit or perpetrate an unjust and unfair claim. A trademark is an industrial property and the owner thereof has property rights over it. The privilege of being issued a registration for its exclusive use, therefore, should be based on the concept of ownership. The IP Code implements the TRIPS Agreement and therefore, the idea of "registered owner" does not mean that ownership is established by mere registration but that registration establishes merely a presumptive right of ownership. That presumption of ownership yields to superior evidence of actual and real ownership of the trademark and to the TRIPS Agreement requirement that no existing prior rights shall be prejudiced. Thus, Sec. 13'4 of the IP Code provides in part that:

reyeo 1vs.villaflores <:ERTIFIED TRUE COpy~ page 9 of 10

~ DI'",I"'''''.'1 "y~ .. n ......

I., ~

I I fI

"SEC. 134. Opposition- Any person who believes that he would be damaged by the registration of a mark may, upon payment of the required fee and within thirty (30) days after the publication referred to in Subsection 133.2, file with the Office an opposition to the application.x x x ..

The Appellant in filing the instant opposition has shown that the registration of the mark TOMI & Design in favor of the Appellee would damage its interest. The Appellant was the first one to use the mark in commerce and was responsible for bringing in goods and products bearing the subject mark into the consciousness of the buying public.

Further review of the records also reveal that contrary to the findings of the Director, the Appellee in fact did not file the required DAU. While the Director cited that the Appellee filed on 20 September 2006 his DAU 16

, a perusal of the document shows that the DAU was not executed by the Appellee but by a certain Delfin C. De Leon. De Leon even indicated in the document that he is the "applicant". There is nothing on the records, however, that shows who Delfin C. De Leon is or whether he was duly authorized by the Appellee to execute the DAU in his favor. Accordingly, the Director should have been more careful in citing the aforementioned DAU. Had she judiciously examined this document, the more reason she could have been more conscious of the certification issued by the Trademark Publication and Registry

. Division of the Bureau of Trademarks on 21 August 2007. That there is no DAU filed by the Appellee is consistent with the issuance of the certification.

WHEREFORE, premises considered, the appeal is hereby GRANTED. The Trademark Application No. 4-2005-003543 for the mark TOMI & DESIGN filed by the Appellee is hereby REJECTED.

Let a copy of this Decision as well as the records be furnished and returned to the Director of Bureau of Legal Affairs for appropriate action. Further, let also the Director of the Bureau of Trademarks and the library of the Documentation, Information and Technology Transfer Bureau be furnished a copy of this Decision for information, guidance, and records purposes.

SO ORDERED.

DEC' 8 2e. Makati City

i 16 Decision No. 2007-126, dated 31 August2007, page 14.

reyco1vs.villaflores CERTIFIED TRUE COPY: page 10 of 10

I

1

j ~IP INTELLECTUAL PROPERTY PHILIPPINES

OFFICE OF THE DIRECTOR GENERAL

II REYCO INDUSTRIAL SALES APPEAL NO. 14-07-51

} CORPORATION, IPC NO. 14-2006-000175

iIiII

Petitioner-Appellant, Opposition to:

-versus- Application No. 4-2005-003543 Date Filed: 20 April 2005

1 MARVIN VILLAFLORES, Trademark: TOMI & DESIGN t Respondent-Registrant-Appellee.

x----------------------------------------------x

NOTICE OF DECISION

DELAPAZ GUINHAWABARCENAS DIRECTOR LENY B. RAZ Counsel for Appellant Bureau of Legal Affairs Unit 1009 Cityland Herrera Tower Intellectual Property Office Herrera corner Valero Streets Makati City Salcedo Village 1227 Makati City

MAGPUSAO ONG VARIAS EVANGELISTA IP PHILIPPINES LIBRARY & ASSOCIATES LAW OFFICES Documentation, Information Counsel for Appellee and Technology Transfer Bureau Unit 206, Ablaza Building Intellectual Property Office 117 E. Rodriguez, Sr. Avenue, Quezon City Makati City

o ESTRELLITA BELTRAN-ABELARDO Director, Bureau of Legal Affairs Intellectual Property Office Makati City

GREETINGS:

Please be informed that on 18 December 2008, the Office of the Director General rendered a Decision in the above-titled case (copy attached).

Makati City, 18 December 2008.

Very truly yours,

II

Ii

ATTY. A Atto ey VI Head, Office of Legal Counsel

Republic ofthe Phit\il· of the Director General INTELLECTUAL PROPERTY OFFICE

351 Sen. Gil PuvatAve.. Makati City 1200 Philinnines s www.inonhilcovnh

II