This article talks about the legal remedy against a trademark registration fraudulently obtained or made in bad faith which is to file a Petition for Cancellation of Trademark before the IPO anytime.
“A business is remembered and revered by its goodwill and reputation. Hence, for a business, its mark is not simply a random, meaningless combination of letters, phrases or symbols. Rather these emblems embody the quality of the goods and services offered by the entity. For these reasons, the law steps in to protect its intellectual property rights.” [Emzee Foods, Inc. vs. ElarFoods, Inc., G.R. No. 220558, 17 February 2021]
The Philippines adopts the first-to-file system in the registration of trademarks. Thus, the first person to file an application with the Philippine Intellectual Property Office (“IPO”) shall have priority right to the exclusion of new and subsequent applicants for registration of the same or similar mark. However, this rule is not absolute. While it has been affirmed that registration is the system of acquiring rights over a mark, for the See to acquire ownership of the trademarks, such registration should be done in good faith [Lim vs. See, G.R. No. 193569, 25 January 2023].
What if someone applied for a trademark and subsequently had it registered in bad faith? What is your remedy?
The remedy is to file a petition for cancellation of trademark registration with the IPO. Section 151.1 of Republic Act. No. 8293, otherwise known as the Intellectual Property Code of the Philippines (“IP Code”), states:
“SECTION 151. Cancellation. ‑ 151.1. A petition to cancel a registration of a mark under this Act may be filed with the Bureau of Legal Affairs by any person who believes that he is or will be damaged by the registration of a mark under this Act as follows:
(a) Within five (5) years from the date of the registration of the mark under this Act.
(b) At any time, if the registered mark becomes the generic name for the goods or services, or a portion thereof, for which it is registered, or has been abandoned, or its registration was obtained fraudulently or contrary to the provisions of this Act, or if the registered mark is being used by, or with the permission of, the registrant so as to misrepresent the source of the goods or services on or in connection with which the mark is used. If the registered mark becomes the generic name for less than all of the goods or services for which it is registered, a petition to cancel the registration for only those goods or services may be filed. A registered mark shall not be deemed to be the generic name of goods or services solely because such mark is also used as a name of or to identify a unique product or service. The primary significance of the registered mark to the relevant public rather than purchaser motivation shall be the test for determining whether the registered mark has become the generic name of goods or services on or in connection with which it has been used.
(c) At any time, if the registered owner of the mark without legitimate reason fails to use the mark within the Philippines, or to cause it to be used in the Philippines by virtue of a license during an uninterrupted period of three (3) years or longer.”
It must be noted that the usual period to file the petition for cancellation with the IPO is within 5 years from the date of the registration of the trademark. However, if bad faith or fraud attended the registration of the trademark, then the petition can be filed anytime.
In the case of Zuneca Pharmaceutical vs. Natrapharm, Inc.,G.R. No. 211850, 08 September 2020, the Supreme Court had the occasion to define fraud or bad faith trademark registration as follows:
“The concepts of bad faith and fraud were defined in Mustang-Bekleidungswerke GmbH + Co. KG v. Hung Chiu Ming, a case decided by the Office of the Director General of the IPO under the Trademark Law, as amended, viz.:
What constitutes fraud or bad faith in trademark registration? Bad faith means that the applicant or registrant has knowledge of prior creation, use and/or registration by another of an identical or similar trademark. In other words, it is copying and using somebody else’s trademark. Fraud, on the other hand, may be committed by making false claims in connection with the trademark application and registration, particularly, on the issues of origin, ownership, and use of the trademark in question, among other things.
The concept of fraud contemplated above is not a mere inaccurate claim as to the origin, ownership, and use of the trademark. In civil law, the concept of fraud has been defined as the deliberate intention to cause damage or prejudice. The same principle applies in the context of trademark registrations: fraud is intentionally making false claims to take advantage of another’s goodwill thereby causing damage or prejudice to another. Indeed, the concepts of bad faith and fraud go hand-in-hand in this context. There is no distinction between the concepts of bad faith and fraud in trademark registrations because the existence of one necessarily presupposes the existence of the other.”
In the recent case of Gloria Maris Shark’s Fin Restaurant, Inc. vs. Lim, G.R. No. 264919, 20 May 2024, the Supreme Court illustrated the various instances when bad faith accompanied the trademark registration, to wit:
“Thus, in Shangri-La International Hotel Management, Ltd. v. Developers Group of Companies, Inc. , the respondent was found to be in bad faith when it appropriated and registered the “Shangri-La” mark, having the exact same lettering and logo design, after having been found that the respondent’s president had previously stayed as a guest at the petitioner’s hotel in Kowloon.
Similarly, the Court in Ecole de Cuisine Manille, Inc. v. Renaud Cointreau & Cie upheld the CA’s finding of bad faith when it noted that petitioner had been fully aware of the respondent’s prior use of the marks because its directress had trained in the respondent’s culinary school in Paris, France.
In Emzee Foods, Inc. v. Elarfoods, lnc., the Court held that the petitioner’s officers acted in bad faith since its president and incorporators were former employees of the respondent corporation. Clearly, they had knowledge of the subject trademarks which had been consistently and continuously used by the latter since 1989.
In Cymar International, Inc. v. Farling Industrial Co., Ltd.,65 Cymar was found to be in bad faith since at the time of the filing of the application, Cymar knew fully well of Farling’s history of use of the mark.”
Consequently, the legal remedy against a trademark registration fraudulently obtained or made in bad faith is to file a Petition for Cancellation of Trademark before the IPO anytime. The Regulations on Inter Partes Proceedings govern petitions for cancellation. It is summary in nature and has recently been amended on June 30, 2022.
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