The Long and Winding Road - Supreme Court Finally Cancels Gloria Maris Marks Filed in Bad Faith - KASS

The Long and Winding Road – Supreme Court Finally Cancels Gloria Maris Marks Filed in Bad Faith

Key Takeaways

Bad Faith Undermines Trademark Integrity – Registering a trademark with knowledge of another’s prior use constitutes bad faith and invites legal action.
Vigilance Over IP Assets is Crucial – Companies must actively monitor who controls and registers their trademarks to prevent internal abuses.
Internal Misconduct Can Cost Businesses Dearly – Entrusting trademark registration without oversight can lead to hijacking and costly legal battles.
Swift Action Protects Brand Ownership – Timely monitoring and enforcement of IP rights are essential to safeguard a company’s identity and reputation.

Trademark Protection Starts Here.

Facts of the Case:

Gloria Maris Shark’s Fin Restaurant Inc. (Gloria Maris) was registered with the Securities and Exchange Commission (SEC) on 26 January 1994, with Lim as one of its incorporators.

The registration of Gloria Maris trademarks with the Intellectual Property Office (IPO) was entrusted by the Board of Directors of Gloria Maris to Lim.

However, Gloria Maris had discovered at a later stage that the trademarks were registered with the IPO only in 2005, more than 10 years after Gloria Maris’ registration with the SEC, and under the name of Lim.

On 04 December 2009, Gloria Maris filed before the Bureau of Legal Affairs (BLA) of the IPO separate petitions to cancel the following trademarks registered in the name of Lim:

GLORIA MARIS WOK SHOP AND DESIGN, Reg. No. 4-2004-009149
GLORIA MARIS DIMSUM KITCHEN WITH LOGO, Reg. No.4-2004- 009150
GLORIA MARIS SHARK’S FIN RESTAURANT AND LOGO, Reg No. 4-2004-009151

The BLA dismissed the petitions for cancellation on the basis that the marks were created by Lim prior to the registration of Gloria Maris with the SEC and that the trademarks were published in IPO Gazette in the name of Lim and without opposition action filed by Gloria Maris.

The Office of the Director General (ODG) reversed the decision of BLA. The ODG noted that Gloria Maris had been using the name “Gloria Maris” as part of its corporate name and business identity for more than 10 years before the registration of the trademarks in the name of Lim with the IPO.

However, the Court of Appeals reinstated the ruling of BLA. Gloria Maris then appealed to the Supreme Court.

Issue: Is the registration of GLORIA MARIS trademarks in the name of Lim filed in bad faith?

Held:

The Supreme Court ruled in favor of Gloria Maris, finding the registrations of Gloria Maris trademarks in the name of Lim were filed in bad faith.

Bad faith in the context of trademark registration means that the applicant or registrant has knowledge of prior creation, use and/or registration by another of an identical or similar trademark.

In finding that the marks were filed in Bad faith, the Supreme Court took into account the following circumstances :-:

Lim registered the subject trademarks, with full knowledge that the mark and the name “Gloria Maris” was being used by petitioner Gloria Maris for more than 10 years.
Lim not only knew of Gloria Maris’ use of the mark and name, but he was the incorporator and a director of the company. He even insisted that he remain as a shareholder of Gloria Maris even after registering the said trademarks and offering, by himself, to franchise the concept of the restaurant Gloria Maris to other companies
It was bad faith on Lim’s part to reap the fruits of the goodwill built by the Gloria Maris brand when he registered the subject marks in his own name. Obviously, it was the corporation as a whole that built and established the brand “Gloria Maris”.

The Court held that a trademark registered in bad faith is considered as unfair competition under the IP Code. Thus, the Supreme Court ordered the cancellation of Lim’s registration over the trademarks. This case shows that companies must be vigilant and proactive in monitoring and reviewing, not only the actions by officers of the company entrusted with obtaining protection of its marks but also the IP portfolio itself. In this case it took the company more than 10 years to discover that not only were its trademarks unprotected for a long period of time, but also that their rights in the trademark were effectively “hijacked” by an officer of the company. As the case was fought all the way to the Supreme Court, this is certainly a costly lesson for Gloria Maris and a cautionary tale to any IP owner against sleeping on their rights.