562 Phil.

217

THIRD DIVISION
[ G.R. No. 171053. October 15, 2007 ]
SEHWANI, INCORPORATED AND/OR BENITA’S FRITES, INC.,
PETITIONER, VS. IN-N-OUT BURGER, INC., RESPONDENT.
DECISION

YNARES-SATIAGO, J.:

This petition for review assails the Decision[1] of the Court of Appeals in CA-G.R. SP No.
88004 dated October 21, 2005, which affirmed the December 7, 2004 Order[2] of Director
General Emma C. Francisco of the Intellectual Property Office (IPO), in Appeal No. 14-2004-
0004 finding that petitioners’ appeal was filed out of time, as well as the Resolution[3] dated
January 12, 2006 denying the motion for reconsideration.

Respondent IN-N-OUT Burger, Inc., a foreign corporation organized under the laws of
California, U.S.A., and not doing business in the Philippines, filed before the Bureau of Legal
Affairs of the IPO (BLA-IPO), an administrative complaint against petitioners Sehwani, Inc.
and Benita’s Frites, Inc. for violation of intellectual property rights, attorney’s fees and damages
with prayer for the issuance of a restraining order or writ of preliminary injunction.[4]

Respondent alleged that it is the owner of the tradename “IN-N-OUT” and trademarks “IN-N-
OUT,” “IN-N-OUT Burger & Arrow Design” and “IN-N-OUT Burger Logo,” which are used in
its business since 1948 up to the present.  These tradename and trademarks were registered in
the United States as well as in other parts of the world.[5] 

On June 2, 1997, respondent applied with the IPO for the registration of its trademark “IN-N-
OUT Burger & Arrow Design” and servicemark “IN-N-OUT.”  In the course of its application,
respondent discovered that petitioner Sehwani, Inc. had obtained Trademark Registration No.
56666 for the mark “IN N OUT” (THE INSIDE OF THE LETTER “O” FORMED LIKE A
STAR) on December 17, 1993 without its authority.[6]   Respondent thus demanded that
petitioner Sehwani, Inc. desist from claiming ownership of the mark “IN-N-OUT” and to
voluntarily cancel its Trademark Registration No. 56666.  Petitioner Sehwani, Inc. however
refused to accede to the demand and even entered into a Licensing Agreement granting its co-
petitioner Benita’s Frites, Inc. license to use for a period of five years the trademark “IN-N-
OUT BURGER” in its restaurant in Pasig City.[7]  Hence, respondent filed a complaint for
violation of intellectual property rights.

In their answer with counterclaim, petitioners alleged that respondent lack the legal capacity to
sue because it was not doing business in the Philippines and that it has no cause of action
because its mark is not registered or used in the Philippines.    Petitioner Sehwani, Inc. also
claimed that as the registered owner of the “IN-N-OUT” mark, it enjoys the presumption that
the same was validly acquired and that it has the exclusive right to use the mark.  Moreover,
petitioners argued that other than the bare allegation of fraud in the registration of the mark,
respondent failed to show the existence of any of the grounds for cancellation thereof under
Section 151 of Republic Act (R.A.) No. 8293, otherwise known as The Intellectual Property
Code of the Philippines.[8]

On December 22, 2003, Bureau Director Estrellita Beltran-Abelardo rendered Decision No.
2003-02 finding that respondent has the legal capacity to sue and that it is the owner of the
internationally well-known trademarks; however, she held that petitioners are not guilty of
unfair competition, thus:

With the foregoing disquisition, Certificate of Registration No. 56666 dated 17

December 1993 for the mark “IN-N-OUT (the inside of the letter “O” formed like a
star) issued in favor of Sehwani, Incorporated is hereby CANCELLED. 
Consequently, Respondents Sehwani, Inc. and Benita’s Frites are hereby ordered to
permanently cease and desist from using the mark “IN-N-OUT” and “IN-N-OUT
BURGER LOGO” on its goods and in its business.  With regard to mark “Double-
Double”, considering that as earlier discussed, the mark has been approved by this
Office for publication and that as shown by the evidence, Complainant is the owner
of the said mark, Respondents are also ordered to permanently cease and desist from
using the mark Double-Double.  NO COSTS.

SO ORDERED.[9]

Petitioners filed a motion for reconsideration[10] insisting that respondent has no legal capacity
to sue, that no ground for cancellation was duly proven, and that the action is barred by laches;
while respondent moved for partial reconsideration[11] assailing the finding that petitioners are
not guilty of unfair competition.  Both, however, were denied in Resolution No. 2004-18 dated
October 28, 2004[12] and Resolution No. 2005-05 dated April 25, 2005,[13] respectively.

On separate dates, the parties appealed to the Office of the Director General which rendered an
Order dated December 7, 2004,[14] in Appeal No. 14-2004-0004, dismissing petitioners’ appeal
for being filed out of time, thus:

WHEREFORE, premises considered, the MOTION TO ADMIT COPY OF

DECISION NO. 2003-02 is hereby granted.  The instant appeal, however, is hereby
DISMISSED for having been filed out of time.[15]

Aggrieved, petitioners filed a petition before the Court of Appeals which was dismissed for lack
of merit.  It held that the right to appeal is not a natural right or a part of due process, but a
procedural remedy of statutory origin, hence, its requirements must be strictly complied with. 
The appeal being filed out of time, the December 22, 2003 Decision and the October 28, 2004
Orders of Bureau Director Beltran-Abelardo are now final and executory.[16]

Meanwhile, respondent filed a Manifestation with the Court of Appeals that on December 23,
2005, Director General Adrian S. Cristobal, Jr. had rendered a Decision in Appeal 10-05-01
finding petitioners guilty of unfair competition.[17]

Petitioners’ motion for reconsideration was denied; hence, the instant petition raising the
following issues:

THE COURT OF APPEALS COMMITTED GRAVE ERROR IN UPHOLDING

THE IPO DIRECTOR GENERAL’S DISMISSAL OF APPEAL NO. 14-2004-0004
ON A MERE TECHNICALITY.

SUBSTANTIAL JUSTICE WOULD BE BETTER SERVED IF THE COURT OF

APPEALS AND THE IPO DIRECTOR GENERAL ENTERTAINED
PETITIONERS APPEAL AS THE BUREAU OF LEGAL AFFAIR’S DECISION
AND RESOLUTION (1) CANCELING PETITIONER SEHWANI’S
CERTIFICATE OF REGISTRATION FOR THE MARK “IN-N-OUT,” AND (2)
ORDERING PETITIONERS TO PERMANENTLY CEASE AND DESIST FROM
USING THE SUBJECT MARK ON ITS GOODS AND BUSINESS ARE
CONTRARY TO LAW AND/OR NOT SUPPORTED BY EVIDENCE.[18]

Petitioners contend that the Court of Appeals erred when it dismissed the petition on mere
technicality which resulted in a miscarriage of justice and deprivation of intellectual property
rights.  They claim that their counsel believed in good faith that Resolution No. 2004-18 dated
October 28, 2004, denying the motion for reconsideration, was received only on November 3,
2004, thus, they have until November 18, 2004 within which to file an appeal memorandum
with the Office of the Director General.  They claim that they should not be prejudiced by their
counsel’s mistake in computing the period to appeal; besides, the same is understandable and
excusable as their counsel is a solo practitioner with only a handful of non-legal staff assisting
him.  They also reiterate their position that respondent has no legal capacity to sue, that no
ground for cancellation was duly proven, and that the complaint is barred by laches, if not, by
prescription.[19]

The petition has no merit.

The Court has invariably ruled that perfection of an appeal within the statutory or reglementary
period is not only mandatory but also jurisdictional; failure to do so renders the questioned
decision/final order final and executory, and deprives the appellate court of jurisdiction to alter
the judgment or final order, much less to entertain the appeal.[20]  True, this rule had been
relaxed but only in highly meritorious cases to prevent a grave injustice from being done.[21] 
Such does not obtain in this case.    

Director General Francisco, as affirmed by the Court of Appeals, correctly held:

[T]hat the appeal must be dismissed outright.  Section 2 of the Uniform Rules on
Appeal (Office Order no. 12, s. 2002) states that:

Section 2.  Appeal to the Director General. – The decisions or final orders
of the Bureau Director shall become final and executory thirty (30) days
after receipt of a copy thereof by the appellant or appellants unless,
 within the same period, a motion for reconsideration is filed with the
Bureau Director or an appeal to the Director General has been perfected;
Provided, that only one (1) motion for reconsideration of the decision or
order of the Bureau Director shall be allowed, and, in case the motion for
reconsideration is denied, the appellant or appellants has/have the balance
of the period prescribed above within which to file the appeal.

Considering that the Respondent-Appellants received a copy of the appealed

Decision on 15 January 2004 and filed their MOTION FOR RECONSIDERATION
on 30 January 2004, said parties had a balance of 15 days from their receipt of the
Resolution denying said motion within which to file the APPEAL
MEMORANDUM.  Per records of the Bureau of Legal Affairs, the Respondents-
Appellants received a copy of the Resolution on 29 October 2004.  Hence the
deadline for the filing of the APPEAL MEMORANDUM was on 13 November
2004.  Since said date fell on a Saturday, the appeal should have been filed on the
ensuing working day, that is, 15 November 2004.

On this score, Section 5(c) of the Uniform Rules on Appeal provides:

Section 5. Action on the Appeal Memorandum – The Director General shall:

xxxx

c. Dismiss the appeal for being patently without merit, provided that the
dismissal shall be outright if the appeal is not filed within the prescribed period
or for failure of the appellant to pay the required fee within the period of
appeal.[22] (Underscoring supplied)   

Petitioners’ allegation that they honestly believed that they received Resolution No. 2004-18
dated October 28, 2004 on November 3, 2004 and not on October 29, 2004, as what appears on
the records of the BLA-IPO, is self-serving and unbelievable.  The inadvertent computation of
the period for one to file a pleading is inexcusable, and has become an all too familiar and ready
excuse on the part of lawyers remiss in their bounden duty to comply with the mandatory
periods.[23]

This Court has always reminded the members of the legal profession that every case they handle
deserves full and undivided attention, diligence, skill and competence, regardless of its
importance.[24]  A lawyer has the responsibility of monitoring and keeping track of the period of
time left to file pleadings and to see to it that said pleadings are filed before the lapse of the
period.  If he fails to do so, his client is bound by his conduct, negligence and mistakes.[25]  This
responsibility is imposed on all lawyers notwithstanding the presence or absence of staff
assisting them in the discharge thereof. 

Thus, as correctly held by the Court of Appeals, petitioners’ belated filing of an appeal
memorandum rendered the December 22, 2003 Decision and the October 28, 2004 Order of
Bureau Director Beltran-Abelardo final and executory. 

At this point, the Court could very well write finis to this petition.  However, in disposing of the
instant case, we shall resolve the principal issues raised by petitioners.

Contrary to petitioners’ argument, respondent has the legal capacity to sue for the protection of
its trademarks, albeit it is not doing business in the Philippines.   Section 160 in relation to
Section 3 of R.A. No. 8293, provides:

SECTION 160. Right of Foreign Corporation to Sue in Trademark or Service Mark

Enforcement Action. — Any foreign national or juridical person who meets the
requirements of Section 3 of this Act and does not engage in business in the
Philippines may bring a civil or administrative action hereunder for opposition,
cancellation, infringement, unfair competition, or false designation of origin and
false description, whether or not it is licensed to do business in the Philippines under
existing laws.

Section 3 thereof provides:

SECTION 3.   International Conventions and Reciprocity. — Any person who is a

national or who is domiciled or has a real and effective industrial establishment in a
country which is a party to any convention, treaty or agreement relating to
intellectual property rights or the repression of unfair competition, to which the
Philippines is also a party, or extends reciprocal rights to nationals of the Philippines
by law, shall be entitled to benefits to the extent necessary to give effect to any
provision of such convention, treaty or reciprocal law, in addition to the rights to
which any owner of an intellectual property right is otherwise entitled by this Act.

Respondent anchors its causes of action under Articles 6bis and 8 of The Convention of Paris for
the Protection of Industrial Property, otherwise known as the Paris Convention, wherein both
the United States and the Philippines are signatories.[26]  The Articles read:

Article 6bis

(1)  The countries of the Union undertake, ex officio if their legislation so permits, or
at the request of an interested party, to refuse or to cancel the registration, and to
prohibit the use, of a trademark which constitutes a reproduction, an imitation, or a
translation, liable to create confusion, of a mark considered by the competent
authority of the country of registration or use to be well known in that country as
being already the mark of a person entitled to the benefits of this Convention and
used for identical or similar goods. These provisions shall also apply when the
essential part of the mark constitutes a reproduction of any such well-known mark or
an imitation liable to create confusion therewith.

x x x x.

Article 8

A tradename shall be protected in all countries of the Union without the obligation of
filing or registration whether or not it forms part of a trademark.
Article 6bis which governs the protection of well-known trademarks, is a self-executing
provision and does not require legislative enactment to give it effect in the member country.  It
may be applied directly by the tribunals and officials of each member country by the mere
publication or proclamation of the Convention, after its ratification according to the public law
of each state and the order for its execution.  The essential requirement under this Article is that
the trademark to be protected must be "well-known" in the country where protection is sought. 
The power to determine whether a trademark is well-known lies in the “competent authority of
the country of registration or use.”   This competent authority would be either the registering
authority if it has the power to decide this, or the courts of the country in question if the issue
comes before a court.[27]

The question of whether or not respondent’s trademarks are considered “well-known” is factual
in nature, involving as it does the appreciation of evidence adduced before the BLA-IPO.  The
settled rule is that the factual findings of quasi-judicial agencies, like the IPO, which have
acquired expertise because their jurisdiction is confined to specific matters, are generally
accorded not only respect, but, at times, even finality if such findings are supported by
substantial evidence.[28]

Director Beltran-Abelardo found that:

Arguing mainly that it is the owner of an internationally well-known mark,

complainant presented its United States trademark registrations, namely: United
States Trademark Registration No. 1,514,689 for the mark “IN-N-OUT Burger and
Arrow Design” under class 25 dated November 29, 1988 for the shirts (Exhibit “L”);
United States Trademark Registration No. 1,528,456 for the mark “IN-N-OUT
Burger and Arrow Design” under Class 29, 30, 32 and 42 dated March 7, 1989 for
milk and french-fried  potatoes for consumption on or off the premises, for
hamburger sandwiches, cheeseburger sandwiches, hot coffee and milkshakes for
consumption on or off the premises, lemonade and softdrinks for consumption on
and off the premises, restaurant services respectively (Exhibit “M”); US Trademark
Registration No. 1,101,638 for the mark “IN-N-OUT” under Class No. 30 dated
September 5, 1978 for cheeseburgers, hamburgers, hot coffee and milkshake for
consumption on or off premises (Exhibit “N”); US Trademark Registration No.
1,085,163   “IN-N-OUT” under Class 42 dated February 7, 1978 for Restaurant
Services and carry-out restaurant services (Exhibit “Q”).  For its mark “Double-
Double” it submitted Certificates of Registration of said mark in several countries
(Exhibits “MM” and submarkings).

xxxx

Moreover, complainant also cites our decision in Inter Pares Case No. 14-1998-
00045 dated 12 September 2000, an opposition case involving the mark “IN-N-
OUT” between IN-N-OUT Burger (herein complainant) and Nestor SJ Bonjales
where we ruled:

“And last but not the lease, the herein Opposer was able to prove
substantially that its mark  “IN-N-OUT Burger and Arrow Design” is an
internationally well known mark as evidenced by its trademark
 registrations around the world and its comprehensive advertisements
therein.”

The nub of complainant’s reasoning is that the Intellectual Property Office as a

competent authority had declared in previous inter partes case that “IN-N-OUT
Burger and Arrow Design” is an internationally well known mark.

In the aforementioned case, we are inclined to favor the declaration of the mark “IN-
N-OUT” as an internationally well-known mark on the basis of “registrations in
various countries around the world and its comprehensive advertisements therein.”

The Ongpin Memorandum dated 25 October 1983 which was the basis for the
decision in the previous inter partes case and which set the criteria for determining
whether a mark is well known, takes into consideration the extent of registration of a
mark.  Similarly, the implementing rules of Republic Act 8293, specifically Section
(e) Rule 102 Criteria for determining whether a mark is well known, also takes into
account the extent to which the mark has been registered in the world in determining
whether a mark is well known.

Likewise, as shown by the records of the instant case, Complainant submitted

evidence consisting of articles about “IN-N-OUT Burger” appearing in magazines,
newspapers and print-out of what appears to be printed representations of its internet
website (www.innout.com) (Exhibits “CCC” to “QQQ”), as well as object evidence
consisting of videotapes of famous celebrities mentioning IN-N-OUT burgers in the
course of their interviews (Exhibits “EEEE” and “FFFF”) showing a tremendous
following among celebrities.

The quality image and reputation acquired by the complainant’s IN-N-OUT mark is
unmistakable.  With this, complainant’s mark have met other criteria set in the
Implementing Rules of Republic Act 8293, namely, ‘a’ and ‘d’ of Rule 102, to wit:

“Rule 102:

(a) the duration, extent and geographical area of any use of the mark, in particular,
the duration, extent and geographical area of any promotion of the mark,
including publicity and the presentation at fairs or exhibitions, of the goods
and/or services to which the mark applies;

xxxx

(d) the quality image or reputation acquired by the mark”

Hence, on the basis of evidence presented consisting of worldwide registration of

mark “IN-N-OUT” almost all of which were issued earlier than the respondent’s date
of filing of its application and the subsequent registration of the mark “IN-N-OUT”
in this Office, as well as the advertisements therein by the complainant, this Office
hereby affirms its earlier declaration that indeed, the mark “IN-N-OUT BURGER
LOGO” is an internally well-known mark.[29]
We find the foregoing findings and conclusions of Director Beltran-Abelardo fully substantiated
by the evidence on record and in accord with law.

The fact that respondent’s marks are neither registered nor used in the Philippines is of no
moment.  The scope of protection initially afforded by Article 6bis of the Paris Convention has
been expanded in the 1999 Joint Recommendation Concerning Provisions on the Protection of
Well-Known Marks, wherein the World Intellectual Property Organization (WIPO) General
Assembly and the Paris Union agreed to a nonbinding recommendation that a well-known mark
should be protected in a country even if the mark is neither registered nor used in that country. 
Part I, Article 2(3) thereof provides:

(3) [Factors Which Shall Not Be Required] (a) A Member State shall not require, as a
condition for determining whether a mark is a well-known mark:

(i) that the mark has been used in, or that the mark has been registered or that an
application for registration of the mark has been filed in or in respect of, the Member
State;

(ii) that the mark is well known in, or that the mark has been registered or that an
application for registration of the mark has been filed in or in respect of, any
jurisdiction other than the Member State; or

(iii) that the mark is well known by the public at large in the Member State.
(Underscoring supplied)

Moreover, petitioners’ claim that no ground exists for the cancellation of their registration lacks
merit.  Section 151(b) of RA 8293 provides:

SECTION 151. Cancellation. — 151.1. A petition to cancel a registration of a mark

under this Act may be filed with the Bureau of Legal Affairs by any person who
believes that he is or will be damaged by the registration of a mark under this Act as
follows:

xxxx

(b) At any time, if the registered mark becomes the generic name for the goods or
services, or a portion thereof, for which it is registered, or has been abandoned, or its
registration was obtained fraudulently or contrary to the provisions of this Act, or if
the registered mark is being used by, or with the permission of, the registrant so as to
misrepresent the source of the goods or services on or in connection with which the
mark is used. x x x.

The evidence on record shows that not only did the petitioners use the IN-N-OUT Burger
trademark for the name of their restaurant, but they also used identical or confusingly similar
mark for their hamburger wrappers and french-fries receptacles, thereby effectively
misrepresenting the source of the goods and services.[30]

Finally, petitioner’s contention that respondent is precluded from asserting its claim by laches, if
not by prescription, lacks basis.  Section 151(b) of R.A. No. 8293 specifically provides that a
petition to cancel the registration of a mark which is registered contrary to the provisions
thereof, or which is used to misrepresent the source of the goods or services, may be filed at any
time.  Moreover, laches may not prevail against a specific provision of law, since equity, which
has been defined as ‘justice outside legality’ is applied in the absence of and not against
statutory law or rules of procedure.[31]  Aside from the specific provisions of R.A. No. 8293, the
Paris Convention and the WIPO Joint Recommendation have the force and effect of law, for
under Section 2, Article II of the Constitution, the Philippines adopts the generally accepted
principles of international law as part of the law of the land.  To rule otherwise would be to
defeat the equitable consideration that no one other than the owner of the well-known mark
shall reap the fruits of an honestly established goodwill.

WHEREFORE, the petition is DENIED.  The Decision and Resolution of the Court of
Appeals in CA-G.R. SP No. 88004, dated October 21, 2005 and January 16, 2006, affirming the
December 7, 2004 Order of Director General Emma C. Francisco, in Appeal No. 14-2004-0004,
and denying the motion for reconsideration, respectively, are AFFIRMED.

SO ORDERED.

Austria-Martinez, Chico-Nazario, Nachura, and Reyes, JJ., concur.

[1]Rollo, pp. 35-41.  Penned by Associate Justice Juan Q. Enriquez, Jr. and concurred in by
Associate Justices Conrado M. Vasquez, Jr. and Vicente Q. Roxas.

[2] Id. at 153-155.

[3] Id. at 43.

[4] Id. at 52.

[5] Id. at 53-56.

[6] Id. at 57-58.

[7] Id. at 46-47.

[8] Id. at 81-86.

[9] Id. at 108.

[10] Id. at 109-116.

[11] Id. at 117-133.

[12] Id. at 137-140.

[13] Id. at 238.

[14] Penned by Director General Emma C. Francisco.

[15] Rollo, p. 154.

[16] Id. at 39-40.

[17] Id. at 235-250.

[18] Id. at 11-12.

[19] Id. at 12-24.

[20] Ang v. Grageda, G.R. No. 166239, June 8, 2006, 490 SCRA 424, 438.

[21]Sameer Overseas Placement Agency, Inc. v. Levantino, G.R. No. 153942, June 29, 2005,
462 SCRA 231, 240.

[22] Rollo, pp. 153-154.

[23]LTS Philippines Corporation v. Maliwat, G.R. No. 159024, January 14, 2005, 448 SCRA
254, 259.

[24] Consolidated Farms, Inc. v. Alpon, A.C. No. 5525, March 4, 2005, 452 SCRA 668, 672.

[25] Supra note 23.

[26] Mirpuri v. Court of Appeals, 376 Phil. 628, 654 (1999).

[27] Id. at 655-656.

[28]
Eastern Service Employment Center, Inc. v. Bea, G.R. No. 143023, November 29, 2005, 476
SCRA 384, 389.

[29] Rollo, pp. 101- 104.

[30] Id. at 371-372.

[31] Velez v. Demetrio, 436 Phil. 1, 9 (2002).

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