By Syril Diesta 

The Supreme Court of the Philippines has refused to uphold the first-to-file rule for trademark registrations when bad faith is involved. This stance was reaffirmed in the case of Edmond Lim and Gerd Paland vs. Catalina See, G.R. No. 193569, promulgated on January 25th, 2023, consistent with its earlier ruling in Zuneca Pharmaceutical v. Natrapharm, Inc.

Key Clarifications on Trademark Ownership

In the Zuneca case, the Court emphasized that prior use no longer determines trademark ownership. Instead, ownership arises from valid registration under the Intellectual Property Code of the Philippines. The Edmond Lim and Gerd Paland vs. Catalina See decision reiterated this principle, stating that rights to a mark are acquired only through valid registration, as required by Section 122 of the Code.

The Disputed Trademark Applications

The case originated when Chai Seng Ang applied for trademarks like “CROWN DEVICE,” “JOWIKA & DEVICE,” and “ORO & DEVICE.” These trademarks covered products such as scissors and nail cutters. Ang later assigned the trademarks to Catalina See, which sparked opposition from Lim and Paland. Both parties claimed ownership of the trademarks.

Decisions by IPOPHL and the Courts

The Bureau of Legal Affairs (IPOPHL) initially approved most of the trademark applications, except for “Schiso & Device.” However, the Office of the Director General (ODG), IPOPHL disagreed, ruling that Paland was the rightful manufacturer and source of the products. When the case reached the Court of Appeals, the decision was reversed, favoring See as the rightful owner based on the first-to-apply principle.

The Philippine Supreme Court ultimately overturned the Court of Appeals’ decision and reinstated the ruling of the ODG. It denied See’s trademark applications, citing evidence of bad faith in the registration process.

The Role of Good Faith in Trademark Registration

The Supreme Court determined that Ang, acting on behalf of See, was aware of the prior creation and use of the disputed trademarks. The evidence showed that Ang acted merely as an importer or distributor without authority to register the trademarks. As a result, the Court concluded that See had registered the trademarks in bad faith.

The Court clarified that the first-to-file rule does not apply when bad faith taints the trademark registration process. It stated that bad faith involves knowingly registering a trademark already created, used, or registered by another party. Trademarks registered in bad faith are invalid because they fail to meet the legal requirement of good faith under the Intellectual Property Code.

Final Ruling on the Case

The Supreme Court concluded that See’s failure to register the trademarks in good faith barred her from claiming ownership. It emphasized that the first-to-file rule cannot shield a registrant who fails to comply with the good faith requirement.

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