GR L 54158; (November, 1982) (Digest)
G.R. No. L-54158 November 19, 1982
PAGASA INDUSTRIAL CORPORATION, petitioner, vs. HE HONORABLE COURT OF APPEALS, TIBURCIO S. EVALLE Director of Patents, and YOSHIDA KOGYO KABUSHIKI KAISHA, respondents.
FACTS
Respondent Yoshida Kogyo Kabushiki Kaisha (Kaisha) obtained Certificate of Registration No. 9331 for the trademark “YKK” for slide fasteners and zippers on November 9, 1961. Over five years later, on April 27, 1967, petitioner Pagasa Industrial Corporation filed an application for registration of the identical trademark “YKK” for zippers, which was granted on April 4, 1968, as Registration No. 13756. Kaisha subsequently filed a petition for the cancellation of Pagasa’s registration before the Director of Patents, alleging the marks were confusingly similar for identical goods.
The Director of Patents cancelled Pagasa’s registration on May 5, 1977, finding the mark confusingly similar under Section 4(d) of Republic Act No. 166 and acknowledging an oversight in the Patent Office for allowing the second registration. Pagasa appealed to the Court of Appeals, arguing Kaisha was guilty of laches for filing the cancellation petition nearly seven years after Pagasa’s registration and that Kaisha never acquired ownership due to a lack of proven commercial use of the mark in the Philippines. The appellate court affirmed the cancellation, rejecting the defenses of laches and estoppel.
ISSUE
The core issues are: (1) whether the equitable principles of laches, estoppel, and acquiescence bar Kaisha’s cancellation petition; and (2) whether registration alone, absent proven commercial use in the Philippines, vests ownership of a trademark.
RULING
The Supreme Court reversed the Court of Appeals and set aside the cancellation of Pagasa’s registration. On the first issue, the Court held that laches applied. Kaisha’s inaction for almost seven years, while Pagasa openly used the mark and built commercial goodwill, led Pagasa to believe its use was unobjectionable. Equity bars a claim when a party negligently fails to assert its right for an unreasonable length of time, causing prejudice to the adverse party. The Court found such prejudice to Pagasa, which had invested in promoting the mark.
On the second issue, the Court ruled that registration alone does not confer ownership under Philippine trademark law; ownership is acquired through actual commercial use of the mark in the market. The Court found Kaisha’s evidence of use—advertisements in international magazines like Life and Time—insufficient to prove actual use of the “YKK” trademark in commerce within the Philippines. Without such proof of prior use, Kaisha could not claim superior ownership to justify cancelling Pagasa’s registration, which was supported by actual use. Therefore, Pagasa’s registration was sustained.