G.R. No. 111580 & G.R. No. 114802, June 21, 2001
SHANGRI-LA INTERNATIONAL HOTEL MANAGEMENT LTD., SHANGRI-LA PROPERTIES, INC., MAKATI SHANGRI-LA HOTEL AND RESORT, INC. and KUOK PHILIPPINE PROPERTIES, INC., petitioners, vs. THE COURT OF APPEALS, HON. FELIX M. DE GUZMAN, as Judge, RTC of Quezon City, Branch 99 and DEVELOPERS GROUP OF COMPANIES, INC., respondents. (G.R. No. 111580)

DEVELOPERS GROUP OF COMPANIES, INC., petitioner, vs. THE COURT OF APPEALS, HON. IGNACIO S. SAPALO, in his capacity as Director, Bureau of Patents, Trademarks and Technology Transfer, and SHANGRI-LA INTERNATIONAL HOTEL MANAGEMENT, LTD., respondents. (G.R. No. 114802)

FACTS

On June 21, 1988, the Shangri-La Group filed with the Bureau of Patents, Trademarks and Technology Transfer (BPTTT) a petition (Inter Partes Case No. 3145) for the cancellation of the “Shangri-La” mark and “S” device/logo registered by Developers Group of Companies, Inc., alleging prior ownership and use since 1962. The Shangri-La Group also filed its own application for registration, which Developers Group opposed (Inter Partes Case No. 3529). On April 15, 1991, Developers Group filed a complaint for infringement and damages with the Regional Trial Court (RTC) of Quezon City (Civil Case No. Q-91-8476) against the Shangri-La Group. The Shangri-La Group moved to suspend the infringement case due to the pending BPTTT proceedings, but the RTC denied the motion and a subsequent motion for reconsideration and motion to inhibit the judge. The Shangri-La Group’s petition for certiorari before the Court of Appeals (CA-G.R. SP No. 29006) was dismissed, leading to G.R. No. 111580. Meanwhile, in the BPTTT case, Developers Group filed an Urgent Motion to Suspend Proceedings, invoking the pending infringement case. The BPTTT, through Director Ignacio S. Sapalo, denied the motion. The Court of Appeals (CA-G.R. SP No. 27742) dismissed Developers Group’s petition for certiorari, mandamus and prohibition against this denial, leading to G.R. No. 114802. The Supreme Court consolidated the two petitions.

ISSUE

Whether, despite the prior institution of an Inter Partes case for cancellation of a mark with the BPTTT, the adverse party (the registrant) can file a subsequent action for infringement with the regular courts in connection with the same registered mark.

RULING

Yes. The Supreme Court ruled in the affirmative. Applying Section 151.2 of the Intellectual Property Code (Republic Act No. 8293) and Rule 8, Section 7 of the Regulations on Inter Partes Proceedings, the earlier filing of a petition to cancel a mark with the Bureau (BPTTT) does not constitute a prejudicial question that must be resolved before an action to enforce the rights to the same registered mark may be decided. Therefore, the earlier Inter Partes case filed by Shangri-La Group for cancellation could not bar the subsequent filing of an infringement case by the registrant, Developers Group. The rationale is that the Certificate of Registration remains valid and subsisting until cancelled and constitutes prima facie evidence of the registrant’s ownership and exclusive right. The issues in the two proceedings are different: cancellation before the BPTTT and infringement before the trial court. Citing Conrad and Company, Inc. v. Court of Appeals, the Court held that an application for administrative cancellation cannot restrain courts from exercising their conferred jurisdiction over infringement suits. However, to provide a judicious resolution, the Supreme Court ordered the suspension of the proceedings before the Bureau (now the Bureau of Legal Affairs, Intellectual Property Office) in Inter Partes Case No. 3145 pending the final outcome of the appeal in the infringement case (Civil Case No. Q-91-8476), where the validity of the registration was passed upon. The Court dismissed G.R. No. 111580 as moot and academic.