G.R. No. 179127 , December 24, 2008
IN-N-OUT BURGER, INC., petitioner, vs. SEHWANI, INCORPORATED AND/OR BENITA’S FRITES, INC., respondents.

FACTS

Petitioner IN-N-OUT BURGER, INC., a corporation from California, USA, is engaged in the restaurant business but has never operated in the Philippines. It is a signatory to international intellectual property conventions. On June 2, 1997, it filed trademark applications in the Philippines for “IN-N-OUT” and “IN-N-OUT Burger & Arrow Design.” It later discovered that respondent Sehwani, Incorporated had already obtained a Trademark Registration for “IN N OUT (the inside of the letter ‘O’ formed like a star)” on December 17, 1993, based on an application filed in 1991. Respondent Benita Frites, Inc. used the mark via a licensing agreement. On June 4, 2001, petitioner filed an administrative complaint with the IPO Bureau of Legal Affairs (BLA) against respondents for unfair competition and cancellation of trademark registration, claiming its marks are internationally well-known. The IPO Director of Legal Affairs rendered a Decision on December 22, 2003, ordering the cancellation of respondent Sehwani’s trademark registration and directing respondents to cease and desist from using the “IN-N-OUT” and “Double Double” marks. Both parties filed motions for reconsideration, which were denied. Respondents filed an appeal to the IPO Director General, which was dismissed for being filed out of time. This dismissal was affirmed by the Court of Appeals in a related case (CA-G.R. SP No. 88004, which led to G.R. No. 171053 ). In the present case ( G.R. No. 179127 ), the Court of Appeals, in its Decision dated July 18, 2006, reversed the IPO Director General’s decision in Appeal No. 10-05-01, ruling that the IPO Director of Legal Affairs and the IPO Director General do not have jurisdiction over cases involving unfair competition.

ISSUE

Whether the Intellectual Property Office (IPO), through its Director of Legal Affairs and Director General, has jurisdiction over cases involving unfair competition.

RULING

Yes. The Supreme Court reversed the Court of Appeals’ Decision. It held that the IPO has jurisdiction over unfair competition cases. The Court ruled that Section 10 of Republic Act No. 8293 (The Intellectual Property Code) explicitly grants the IPO the authority to exercise original jurisdiction in administrative cases for violations of laws involving intellectual property rights, including complaints for unfair competition. Furthermore, Section 160 of the same Code specifically provides that the provisions thereof on unfair competition shall apply to marks, trade names, and service marks, which are within the scope of the IPO’s jurisdiction. The Court emphasized that the IPO’s jurisdiction extends to all grounds for cancellation provided under the Code, including those related to well-known marks and unfair competition. The Court also noted that its ruling in the related case, G.R. No. 171053 , which affirmed the IPO Director of Legal Affairs’ Decision cancelling respondent’s trademark registration, had already become final and executory. Consequently, the Court reinstated the Decision dated December 22, 2003, of the IPO Director of Legal Affairs, as affirmed by the IPO Director General.