Philippines: Philippines Supreme Court Affirms Country's Treaty Commitment For Protection Of Well-Known Marks

The Philippine Supreme Court resolved this question in the recent case of Pribhdas J. Mirpuri vs. Court of Appeals, Director of Patents and the Barbizon Corporation, G.R. No. 114508, promulgated on November 19, 1999.

The factual milieu of the case follows:

Lolita Escobar filed an application with the Philippine Bureau of Patents on June 15, 1970 for the registration of the trademark "Barbizon" for use in brassieres and ladies undergarments. Escobar claimed that she had been manufacturing and selling these products since March 3, 1970.

Private respondent Barbizon Corporation, a corporation organised and doing business under the laws of New York., U.S.A., filed an opposition to the application. This was docketed as Inter Partes Case No. 686 (IPC No. 686). The Director of Patents rendered a decision dismissing the opposition and giving due course to Escoba's application. Escobar was issued a certificate of registration for the trademark "Barbizon". Escobar later assigned all her rights and interests over the trademark to petitioner Pribhdas J. Mirpuri who was the sole and exclusive distributor of Escobar's "Barbizon" products.

The certificate of registration of Escobar was cancelled by the Bureau of Patents when she failed to file the Affidavit of Use of the trademark required by Republic Act No. 166, the Philippine Trademark Law.

On May 27, 1981, Escobar reapplied for registration of the cancelled trademark. Petitioner filed his own application for registration of Escobar's trademark. Escobar then assigned her application to petitioner and the application was opposed by private respondent. This was docketed as Inter Partes Case No. 2049 (IPC No. 2049). In support of its opposition, private respondent alleged, among other matters, that its "BARBIZON" mark qualifies as a well-known trademark entitled to protection under Article 6bis of the Convention of Paris for the Protection of Industrial Property, and the Memorandum of the Philippine Minister of Trade to the Honourable Director of Patents dated November 20, 1980, Executive order No. 913 dated October 7, 1983 and the Memorandum of the Minister of Trade and Industry to the Honourable Director of Patents dated October 25, 1983.

Executive Order No. 913 is the statute granting the Philippine Minister of Trade and Industry broad adjudicatory powers relating to matters involving the enforcement of trade and industry laws, including disputes involving the infringement of internationally-known tradenames and trademarks. The earlier-issued Memorandum (also known as the Villafuerte Memorandum) mentioned served as an instruction to the Director of Patents to reject all pending applications for Philippines registration of signature and other world-famous trademarks by applicants other than their original owners or users. The Minister enumerated several internationally-known trademarks and ordered the Director of Patents to require Philippine registrants of such marks to surrender their certificates of registration. The subsequent Memorandum (the Ongpin Memorandum), did not enumerate well-known trademarks but laid down guidelines for the Director of Patents to observe in determining whether a trademark is entitled to protection as a well-known mark in the Philippines under Article 6bis of the Paris Convention.

Petitioner presented the defence of res judicata in replying to private respondent's opposition. The Director of Patents rendered a decision declaring private respondent's opposition barred by res judicata and giving due course to petitioner's application for registration. The decision was questioned by private respondent before the Philippine Court of Appeals, which then set aside the said decision and remanded the case to the Bureau of Patents for further proceedings. The Court of Appeals denied reconsideration of its decision. Hence, the matter was elevated to the Supreme Court.

The main issue resolved by the Supreme Court is whether or not res judicata is applicable to this case. Following prevailing procedure and doctrine, the Supreme Court stated that res judicata means a matter adjudged, a thing judicially acted upon or decided; a thing or matter settled by judgement. In res judicata, the judgement 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 adjudged therein. Res judicata is an absolute bar to subsequent action for the same cause, and its requisites are: (a) the former judgement or order must be final; (b) the judgement or order must be one on the merits; (c) it must have been rendered by a court having jurisdiction over the subject matter and parties; (d) there must be between the first or second actions, identity of parties, of subject matter and of causes of action.

While the Supreme Court held that the first three requisites of res judicata were present in the case, it was of the opinion that there was no identity of causes of action between the first inter partes case and the subsequent one. As explained by the Supreme Court.

"IPC No. 2049 raised the issue of ownership of the trademark, the first registration and use of the trademark in the United States and other countries, and the international recognition and reputation of the trademark established by extensive use and advertisement of private respondent's products for over forty years here and abroad. These are different from the issues of confusing similarity and damage in IPC No. 686. The issue of prior use may have been raised in IPC No. 686 but this claim was limited to prior use in the Philippines only. Prior use in IPC No. 2049 stems from private respondent's claim as originator of the word and symbol "Barbizon," as the first and registered user of the mark attached to its products which have been sold and advertised world-wide for a considerable number of years prior to petitioner's 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 subject matter, which constitute separate or distinct causes of action and were not put in issue in the former action."

"Respondent corporation also introduced in the second case a fact that did not exist at the time the first case was filed and terminated. The cancellation of petitioner's certificate of registration for failure to file the affidavit of use arose only after IPC No. 686. 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 extends only to facts and conditions as they existed at the time judgement was rendered and to the legal rights and relations of the parties fixed by the facts so determined."

"When new facts or conditions intervene before the second suit, furnishing a new basis for the claims and defences of the parties, the issues are no longer the same, and the former judgement cannot be pleaded as a bar to the subsequent action."

"It is also noted that the oppositions in the first and second cases are based on different laws. The opposition in IPC No. 686 was based on specific provisions of the Trademark Law."

"The opposition in IPC No. 2049 invoked the Paris Convention, particularly Article 6bis thereof, E.O. No. 913 and the two Memoranda of the Minister of Trade and Industry. This opposition also invoked Article 189 of the Revised Penal Code which is a statute totally different from the Trademark Law. 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 subsequent actions on others. The mere fact that the same relief is sought in the subsequent action will not render the judgement in the prior action operative as res judicata, such as where the two actions are based on different statute. Res judicata therefore does not apply to the instant case and respondent Court of Appeals did not err in so ruling."

In accordance with the foregoing findings and conclusions, the Supreme Court denied the petition and affirmed the Decision and Resolution of the Court of Appeals. It also took the opportunity to affirm the Philippines' commitment to be an active participant in a global economy enhanced by multilateral agreements of which it is a party or signatory. It declared in no uncertain terms that the Philippines recognises the importance of protecting intellectual property rights and that it is ready, willing and able to honour its commitment to the international community to provide sufficient protection for these rights.

The Court thus declared:

"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. Trademarks play a significant role in communication, commerce and trade, and serve valuable and interrelated business functions, both nationally and internationally. For 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 industrialisation, 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." The Intellectual Property Code took effect on January1, 1998 and by its express provision, repealed the Trademark Law, the Patent Law, Articles 188 and 189 of the Revised Penal Code, the Decree on Intellectual Property, and the Decree on Compulsory Reprinting of Foreign Textbooks. The Code was enacted to strengthen the country's accession to the Agreement Establishing the World Trade Organisation (WTO)"

"The WTO is a common institutional framework for the conduct of trade relations among its members in matters related to the multilateral and plurilateral trade agreements annexed to the WTO Agreement. The WTO framework ensures a "single undertaking approach" to the administration and operation of all agreements and arrangements attached to the WTO Agreement. Among those annexed is the Agreement on Trade-Related Aspects of Intellectual Property Rights of TRIPs. Members to this Agreement "desire to reduce distortions and impediments to international trade, taking into account the need to promote effective and adequate 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 fulfil these objectives, the members have agreed to adhere to minimum standards of protection set by several Conventions. These Conventions are: the Berne Convention for the Protection of Literary and Artistic Works (1971), the Rome Convention or the International Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organisations, the Treaty on Intellectual Property in Respect of Integrated Circuits, and the Paris Convention (1967), as revised in Stockholm on July 14, 1967."

"A major proportion of international trade depends on the protection of intellectual property rights. Since the late 1970's, the unauthorised counterfeiting of industrial property and trademarked products has had a considerable adverse impact on domestic and international trade revenues. The TRIPs Agreement seeks to grant adequate protection of intellectual property rights by creating a favourable economic environment to encourage the inflow of foreign investments, and strengthening the multi-lateral trading system to bring about economic, cultural and technological independence."

"The Philippines and the United States of America have acceded to the WTO Agreement. This Agreement has revolutionised international business and economic relations among states, and has propelled the world towards trade liberalisation and economic globalisation. 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 co-operation, reflecting the widespread desire to operate in a fairer and more open multilateral trading system.' Conformably, the State must reaffirm its commitment to the global community and take part in evolving a new international economic order at the dawn of the new millennium."

Indeed, "that's one small step for a member-country…one giant leap for the Union".

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