Trademark Law in the Eyes of a Social Democrat

by precybacalangco

The Subject

Republic Act No. 8293, otherwise known as the Intellectual Property Code of the Philippines

–          It is an act prescribing the intellectual property code and establishing the intellectual property office, providing for its powers and functions, and for other purposes.

Statutory bases of the Trademark Law

The first trademark law in place in the Philippines was that which Queen Maria Cristina of Spain promulgated on October 26, 1888. This law accorded trademark rights to the person who registered first.

This law was replaced on March 6, 1903 by Act No. 666 or the Trademark and Trade Name Law of the Philippine Islands, which abandoned prior registration in favor of actual use of the mark as the basis for trademark rights. The Philippines, being then a territory of the United States, incorporated into Act 666 principles upon which the U.S. trademark law was founded on.

R. A.166 repealed Act 666 in 1946, and was itself expressly repealed on January 1, 1998 when Republic Act No. 8293 was enacted in compliance with the WTO TRIPS Agreement.

Legal Definition

“Mark” means any visible sign capable of distinguishing the goods (trademark) or services (service mark) of an enterprise and shall include a stamped or marked container of goods.

“Trade name” means the name or designation identifying or distinguishing an enterprise.

Acquiring Trademark Rights

The rights in a mark shall be acquired through registration made validly in accordance with the provisions of this law. (SECTION 122)

The applicant or the registrant shall file a declaration of actual use of the mark with evidence to that effect, as prescribed by the Regulations within three (3) years from the filing date of the application. Otherwise, the application shall be refused or the mark shall be removed from the Register by the Director. (Section 124.2)

NON-USE OF MARK, WHEN EXCUSED (Section 152):

  •  If caused by circumstances arising independently of the will of the trademark owner. Lack of funds shall not excuse non-use of a mark
  • The use of the mark in a form different from the form in which it is registered, which does not alter its distinctive character, shall not be ground for cancellation or removal of the mark and shall not diminish the protection granted to the mark
  • The use of a mark in connection with one or more of the goods or services belonging to the class in respect of which the mark is registered shall prevent its cancellation or removal in respect of all other goods or services of the same class
  • The use of a mark by a company related with the registrant or applicant shall inure to the latter’s benefit, and such use shall not affect the validity of such mark or of its registration: Provided, that such mark is not used in such manner as to deceive the public. If use of a mark by a person is controlled by the registrant or applicant with respect to the nature and quality of the goods or services, such use shall inure to the benefit of the registrant or applicant.

Certificate of Registration

A certificate of registration of a mark shall be prima facie evidence of the validity of the registration, the registrant’s ownership of the mark, and of the registrant’s exclusive right to use the same in connection with the goods or services and those that are related thereto specified in the certificate.

Term of Protection

A certificate of registration shall remain in force for ten (10) years: Provided, That the registrant shall file a declaration of actual use and evidence to that effect, or shall show valid reasons based on the existence of obstacles to such use, as prescribed by the Regulations, within one (1) year from the fifth anniversary of the date of the registration of the mark. Otherwise, the mark shall be removed from the Register by the Office.

Unregistrable Marks

A mark cannot be registered if it:

  • Consists of immoral, deceptive or scandalous matter, or matter which may disparage or falsely suggest a connection with persons, living or dead, institutions, beliefs, or national symbols, or bring them into contempt or disrepute;
  • Consists of the flag or coat of arms or other insignia of the Philippines or any of its political subdivisions, or of any foreign nation, or any simulation thereof;
  •  Consists of a name, portrait or signature identifying a particular living individual except by his written consent, or the name, signature, or portrait of a deceased President of the Philippines, during the life of his widow, if any, except by written consent of the widow;
  • (FIRST TO FILE RULE) Is identical with a registered mark belonging to a different proprietor or a mark with an earlier filing or priority date, in respect of:
    (i) The same goods or services, or
    (ii) Closely related goods or services, or
    (iii) (CONFUSING SIMILARITY) If it nearly resembles such a mark as to be likely to deceive or cause confusion;
  • (UNREGISTERED INTERNATIONALLY WELL-KNOWN MARKS) Is identical with, or confusingly similar to, or constitutes a translation of a mark which is considered by the competent authority of the Philippines to be well-known internationally and in the Philippines, whether or not it is registered here, as being already the mark of a person other than the applicant for registration, and used for identical or similar goods or services: Provided, That in determining whether a mark is well-known, account shall be taken of the knowledge of the relevant sector of the public, rather than of the public at large, including knowledge in the Philippines which has been obtained as a result of the promotion of the mark;
  • (REGISTERED WELL-KNOWN MARKS) Is identical with, or confusingly similar to, or constitutes a translation of a mark considered well-known in accordance with the preceding paragraph, which is registered in the Philippines with respect to goods or services which are not similar to those with respect to which registration is applied for: Provided, That use of the mark in relation to those goods or services would indicate a connection between those goods or services, and the owner of the registered mark: Provided further, That the interests of the owner of the registered mark are likely to be damaged by such use;
  • (DESCRIPTIVELY MISLEADING) Is likely to mislead the public, particularly as to the nature, quality, characteristics or geographical origin of the goods or services;
  • (GENERIC MARKS) Consists exclusively of signs that are generic for the goods or services that they seek to identify;
  • (GENERICIDAL MARKS) Consists exclusively of signs or of indications that have become customary or usual to designate the goods or services in everyday language or in bona fide and established trade practice;
  • (DESCRIPTIVE MARKS) Consists exclusively of signs or of indications that may serve in trade to designate the kind, quality, quantity, intended purpose, value, geographical origin, time or production of the goods or rendering of the services, or other characteristics of the goods or services;
  • Consists of shapes that may be necessitated by technical factors or by the nature of the goods themselves or factors that affect their intrinsic value;
  • Consists of color alone, unless defined by a given form; or
  • Contrary to public order or morality

Trademark Rights

The owner of a registered mark shall have the exclusive right to prevent all third parties not having the owner’s consent from using in the course of trade identical or similar signs or containers for goods or services which are identical or similar to those in respect of which the trademark is registered where such use would result in a likelihood of confusion. In case of the use of an identical sign for identical goods or services, a likelihood of confusion shall be presumed.

INTERNATIONALLY WELL-KNOWN TRADEMARK DILUTION  The exclusive right of the owner of a well-known mark defined in Subsection 123.1(e) which is registered in the Philippines, shall extend to goods and services which are not similar to those in respect of which the mark is registered: Provided, That use of that mark in relation to those goods or services would indicate a connection between those goods or services and the owner of the registered mark: Provided further, That the interests of the owner of the registered mark are likely to be damaged by such use. (n)

Limitations to Trademark Rights

Registration of the mark shall not confer on the registered owner the right to preclude third parties from using bona fide their names, addresses, pseudonyms, a geographical name, or exact indications concerning the kind, quality, quantity, destination, value, place of origin, or time of production or of supply, of their goods or services: Provided, That such use is confined to the purposes of mere identification or information and cannot mislead the public as to the source of the goods or services.

Trade-Related Aspects of Intellectual Property Rights (“TRIPS”) ARTICLE 17: Exceptions (FAIR USE OF TRADEMARK) Members may provide limited exceptions to the rights conferred by a trademark, such as fair use of descriptive terms, provided that such exceptions take account of the legitimate interests of the owner of the trademark and of third parties.

Trademark Infringement

Any person who shall, without the consent of the owner of the registered mark:

1.  Use in commerce any reproduction, counterfeit, copy, or colorable imitation of a registered mark or the same container or a dominant feature thereof in connection with the sale, offering for sale, distribution, advertising of any goods or services including other preparatory steps necessary to carry out the sale of any goods or services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive; or

2.  Reproduce, counterfeit, copy or colorably imitate a registered mark or a dominant feature thereof and apply such reproduction, counterfeit, copy or colorable imitation to labels, signs, prints, packages, wrappers, receptacles or advertisements intended to be used in commerce upon or in connection with the sale, offering for sale, distribution, or advertising of goods or services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive, shall be liable in a civil action for infringement by the registrant for the remedies hereinafter set forth: Provided, That the infringement takes place at the moment any of the acts stated in Subsection 155.1 or this subsection are committed regardless of whether there is actual sale of goods or services using the infringing material.

Remedies

RECOVERY OF DAMAGES. The owner of a registered mark may recover damages from any person who infringes his rights, and the measure of the damages suffered shall be either the reasonable profit which the complaining party would have made, had the defendant not infringed his rights, or the profit which the defendant actually made out of the infringement, or in the event such measure of damages cannot be readily ascertained with reasonable certainty, then the court may award as damages a reasonable percentage based upon the amount of gross sales of the defendant or the value of the services in connection with which the mark or trade name was used in the infringement of the rights of the complaining party.

DOUBLE DAMAGES. In cases where actual intent to mislead the public or to defraud the complainant is shown, in the discretion of the court, the damages may be doubled.

Note:  On application of the complainant, the court may impound during the pendency of the action, sales invoices and other documents evidencing sales. (n)

INJUNCTION.  The complainant, upon proper showing, may also be granted injunction.

DESTRUCTION OF INFRINGING MATERIALS.  In any action arising under this Act, in which a violation of any right of the owner of the registered mark is established, the court may order that goods found to be infringing be, without compensation of any sort, disposed of outside the channels of commerce in such a manner as to avoid any harm caused to the right holder, or destroyed; and all labels, signs, prints, packages, wrappers, receptacles and advertisements in the possession of the defendant, bearing the registered mark or trade name or any reproduction, counterfeit, copy or colorable imitation thereof, all plates, molds, matrices and other means of making the same, shall be delivered up and destroyed.

In regard to counterfeit goods, the simple removal of the trademark affixed shall not be sufficient other than in exceptional cases which shall be determined by the Regulations, to permit the release of the goods into the channels of commerce.

The Issue

Does the use of competing marks in a corporate sponsored event fall under trademark infringement?

The Stance of a Social Democrat

Social democrats, who are we?

Social democrats (“socdems”) are a rare political species in the Philippines even though we may be found in rather high altitudes of government in great disproportion to our actual numbers.  We are the people and institutions that have been formed by its social vision and political practice, and by all those who will be willing to learn from the experience and take up the challenge to continue the struggle. I, for one, believe that we should not only confine our thoughts or philosophies in a box.  True, we are governed by rules that are there to ensure order and stability in our society, but we are also propelled to look beyond and see the other side to have a holistic view of a particular scenario.  In the end, what will distinguish us from the rest of the political kinds are our strong sense of involvement in the cause of our fellowmen and the passion of pursuing said cause in the light of social justice and equity³.

My Viewpoint

Nowhere in the aforementioned paragraphs about trademark infringement can you find violation involving use of competing marks in an event sponsored by another institution, which, to the extreme, may appear as the direct competitor of the event organizer. Concept of unfair competition, though not directly associated with the present case, comes into play when any person who shall employ deception or any other means contrary to good faith by which he shall pass off the goods manufactured by him or in which he deals, or his business, or services for those of the one having established such goodwill, or who shall commit any acts calculated to produce said result. This definition alone is not in four squares as to the issue at hand but I have to expand my horizon to have a better view in assessing the said issue. And as a social democrat, I am guided by the philosophies far reaching from what is in the words of the law.   

Corporate events or activities are part and parcel of the existence of an organization.  It has become a norm that almost, if not all bonafide companies sponsor an event once or twice a year, to celebrate a milestone or to forge unity and oneness among its employees and even business partners, e.g. suppliers.  In contextualizing the scenario and strictly applying the law, nothing has been infringed in this case.  To label the act as a form of unfair competition, thereby extending its meaning, may tend to mislead, rather than inform all concerned.  Trademark law does not thereby cover every unfair act committed in the course of business; it covers only acts characterized by “deception or any other means contrary to good faith” in the passing off of goods and services as those of another who has established goodwill in relation with these goods or services, or any other act calculated to produce the same result.  Further delving into the particulars provided by the subject act on unfair competition, one may easily cite the catch-all phrase that says: a person shall be guilty of unfair competition “who shall commit any other act contrary to good faith of a nature calculated to discredit the goods, business or services of another.”  Looking for proper application of social justice and equity on this phrase alone, I can surmise that the competing brand is still not liable of unfair competition.  From jurisprudence¹, unfair competition has been defined as the passing off (or palming off) or attempting to pass off upon the public the goods or business of one person as the goods or business of another with the end and probable effect of deceiving the public. Deception, passing off and fraud upon the public are still the key elements that must be present for unfair competition to exist.  Attendance of a competing brand in a corporate sponsored event does not fall under any of these key elements.  If we will further analyze the case, deception might have been employed as a ticket or vehicle in entering the event, but the effect is not directed to deceiving the public, rather to the event sponsors themselves.  Just imagine the display of emotion later on if the sponsors find out that a competitor graced their event. To the public, it might appear interesting, seeing competing brands rubbing elbows with each other.  No indication of fraud is committed to the public least is annoyance being caught in a brand brawl. But that’s just there is to it.  You cannot make someone liable for something not provided by law.   Going back to the issue at hand, no such transgression of the subject law is committed.

But wait, we can’t just let this behavior remain unnoticed.  On the side of social justice and equity, I find the act of showing up in an event of a competitor “unethical”.  Ethics² examines the rational justification for our moral judgments; it studies what is morally right or wrong, just or unjust.  Ethics also refers to the specific values, standards, rules, and agreements people adopt for conducting their lives.  Judging the aforementioned conduct, there is little or non-justification at all showing in a corporate sponsored event by a competing brand, if not to antagonize the sponsor.  Companies will not set as standards the presence or attendance of their competitors in their event, except for the possible reason of boasting their accomplishments.  Just the same, it is not right to gain exposure from an occasion paid for by your competitor.  This conduct should be restrained, if not totally prohibited, to uphold fair and healthy competition.  At the end of the day, both characters need to exist to maintain balance in a normal business setting.

We live in a society where laws and customs govern the conduct of its inhabitants.  We cannot simply close our eyes to the fact that there are norms that affect our thinking and emotions when confronted with issues like in this case. These well-accepted practices, though not carved in jurisprudence and laws, somehow fill the vacuum that the law cannot penetrate. 

This article is for academic purposes only and is not a substitute for professional advice where the facts and circumstances warrant. The views and opinion expressed above are those of the author, except on the discussion of the contents of the subject law which is lifted from the Act itself.

 

 

Endnotes

¹sc.judiciary.gov.ph/jurisprudence/2008/november2008/154491.htm

²www.tbs-sct.gc.ca

³www.uow.edu.au/~sharonb/STS300/equity/meaning/index.html

[1]en.wikipedia.org/wiki/Trademark

[2] en.wikipedia.org/wiki/Philippine_trademark_law

[3] www.lawphil.net/statutes/repacts/ra1997/ra_8293_1997.html

[4] Trademark Law in a Knotshell: From Caves to Cyberspace
       September 20, 2007
       By: Ferdinand M. Negre

     http://www.iplaw.ph/ip-views/TrademarkLaw-From-Caves-to-Cyberspace.html

[5] opinion.inquirer.net/20767/socdem

 

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