This article talks about the first-to-file system under the Intellectual Property Code of the Philippines wherein the first person to file an application with the Philippine Intellectual Property Office or IPO shall have priority right to the exclusion of new and subsequent applicants for registration of the same or similar mark.
Republic Act. No. 8293, otherwise known as the Intellectual Property Code of the Philippines (“IP Code”), adopts the first-to-file system of trademark registration. This effectively repealed the prior use system under the old trademark law Republic Act No. 166.
The first-to-file rule is embodied in Section 123. 1 (d) of the IP Code, viz:
“A mark cannot be registered if it 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 (iii) if it nearly resembles such a mark as to be likely to deceive or cause confusion.”
In other words, settled is the rule in this jurisdiction that 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. The filing date is important because, as a general rule, as between two applications of different proprietors of identical or substantially similar marks covering the same goods or services, or closely related goods or services, the application with an earlier filing date prevails and the mark registered, to the exclusion of the mark whose application date is late. [Ruben Agpalo, The Law on Trademark Infringement and Unfair Competition, p. 91 (2000)]
Thus, Section 122 of the IP Code expressly provides that “rights in a mark shall be acquired through registration made validly in accordance with the provisions of this law”.
The Supreme Court in the case of Zuneca Pharmaceutical vs. Natrapharm, Inc.(G.R. No. 211850, 08 September 2020) reinforced the first-to-file system and ruled:
“The Court holds that Zuneca’s argument has no merit because: (i) the language of the IP Code provisions clearly conveys the rule that ownership of a mark is acquired through registration; (ii) the intention of the lawmakers was to abandon the rule that ownership of a mark is acquired through use; and (iii) the rule on ownership used in Berris and E.Y. Industrial Sales, Inc. is inconsistent with the IP Code regime of acquiring ownership through registration. x x x
Reading together Sections 122 and 123. l(d) of the IP Code, therefore, a registered mark or a mark with an earlier filing or priority date generally bars the future registration of- and the future acquisition of rights in – an identical or a confusingly similar mark, in respect of the same or closely related goods or services, if the resemblance will likely deceive or cause confusion.
The current rule under the IP Code is thus in stark contrast to the rule on acquisition of ownership under the Trademark Law, as amended. To recall, the Trademark Law, as amended, provided that prior use and non-abandonment of a mark by one person barred the future registration of an identical or a confusingly similar mark by a different proprietor when confusion or deception was likely. It also stated that one acquired ownership over a mark by actual use.
Once the IP Code took effect, however, the general rule on ownership was changed and repealed. 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. x x x
Subparagraph (d) of the above provision of the Trademark Law was amended in the IP Code to, among others, remove the phrase “previously used in the Philippines by another and not abandoned.” Under the Trademark Law, as amended, the first user of the mark had the right to file a cancellation case against an identical or confusingly mark registered in good faith by another person. However, with the omission in the IP Code provision of the phrase “previously used in the Philippines by another and not abandoned” said right of the first user is no longer available. In effect, based on the language of the provisions of the IP Code, even if the mark was previously used and not abandoned by another person, a good faith applicant may still register the same and thus become the owner thereof, and the prior user cannot ask for the cancellation of the latter’s registration. If the lawmakers had wanted to retain the regime of acquiring ownership through use, this phrase should have been retained in order to avoid conflicts in ownership. The removal of such a right unequivocally shows the intent of the lawmakers to abandon the regime of ownership under the Trademark Law, as amended. x x x
To repeat, after the IP Code became effective starting 1998, use was no longer required in order to acquire or perfect ownership of the mark. In this regard, the Court now rectifies the inaccurate statement in Berris that “[t]he ownership of a trademark is acquired by its registration and its actual use.” The rectified statement should thus read: “Under the IP Code, the ownership of a trademark is acquired by its registration.” Any pronouncement in Berris inconsistent herewith should be harmonized accordingly. To clarify, while subsequent use of the mark and proof thereof are required to prevent the removal or cancellation of a registered mark or the refusal of a pending application under the IP Code, this should not be taken to mean that actual use and proof thereof are necessary before one can own the mark or exercise the rights of a trademark owner.”
This is the first-to-file rule in trademark applications under the current IP regime pursuant to the IP Code.
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