IP News

CA: The IPO-BLA without Jurisdiction over False Designation of Origin Cases

February 6, 2014

In Erico Perez vs. Intellectual Property Office, the Court of Appeals held that the jurisdiction over violations of Section 169 of the Intellectual Property Code fall with the regular courts, and not with the Bureau of Legal Affairs of the Intellectual Property office.

In this case, the Court of Appeals (CA) decided on the matter of jurisdiction over an action involving Section 169 of the Intellectual Property Code (IPC) on False Designation of Origin. In particular, the CA determined which between regular courts and the Intellectual Property Office - Bureau of Legal Affairs (IPO – BLA) has authority to exercise jurisdiction over complaints of such actions.

Antecedents

The case stems from the complaint filed by the Araneta Center Incoporated (Araneta Inc.) claiming that it suffered damages as a result of Perez’s registration of “aranetacenter.com” as the dominant name of his internet website. Perez, in his answer, countered on two points. First, he said that the right Araneta Inc. alleged to have been violated was not an “intellectual property right” as defined by Section 4.1 of the IPC. Second, he said that had the action been actually a violation of section 169 of the IPC, the recourse was to file the complaint before the regular courts and not before the IPO-BLA.

Acting on the Motion filed by Perez to resolve the issue of jurisdiction, the IPO-BLA Hearing Officer, denying said motion, ruled that it had jurisdiction over the complaint and directed the continuation of the proceedings by the presentation of Araneta Inc.’s witnesses. The IPO – BLA’s decision was based on the powers conferred to it by Section 10.2 (a) of the IPC as well as the ruling in the case of In-N-Out Burger vs. Sehwani.  Perez’s motion for reconsideration was also denied.

Perez raised the question to the CA via a petition for certiorari under Rule 65. During the pendency of the action, Perez likewise filed several motions to admit supplements to the petition due to supervening circumstances which eventually led to the issuance of the IPO – BLA decision dated November 15, 2011. In said decision, the Court found Perez guilty of violating Section 169 of the IPC. 

The Appellate Court’s Decision 

Ruling on the petition, the CA agreed with petitioner Perez that the IPO – BLA had no jurisdiction over the action initiated by Araneta Inc. The Court gave three reasons for its decision.  

First, noting that the action was based on the ownership of the trade name, Araneta Center, Inc., the Court said the right involved was not one of the intellectual property rights as defined in the IPC. The Court said:

 

“The enumeration of what intellectual property consist of does not include common words or names. Likewise, the enumeration does not include words, terms or names that are employed in the designation or description of the origin of goods or services. Therefore, only the items expressly mentioned can be considered intellectual property rights, certainly the trade name or business name of private respondent are excluded.”

 

Second, the Court said that Sections 169 and 163 of the IPC clearly state that recourse for violations of the former provision is with the regular courts. The Court emphasized on this, citing A.M. 02-1-11-SC which designated certain Regional Trial Courts as Intellectual Property Courts and A.M. 10-3-10-SC which designated Special Commercial Courts to hear cases involving intellectual property rights. 

Third, the Court noted that Araneta Inc.’s reliance on the decision in the In-N-Out Burger vs. Sehwani Inc. case was misplaced. For one, the Sehwani case and the present one are based on different provisions of the IPC. Also, the Sehwani case involved a trademark which clearly falls within the ambit of “intellectual property rights” as defined by the IPC. And lastly, the case gave administrative remedies only to foreign corporations of which Araneta Inc. was not. 

Hence, declaring all previous decisions and actions by the IPO – BLA as null and void, the CA held that violations of Section 169 of the Intellectual Property Code should be filed with the regular courts by virtue of Section 163 and not with the Intellectual Property Office.
 

Office Address

2nd Floor SEDCCO Building
Rada cor Legaspi Streets
Makati City, Metro Manila
1229 Philippines

Contact

Ph: (632) 813.0120
(632) 892.3228
(632) 892.3252
Fax: (632) 894.2073
E-mail: bnu@iplaw.ph
URL: www.iplaw.ph