Source: http://lawlibrary.chanrobles.com/index.php?option=com_content&view=article&id=83267:57267&catid=1585&Itemid=566
Timestamp: 2019-04-23 04:18:40+00:00

Document:
G.R. No. 190706, July 21, 2014 - SHANG PROPERTIES REALTY CORPORATION (FORMERLY THE SHANG GRAND TOWER CORPORATION) AND SHANG PROPERTIES, INC. (FORMERLY EDSA PROPERTIES HOLDINGS, INC.), Petitioners, v. ST. FRANCIS DEVELOPMENT CORPORATION, Respondent.
SHANG PROPERTIES REALTY CORPORATION (FORMERLY THE SHANG GRAND TOWER CORPORATION) AND SHANG PROPERTIES, INC. (FORMERLY EDSA PROPERTIES HOLDINGS, INC.), Petitioners, v. ST. FRANCIS DEVELOPMENT CORPORATION, Respondent.
Assailed in this petition for review on certiorari1 is the Decision2 dated December 18, 2009 of the Court of Appeals (CA) in CA-G.R. SP No. 105425 which affirmed with modification the Decision3 dated September 3, 2008 of the Intellectual Property Office (IPO) Director-General. The CA: (a) affirmed the denial of the application for registration of the mark “ST. FRANCIS TOWERS” filed by petitioners Shang Properties Realty Corporation and Shang Properties, Inc. (petitioners); (b) found petitioners to have committed unfair competition for using the marks “THE ST. FRANCIS TOWERS” and “THE ST. FRANCIS SHANGRI-LA PLACE”; (c) ordered petitioners to cease and desist from using “ST. FRANCIS” singly or as part of a composite mark; and (d) ordered petitioners to jointly and severally pay respondent St. Francis Square Development Corporation (respondent) a fine in the amount of ?200,000.00.
Petitioners denied committing unfair competition and false or fraudulent declaration, maintaining that they could register the mark “THE ST. FRANCIS TOWERS” and “THE ST. FRANCIS SHANGRI-LA PLACE” under their names. They contended that respondent is barred from claiming ownership and exclusive use of the mark “ST. FRANCIS” because the same is geographically descriptive of the goods or services for which it is intended to be used.7 This is because respondent’s as well as petitioners’ real estate development projects are located along the streets bearing the name “St. Francis,” particularly, St. Francis Avenue and St. Francis Street (now known as Bank Drive),8 both within the vicinity of the Ortigas Center.
Both parties appealed the decision in the IPV Case, while petitioners appealed the decision in the St. Francis Towers IP Case. Due to the identity of the parties and issues involved, the IPO Director-General ordered the consolidation of the separate appeals.15 Records are, however, bereft of any showing that the decision in the St. Francis Shangri-La IP Case was appealed by either party and, thus, is deemed to have lapsed into finality.
Disagreeing solely with the IPO Director-General’s ruling on the issue of unfair competition (the bone of contention in the IPV Case), respondent elevated the same to the CA.
In contrast, records do not show that either party appealed the IPO Director-General’s ruling on the issue of the registrability of the mark “THE ST. FRANCIS TOWERS” (the bone of contention in the St. Francis Towers IP Case). As such, said pronouncement is also deemed to have lapsed into finality.
In a Decision19 dated December 18, 2009, the CA found petitioners guilty of unfair competition not only with respect to their use of the mark “THE ST. FRANCIS TOWERS” but also of the mark “THE ST. FRANCIS SHANGRI-LA PLACE.” Accordingly, it ordered petitioners to cease and desist from using “ST. FRANCIS” singly or as part of a composite mark, as well as to jointly and severally pay respondent a fine in the amount of P200,000.00.
Dissatisfied, petitioners filed the present petition.
Section 168 of Republic Act No. 8293,21 otherwise known as the “Intellectual Property Code of the Philippines” (IP Code), provides for the rules and regulations on unfair competition.
Cognizant of the foregoing, the Court disagrees with the CA that petitioners committed unfair competition due to the mistaken notion that petitioner had established goodwill for the mark “ST. FRANCIS” precisely because said circumstance, by and of itself, does not equate to fraud under the parameters of Section 168 of the IP Code as above-cited. In fact, the records are bereft of any showing that petitioners gave their goods/services the general appearance that it was respondent which was offering the same to the public. Neither did petitioners employ any means to induce the public towards a false belief that it was offering respondent’s goods/services. Nor did petitioners make any false statement or commit acts tending to discredit the goods/services offered by respondent. Accordingly, the element of fraud which is the core of unfair competition had not been established.
Besides, respondent was not able to prove its compliance with the requirements stated in Section 123.2 of the IP Code to be able to conclude that it acquired a secondary meaning – and, thereby, an exclusive right – to the “ST. FRANCIS” mark, which is, as the IPO Director-General correctly pointed out, geographically-descriptive of the location in which its realty developments have been built, i.e., St. Francis Avenue and St. Francis Street (now known as “Bank Drive”). Verily, records would reveal that while it is true that respondent had been using the mark “ST. FRANCIS” since 1992, its use thereof has been merely confined to its realty projects within the Ortigas Center, as specifically mentioned. As its use of the mark is clearly limited to a certain locality, it cannot be said that there was substantial commercial use of the same recognized all throughout the country. Neither is there any showing of a mental recognition in buyers’ and potential buyers’ minds that products connected with the mark “ST. FRANCIS” are associated with the same source35 – that is, the enterprise of respondent. Thus, absent any showing that there exists a clear goods/service-association between the realty projects located in the aforesaid area and herein respondent as the developer thereof, the latter cannot be said to have acquired a secondary meaning as to its use of the “ST. FRANCIS” mark.
Hence, for all the reasons above-discussed, the Court hereby grants the instant petition, and, thus, exonerates petitioners from the charge of unfair competition in the IPV Case. As the decisions in the Inter Partes Cases were not appealed, the registrability issues resolved therein are hereby deemed to have attained finality and, therefore, are now executory.
WHEREFORE, the petition is GRANTED. The Decision dated December 18, 2009 of the Court of Appeals in CA-G.R. SP No. 105425 is hereby REVERSED and SET ASIDE. Accordingly, the Decision dated September 3, 2008 of the Intellectual Property Office-Director General is REINSTATED.
Carpio, (Chairperson), Brion, Peralta,*and Perez, JJ., concur.
* Designated Additional Member per Raffle dated July 16, 2014.
2 Id. at 68-95. Penned by Associate Justice Jane Aurora C. Lantion, with Associate Justices Mario L. Guariña III and Mariflor P. Punzalan Castillo, concurring.
3 Id. at 98-114. Penned by IPO Director-General Adrian S. Cristobal, Jr.
5 Id. at 99; See also CA rollo, pp. 341-349.
6 See id. at 69-72 and 99-101.
7 See id. at 99-100.
8 See id. at 104.
9 CA rollo, pp. 244-266. Penned by Director Estrellita Beltran-Abelardo.
11 See id. at 259-263.
17 Id. at 103-106 and 111-112.
20 See id. at 91-93.
156.1. The owner of a registered mark may recover damages from any person who infringes his rights, and the measure of the damages suffered shall be either the reasonable profit which the complaining party would have made, had the defendant not infringed his rights, or the profit which the defendant actually made out of the infringement, or in the event such measure of damages cannot be readily ascertained with reasonable certainty, then the court may award as damages a reasonable percentage based upon the amount of gross sales of the defendant or the value of the services in connection with which the mark or trade name was used in the infringement of the rights of the complaining party.
156.2. On application of the complainant, the court may impound during the pendency of the action, sales invoices and other documents evidencing sales.
156.3. In cases where actual intent to mislead the public or to defraud the complainant is shown, in the discretion of the court, the damages may be doubled.
156.4. The complainant, upon proper showing, may also be granted injunction.
157.1. In any action arising under this Act, in which a violation of any right of the owner of the registered mark is established, the court may order that goods found to be infringing be, without compensation of any sort, disposed of outside the channels of commerce in such a manner as to avoid any harm caused to the right holder, or destroyed; and all labels, signs, prints, packages, wrappers, receptacles and advertisements in the possession of the defendant, bearing the registered mark or trade name or any reproduction, counterfeit, copy or colorable imitation thereof, all plates, molds, matrices and other means of making the same, shall be delivered up and destroyed.
157.2. In regard to counterfeit goods, the simple removal of the trademark affixed shall not be sufficient other than in exceptional cases which shall be determined by the Regulations, to permit the release of the goods into the channels of commerce.
24 SECTION 161. Authority to Determine Right to Registration. — In any action involving a registered mark, the court may determine the right to registration, order the cancellation of a registration, in whole or in part, and otherwise rectify the register with respect to the registration of any party to the action in the exercise of this. Judgment and orders shall be certified by the court to the Director, who shall make appropriate entry upon the records of the Bureau, and shall be controlled thereby.
25 G.R. No. 194062, June 17, 2013, 698 SCRA 666.
27Superior Commercial Enterprises, Inc. v. Kunnan Enterprises Ltd., G.R. No. 169974, April 20, 2010, 618 SCRA 531, 556.
28 See Levi Strauss (Phils.), Inc. v. Lim, 593 Phil. 435, 457 (2008). See also Co Tiong Sa v. Director of Patents, 95 Phil. 1, 4 (1954).
29 625 So.2d 463 (1993).
30 Id.; emphases and underscoring supplied; brackets and citations omitted.
31 871 F.2d 590 (1989).
32In re Societe Generale Des Eaux Minerales de Vittel, S.A., 824 F.2d 957, 3 USPQ2d 1450 (Fed. Cir. 1987). See also In re California Pizza Kitchen, Inc., 10 USPQ2d 1704 (TTAB 1988).
33 In re California Pizza Kitchen, Inc., id., citing In re Handler Fenton Westerns, Inc., 214 USPQ 848 (TTAB 1982).
35 See Japan Telecom, Inc. v. Japan Telecom America, Inc., 287 F.3d 866 (2002); Self-Realization Fellowship Church v. Ananda Church of Self-Realization, 59 F.3d 902, 35 USPQ2d 1342 (Fed Cir. 1995); Levi Strauss & Co. v. Blue Bell, Inc., 632 F.2d 817, 208 USPQ 713 (Fed Cir. 1980).

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