G.R. No.

114508 November 19, 1999

PRIBHDAS J. MIRPURI, petitioner,
vs.
COURT O APP!A"S, DIR!CTOR O PAT!NTS #$% &'e BARBI(ON CORPORATION, respondents.

PUNO, J.:
The Convention of Paris for the Protection of Industrial Property is a multi-lateral treaty which the Philippines bound itself to honor and
enforce in this country. As to whether or not the treaty affords protection to a foreign corporation against a Philippine applicant for the
registration of a similar trademark is the principal issue in this case.
n !une "#, "$%&, one 'olita (scobar, the predecessor-in-interest of petitioner Pribhdas !. )irpuri, filed an application with the *ureau of
Patents for the registration of the trademark +*arbi,on+ for use in brassieres and ladies undergarments. (scobar alleged that she had been
manufacturing and selling these products under the firm name +' - *) Commercial+ since )arch ., "$%&.
Private respondent *arbi,on Corporation, a corporation organi,ed and doing business under the laws of /ew 0ork, 1.2.A., opposed the
application. It claimed that3
The mark *A4*I5/ of respondent-applicant is confusingly similar to the trademark *A4*I5/ which opposer owns
and has not abandoned.
That opposer will be damaged by the registration of the mark *A4*I5/ and its business reputation and goodwill will
suffer great and irreparable in6ury.
That the respondent-applicant7s use of the said mark *A4*I5/ which resembles the trademark used and owned by
opposer, constitutes an unlawful appropriation of a mark previously used in the Philippines and not abandoned and
therefore a statutory violation of 2ection 8 9d: of 4epublic Act /o. ";;, as amended.
1
This was docketed as Inter Partes Case /o. ;<; 9IPC /o. ;<;:. After filing of the pleadings, the
parties submitted the case for decision.
n !une "<, "$%8, the =irector of Patents rendered 6udgment dismissing the opposition and giving due
course to (scobar7s application, thus3
>?(4(@4(, the opposition should be, as it is hereby, =I2)I22(=. Accordingly,
Application 2erial /o. "$&"& for the registration of the trademark *A4*I5/, of
respondent 'olita 4. (scobar, is given due course.
IT I2 2 4=(4(=.
)
This decision became final and on 2eptember "", "$%8, 'olita (scobar was issued a certificate of
registration for the trademark +*arbi,on.+ The trademark was +for use in +brassieres and lady7s
underwear garments like panties.+
*
(scobar later assigned all her rights and interest over the trademark to petitioner Pribhdas !. )irpuri who,
under his firm name then, the +*onito (nterprises,+ was the sole and eAclusive distributor of (scobar7s
+*arbi,on+ products.
In "$%$, however, (scobar failed to file with the *ureau of Patents the Affidavit of 1se of the trademark
reBuired under 2ection "C of 4epublic Act 94.A.: /o. ";;, the Philippine Trademark 'aw. =ue to this
failure, the *ureau of Patents cancelled (scobar7s certificate of registration.
n )ay C%, "$<", (scobar reapplied for registration of the cancelled trademark. )irpuri filed his own
application for registration of (scobar7s trademark. (scobar later assigned her application to herein
petitioner and this application was opposed by private respondent. The case was docketed as Inter
Partes Case /o. C&8$ 9IPC /o. C&8$:.
In its opposition, private respondent alleged that3
9a: The pposer has adopted the trademark *A4*I5/ 9word:, sometime in !une "$..
and has then used it on various kinds of wearing apparel. n August "8, "$.8, pposer
obtained from the 1nited 2tates Patent ffice a more recent registration of the said mark
under Certificate of 4egistration /o. .";,";". n )arch ", "$8$, pposer obtained from
the 1nited 2tates Patent ffice a more recent registration for the said trademark under
Certificate of 4egistration /o. #&%,C"8, a copy of which is herewith attached as AnneA
+A.+ 2aid Certificate of 4egistration covers the following goods D wearing apparel3 robes,
pa6amas, lingerie, nightgowns and slipsE
9b: 2ometime in )arch "$%;, pposer further adopted the trademark *A4*I5/ and
*ee design and used the said mark in various kinds of wearing apparel. n )arch "#,
"$%%, pposer secured from the 1nited 2tates Patent ffice a registration of the said
mark under Certificate of 4egistration /o. ",&;",C%%, a copy of which is herein enclosed
as AnneA +*.+ The said Certificate of 4egistration covers the following goods3 robes,
pa6amas, lingerie, nightgowns and slipsE
9c: 2till further, sometime in "$;", pposer adopted the trademark *A4*I5/ and a
4epresentation of a >oman and thereafter used the said trademark on various kinds of
wearing apparel. pposer obtained from the 1nited 2tates Patent ffice registration of
the said mark on April #, "$<. under Certificate of 4egistration /o. ",C..,;;; for the
following goods3 wearing apparel3 robes, pa6amas, nightgowns and lingerie. A copy of the
said certificate of registration is herewith enclosed as AnneA +C.+
9d: All the above registrations are subsisting and in force and pposer has not
abandoned the use of the said trademarks. In fact, pposer, through a wholly-owned
Philippine subsidiary, the Philippine 'ingerie Corporation, has been manufacturing the
goods covered by said registrations and selling them to various countries, thereby
earning valuable foreign eAchange for the country. As a result of respondent-applicant7s
misappropriation of pposer7s *A4*I5/ trademark, Philippine 'ingerie Corporation is
prevented from selling its goods in the local market, to the damage and pre6udice of
pposer and its wholly-owned subsidiary.
9e: The pposer7s goods bearing the trademark *A4*I5/ have been used in many
countries, including the Philippines, for at least 8& years and has en6oyed international
reputation and good will for their Buality. To protect its registrations in countries where the
goods covered by the registrations are being sold, pposer has procured the registration
of the trademark *A4*I5/ in the following countries3 Australia, Austria, Abu =habi,
Argentina, *elgium, *olivia, *ahrain, Canada, Chile, Colombia, =enmark, (cuador,
@rance, >est Fermany, Freece, Fuatemala, ?ongkong, ?onduras, Italy, !apan, !ordan,
'ebanon, )eAico, )orocco, Panama, /ew 5ealand, /orway, 2weden, 2wit,erland, 2yria,
(l 2alvador, 2outh Africa, 5ambia, (gypt, and Iran, among othersE
9f: To enhance its international reputation for Buality goods and to further promote
goodwill over its name, marks and products, pposer has eAtensively advertised its
products, trademarks and name in various publications which are circulated in the 1nited
2tates and many countries around the world, including the PhilippinesE
9g: The trademark *A4*I5/ was fraudulently registered in the Philippines by one 'olita
4. (scobar under 4egistration /o. C"$C&, issued on 2eptember "", "$%8, in violation of
Article "<$ 9.: of the 4evised Penal Code and 2ection 8 9d: of the Trademark 'aw.
?erein respondent applicant acBuired by assignment the +rights+ to the said mark
previously registered by 'olita (scobar, hence respondent-applicant7s title is vitiated by
the same fraud and criminal act. *esides, Certificate of 4egistration /o. C"$C& has been
cancelled for failure of either 'olita (scobar or herein respondent-applicant, to
seasonably file the statutory affidavit of use. *y applying for a re-registration of the mark
*A4*I5/ sub6ect of this opposition, respondent-applicant seeks to perpetuate the fraud
and criminal act committed by 'olita (scobar.
9h: pposer7s *A4*I5/ as well as its *A4*I5/ and *ee =esign and *A4*I5/ and
4epresentation of a >oman trademarks Bualify as well-known trademarks entitled to
protection under Article ;bis of the Convention of Paris for the Protection of Industrial
Property and further amplified by the )emorandum of the )inister of Trade to the
?onorable =irector of Patents dated ctober C#, "$<. GsicH,
4
(Aecutive rder /o. $".
dated ctober %, "$;. and the )emorandum of the )inister of Trade and Industry to the
?onorable =irector of Patents dated ctober C#, "$<..
9i: The trademark applied for by respondent applicant is identical to pposer7s
*A4*I5/ trademark and constitutes the dominant part of pposer7s two other marks
namely, *A4*I5/ and *ee design and *A4*I5/ and a 4epresentation of a >oman.
The continued use by respondent-applicant of pposer7s trademark *A4*I5/ on
goods belonging to Class C# constitutes a clear case of commercial and criminal piracy
and if allowed registration will violate not only the Trademark 'aw but also Article "<$ of
the 4evised Penal Code and the commitment of the Philippines to an international treaty.
5
4eplying to private respondent7s opposition, petitioner raised the defense of res judicata.
n )arch C, "$<C, (scobar assigned to petitioner the use of the business name +*arbi,on International.+
Petitioner registered the name with the =epartment of Trade and Industry 9=TI: for which a certificate of
registration was issued in "$<%.
@orthwith, private respondent filed before the ffice of 'egal Affairs of the =TI a petition for cancellation of
petitioner7s business name.
n /ovember C;, "$$", the =TI, ffice of 'egal Affairs, cancelled petitioner7s certificate of registration,
and declared private respondent the owner and prior user of the business name +*arbi,on International.+
Thus3
>?(4(@4(, the petition is hereby F4A/T(= and petitioner is declared the owner and
prior user of the business name +*A4*I5/ I/T(4/ATI/A'+ under Certificate of
4egistration /o. <%-&$&&& dated )arch "&, "$<% and issued in the name of respondent,
is GsicH hereby ordered revoked and cancelled. . . . .
+
)eanwhile, in IPC /o. C&8$, the evidence of both parties were received by the =irector of Patents. n
!une "<, "$$C, the =irector rendered a decision declaring private respondent7s opposition barred by res
judicata and giving due course to petitioner7s application for registration, to wit3
>?(4(@4(, the present pposition in Inter Partes Case /o. C&8$ is hereby
=(C'A4(= *A44(= by res judicata and is hereby =I2)I22(=. Accordingly,
Application 2erial /o. 8#&"" for trademark *A4*I5/ filed by Pribhdas !. )irpuri is
FII(/ =1( C142(.
2 4=(4(=.
,
Private respondent Buestioned this decision before the Court of Appeals in CA-F.4. 2P /o. C<8"#. n
April .&, "$$., the Court of Appeals reversed the =irector of Patents finding that IPC /o. ;<; was not
barred by 6udgment in IPC /o. C&8$ and ordered that the case be remanded to the *ureau of Patents for
further proceedings, viz3
>?(4(@4(, the appealed =ecision /o. $C-". dated !une "<, "$$C of the =irector of
Patents in Inter Partes Case /o. C&8$ is hereby 2(T A2I=(E and the case is hereby
remanded to the *ureau of Patents for further proceedings, in accordance with this
pronouncement. /o costs.
8
In a 4esolution dated )arch ";, "$$8, the Court of Appeals denied reconsideration of its
decision.
9
?ence, this recourse.
*efore us, petitioner raises the following issues3
". >?(T?(4 4 /T T?( =(CI2I/ @ T?( =I4(CT4 @ PAT(/T2 I/ I/T(4
PA4T(2 CA2( /. ;<; 4(/=(4(= / !1/( "<, "$%8, A//(J C ?(4(@,
C/2TIT1T(= RES JUDICATA I/ 2 @A4 A2 T?( CA2( *(@4( T?( =I4(CT4
@ PAT(/T2 I2 C/C(4/(=E
C. >?(T?(4 4 /T T?( =I4(CT4 @ PAT(/T2 C44(CT'0 APP'I(= T?(
P4I/CIP'( @ RES JUDICATA I/ =I2)I22I/F P4IIAT( 4(2P/=(/T *A4*I5/72
PP2ITI/ T P(TITI/(472 APP'ICATI/ @4 4(FI2T4ATI/ @4 T?(
T4A=()A4K *A4*I5/, >?IC? ?A2 2I/C( 4IP(/(= T C(4TI@ICAT( @
4(FI2T4ATI/ /. #.$C& / /I()*(4 ";, "$$CE
.. >?(T?(4 4 /T T?( 4(L1I2IT( T?AT A +!1=F)(/T / T?( )(4IT2+
4(L1I4(= A +?(A4I/F >?(4( *T? PA4TI(2 A4( 21PP2(= T A==1C(
(II=(/C(+ A/= >?(T?(4 T?( !I/T 21*)I22I/ @ T?( PA4TI(2 T A CA2(
/ T?( *A2I2 @ T?(I4 4(2P(CTII( P'(A=I/F2 >IT?1T P4(2(/TI/F
T(2TI)/IA' 4 =C1)(/TA40 (II=(/C( @A''2 >IT?I/ T?( )(A/I/F @
+!1=F)(/T / T?( )(4IT2+ A2 /( @ T?( 4(L1I2IT(2 T C/2TIT1T( RES
JUDICATAE
8. >?(T?(4 A =(CI2I/ @ T?( =(PA4T)(/T @ T4A=( A/= I/=12T40
CA/C(''I/F P(TITI/(472 @I4) /A)( +*A4*I5/ I/T(4/ATI/A'+ A/=
>?IC? =(CI2I/ I2 2TI'' P(/=I/F 4(C/2I=(4ATI/ /(I(4 @@(4(= I/
(II=(/C( *(@4( T?( =I4(CT4 @ PAT(/T2 I/ I/T(4 PA4T(2 CA2( /.
C&8$ ?A2 T?( 4IF?T T =(CI=( 21C? CA/C(''ATI/ /T / T?( *A2I2 @
T?( *12I/(22 /A)( 'A> 9A2 I)P'()(/T(= *0 T?( *14(A1 @ =)(2TIC
T4A=(: *1T / T?( *A2I2 @ T?( PA4I2 C/I(/TI/ A/= T?( T4A=()A4K
'A> 94.A. ";;: >?IC? I2 >IT?I/ T?( 4IFI/A' A/= (JC'12II( !14I2=ICTI/
@ T?( =I4(CT4 @ PAT(/T2.
10
*efore ruling on the issues of the case, there is need for a brief background on the function and historical
development of trademarks and trademark law.
A +trademark+ is defined under 4.A. ";;, the Trademark 'aw, as including +any word, name, symbol,
emblem, sign or device or any combination thereof adopted and used by a manufacturer or merchant to
identify his goods and distinguish them from those manufactured, sold or dealt in by others.
11
This
definition has been simplified in 4.A. /o. <C$., the Intellectual Property Code of the Philippines, which
defines a +trademark+ as +any visible sign capable of distinguishing goods.+
1)
In Philippine 6urisprudence,
the function of a trademark is to point out distinctly the origin or ownership of the goods to which it is
affiAedE to secure to him, who has been instrumental in bringing into the market a superior article of
merchandise, the fruit of his industry and skillE to assure the public that they are procuring the genuine
articleE to prevent fraud and impositionE and to protect the manufacturer against substitution and sale of
an inferior and different article as his product.
1*
)odern authorities on trademark law view trademarks as performing three distinct functions3 9": they
indicate origin or ownership of the articles to which they are attachedE 9C: they guarantee that those
articles come up to a certain standard of BualityE and 9.: they advertise the articles they symboli,e.
14
2ymbols have been used to identify the ownership or origin of articles for several centuries.
15
As early as
#,&&& *.C., markings on pottery have been found by archaeologists. Cave drawings in southwestern
(urope show bison with symbols on their flanks.
1+
Archaeological discoveries of ancient Freek and
4oman inscriptions on sculptural works, paintings, vases, precious stones, glassworks, bricks, etc. reveal
some features which are thought to be marks or symbols. These marks were affiAed by the creator or
maker of the article, or by public authorities as indicators for the payment of taA, for disclosing state
monopoly, or devices for the settlement of accounts between an entrepreneur and his workmen.
1,
In the )iddle Ages, the use of many kinds of marks on a variety of goods was commonplace. @ifteenth
century (ngland saw the compulsory use of identifying marks in certain trades. There were the baker7s
mark on bread, bottlemaker7s marks, smith7s marks, tanner7s marks, watermarks on paper, etc.
18
(very
guild had its own mark and every master belonging to it had a special mark of his own. The marks were
not trademarks but police marks compulsorily imposed by the sovereign to let the public know that the
goods were not +foreign+ goods smuggled into an area where the guild had a monopoly, as well as to aid
in tracing defective work or poor craftsmanship to the artisan.
19
@or a similar reason, merchants also
used merchants7 marks. )erchants dealt in goods acBuired from many sources and the marks enabled
them to identify and reclaim their goods upon recovery after shipwreck or piracy.
)0
>ith constant use, the mark acBuired popularity and became voluntarily adopted. It was not intended to
create or continue monopoly but to give the customer an indeA or guarantee of Buality.
)1
It was in the late
"<th century when the industrial revolution gave rise to mass production and distribution of consumer
goods that the mark became an important instrumentality of trade and commerce.
))
*y this time,
trademarks did not merely identify the goodsE they also indicated the goods to be of satisfactory Buality,
and thereby stimulated further purchases by the consuming public.
)*
(ventually, they came to symboli,e
the goodwill and business reputation of the owner of the product and became a property right protected
by law.
)4
The common law developed the doctrine of trademarks and tradenames +to prevent a person
from palming off his goods as another7s, from getting another7s business or in6uring his reputation by
unfair means, and, from defrauding the public.+
)5
2ubseBuently, (ngland and the 1nited 2tates enacted
national legislation on trademarks as part of the law regulating unfair trade.
)+
It became the right of the
trademark owner to eAclude others from the use of his mark, or of a confusingly similar mark where
confusion resulted in diversion of trade or financial in6ury. At the same time, the trademark served as a
warning against the imitation or faking of products to prevent the imposition of fraud upon the public.
),
Today, the trademark is not merely a symbol of origin and goodwillE it is often the most effective agent for
the actual creation and protection of goodwill. It imprints upon the public mind an anonymous and
impersonal guaranty of satisfaction, creating a desire for further satisfaction. In other words, the mark
actually sells the goods.
)8
The mark has become the +silent salesman,+ the conduit through which direct
contact between the trademark owner and the consumer is assured. It has invaded popular culture in
ways never anticipated that it has become a more convincing selling point than even the Buality of the
article to which it refers.
)9
In the last half century, the unparalleled growth of industry and the rapid
development of communications technology have enabled trademarks, tradenames and other distinctive
signs of a product to penetrate regions where the owner does not actually manufacture or sell the product
itself. Foodwill is no longer confined to the territory of actual market penetrationE it eAtends to ,ones
where the marked article has been fiAed in the public mind through advertising.
*0
>hether in the print,
broadcast or electronic communications medium, particularly on the Internet,
*1
advertising has paved the
way for growth and eApansion of the product by creating and earning a reputation that crosses over
borders, virtually turning the whole world into one vast marketplace.
This is the mise-en-scene of the present controversy. Petitioner brings this action claiming that +*arbi,on+
products have been sold in the Philippines since "$%&. Petitioner developed this market by working long
hours and spending considerable sums of money on advertisements and promotion of the trademark and
its products. /ow, almost thirty years later, private respondent, a foreign corporation, +swaggers into the
country like a conBuering hero,+ usurps the trademark and invades petitioner7s market.
*)
!ustice and
fairness dictate that private respondent be prevented from appropriating what is not its own. 'egally, at
the same time, private respondent is barred from Buestioning petitioner7s ownership of the trademark
because of res judicata.
**
'iterally, res judicata means a matter ad6udged, a thing 6udicially acted upon or decidedE a thing or matter
settled by 6udgment.
*4
In res judicata, the 6udgment in the first action is considered conclusive as to every
matter offered and received therein, as to any other admissible matter which might have been offered for
that purpose, and all other matters that could have been ad6udged therein.
*5
Res judicata is an absolute
bar to a subseBuent action for the same causeE and its reBuisites are3 9a: the former 6udgment or order
must be finalE 9b: the 6udgment or order must be one on the meritsE 9c: it must have been rendered by a
court having 6urisdiction over the sub6ect matter and partiesE 9d: there must be between the first and
second actions, identity of parties, of sub6ect matter and of causes of action.
*+
The 2olicitor Feneral, on behalf of respondent =irector of Patents, has 6oined cause with petitioner. *oth
claim that all the four elements of res judicata have been complied with3 that the 6udgment in IPC /o. ;<;
was final and was rendered by the =irector of Patents who had 6urisdiction over the sub6ect matter and
partiesE that the 6udgment in IPC /o. ;<; was on the meritsE and that the lack of a hearing was immaterial
because substantial issues were raised by the parties and passed upon by the =irector of Patents.
*,
The decision in IPC /o. ;<; reads as follows3
AAA AAA AAA.
/either party took testimony nor adduced documentary evidence. They submitted the
case for decision based on the pleadings which, together with the pertinent records, have
all been carefully considered.
Accordingly, the only issue for my disposition is whether or not the herein opposer would
probably be damaged by the registration of the trademark *A4*I5/ sought by the
respondent-applicant on the ground that it so resembles the trademark *A4*I5/
allegedly used and owned by the former to be +likely to cause confusion, mistake or to
deceive purchasers.+
n record, there can be no doubt that respondent-applicant7s sought-to-be-registered
trademark *A4*I5/ is similar, in fact obviously identical, to opposer7s alleged
trademark *A4*I5/, in spelling and pronunciation. The only appreciable but very
negligible difference lies in their respective appearances or manner of presentation.
4espondent-applicant7s trademark is in bold letters 9set against a black background:,
while that of the opposer is offered in stylish script letters.
It is opposer7s assertion that its trademark *A4*I5/ has been used in trade or
commerce in the Philippines prior to the date of application for the registration of the
identical mark *A4*I5/ by the respondent-applicant. ?owever, the allegation of facts
in opposer7s verified notice of opposition is devoid of such material information. In fact, a
reading of the teAt of said verified opposition reveals an apparent, if not deliberate,
omission of the date 9or year: when opposer7s alleged trademark *A4*I5/ was first
used in trade in the Philippines 9see par. /o. ", p. C, Ierified /otice of pposition, 4ec.:.
Thus, it cannot here and now be ascertained whether opposer7s alleged use of the
trademark *A4*I5/ could be prior to the use of the identical mark by the herein
respondent-applicant, since the opposer attempted neither to substantiate its claim of use
in local commerce with any proof or evidence. Instead, the opposer submitted the case
for decision based merely on the pleadings.
n the other hand, respondent-applicant asserted in her amended application for
registration that she first used the trademark *A4*I5/ for brassiere 9or +brasseire+:
and ladies underwear garments and panties as early as )arch ., "$%&. *e that as it may,
there being no testimony taken as to said date of first use, respondent-applicant will be
limited to the filing date, !une "#, "$%&, of her application as the date of first use 94ule
"%., 4ules of Practice in Trademark Cases:.
@rom the foregoing, I conclude that the opposer has not made out a case of probable
damage by the registration of the respondent-applicant7s mark *A4*I5/.
>?(4(@4(, the opposition should be, as it is hereby, =I2)I22(=. Accordingly,
Application 2erial /o. "$&"&, for the registration of the trademark *A4*I5/ of
respondent 'olita 4. (scobar, is given due course.
*8
The decision in IPC /o. ;<; was a 6udgment on the merits and it was error for the Court of Appeals to rule
that it was not. A 6udgment is on the merits when it determines the rights and liabilities of the parties
based on the disclosed facts, irrespective of formal, technical or dilatory ob6ections.
*9
It is not necessary
that a trial should have been conducted. If the court7s 6udgment is general, and not based on any
technical defect or ob6ection, and the parties had a full legal opportunity to be heard on their respective
claims and contentions, it is on the merits although there was no actual hearing or arguments on the facts
of the case.
40
In the case at bar, the =irector of Patents did not dismiss private respondent7s opposition
on a sheer technicality. Although no hearing was conducted, both parties filed their respective pleadings
and were given opportunity to present evidence. They, however, waived their right to do so and submitted
the case for decision based on their pleadings. The lack of evidence did not deter the =irector of Patents
from ruling on the case, particularly on the issue of prior use, which goes into the very substance of the
relief sought by the parties. 2ince private respondent failed to prove prior use of its trademark, (scobar7s
claim of first use was upheld.
The 6udgment in IPC /o. ;<; being on the merits, petitioner and the 2olicitor Feneral allege that IPC /o.
;<; and IPC /o. C&8$ also comply with the fourth reBuisite of res judicata, i.e., they involve the same
parties and the same sub6ect matter, and have identical causes of action.
1ndisputedly, IPC /o. ;<; and IPC /o. C&8$ involve the same parties and the same sub6ect matter.
Petitioner herein is the assignee of (scobar while private respondent is the same American corporation in
the first case. The sub6ect matter of both cases is the trademark +*arbi,on.+ Private respondent counter-
argues, however, that the two cases do not have identical causes of action. /ew causes of action were
allegedly introduced in IPC /o. C&8$, such as the prior use and registration of the trademark in the 1nited
2tates and other countries worldwide, prior use in the Philippines, and the fraudulent registration of the
mark in violation of Article "<$ of the 4evised Penal Code. Private respondent also cited protection of the
trademark under the Convention of Paris for the Protection of Industrial Property, specifically Article ;bis
thereof, and the implementation of Article ;bis by two )emoranda dated /ovember C&, "$<& and ctober
C#, "$<. of the )inister of Trade and Industry to the =irector of Patents, as well as (Aecutive rder
9(..: /o. $"..
The Convention of Paris for the Protection of Industrial Property, otherwise known as the Paris
Convention, is a multilateral treaty that seeks to protect industrial property consisting of patents, utility
models, industrial designs, trademarks, service marks, trade names and indications of source or
appellations of origin, and at the same time aims to repress unfair competition.
41
The Convention is
essentially a compact among various countries which, as members of the 1nion, have pledged to accord
to citi,ens of the other member countries trademark and other rights comparable to those accorded their
own citi,ens by their domestic laws for an effective protection against unfair competition.
4)
In short,
foreign nationals are to be given the same treatment in each of the member countries as that country
makes available to its own citi,ens.
4*
/ationals of the various member nations are thus assured of a
certain minimum of international protection of their industrial property.
44
The Convention was first signed by eleven countries in Paris on )arch C&, "<<..
45
It underwent several
revisions D at *russels in "$&&, at >ashington in "$"", at The ?ague in "$C#, at 'ondon in "$.8, at
'isbon in "$#<,
4+
and at 2tockholm in "$;%. *oth the Philippines and the 1nited 2tates of America,
herein private respondent7s country, are signatories to the Convention. The 1nited 2tates acceded on
)ay .&, "<<% while the Philippines, through its 2enate, concurred on )ay "&, "$;#.
4,
The Philippines7
adhesion became effective on 2eptember C%, "$;#,
48
and from this date, the country obligated itself to
honor and enforce the provisions of the Convention.
49
In the case at bar, private respondent anchors its cause of action on the first paragraph of Article ;bis of
the Paris Convention which reads as follows3
Article ;bis
9": The countries of the 1nion undertake, either administratively if their legislation so
permits, or at the reBuest of an interested party, to refuse or to cancel the registration and
to prohibit the use, of a trademark which constitutes a reproduction, an imitation, or a
translation, liable to create confusion, of a mark considered by the competent authority of
the country of registration or use to be well-known in that country as being already the
mark of a person entitled to the benefits of this Convention and used for identical or
similar goods. These provisions shall also apply when the essential part of the mark
constitutes a reproduction of any such well-known mark or an imitation liable to create
confusion therewith.
9C: A period of at least five years from the date of registration shall be allowed for seeking
the cancellation of such a mark. The countries of the 1nion may provide for a period
within which the prohibition of use must be sought.
9.: /o time limit shall be fiAed for seeking the cancellation or the prohibition of the use of
marks registered or used in bad faith.
50
This Article governs protection of well-known trademarks. 1nder the first paragraph, each country
of the 1nion bound itself to undertake to refuse or cancel the registration, and prohibit the use of
a trademark which is a reproduction, imitation or translation, or any essential part of which
trademark constitutes a reproduction, liable to create confusion, of a mark considered by the
competent authority of the country where protection is sought, to be well-known in the country as
being already the mark of a person entitled to the benefits of the Convention, and used for
identical or similar goods.
Art. ;bis was first introduced at The ?ague in "$C# and amended in 'isbon in "$#C.
51
It is a self-
eAecuting provision and does not reBuire legislative enactment to give it effect in the member country.
5)
It
may be applied directly by the tribunals and officials of each member country by the mere publication or
proclamation of the Convention, after its ratification according to the public law of each state and the order
for its eAecution.
5*
The essential reBuirement under Article ;bis is that the trademark to be protected must be +well-known+ in
the country where protection is sought. The power to determine whether a trademark is well-known lies in
the +competent authority of the country of registration or use.+ This competent authority would be either
the registering authority if it has the power to decide this, or the courts of the country in Buestion if the
issue comes before a court.
54
Pursuant to Article ;bis, on /ovember C&, "$<&, then )inister 'uis Iillafuerte of the )inistry of Trade
issued a )emorandum to the =irector of Patents. The )inister ordered the =irector that3
Pursuant to the Paris Convention for the Protection of Industrial Property to which the
Philippines is a signatory, you are hereby directed to re6ect all pending applications for
Philippine registration of signature and other world-famous trademarks by applicants
other than its original owners or users.
The conflicting claims over internationally known trademarks involve such name brands
as 'acoste, !ordache, Ianderbilt, 2asson, @ila, Pierre Cardin, Fucci, Christian =ior,
scar de la 4enta, Calvin Klein, Fivenchy, 4alph 'auren, Feoffrey *eene, 'anvin and
Ted 'apidus.
It is further directed that, in cases where warranted, Philippine registrants of such
trademarks should be asked to surrender their certificates of registration, if any, to avoid
suits for damages and other legal action by the trademarks7 foreign or local owners or
original users.
0ou are also reBuired to submit to the undersigned a progress report on the matter.
@or immediate compliance.
55
Three years later, on ctober C#, "$<., then )inister 4oberto ngpin issued another )emorandum to
the =irector of Patents, viz3
Pursuant to (Aecutive rder /o. $". dated % ctober "$<. which strengthens the rule-
making and ad6udicatory powers of the )inister of Trade and Industry and provides inter
alia, that +such rule-making and ad6udicatory powers should be revitali,ed in order that
the )inister of Trade and Industry can . . . apply more swift and effective solutions and
remedies to old and new problems . . . such as infringement of internationally-known
tradenames and trademarks . . .+ and in view of the decision of the Intermediate Appellate
Court in the case of 'A C?()I2( 'AC2T(, 2.A., versus 4A) 2A=>?A/I GAC-F.4.
2P /. "..#$ 9"%: !une "$<.H
5+
which affirms the validity of the )()4A/=1) of
then )inister 'uis 4. Iillafuerte dated C& /ovember "$<& confirming our obligations
under the PA4I2 C/I(/TI/ @4 T?( P4T(CTI/ @ I/=12T4IA' P4P(4T0
to which the 4epublic of the Philippines is a signatory, you are hereby directed to
implement measures necessary to effect compliance with our obligations under said
Convention in general, and, more seci!icall", to #onor our commitment under Section
;bis
5,
t#ereo!$ as follows3
". >hether the trademark under consideration is well-known in the
Philippines or is a mark already belonging to a person entitled to the
benefits of the C/I(/TI/, this should be established, pursuant to
Philippine Patent ffice procedures in inter artes and e% arte cases,
according to any of the following criteria or any combination thereof3
9a: a declaration by the )inister of Trade and Industry
that the trademark being considered is already well-
known in the Philippines such that permission for its use
by other than its original owner will constitute a
reproduction, imitation, translation or other infringementE
9b: that the trademark is used in commerce
internationally, supported by proof that goods bearing
the trademark are sold on an international scale,
advertisements, the establishment of factories, sales
offices, distributorships, and the like, in different
countries, including volume or other measure of
international trade and commerceE
9c: that the trademark is duly registered in the industrial
property office9s: of another country or countries, taking
into consideration the date of such registrationE
9d: that the trademark has long been established and
obtained goodwill and international consumer
recognition as belonging to one owner or sourceE
9e: that the trademark actually belongs to a party
claiming ownership and has the right to registration
under the provisions of the aforestated PA4I2
C/I(/TI/.
C. The word trademark, as used in this )()4A/=1), shall include
tradenames, service marks, logos, signs, emblems, insignia or other
similar devices used for identification and recognition by consumers.
.. The Philippine Patent ffice shall refuse all applications for, or cancel
the registration of, trademarks which constitute a reproduction,
translation or imitation of a trademark owned by a person, natural or
corporate, who is a citi,en of a country signatory to the PA4I2
C/I(/TI/ @4 T?( P4T(CTI/ @ I/=12T4IA' P4P(4T0.
8. The Philippine Patent ffice shall give due course to the pposition in
cases already or hereafter filed against the registration of trademarks
entitled to protection of 2ection ;bis of said PA4I2 C/I(/TI/ as
outlined above, by remanding applications filed by one not entitled to
such protection for final disallowance by the (Aamination =ivision.
#. All pending applications for Philippine registration of signature and
other world-famous trademarks filed by applicants other than their
original owners or users shall be re6ected forthwith. >here such
applicants have already obtained registration contrary to the
abovementioned PA4I2 C/I(/TI/ andMor Philippine 'aw, they shall
be directed to surrender their Certificates of 4egistration to the Philippine
Patent ffice for immediate cancellation proceedings.
AAA AAA AAA.
58
In the Iillafuerte )emorandum, the )inister of Trade instructed the =irector of Patents to re6ect all
pending applications for Philippine registration of signature and other world-famous trademarks by
applicants other than their original owners or users. The )inister enumerated several internationally-
known trademarks and ordered the =irector of Patents to reBuire Philippine registrants of such marks to
surrender their certificates of registration.
In the ngpin )emorandum, the )inister of Trade and Industry did not enumerate well-known trademarks
but laid down guidelines for the =irector of Patents to observe in determining whether a trademark is
entitled to protection as a well-known mark in the Philippines under Article ;bis of the Paris Convention.
This was to be established through Philippine Patent ffice procedures in inter artes and e% arte cases
pursuant to the criteria enumerated therein. The Philippine Patent ffice was ordered to refuse
applications for, or cancel the registration of, trademarks which constitute a reproduction, translation or
imitation of a trademark owned by a person who is a citi,en of a member of the 1nion. All pending
applications for registration of world-famous trademarks by persons other than their original owners were
to be re6ected forthwith. The ngpin )emorandum was issued pursuant to (Aecutive rder /o. $".
dated ctober %, "$<. of then President )arcos which strengthened the rule-making and ad6udicatory
powers of the )inister of Trade and Industry for the effective protection of consumers and the application
of swift solutions to problems in trade and industry.
59
*oth the Iillafuerte and ngpin )emoranda were sustained by the 2upreme Court in the "$<8 landmark
case of &a C#emise &acoste, S'A' v' (ernandez.
+0
This court ruled therein that under the provisions of
Article ;bis of the Paris Convention, the )inister of Trade and Industry was the +competent authority+ to
determine whether a trademark is well-known in this country.
+1
The Iillafuerte )emorandum was issued in "$<&, i.e., fifteen 9"#: years after the adoption of the Paris
Convention in "$;#. In the case at bar, the first inter artes case, IPC /o. ;<;, was filed in "$%&, be!ore
the Iillafuerte )emorandum but five 9#: years a!ter the effectivity of the Paris Convention. Article ;bis was
already in effect five years before the first case was instituted. Private respondent, however, did not cite
the protection of Article ;bis, neither did it mention the Paris Convention at all. It was only in "$<" when
IPC /o. C&8$ was instituted that the Paris Convention and the Iillafuerte )emorandum, and, during the
pendency of the case, the "$<. ngpin )emorandum were invoked by private respondent.
The 2olicitor Feneral argues that the issue of whether the protection of Article ;bis of the Convention and
the two )emoranda is barred by res judicata has already been answered in )olverine )orldwide, Inc. v.
Court o!
Aeals.
+)
In this case, petitioner >olverine, a foreign corporation, filed with the Philippine Patent ffice
a petition for cancellation of the registration certificate of private respondent, a @ilipino citi,en, for the
trademark +?ush Puppies+ and +=og =evice.+ Petitioner alleged that it was the registrant of the
internationally-known trademark in the 1nited 2tates and other countries, and cited protection under the
Paris Convention and the ngpin )emorandum. The petition was dismissed by the Patent ffice on the
ground of res judicata. It was found that in "$%. petitioner7s predecessor-in-interest filed two petitions for
cancellation of the same trademark against respondent7s predecessor-in-interest. The Patent ffice
dismissed the petitions, ordered the cancellation of registration of petitioner7s trademark, and gave due
course to respondent7s application for registration. This decision was sustained by the Court of Appeals,
which decision was not elevated to us and became final and
eAecutory.
+*
>olverine claimed that while its previous petitions were filed under 4.A. /o. ";;, the Trademark 'aw, its
subseBuent petition was based on a new cause of action, i.e., the ngpin )emorandum and (.. /o.
$". issued in "$<., after finality of the previous decision. >e held that the said )emorandum and (..
did not grant a new cause of action because it did +not amend the Trademark 'aw,+ . . . +nor did it indicate
a new policy with respect to the registration in the Philippines of world-famous trademarks.+
+4
This
conclusion was based on the finding that >olverine7s two previous petitions and subseBuent petition dealt
with the same issue of ownership of the trademark.
+5
In other words, since the first and second cases
involved the same issue of ownership, then the first case was a bar to the second case.
In the instant case, the issue of ownership of the trademark +*arbi,on+ was not raised in IPC /o. ;<;.
Private respondent7s opposition therein was merely anchored on3
9a: +confusing similarity+ of its trademark with that of (scobar7sE
9b: that the registration of (scobar7s similar trademark will cause damage to private
respondent7s business reputation and goodwillE and
9c: that (scobar7s use of the trademark amounts to an unlawful appropriation of a mark
previously used in the Philippines which act is penali,ed under 2ection 8 9d: of the
Trademark 'aw.
In IPC /o. C&8$, private respondent7s opposition set forth several issues summari,ed as follows3
9a: as early as "$.., it adopted the word +*A4*I5/+ as trademark on its products such
as robes, pa6amas, lingerie, nightgowns and slipsE
9b: that the trademark +*A4*I5/+ was registered with the 1nited 2tates Patent ffice in
"$.8 and "$8$E and that variations of the same trademark, i.e., +*A4*I5/+ with *ee
design and +*A4*I5/+ with the representation of a woman were also registered with
the 1.2. Patent ffice in "$;" and "$%;E
9c: that these marks have been in use in the Philippines and in many countries all over
the world for over forty years. +*arbi,on+ products have been advertised in international
publications and the marks registered in .; countries worldwideE
9d: (scobar7s registration of the similar trademark +*A4*I5/+ in "$%8 was based on
fraudE and this fraudulent registration was cancelled in "$%$, stripping (scobar of
whatsoever right she had to the said markE
9e: Private respondent7s trademark is entitled to protection as a well-known mark under
Article ;bis of the Paris Convention, (Aecutive rder /o. $"., and the two )emoranda
dated /ovember C&, "$<& and ctober C#, "$<. of the )inister of Trade and Industry to
the =irector of PatentsE
9f: (scobar7s trademark is identical to private respondent7s and its use on the same class
of goods as the latter7s amounts to a violation of the Trademark 'aw and Article "<$ of
the 4evised Penal Code.
IPC /o. C&8$ raised the issue of ownership of the trademark, the first registration and use of the
trademark in the 1nited 2tates and other countries, and the international recognition and
reputation of the trademark established by eAtensive use and advertisement of private
respondent7s products for over forty years here and abroad. These are different from the issues of
confusing similarity and damage in IPC /o. ;<;. The issue of prior use may have been raised in
IPC /o. ;<; but this claim was limited to prior use in the Philippines only. Prior use in IPC /o.
C&8$ stems from private respondent7s claim as ori*inator of the word and symbol +*arbi,on,+
++
as
the first and registered user of the mark attached to its products which have been sold and
advertised worldwide for a considerable number of years prior to petitioner7s first application for
registration of her trademark in the Philippines. Indeed, these are substantial allegations that
raised new issues and necessarily gave private respondent a new cause of action. Res judicata
does not apply to rights, claims or demands, although growing out of the same sub6ect matter,
which constitute separate or distinct causes of action and were not put in issue in the former
action.
+,
4espondent corporation also introduced in the second case a fact that did not eAist at the time the first
case was filed and terminated. The cancellation of petitioner7s certificate of registration for failure to file
the affidavit of use arose only after IPC /o. ;<;. It did not and could not have occurred in the first case,
and this gave respondent another cause to oppose the second application. Res judicata eAtends only to
facts and conditions as they eAisted at the time 6udgment was rendered and to the legal rights and
relations of the parties fiAed by the facts so determined.
+8
>hen new facts or conditions intervene before
the second suit, furnishing a new basis for the claims and defenses of the parties, the issues are no
longer the same, and the former 6udgment cannot be pleaded as a bar to the subseBuent action.
+9
It is also noted that the oppositions in the first and second cases are based on different laws. The
opposition in IPC /o. ;<; was based on specific provisions of the Trademark 'aw, i.e., 2ection 8 9d:
,0
on
confusing similarity of trademarks and 2ection <
,1
on the reBuisite damage to file an opposition to a
petition for registration. The opposition in IPC /o. C&8$ invoked the Paris Convention, particularly Article
;bis thereof, (.. /o. $". and the two )emoranda of the )inister of Trade and Industry. This opposition
also invoked Article "<$ of the 4evised Penal Code which is a statute totally different from the Trademark
'aw.
,)
Causes of action which are distinct and independent from each other, although arising out of the
same contract, transaction, or state of facts, may be sued on separately, recovery on one being no bar to
subseBuent actions on others.
,*
The mere fact that the same relief is sought in the subseBuent action will
not render the 6udgment in the prior action operative as res judicata, such as where the two actions are
based on different statutes.
,4
Res judicata therefore does not apply to the instant case and respondent
Court of Appeals did not err in so ruling.
Intellectual and industrial property rights cases are not simple property cases. Trademarks deal with the
psychological function of symbols and the effect of these symbols on the public at large.
,5
Trademarks
play a significant role in communication, commerce and trade, and serve valuable and interrelated
business functions, both nationally and internationally. @or this reason, all agreements concerning
industrial property, like those on trademarks and tradenames, are intimately connected with economic
development.
,+
Industrial property encourages investments in new ideas and inventions and stimulates
creative efforts for the satisfaction of human needs. They speed up transfer of technology and
industriali,ation, and thereby bring about social and economic progress.
,,
These advantages have been
acknowledged by the Philippine government itself. The Intellectual Property Code of the Philippines
declares that +an effective intellectual and industrial property system is vital to the development of
domestic and creative activity, facilitates transfer of technology, it attracts foreign investments, and
ensures market access for our products.+
,8
The Intellectual Property Code took effect on !anuary ", "$$<
and by its eApress provision,
,9
repealed the Trademark 'aw,
80
the Patent 'aw,
81
Articles "<< and "<$ of
the 4evised Penal Code, the =ecree on Intellectual Property,
8)
and the =ecree on Compulsory 4eprinting
of @oreign TeAtbooks.
8*
The Code was enacted to strengthen the intellectual and industrial property
system in the Philippines as mandated by the country7s accession to the Agreement (stablishing the
>orld Trade rgani,ation 9>T:.
84
The >T is a common institutional framework for the conduct of trade relations among its members in
matters related to the multilateral and plurilateral trade agreements anneAed to the >T Agreement.
85

The >T framework ensures a +single undertaking approach+ to the administration and operation of all
agreements and arrangements attached to the >T Agreement. Among those anneAed is the Agreement
on Trade-4elated Aspects of Intellectual Property 4ights or T4IPs.
8+
)embers to this Agreement +desire
to reduce distortions and impediments to international trade, taking into account the need to promote
effective and adeBuate protection of intellectual property rights, and to ensure that measures and
procedures to enforce intellectual property rights do not themselves become barriers to legitimate trade.+
To fulfill these ob6ectives, the members have agreed to adhere to minimum standards of protection set by
several Conventions.
8,
These Conventions are3 the *erne Convention for the Protection of 'iterary and
Artistic >orks 9"$%":, the 4ome Convention or the International Convention for the Protection of
Performers, Producers of Phonograms and *roadcasting rganisations, the Treaty on Intellectual
Property in 4espect of Integrated Circuits, and t#e +aris Convention ,-./01, as revised in 2tockholm on
!uly "8, "$;%.
88
A ma6or proportion of international trade depends on the protection of intellectual property rights.
89
2ince
the late "$%&7s, the unauthori,ed counterfeiting of industrial property and trademarked products has had a
considerable adverse impact on domestic and international trade revenues.
90
The T4IPs Agreement
seeks to grant adeBuate protection of intellectual property rights by creating a favorable economic
environment to encourage the inflow of foreign investments, and strengthening the multi-lateral trading
system to bring about economic, cultural and technological independence.
91
The Philippines and the 1nited 2tates of America have acceded to the >T Agreement. This Agreement
has revolutioni,ed international business and economic relations among states, and has propelled the
world towards trade liberali,ation and economic globali,ation.
9)
Protectionism and isolationism belong to
the past. Trade is no longer confined to a bilateral system. There is now +a new era of global economic
cooperation, reflecting the widespread desire to operate in a fairer and more open multilateral trading
system.+
9*
Conformably, the 2tate must reaffirm its commitment to the global community and take part in
evolving a new international economic order at the dawn of the new millenium.
I/ II(> >?(4(@, the petition is denied and the =ecision and 4esolution of the Court of Appeals in
CA-F.4. 2P /o. C<8"# are affirmed.
2 4=(4(=.