Birkenstock Orthopaedi Gmbh and Co. Kg, etc. Vs.

Philippine Shoe Expo Marketing

Summary Cases:

● Birkenstock Orthopaedi Gmbh and Co. Kg, etc. Vs. Philippine Shoe Expo Marketing Corp.

Subject: Administrative bodies, such as the IPO, are not bound by technical rules of procedure;
Abandonment of trademark; Registration and ownership of trademark: Actual use requirement; Petitioner
is entitled to the registration of the mark, being the owner thereof

Facts:

In March 1994, Birkenstock Orthopaedie GmbH & Co. KG. (petitioner), a German company, applied for
various trademark registrations before the Intellectual Property Office (IPO) over the name
““BIRKENSTOCK”

However, registration proceedings were suspended in view of an existing registration of the mark
“BIRKENSTOCK AND DEVICE” under Registration No. 56334 dated October 21, 1993 in the name of
Shoe Town International, the predecessor-in-interest of Philippine Shoe Expo Marketing Corporation
(respondent).

Petitioner filed a petition for cancellation of Registration No. 56334 on the ground that it is the lawful and
rightful owner of the Birkenstock marks. Since respondent and/or its 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, this resulted in the cancellation of such mark. Accordingly, the cancellation
case was dismissed for being moot and academic

Petitioner's application was published in the IPO e-Gazette, to which respondent filed several
oppositions claiming that (a) it, together with its predecessor-in-interest, has been using Birkenstock
marks in the Philippines for more than 16 years through the mark “BIRKENSTOCK AND DEVICE”; (b)
the marks covered by the subject applications are identical to the one covered by Registration No. 56334
(c) on November 15, 1991, respondent’s predecessor-in-interest likewise obtained a Certificate of
Copyright Registration for the word “BIRKENSTOCK”; (d) while respondent and its
predecessor-in-interest failed to file the 10th Year DAU, it continued the use of “BIRKENSTOCK AND
DEVICE” in lawful commerce.

The Bureau of Legal Affairs (BLA) of the IPO sustained respondent’s opposition, thus, ordering the
rejection of the subject applications. On appeal, the IPO Director General reversed and allowed the
application. However, on petition for review, the Court of Appeals (CA) reinstated that of the BLA. It
disallowed the registration of the subject applications on the ground that the marks covered by such
applications “are confusingly similar, if not outright identical” with respondent’s mark. Hence, the present
petition.

Held:

Administrative bodies, such as the IPO, are not bound by technical rules of procedure

1. It is well-settled that “the rules of procedure are mere tools aimed at facilitating the attainment of
justice, rather than its frustration. A strict and rigid application of the rules must always be eschewed
when it would subvert the primary objective of the rules, that is, to enhance fair trials and expedite justice.
Technicalities should never be used to defeat the substantive rights of the other party. This is especially
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true with quasi-judicial and administrative bodies, such as the IPO, which are not bound by technical
rules of procedure.

2. Section 5 of the Rules on Inter Partes Proceedings provides: “ The Bureau shall not be bound by strict
technical rules of procedure and evidence but may adopt, in the absence of any applicable rule herein,
such mode of proceedings which is consistent with the requirements of fair play and conducive to the
just, speedy and inexpensive disposition of cases, and which will give the Bureau the greatest possibility
to focus on the contentious issues before it.

3. In the case at bar, while petitioner submitted mere photocopies as documentary evidence in the
Consolidated Opposition Cases, it should be noted that the IPO had already obtained the originals of
such documentary evidence in the related Cancellation Case earlier filed before it. Under this
circumstance, the Court holds that the IPO Director General’s relaxation of procedure was a valid
exercise of his discretion in the interest of substantial justice.

Abandonment of trademark

4. Republic Act No. 166, the governing law for Registration No. 56334, requires the filing of a Declaration
of Actual Use (DAU) on specified periods. Failure to file the DAU within the requisite period results in the
automatic cancellation of registration of a trademark. In turn, such failure is tantamount to the
abandonment or withdrawal of any right or interest the registrant has over his trademark.

5. Respondent admitted that it failed to file the 10th 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.” Neither can it invoke
Section 236 of the IP Code which pertains to intellectual property rights obtained under previous
intellectual property laws, e.g., RA 166, precisely because it already lost any right or interest over the
said mark.

Registration and ownership of trademark: Actual use requirement

6. Under Section 238 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-A39 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 owner’s failure to use the same in the Philippines for two (2)
months prior to registration.

7. It must be emphasized that registration of a trademark, by itself, is not a mode of acquiring

8. Clearly, 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
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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.

9. The prima facie presumption brought about by the registration of a mark may be challenged and
overcome in an appropriate action, by evidence of prior use by another person. This is because a
trademark is a creation of use and belongs to one who first used it in trade or commerce.

Petitioner is entitled to the registration of the mark, being the owner thereof

10. Petitioner was able to establish that it is the owner of the mark “BIRKENSTOCK.” It submitted
evidence relating to the origin and history of “BIRKENSTOCK” and its use in commerce long before
respondent was able to register the same here in the Philippines. It has sufficiently proven that
“BIRKENSTOCK” was first adopted in Europe in 1774 by its inventor, Johann Birkenstock, a shoemaker,
on his line of quality footwear and thereafter, numerous generations of his kin continuously engaged in
the manufacture and sale of shoes and sandals bearing the mark “BIRKENSTOCK” until it became the
entity now known as the petitioner. 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.

11. On the other hand, aside from Registration No. 56334 which had been cancelled, respondent only
presented copies of sales invoices and advertisements, which are not conclusive evidence of its claim of
ownership of the mark “BIRKENSTOCK” as these merely show the transactions made by respondent
involving the same.

12. The Court finds the petitioner to be the true and lawful owner of the mark “BIRKENSTOCK” and
entitled to its registration, and that respondent was in bad faith in having it registered in its name.

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