G.R. No. L-28554. February 28, 1983.
UNNO COMMERCIAL ENTERPRISES, INCORPORATED, petitioner, vs. GENERAL MILLING CORPORATION and TIBURCIO S. EVALLE, in his capacity as Director of Patents, respondents.

FACTS

Respondent General Milling Corporation (GMC) filed an application to register the trademark “All Montana” for wheat flour on December 11, 1962. This triggered an interference proceeding at the Patent Office because petitioner Unno Commercial Enterprises, Inc. (UNNO) had obtained a certificate of registration for the identical mark on March 8, 1962. GMC claimed prior use since August 31, 1955, supported by a 1962 deed of assignment from the original American owner, Centennial Mills, Inc. UNNO, asserting prior use from June 30, 1956, based its claim on being an indentor or broker for a local importer, S.H. Huang Bros. & Co., handling shipments of “All Montana” flour from Centennial Mills.
The Director of Patents ruled in favor of GMC, adjudging it the prior user and ordering the cancellation of UNNO’s registration. The Director also noted the mark was geographically descriptive (“Montana”) and remanded the matter for possible registration on the Supplemental Register. UNNO’s motion for reconsideration was denied, prompting this petition. UNNO argued that as a lawful dealer, it could appropriate the trademark under Section 2-A of the Trademark Law (R.A. 166), irrespective of not being the manufacturer.

ISSUE

Whether the Director of Patents correctly cancelled UNNO’s trademark registration and declared GMC as the rightful prior user and owner of the “All Montana” trademark.

RULING

Yes, the Supreme Court affirmed the decision of the Director of Patents. The legal logic is anchored on the fundamental principle that the right to register a trademark is based on ownership. Under the Trademark Law, only the owner of a mark used to distinguish his goods or services is entitled to register it. An importer, broker, or distributor does not acquire ownership rights over a foreign trademark merely by dealing in the goods; such rights can only arise from a valid transfer or assignment from the actual owner.
The Court found that the trademark “All Montana” was originally owned and registered by Centennial Mills, Inc. in the United States. GMC established its ownership through a formal deed of assignment from Centennial Mills. In contrast, UNNO failed to prove ownership. Its role was merely that of an exclusive distributor or indentor for the imported flour. The documents and invoices it presented only proved it dealt in goods bearing the mark, not that it owned the mark itself. Section 2-A of the Trademark Law, which allows a lawful dealer to appropriate a mark, cannot be invoked to claim ownership of a mark already owned by another entity, especially a foreign manufacturer. UNNO was not the producer and had no authorization from the true owner to claim the mark as its own at the time of its application.
Furthermore, the Court upheld the Director’s authority to order cancellation in an interference proceeding under the applicable rules of practice. Since GMC proved prior adoption and use through its licensor-assignor, and UNNO had no valid claim of ownership, the cancellation of UNNO’s registration and the recognition of GMC’s prior right were proper. The petition was denied.