G.R. No. L-24075. January 31, 1974.
CRISANTA Y. GABRIEL, petitioner, vs. DR. JOSE R. PEREZ and HONORABLE TIBURCIO EVALLE as Director of Patents, respondents.

FACTS

Petitioner Crisanta Y. Gabriel sought the cancellation of Certificate of Registration No. SR-389 for the trademark “WONDER” on beauty soap, issued to respondent Dr. Jose R. Perez. Gabriel alleged she was the rightful owner, having used the mark since March 1959, and that Perez procured registration through fraud and misrepresentation. She cited a written contract wherein Perez purportedly recognized her ownership and argued the labels he submitted for registration were actually her property. Respondent Perez denied these allegations and highlighted a pending unfair competition case (Civil Case No. 2422) he filed against Gabriel in the Court of First Instance of Bulacan, where a preliminary injunction had been issued restraining her from manufacturing and selling “Wonder Bleaching Beauty Soap.”
The factual background established that Perez, a medical researcher, applied for registration on February 23, 1961, claiming first use of the mark on March 10, 1953. His application was granted. Gabriel had earlier filed her own application on October 3, 1960, claiming first use in March 1959, but it was dismissed as she was found not to be the owner, with the labels indicating Perez’s ownership. The records revealed an exclusive distributorship agreement where Perez manufactured the soap and Gabriel distributed it. This arrangement ceased in January 1961 when Perez alleged Gabriel began manufacturing her own soap, placing it in boxes bearing his name and trademark, prompting the unfair competition suit.

ISSUE

Whether the Director of Patents correctly denied the petition for cancellation of the “WONDER” trademark registration.

RULING

The Supreme Court affirmed the decision of the Director of Patents, dismissing the petition for cancellation. The legal logic centered on the validity of Perez’s registration and Gabriel’s failure to establish her superior right. Perez’s registration was procedurally sound, and his claim of first use in 1953 was supported by evidence. The Court found Gabriel’s claim of ownership since 1959 unconvincing, as the evidence indicated her initial role was merely that of a distributor under an agreement with Perez. Her subsequent manufacture of soap bearing a similar mark (“C.Y. GABRIEL WONDER”) after the cessation of their agreement, while Perez’s unfair competition case was pending, demonstrated bad faith and a disregard for fair dealing.
The Court emphasized that trademark law protects not just registration but also the principles of fair competition. Gabriel’s actions, manufacturing a competing product using a confusingly similar mark derived from her prior distributorship, constituted an attempt to trade upon the goodwill established by Perez. This was deemed worse than the scenario in cited precedent, as it involved a direct breach of a prior commercial relationship. Consequently, the Director of Patents’ decision was upheld as legally sound and ethically commendable for upholding fairness in commerce. Costs were imposed on petitioner.