EY Industrial v. Shen Dar - Ownership - Digest
EY Industrial v. Shen Dar - Ownership - Digest
EY Industrial v. Shen Dar - Ownership - Digest
E.Y. Industrial Sales, Inc. and Engracio Yap v. Shen Dar Electricity and Machinery
Co., Ltd.
G.R. No. 184850
October 20, 2010
FACTS: E.Y. Industrial Sales, Inc. (EYIS) is a domestic corporation engaged in the
production, distribution and sale of air compressors and other industrial tools and
equipment. Petitioner Engracio Yap is the Chairman of the Board of Directors of EYIS.
Respondent Shen Dar Electricity and Machinery Co., Ltd. (Shen Dar) is a
Taiwan-based foreign corporation engaged in the manufacture of air compressors.
Both companies claimed to have the right to register the trademark “VESPA” for
air compressors.
From 1997 to 2004, EYIS imported air compressors from Shen Dar through sales
contracts. There is no documentary evidence to show that such air compressors were
marked “VESPA.”
On June 9, 1997, Shen Dar filed Trademark Application Serial No. 4-1997-
121492 with the IPO for the mark “VESPA, Chinese Characters and Device” for use on
air compressors and welding machines.
On July 28, 1999, EYIS filed Trademark Application Serial No. 4-1999-005393,
also for the mark “VESPA,” for use on air compressors.
On January 18, 2004, the IPO issued Certificate of Registration (COR) No. 4-
1999-005393 in favor of EYIS. Thereafter, on February 8, 2007, Shen Dar was also
issued COR No. 4-1997-121492.
In the meantime, on June 21, 2004, Shen Dar filed a Petition for Cancellation of
EYIS’ COR with the Bureau of Legal Affairs (BLA) alleging that the issuance of EYIS’
COR violated Sec. 123 of Republic Act (RA) No. 8293, that EYIS was a mere distributor
of air compressors bearing the mark “VESPA” which it imported from Shen Dar, and
that it had prior and exclusive right to the use and registration of the mark “VESPA” in
the Philippines under the provisions of the Paris Convention.
In its Answer, EYIS and Yap denied the claim of Shen Dar to be the true owners
of the mark “VESPA” being the sole assembler and fabricator of air compressors since
the early 1990s. They further alleged that the air compressors that Shen Dar allegedly
supplied them bore the mark “SD” for Shen Dar and not “VESPA.” Moreover, EYIS
argued that Shen Dar, not being the owner of the mark, could not seek protection from
the provisions of the Paris Convention or the IP Code.
Thereafter, the Director of the BLA issued its Decision on May 29, 2006 in favor
of EYIS and against Shen Dar.
Shen Dar appealed the decision of the BLA Director to the Director General of
the IPO. Later, the IPO Director General issued a Decision on May 25, 2007 upholding
the COR issued in favor of EYIS while cancelling the COR of Shen Dar.
Shen Dar appealed the decision of the IPO Director General to the CA. In the
assailed decision, the CA reversed the IPO Director General and ruled in favor of Shen
Dar. EYIS filed a motion for reconsideration of the assailed decision which the CA
denied in the assailed resolution. Hence, the petition for review on certiorari happened
seeking to nullify and reverse the CA Decision and Resolution.
ISSUE: Whether or not EYIS is the true owner of the mark “VESPA.”
HELD: EYIS is considered as the prior and continuous user of the mark “VESPA”
and its true owner.
RA 8293 espouses the “first-to-file” rule as stated under Sec. 123.1 (d) which
states:
xxxx
(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
(iii) If it nearly resembles such a mark as to be likely to deceive or cause confusion.
Under this provision, the registration of a mark is prevented with the filing of an
earlier application for registration. This must not, however, be interpreted to mean that
ownership should be based upon an earlier filing date. While RA 8293 removed the
previous requirement of proof of actual use prior to the filing of an application for
registration of a mark, proof of prior and continuous use is necessary to establish
ownership of a mark. Such ownership constitutes sufficient evidence to oppose the
registration of a mark.
Notably, the Court has ruled that the prior and continuous use of a mark may
even overcome the presumptive ownership of the registrant and be held as the owner of
the mark. As aptly stated by the Court in Shangri-la International Hotel Management,
Ltd. v. Developers Group of Companies, Inc.:
Registration, without more, does not confer upon the registrant an absolute right to the
registered mark. The certificate of registration is merely a prima facie proof that the
registrant is the owner of the registered mark or trade name. Evidence of prior and
continuous use of the mark or trade name by another can overcome the presumptive
ownership of the registrant and may very well entitle the former to be declared owner in
an appropriate case.
xxxx
Ownership of a mark or trade name may be acquired not necessarily by registration but
by adoption and use in trade or commerce. As between actual use of a mark without
registration, and registration of the mark without actual use thereof, the former prevails
over the latter. For a rule widely accepted and firmly entrenched, because it has come
down through the years, is that actual use in commerce or business is a pre-requisite to
the acquisition of the right of ownership.
xxxx
By itself, registration is not a mode of acquiring ownership. When the applicant is not
the owner of the trademark being applied for, he has no right to apply for registration of
the same. Registration merely creates a prima facie presumption of the validity of the
registration, of the registrant’s ownership of the trademark and of the exclusive right to
the use thereof. Such presumption, just like the presumptive regularity in the
performance of official functions, is rebuttable and must give way to evidence to the
contrary.