E.Y. INDUSTRIAL SALES, INC.

and ENGARCIO YAP

-versus-
SHEN DAR ELECTRICITY AND MACHINERY CO., LTD.
G.R. No. 184850

FACTS:

E.Y. Industrial Sales, Inc. is a domestic corporation engaged in the production,

distribution and sale of air compressors while Shen Dar Electricity and Machinery Co., Ltd., is a
Taiwan-based foreign corporation engaged in the manufacture of compressors. E.Y. Industrial
imported air compressors from Shen Dar from the year 1997-2004. On June 9, 1997, Shen Dar
filed a Trademark Application with the Intellectual Property Office (IPO) for the mark,
“VESPA” for the use of air compressors. It was then approved on February 8, 2007. On July 18,
1999, E.Y. Industrial filed a Trademark Application also for the mark, “VESPA” for the use of
air compressors and it was approved on January 18, 2004.

On June 21, 2004, Shen Dar filed a Petition for Cancellation of EYIS COR with the
Bureau of Legal Affairs contending that there was a violation of the Intellectual Property Code.
Thereafter, the Director of the BLA issued its decision in favor of EYIS and against Shen Dar.
Shen Dar appealed the decision of the BLA Director to the Director General of the IPO. Later,
the IPO Director General issued a decision upholding the COR issued in favor of EYIS while
cancelling the COR of Shen Dar.

ISSUE:

Whether the Director General of the IPO can, under the circumstances, order the
cancellation of Respondents certificate of registration for VESPA, which has been fraudulently
obtained and erroneously issued.

RULING:

Shen Dar challenges the propriety of such cancellation on the ground that there was no
petition for cancellation under Sec. 151 of R.A. 8291.

In his decision, the IPO Director General stated that, despite the fact that the instant case
was for the cancellation of the COR issued in favor of EYIS, the interests of justice dictate, and
in view of its findings, that the COR of Shen Dar must be cancelled.

The above rules reflect the oft-repeated legal principle that quasi-judicial and
administrative bodies are not bound by technical rules of procedure. Such principle, however, is
tempered by fundamental evidentiary rules, including due process.
 The fact that no petition was filed against the COR issued to Shen Dar does not preclude
the cancellation of Shen Dar’s COR. It must be emphasized that, during the hearing of the
cancellation of EYIS’ COR before the BLA, Shen Dar established that it, not EYIS, was the true
owner of the mark “VESPA” and, thus, entitled to have it registered. Shen Dar had more than
sufficient opportunity to present its evidence and argue its case, and it did. It was given its day in
court and its right to due process was respected. The IPO Director General’s disregard on the
procedure for the cancellation of a registered mark was a valid exercise of his discretion.

Remember, .E.Y.’s application was the one granted, and it is Shen Dar’s application that
was cancelled. It does not mean that even you were the one that filed; your application cannot be
cancelled. The BLA who has jurisdiction over the case, were able to determine that it is Shen
Dar’s trademark that should not have been issued with registration, even it is the plaintiff.