January 16, 2008
by: R.G. Pasiliao
In determining a mark as well-known, the fact that the mark is neither registered nor used in the Philippines is of no consequence. This was the ruling of the Supreme Court in Sehwani, Inc. v. In-N-Out Burger, Inc. (G.R. No. 171053, October 15, 2007), where American fast food chain In-N-Out Burger, Inc., was granted exclusive rights over the use of the IN-N-OUT and IN-N-OUT BURGER marks.
The ruling is a marked departure from the doctrines enunciated in Kabushi Kaisha Isetan v. IAC (G.R. No. 75420, November 15, 1991) and Philip Morris v. Court of Appeals (G.R. No. 91332, July 16, 1993), where actual use in commerce in the Philippines was held to be an indispensable element for the acquisition of ownership over a trademark or a tradename.
Under the old Trademark Law, which was the governing law when the controversies in Kabushi Kaisha andPhilip Morris took place, actual commercial use in the Philippines was a pre-requisite to the acquisition of ownership over a trademark or a tradename. When the controversy in Sehwani arose, however, the old Trademark Law was no longer in effect. Thus, the Supreme Court cited the rules implementing the Intellectual Property Code, which provide guidelines in determining whether a mark is well-known.
Sehwani also made use of the Joint Recommendation Concerning Provisions on the Protection of Well-Known Marks, adopted by the Assembly of the Paris Union for the Protection of Industrial Property and the General Assembly of the World Intellectual Property Organization (WIPO) in 1999. Rule 102 of the Rules and Regulations on Trademarks, Service Marks, Tradenames and Marked or Stamped Containers, states the criteria for determining whether a mark is well-known. The following criteria or any combination thereof may be taken into account:
(a) the duration, extent and geographical area of any use of the mark, in particular, the duration, extent and geographical area of any promotion of the mark, including advertising or publicity and the presentation, at fairs or exhibitions, of the goods and/or services to which the mark applies;
(b) the market share, in the Philippines and in other countries, of the goods and/or services to which the mark applies;
(c) the degree of the inherent or acquired distinction of the mark;
(d) the quality-image or reputation acquired by the mark;
(e) the extent to which the mark has been registered in the world;
(f) the exclusivity of registration attained by the mark in the world;
(g) the extent to which the mark has been used in the world;
(h) the exclusivity of use attained by the mark in the world;
(i) the commercial value attributed to the mark in the world;
(j) the record of successful protection of the rights in the mark;
(k) the outcome of litigations dealing with the issue of whether the mark is a well-known mark; and,
(l) the presence or absence of identical or similar marks validly registered for or used on identical or similar goods or services and owned by persons other than the person claiming that his mark is a well-known mark.
In Sehwani, In-N-Out Burger presented its United States trademark registrations before the Intellectual Property Office as evidence that its mark was well-know. It submitted U.S. Trademark Registration No. 1,514,689 for “IN-N-OUT Burger and Arrow Design” under class 25; U.S. Trademark Registration No. 1,528,456 for “IN-N-OUT Burger and Arrow Design” under Classes 29, 30, 32 and 42; U.S. Trademark Registration No. 1,101,638 for “IN-N-OUT” under Class No. 30; and US Trademark Registration No. 1,085,163 “IN-N-OUT” under Class 42. For the mark “Double-Double”, In-N-Out submitted Certificates of Registration of the mark in several countries.
The Supreme Court took note of these various trademark registrations, observing that under Section (e) Rule 102 of the Implementing Rules, the extent to which a mark has been registered in the world is taken into account in determining whether a mark is indeed well known.
In-N-Out Burger likewise submitted evidence consisting of articles about “IN-N-OUT Burger” appearing in magazines and newspapers, and a print-out of what appeared to be printed representations of its website. In-N-Out also presented videotapes of famous celebrities mentioning IN-N-OUT burgers in the course of their interviews.
Citing Sections (a) and (d) of Rule 102, the Court held that these pieces of evidence would tend to show that the mark was well-known and that the quality, image, and reputation acquired by the IN-N-OUT mark was unmistakable. Thus, on the basis of “registrations in various countries around the world and its comprehensive advertisements therein,” In-N-Out Burger was declared a well-known mark.
The Court observed that the 1999 Joint Recommendation Concerning Provisions on the Protection of Well-Known Marks expanded the scope of protection initially afforded by Article 6bis of the Paris Convention. The Court cited Part I, Article 2(3) of the Joint Recommendation, which enumerates three factors to be eliminated in determining whether or not a mark is well-known. Thus, it shall not be required :
a) that the mark has been used in, or that the mark has been registered or that an application for registration of the mark has been filed in or in respect of, the Member State;
b) that the mark is well known in, or that the mark has been registered or that an application for registration of the mark has been filed in or in respect of, any jurisdiction other than the Member State; or
c) that the mark is well known by the public at large in the Member State.
Accordingly, the Court declared that “the fact that respondent’s marks are neither registered nor used in the Philippines is of no moment.”
In the Philip Morris case, Justice Feliciano wrote a dissenting opinion discussing the advertisement function of a trademark . He stated:
“The third or advertisement function of trademark has become of special importance given the modern technology of communication and transportation and the growth of international trade. Through advertisement in the broadcast and print media, the owner of the trademark is able to establish a nexus between its trademarked products and the public in regions where the owner does not itself manufacture or sell its own products. Through advertisement, a well-established and well-earned reputation may be gained in countries where the trademark owner has itself no established business connection.”
The ruling of the Supreme Court in Sehwani coincides with Justice Feliciano’s opinion. By not requiring actual use in commerce and by giving substantial weight to evidence consisting of magazine and newspaper articles, a print-out of an internet website, and videotapes of celebrities, the High Court now clearly recognizes advertisements in establishing the fame and reputation of a mark.
The Court gives full force and effect to the Intellectual Property Code and to international covenants giving protection to well-known trademarks. The ruling also recognizes the role of modern information and communications technology in raising awareness of trademark ownership.