BIRKENSTOCK ORTHOPAEDIE GMBH AND CO.

KG vs PHILIPPINE SHOE EXPO MARKETING CORPORATION,

G.R. No. 194307. November 20, 2013

DOCTRINES:
Under Section 2 of RA 166, which is also the law governing the subject applications, in order to register a trademark, one must be the
owner thereof and must have actually used the mark in commerce in the Philippines for two (2) months prior to the application
for registration. Section 2-A of the same law sets out to define how one goes about acquiring ownership thereof. Under the same
section, it is clear that actual use in commerce is also the test of ownership but the provision went further by saying that the mark
must not have been so appropriated by another. Significantly, to be an owner, Section 2-A does not require that the actual use of a
trademark must be within the Philippines. Thus, under RA 166, one may be an owner of a mark due to its actual use but may not yet have
the right to register such ownership here due to the owners failure to use the same in the Philippines for two (2) months prior to
registration.

It must be emphasized that registration of a trademark, by itself, is not a mode of acquiring ownership. If the applicant is not the owner of
the trademark, he has no right to apply for its registration. Registration merely creates a prima facie presumption of the validity of
the registration, of the registrants ownership of the trademark, and of the exclusive right to the use thereof. Such presumption,
just like the presumptive regularity in the performance of official functions, is rebuttable and must give way to evidence to the contrary.

It is not the application or registration of a trademark that vests ownership thereof, but it is the ownership of a trademark that confers
the right to register the same. A trademark is an industrial property over which its owner is entitled to property rights which
cannot be appropriated by unscrupulous entities that, in one way or another, happen to register such trademark ahead of its true and
lawful owner. The presumption of ownership accorded to a registrant must then necessarily yield to superior evidence of actual and real
ownership of a trademark.

FACTS:
Petitioner Birkenstock, a corporation duly organized and existing under the laws of Germany applied for various trademark registrations
before the Intellectual Property Office (IPO). However, the applications were suspended in view of the existing registration of the mark
BIRKENSTOCK AND DEVICE under Registration No. 56334 dated October 21, 1993 in the name of Shoe Town International and
Industrial Corporation, the predecessor-in-interest of respondent Philippine Shoe Expo Marketing Corporation.

On May 27, 1997, Birkinstock filed a petition (Cancellation Case) for cancellation of Registration No. 564334 on the ground that it is the
lawful and rightful owner of the Birkenstock marks. During its pendency, however, respondent Philippine Shoe Expo or it predecessor-
in-interest failed to file the required 10th Year Declaration of Actual Use (10th Year DAU) for Registration No. 56334 on or before October
21, 2004, thereby resulting the cancellation of such mark. Accordingly, the cancellation case was dismissed for being moot and academic
thereby paving the way for the publication of the subject applications.

In response, respondent Philippine Shoe Expo filed with the Bureau of Legal Affairs (BLA) of the IPO three separate verified notices of
opposition to the subject applications docketed as Inter Partes Cases claiming, among others, it, together with its predecessor-in-interest,
has been using the Birkenstock marks in the Philippines for more than 16 years through the mark BIRKENSTOCK AND DEVICE.

In its Decision, the BLA of the IPO sustained respondents opposition, thus ordering the rejection of the subject applications of Petitioner.
Aggrieved, petitioner Birkinstock appealed to the IPO Director General whereby in its decision, the latter reversed and set aside the
ruling of the BLA thus allowing the registration of the subject applications.

Finding the IPO Director Generals reversal of the BLA unacceptable, respondent Philippine Shoe Expo filed a petition for review with the
Court of Appeals. In its decision dated June 25, 2010, the CA reversed and set aside the ruling of the IPO Director General and reinstated
that of the BLA. The petitioner Birkenstock filed a Motion for Reconsideration but was denied by the CA.

Hence , this petition to the Supreme Court.

ISSUE:
1. Whether or not the subject marks should be allowed registration in the name of the petitioner?

RULING:
1. The court ruled in favour of the petitioner. Under Section 12 of Republic Act 166, it provides that, Each certificate of registration
shall remain in force for twenty years: Provided, that the registration under the provisions of this Act shall be cancelled by the
Director, unless within one year following the fifth, tenth and fifteenth anniversaries of the date of issue of the certificate of
registration, the registrant shall file in the Patent Office an affidavit showing that the mark or trade-name is still in use or showing
that its non-use is due to special circumstance which excuse such non-use and is not due to any intention to abandon the same, and
pay the required fee.

In the case at bar, respondent admitted that it failed to file the 10 th Year DAU for Registration No. 56334 within the requisite
period, or on or before October 21, 2004. As a consequence, it was deemed to have abandoned or withdrawn any right or interest
over the mark BIRKENSTOCK. It must be emphasized that registration of a trademark, by itself, is not a mode of acquiring
ownership. If the applicant is not the owner of the trademark, he has no right to apply for its registration. Registration merely
creates a prima facie presumption of the validity of the registration. Such presumption, just like the presumptive regularity in the
performance of official functions, is rebuttable and must give way to evidence to the contrary. Besides, petitioner has duly
established its true and lawful ownership of the mark BIRKENSTOCK. It submitted evidence relating to the origin and history of
BIRKENSTOCK and it use in commerce long before respondent was able to register the same here in the Philippines. Petitioner
also submitted various certificates of registration of the mark BIRKENSTOCK in various countries and that it has used such mark
in different countries worldwide, including the Philippines.