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FIRSTDIVISION

[G.R.No.114508.November19,1999]

PRIBHDAS J. MIRPURI, petitioner, vs. COURT OF APPEALS, DIRECTOR OF

PATENTSandtheBARBIZONCORPORATION,respondents.
DECISION
PUNO,J.:

The Convention of Paris for the Protection of Industrial Property is a multilateral treaty which the
Philippinesbounditselftohonorandenforceinthiscountry.Astowhetherornotthetreatyaffordsprotectionto
a foreign corporation against a Philippine applicant for the registration of a similar trademark is the principal
issueinthiscase.
OnJune15,1970,oneLolitaEscobar,thepredecessorininterestofpetitionerPribhdasJ.Mirpuri,filedan
applicationwiththeBureauofPatentsfortheregistrationofthetrademark"Barbizon"foruseinbrassieresand
ladies undergarments. Escobar alleged that she had been manufacturing and selling these products under the
firmname"L&BMCommercial"sinceMarch3,1970.
Private respondent Barbizon Corporation, a corporation organized and doing business under the laws of
NewYork,U.S.A.,opposedtheapplication.Itclaimedthat:
"ThemarkBARBIZONofrespondentapplicantisconfusinglysimilartothetrademarkBARBIZONwhich
opposerownsandhasnotabandoned.
ThatopposerwillbedamagedbytheregistrationofthemarkBARBIZONanditsbusinessreputationand
goodwillwillsuffergreatandirreparableinjury.
Thattherespondentapplicant'suseofthesaidmarkBARBIZONwhichresemblesthetrademarkusedand
ownedbyopposer,constitutesanunlawfulappropriationofamarkpreviouslyusedinthePhilippinesandnot
abandonedandthereforeastatutoryviolationofSection4(d)ofRepublicActNo.166,asamended."[1]
ThiswasdocketedasInterPartesCaseNo.686(IPCNo.686).Afterfilingofthepleadings,theparties
submittedthecasefordecision.
On June 18, 1974, the Director of Patents rendered judgment dismissing the opposition and giving due
coursetoEscobar'sapplication,thus:
"WHEREFORE,theoppositionshouldbe,asitishereby,DISMISSED.Accordingly,ApplicationSerialNo.
19010fortheregistrationofthetrademarkBARBIZON,ofrespondentLolitaR.Escobar,isgivenduecourse.
ITISSOORDERED."[2]
This decision became final and on September 11, 1974, Lolita Escobar was issued a certificate of
registration for the trademark "Barbizon." The trademark was "for use in "brassieres and lady's underwear
garmentslikepanties."[3]
EscobarlaterassignedallherrightsandinterestoverthetrademarktopetitionerPribhdasJ.Mirpuriwho,
under his firm name then, the "Bonito Enterprises," was the sole and exclusive distributor of Escobar's
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"Barbizon"products.
In1979,however,EscobarfailedtofilewiththeBureauofPatentstheAffidavitofUseofthetrademark
requiredunderSection12ofRepublicAct(R.A.)No.166,thePhilippineTrademarkLaw.Duetothisfailure,
theBureauofPatentscancelledEscobar'scertificateofregistration.
On May 27, 1981, Escobar reapplied for registration of the cancelled trademark. Mirpuri filed his own
application for registration of Escobar's trademark. Escobar later assigned her application to herein petitioner
andthisapplicationwasopposedbyprivaterespondent.ThecasewasdocketedasInterPartesCaseNo.2049
(IPCNo.2049).
Initsopposition,privaterespondentallegedthat:
"(a)TheOpposerhasadoptedthetrademarkBARBIZON(word),sometimeinJune1933andhasthenusedit
onvariouskindsofwearingapparel.OnAugust14,1934,OpposerobtainedfromtheUnitedStatesPatent
OfficeamorerecentregistrationofthesaidmarkunderCertificateofRegistrationNo.316,161.OnMarch1,
1949,OpposerobtainedfromtheUnitedStatesPatentOfficeamorerecentregistrationforthesaidtrademark
underCertificateofRegistrationNo.507,214,acopyofwhichisherewithattachedasAnnex`A.'Said
CertificateofRegistrationcoversthefollowinggoodswearingapparel:robes,pajamas,lingerie,nightgowns
andslips
(b)SometimeinMarch1976,OpposerfurtheradoptedthetrademarkBARBIZONandBeedesignandusedthe
saidmarkinvariouskindsofwearingapparel.OnMarch15,1977,OpposersecuredfromtheUnitedStates
PatentOfficearegistrationofthesaidmarkunderCertificateofRegistrationNo.1,061,277,acopyofwhichis
hereinenclosedasAnnex`B.'ThesaidCertificateofRegistrationcoversthefollowinggoods:robes,pajamas,
lingerie,nightgownsandslips
(c)Stillfurther,sometimein1961,OpposeradoptedthetrademarkBARBIZONandaRepresentationofa
Womanandthereafterusedthesaidtrademarkonvariouskindsofwearingapparel.Opposerobtainedfromthe
UnitedStatesPatentOfficeregistrationofthesaidmarkonApril5,1983underCertificateofRegistrationNo.
1,233,666forthefollowinggoods:wearingapparel:robes,pajamas,nightgownsandlingerie.Acopyofthesaid
certificateofregistrationisherewithenclosedasAnnex`C.'
(d)AlltheaboveregistrationsaresubsistingandinforceandOpposerhasnotabandonedtheuseofthesaid
trademarks.Infact,Opposer,throughawhollyownedPhilippinesubsidiary,thePhilippineLingerie
Corporation,hasbeenmanufacturingthegoodscoveredbysaidregistrationsandsellingthemtovarious
countries,therebyearningvaluableforeignexchangeforthecountry.Asaresultofrespondentapplicant's
misappropriationofOpposer'sBARBIZONtrademark,PhilippineLingerieCorporationispreventedfrom
sellingitsgoodsinthelocalmarket,tothedamageandprejudiceofOpposeranditswhollyownedsubsidiary.
(e)TheOpposer'sgoodsbearingthetrademarkBARBIZONhavebeenusedinmanycountries,includingthe
Philippines,foratleast40yearsandhasenjoyedinternationalreputationandgoodwillfortheirquality.To
protectitsregistrationsincountrieswherethegoodscoveredbytheregistrationsarebeingsold,Opposerhas
procuredtheregistrationofthetrademarkBARBIZONinthefollowingcountries:Australia,Austria,Abu
Dhabi,Argentina,Belgium,Bolivia,Bahrain,Canada,Chile,Colombia,Denmark,Ecuador,France,West
Germany,Greece,Guatemala,Hongkong,Honduras,Italy,Japan,Jordan,Lebanon,Mexico,Morocco,Panama,
NewZealand,Norway,Sweden,Switzerland,Syria,ElSalvador,SouthAfrica,Zambia,Egypt,andIran,among
others
(f)Toenhanceitsinternationalreputationforqualitygoodsandtofurtherpromotegoodwilloveritsname,
marksandproducts,Opposerhasextensivelyadvertiseditsproducts,trademarksandnameinvarious
publicationswhicharecirculatedintheUnitedStatesandmanycountriesaroundtheworld,includingthe
Philippines
(g)ThetrademarkBARBIZONwasfraudulentlyregisteredinthePhilippinesbyoneLolitaR.Escobarunder
RegistrationNo.21920,issuedonSeptember11,1974,inviolationofArticle189(3)oftheRevisedPenalCode
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andSection4(d)oftheTrademarkLaw.Hereinrespondentapplicantacquiredbyassignmentthe`rights'tothe
saidmarkpreviouslyregisteredbyLolitaEscobar,hencerespondentapplicant'stitleisvitiatedbythesame
fraudandcriminalact.Besides,CertificateofRegistrationNo.21920hasbeencancelledforfailureofeither
LolitaEscobarorhereinrespondentapplicant,toseasonablyfilethestatutoryaffidavitofuse.Byapplyingfora
reregistrationofthemarkBARBIZONsubjectofthisopposition,respondentapplicantseekstoperpetuatethe
fraudandcriminalactcommittedbyLolitaEscobar.
(h)Opposer'sBARBIZONaswellasitsBARBIZONandBeeDesignandBARBIZONandRepresentationofa
WomantrademarksqualifyaswellknowntrademarksentitledtoprotectionunderArticle6bisoftheConvention
ofParisfortheProtectionofIndustrialPropertyandfurtheramplifiedbytheMemorandumoftheMinisterof
TradetotheHonorableDirectorofPatentsdatedOctober25,1983[sic],[4]ExecutiveOrderNo.913dated
October7,1963andtheMemorandumoftheMinisterofTradeandIndustrytotheHonorableDirectorof
PatentsdatedOctober25,1983.
(i)ThetrademarkappliedforbyrespondentapplicantisidenticaltoOpposer'sBARBIZONtrademarkand
constitutesthedominantpartofOpposer'stwoothermarksnamely,BARBIZONandBeedesignand
BARBIZONandaRepresentationofaWoman.ThecontinuedusebyrespondentapplicantofOpposer's
trademarkBARBIZONongoodsbelongingtoClass25constitutesaclearcaseofcommercialandcriminal
piracyandifallowedregistrationwillviolatenotonlytheTrademarkLawbutalsoArticle189oftheRevised
PenalCodeandthecommitmentofthePhilippinestoaninternationaltreaty."[5]
Replyingtoprivaterespondent'sopposition,petitionerraisedthedefenseofresjudicata.
OnMarch2,1982, Escobar assigned to petitioner the use of the businessname"BarbizonInternational."
Petitioner registered the name with the Department of Trade and Industry (DTI) for which a certificate of
registrationwasissuedin1987.
Forthwith,privaterespondentfiledbeforetheOfficeofLegalAffairsoftheDTIapetitionforcancellation
ofpetitioner'sbusinessname.
OnNovember26,1991,theDTI,OfficeofLegalAffairs,cancelledpetitioner'scertificateofregistration,
anddeclaredprivaterespondenttheownerandprioruserofthebusinessname"BarbizonInternational."Thus:
"WHEREFORE,thepetitionisherebyGRANTEDandpetitionerisdeclaredtheownerandprioruserofthe
businessname"BARBIZONINTERNATIONAL"underCertificateofRegistrationNo.8709000datedMarch
10,1987andissuedinthenameofrespondent,is[sic]herebyorderedrevokedandcancelled.xxx."[6]
Meanwhile,inIPCNo.2049,theevidenceofbothpartieswerereceivedbytheDirectorofPatents.OnJune
18,1992,theDirectorrenderedadecisiondeclaringprivaterespondent'soppositionbarredbyresjudicataand
givingduecoursetopetitioner'sapplicationforregistration,towit:
"WHEREFORE,thepresentOppositioninInterPartesCaseNo.2049isherebyDECLAREDBARREDbyres
judicataandisherebyDISMISSED.Accordingly,ApplicationSerialNo.45011fortrademarkBARBIZONfiled
byPribhdasJ.MirpuriisGIVENDUECOURSE.
SOORDERED."[7]
Private respondent questioned this decision before the Court of Appeals in CAG.R. SP No. 28415. On
April30,1993,theCourtofAppealsreversedtheDirectorofPatentsfindingthatIPCNo.686wasnotbarredby
judgment in IPC No. 2049 and ordered that the case be remanded to the Bureau of Patents for further
proceedings,viz:
"WHEREFORE,theappealedDecisionNo.9213datedJune18,1992oftheDirectorofPatentsinInterPartes
CaseNo.2049isherebySETASIDEandthecaseisherebyremandedtotheBureauofPatentsforfurther
proceedings,inaccordancewiththispronouncement.Nocosts."[8]
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In a Resolution dated March 16, 1994, the Court of Appeals denied reconsideration of its decision.[9]
Hence,thisrecourse.
Beforeus,petitionerraisesthefollowingissues:
"1.WHETHERORNOTTHEDECISIONOFTHEDIRECTOROFPATENTSININTERPARTESCASE
NO.686RENDEREDONJUNE18,1974,ANNEXCHEREOF,CONSTITUTEDRESJUDICATAINSO
FARASTHECASEBEFORETHEDIRECTOROFPATENTSISCONCERNED
2.WHETHERORNOTTHEDIRECTOROFPATENTSCORRECTLYAPPLIEDTHEPRINCIPLEOFRES
JUDICATAINDISMISSINGPRIVATERESPONDENTBARBIZON'SOPPOSITIONTOPETITIONER'S
APPLICATIONFORREGISTRATIONFORTHETRADEMARKBARBIZON,WHICHHASSINCE
RIPENEDTOCERTIFICATEOFREGISTRATIONNO.53920ONNOVEMBER16,1992
3.WHETHERORNOTTHEREQUISITETHATA'JUDGMENTONTHEMERITS'REQUIREDA
'HEARINGWHEREBOTHPARTIESARESUPPOSEDTOADDUCEEVIDENCE'ANDWHETHERTHE
JOINTSUBMISSIONOFTHEPARTIESTOACASEONTHEBASISOFTHEIRRESPECTIVE
PLEADINGSWITHOUTPRESENTINGTESTIMONIALORDOCUMENTARYEVIDENCEFALLS
WITHINTHEMEANINGOF'JUDGMENTONTHEMERITS'ASONEOFTHEREQUISITESTO
CONSTITUTERESJUDICATA
4.WHETHERADECISIONOFTHEDEPARTMENTOFTRADEANDINDUSTRYCANCELLING
PETITIONER'SFIRMNAME'BARBIZONINTERNATIONAL'ANDWHICHDECISIONISSTILL
PENDINGRECONSIDERATIONNEVEROFFEREDINEVIDENCEBEFORETHEDIRECTOROF
PATENTSININTERPARTESCASENO.2049HASTHERIGHTTODECIDESUCHCANCELLATION
NOTONTHEBASISOFTHEBUSINESSNAMELAW(ASIMPLEMENTEDBYTHEBUREAUOF
DOMESTICTRADE)BUTONTHEBASISOFTHEPARISCONVENTIONANDTHETRADEMARK
LAW(R.A.166)WHICHISWITHINTHEORIGINALANDEXCLUSIVEJURISDICTIONOFTHE
DIRECTOROFPATENTS."[10]
Beforerulingontheissuesofthecase,thereisneedforabriefbackgroundonthefunctionandhistorical
developmentoftrademarksandtrademarklaw.
A "trademark" is defined under R.A. 166, the Trademark Law, as including "any word, name, symbol,
emblem,signordeviceoranycombinationthereofadoptedandusedbyamanufacturerormerchanttoidentify
hisgoodsanddistinguishthemfromthosemanufactured,soldordealtinbyothers."[11]Thisdefinitionhasbeen
simplifiedinR.A.No.8293,theIntellectualPropertyCodeofthePhilippines,whichdefinesa"trademark"as
"anyvisiblesigncapableofdistinguishinggoods."[12]InPhilippinejurisprudence,thefunctionofatrademarkis
topointoutdistinctlytheoriginorownershipofthegoodstowhichitisaffixedtosecuretohim,whohasbeen
instrumentalinbringingintothemarketasuperiorarticleofmerchandise,thefruitofhisindustryandskillto
assurethepublicthattheyareprocuringthegenuinearticletopreventfraudandimpositionandtoprotectthe
manufactureragainstsubstitutionandsaleofaninferioranddifferentarticleashisproduct.[13]
Modern authorities on trademark law view trademarks as performing three distinct functions: (1) they
indicate origin or ownership of the articles to which they are attached (2) they guarantee that those articles
comeuptoacertainstandardofqualityand(3)theyadvertisethearticlestheysymbolize.[14]
Symbolshavebeenusedtoidentifytheownershipororiginofarticlesforseveralcenturies.[15]Asearlyas
5,000 B.C., markings on pottery have been found by archaeologists. Cave drawings in southwestern Europe
show bison with symbols on their flanks.[16] Archaeological discoveries of ancient Greek and Roman
inscriptionsonsculpturalworks,paintings,vases,preciousstones,glassworks,bricks,etc.revealsomefeatures
whicharethoughttobemarksorsymbols.Thesemarkswereaffixedbythecreatorormakerofthearticle,orby
public authorities as indicators for the payment of tax, for disclosing state monopoly, or devices for the
settlementofaccountsbetweenanentrepreneurandhisworkmen.[17]
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In the Middle Ages, the use of many kinds of marks on a variety of goods was commonplace.Fifteenth
centuryEnglandsawthecompulsoryuseofidentifyingmarksincertaintrades.Therewerethebaker'smarkon
bread,bottlemaker'smarks,smith'smarks,tanner'smarks,watermarksonpaper,etc.[18]Everyguildhaditsown
markandeverymasterbelongingtoithadaspecialmarkofhisown.Themarkswerenottrademarksbutpolice
markscompulsorilyimposedbythesovereigntoletthepublicknowthatthegoodswerenot"foreign"goods
smuggled into an area where the guild had a monopoly, as well as to aid in tracing defective work or poor
craftsmanshiptotheartisan.[19]Forasimilarreason,merchantsalsousedmerchants'marks.Merchantsdealtin
goods acquired from many sources and the marks enabled them to identify and reclaim their goods upon
recoveryaftershipwreckorpiracy.[20]
With constant use, the mark acquired popularity and became voluntarily adopted. It was not intended to
createorcontinuemonopolybuttogivethecustomeranindexorguaranteeofquality.[21]Itwasinthelate18th
centurywhentheindustrialrevolutiongaverisetomassproductionanddistributionofconsumergoodsthatthe
markbecameanimportantinstrumentalityoftradeandcommerce.[22]Bythistime,trademarksdidnotmerely
identify the goods they also indicated the goods to be of satisfactory quality, and thereby stimulated further
purchasesbytheconsumingpublic.[23]Eventually,theycametosymbolizethegoodwillandbusinessreputation
oftheowneroftheproductandbecameapropertyrightprotectedbylaw.[24]Thecommonlawdevelopedthe
doctrine of trademarks and tradenames "to prevent a person from palming off his goods as another's, from
getting another's business or injuring his reputation by unfair means, and, from defrauding the public."[25]
Subsequently, England and the United States enacted national legislation on trademarks as part of the law
regulating unfair trade.[26] It became the right of the trademark owner to exclude others from the use of his
mark,orofaconfusinglysimilarmarkwhereconfusionresultedindiversionoftradeorfinancialinjury.Atthe
same time, the trademark served as a warning against the imitation or faking of products to prevent the
impositionoffrauduponthepublic.[27]
Today,thetrademarkisnotmerelyasymboloforiginandgoodwillitisoftenthemosteffectiveagentfor
theactualcreationandprotectionofgoodwill.Itimprintsuponthepublicmindananonymousandimpersonal
guaranty of satisfaction, creating a desire for further satisfaction. In other words, the mark actually sells the
goods.[28] The mark has become the "silent salesman," the conduit through which direct contact between the
trademarkownerandtheconsumerisassured.Ithasinvadedpopularcultureinwaysneveranticipatedthatit
hasbecomeamoreconvincingsellingpointthaneventhequalityofthearticletowhichitrefers.[29]Inthelast
halfcentury,theunparalleledgrowthofindustryandtherapiddevelopmentofcommunicationstechnologyhave
enabledtrademarks,tradenamesandotherdistinctivesignsofaproducttopenetrateregionswheretheowner
doesnotactuallymanufactureorselltheproductitself.Goodwillisnolongerconfinedtotheterritoryofactual
market penetration it extends to zones where the marked article has been fixed in the public mind through
advertising.[30] Whether in the print, broadcast or electronic communications medium, particularly on the
Internet,[31]advertisinghaspavedthewayforgrowthandexpansionoftheproductbycreatingandearninga
reputationthatcrossesoverborders,virtuallyturningthewholeworldintoonevastmarketplace.
Thisisthemiseensceneofthepresentcontroversy.Petitionerbringsthisactionclaimingthat"Barbizon"
productshavebeensoldinthePhilippinessince1970.Petitionerdevelopedthismarketbyworkinglonghours
andspendingconsiderablesumsofmoneyonadvertisementsandpromotionofthetrademarkanditsproducts.
Now, almost thirty years later, private respondent, a foreign corporation, "swaggers into the country like a
conquering hero," usurps the trademark and invades petitioner's market.[32] Justice and fairness dictate that
private respondent be prevented from appropriating what is not its own. Legally, at the same time, private
respondentisbarredfromquestioningpetitioner'sownershipofthetrademarkbecauseofresjudicata.[33]
Literally,resjudicatameansamatteradjudged,athingjudiciallyacteduponordecidedathingormatter
settled by judgment.[34] In res judicata, the judgment in the first action is considered conclusive as to every
matterofferedandreceivedtherein,astoanyotheradmissiblematterwhichmighthavebeenofferedforthat
purpose, and all other matters that could have been adjudged therein.[35]Res judicata is an absolute bar to a
subsequentactionforthesamecauseanditsrequisitesare:(a)theformerjudgmentorordermustbefinal(b)
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thejudgmentorordermustbeoneonthemerits(c)itmusthavebeenrenderedbyacourthavingjurisdiction
overthesubjectmatterandparties(d)theremustbebetweenthefirstandsecondactions,identityofparties,of
subjectmatterandofcausesofaction.[36]
TheSolicitorGeneral,onbehalfofrespondentDirectorofPatents,hasjoinedcausewithpetitioner. Both
claimthatallthefourelementsofresjudicatahavebeencompliedwith:thatthejudgmentinIPCNo.686was
finalandwasrenderedbytheDirectorofPatentswhohadjurisdictionoverthesubjectmatterandpartiesthat
the judgment in IPC No. 686 was on the merits and that the lack of a hearing was immaterial because
substantialissueswereraisedbythepartiesandpasseduponbytheDirectorofPatents.[37]
ThedecisioninIPCNo.686readsasfollows:
"xxx.
Neitherpartytooktestimonynoradduceddocumentaryevidence.Theysubmittedthecasefordecisionbasedon
thepleadingswhich,togetherwiththepertinentrecords,haveallbeencarefullyconsidered.
Accordingly,theonlyissueformydispositioniswhetherornotthehereinopposerwouldprobablybedamaged
bytheregistrationofthetrademarkBARBIZONsoughtbytherespondentapplicantonthegroundthatitso
resemblesthetrademarkBARBIZONallegedlyusedandownedbytheformertobe`likelytocauseconfusion,
mistakeortodeceivepurchasers.'
Onrecord,therecanbenodoubtthatrespondentapplicant'ssoughttoberegisteredtrademarkBARBIZONis
similar,infactobviouslyidentical,toopposer'sallegedtrademarkBARBIZON,inspellingandpronunciation.
Theonlyappreciablebutverynegligibledifferenceliesintheirrespectiveappearancesormannerof
presentation.Respondentapplicant'strademarkisinboldletters(setagainstablackbackground),whilethatof
theopposerisofferedinstylishscriptletters.
Itisopposer'sassertionthatitstrademarkBARBIZONhasbeenusedintradeorcommerceinthePhilippines
priortothedateofapplicationfortheregistrationoftheidenticalmarkBARBIZONbytherespondent
applicant.However,theallegationoffactsinopposer'sverifiednoticeofoppositionisdevoidofsuchmaterial
information.Infact,areadingofthetextofsaidverifiedoppositionrevealsanapparent,ifnotdeliberate,
omissionofthedate(oryear)whenopposer'sallegedtrademarkBARBIZONwasfirstusedintradeinthe
Philippines(seepar.No.1,p.2,VerifiedNoticeofOpposition,Rec.).Thus,itcannothereandnowbe
ascertainedwhetheropposer'sallegeduseofthetrademarkBARBIZONcouldbepriortotheuseoftheidentical
markbythehereinrespondentapplicant,sincetheopposerattemptedneithertosubstantiateitsclaimofusein
localcommercewithanyprooforevidence.Instead,theopposersubmittedthecasefordecisionbasedmerely
onthepleadings.
Ontheotherhand,respondentapplicantassertedinheramendedapplicationforregistrationthatshefirstused
thetrademarkBARBIZONforbrassiere(or'brasseire')andladiesunderweargarmentsandpantiesasearlyas
March3,1970.Bethatasitmay,therebeingnotestimonytakenastosaiddateoffirstuse,respondentapplicant
willbelimitedtothefilingdate,June15,1970,ofherapplicationasthedateoffirstuse(Rule173,Rulesof
PracticeinTrademarkCases).
Fromtheforegoing,Iconcludethattheopposerhasnotmadeoutacaseofprobabledamagebytheregistration
oftherespondentapplicant'smarkBARBIZON.
WHEREFORE,theoppositionshouldbe,asitishereby,DISMISSED.Accordingly,ApplicationSerialNo.
19010,fortheregistrationofthetrademarkBARBIZONofrespondentLolitaR.Escobar,isgivenduecourse."
[38]

ThedecisioninIPCNo.686wasajudgmentonthemeritsanditwaserrorfortheCourtofAppealstorule
thatitwasnot.Ajudgmentisonthemeritswhenitdeterminestherightsandliabilitiesofthepartiesbasedon
the disclosed facts, irrespective of formal, technical or dilatory objections.[39] It is not necessary that a trial
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should have been conducted. If the court's judgment is general, and not based on any technical defect or
objection,andthepartieshadafulllegalopportunitytobeheardontheirrespectiveclaimsandcontentions,itis
onthemeritsalthoughtherewasnoactualhearingorargumentsonthefactsofthecase.[40]Inthecaseatbar,
the Director of Patents did not dismiss private respondent's opposition on a sheer technicality. Although no
hearing was conducted, both parties filed their respective pleadings and were given opportunity to present
evidence. They, however, waived their right to do so and submitted the case for decision based on their
pleadings.ThelackofevidencedidnotdetertheDirectorofPatentsfromrulingonthecase,particularlyonthe
issueofprioruse,whichgoesintotheverysubstanceofthereliefsoughtbytheparties.Sinceprivaterespondent
failedtoproveprioruseofitstrademark,Escobar'sclaimoffirstusewasupheld.
ThejudgmentinIPCNo.686beingonthemerits,petitionerandtheSolicitorGeneralallegethatIPCNo.
686andIPCNo.2049alsocomplywiththefourthrequisiteofresjudicata,i.e.,theyinvolvethesameparties
andthesamesubjectmatter,andhaveidenticalcausesofaction.
Undisputedly, IPC No. 686 and IPC No. 2049 involve the same parties and the same subject matter.
PetitionerhereinistheassigneeofEscobarwhileprivaterespondentisthesameAmericancorporationinthe
first case. The subject matter of both cases is the trademark "Barbizon." Private respondent counterargues,
however, that the two cases do not have identical causes of action. New causes of action were allegedly
introduced in IPC No. 2049, such as the prior use and registration of the trademark in the United States and
othercountriesworldwide,prioruseinthePhilippines,andthefraudulentregistrationofthemarkinviolationof
Article 189 of the Revised Penal Code. Private respondent also cited protection of the trademark under the
Convention of Paris for the Protection of Industrial Property, specifically Article 6bis thereof, and the
implementation of Article 6bis by two Memoranda dated November 20, 1980 and October 25, 1983 of the
MinisterofTradeandIndustrytotheDirectorofPatents,aswellasExecutiveOrder(E.O.)No.913.
TheConventionofParisfortheProtectionofIndustrialProperty,otherwiseknownastheParisConvention,
is a multilateral treaty that seeks to protect industrial property consisting of patents, utility models, industrial
designs,trademarks,servicemarks,tradenamesandindicationsofsourceorappellationsoforigin,andatthe
same time aims to repress unfair competition.[41] The Convention is essentially a compact among various
countries which, as members of the Union, have pledged to accord to citizens of the other member countries
trademark and other rights comparable to those accorded their own citizens by their domestic laws for an
effectiveprotectionagainstunfaircompetition.[42]Inshort,foreignnationalsaretobegiventhesametreatment
ineachofthemembercountriesasthatcountrymakesavailabletoitsowncitizens.[43]Nationalsofthevarious
membernationsarethusassuredofacertainminimumofinternationalprotectionoftheirindustrialproperty.[44]
TheConventionwasfirstsignedbyelevencountriesinParisonMarch20,1883.[45]Itunderwentseveral
revisionsatBrusselsin1900,atWashingtonin1911,atTheHaguein1925,atLondonin1934,atLisbonin
1958,[46] and at Stockholm in 1967. Both the Philippines and the United States of America, herein private
respondent'scountry,aresignatoriestotheConvention.TheUnitedStatesaccededonMay30,1887whilethe
Philippines,throughitsSenate,concurredonMay10,1965.[47]ThePhilippines'adhesionbecameeffectiveon
September27,1965,[48]andfromthisdate,thecountryobligateditselftohonorandenforcetheprovisionsof
theConvention.[49]
Inthecaseatbar,privaterespondentanchorsitscauseofactiononthefirstparagraphofArticle6bisofthe
ParisConventionwhichreadsasfollows:
"Article6bis
(1)ThecountriesoftheUnionundertake,eitheradministrativelyiftheirlegislationsopermits,oratthe
requestofaninterestedparty,torefuseortocanceltheregistrationandtoprohibittheuse,ofa
trademarkwhichconstitutesareproduction,animitation,oratranslation,liabletocreateconfusion,ofa
markconsideredbythecompetentauthorityofthecountryofregistrationorusetobewellknowninthat
countryasbeingalreadythemarkofapersonentitledtothebenefitsofthisConventionandusedfor
identicalorsimilargoods.Theseprovisionsshallalsoapplywhentheessentialpartofthemark
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constitutesareproductionofanysuchwellknownmarkoranimitationliabletocreateconfusion
therewith.
(2)Aperiodofatleastfiveyearsfromthedateofregistrationshallbeallowedforseekingthecancellationof
suchamark.ThecountriesoftheUnionmayprovideforaperiodwithinwhichtheprohibitionofusemustbe
sought.
(3)Notimelimitshallbefixedforseekingthecancellationortheprohibitionoftheuseofmarksregistered
orusedinbadfaith."[50]
ThisArticlegovernsprotectionofwellknowntrademarks.Underthefirstparagraph,eachcountryofthe
Unionbounditselftoundertaketorefuseorcanceltheregistration,andprohibittheuseofatrademarkwhichis
a reproduction, imitation or translation, or any essential part of which trademark constitutes a reproduction,
liabletocreateconfusion,ofamarkconsideredbythecompetentauthorityofthecountrywhereprotectionis
sought, to be wellknown in the country as being already the mark of a person entitled to the benefits of the
Convention,andusedforidenticalorsimilargoods.
Article 6bis was first introduced at The Hague in 1925 and amended in Lisbon in 1952.[51] It is a self
executingprovisionanddoesnotrequirelegislativeenactmenttogiveiteffectinthemembercountry.[52]Itmay
be applied directly by the tribunals and officials of each member country by the mere publication or
proclamationoftheConvention,afteritsratificationaccordingtothepubliclawofeachstateandtheorderfor
itsexecution.[53]
TheessentialrequirementunderArticle6bisisthatthetrademarktobeprotectedmustbe"wellknown"in
thecountrywhereprotectionissought.Thepowertodeterminewhetheratrademarkiswellknownliesinthe
"competent authority of the country of registration or use." This competent authority would be either the
registeringauthorityifithasthepowertodecidethis,orthecourtsofthecountryinquestioniftheissuecomes
beforeacourt.[54]
Pursuant to Article 6bis, on November 20, 1980, then Minister Luis Villafuerte of the Ministry of Trade
issuedaMemorandumtotheDirectorofPatents.TheMinisterorderedtheDirectorthat:
"PursuanttotheParisConventionfortheProtectionofIndustrialPropertytowhichthePhilippinesisa
signatory,youareherebydirectedtorejectallpendingapplicationsforPhilippineregistrationofsignatureand
otherworldfamoustrademarksbyapplicantsotherthanitsoriginalownersorusers.
TheconflictingclaimsoverinternationallyknowntrademarksinvolvesuchnamebrandsasLacoste,Jordache,
Vanderbilt,Sasson,Fila,PierreCardin,Gucci,ChristianDior,OscardelaRenta,CalvinKlein,Givenchy,Ralph
Lauren,GeoffreyBeene,LanvinandTedLapidus.
Itisfurtherdirectedthat,incaseswherewarranted,Philippineregistrantsofsuchtrademarksshouldbeaskedto
surrendertheircertificatesofregistration,ifany,toavoidsuitsfordamagesandotherlegalactionbythe
trademarks'foreignorlocalownersororiginalusers.
Youarealsorequiredtosubmittotheundersignedaprogressreportonthematter.
Forimmediatecompliance."[55]
Threeyearslater,onOctober25,1983,thenMinisterRobertoOngpinissuedanotherMemorandumtothe
DirectorofPatents,viz:
"PursuanttoExecutiveOrderNo.913dated7October1983whichstrengthenstherulemakingandadjudicatory
powersoftheMinisterofTradeandIndustryandprovidesinteralia,that`suchrulemakingandadjudicatory
powersshouldberevitalizedinorderthattheMinisterofTradeandIndustrycanxxxapplymoreswiftand
effectivesolutionsandremediestooldandnewproblemsxxxsuchasinfringementofinternationallyknown
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tradenamesandtrademarksxxx'andinviewofthedecisionoftheIntermediateAppellateCourtinthecaseof
LACHEMISELACOSTE,S.A.,versusRAMSADWHANI[ACG.R.SPNO.13359(17)June1983][56]which
affirmsthevalidityoftheMEMORANDUMofthenMinisterLuisR.Villafuertedated20November1980
confirmingourobligationsunderthePARISCONVENTIONFORTHEPROTECTIONOFINDUSTRIAL
PROPERTYtowhichtheRepublicofthePhilippinesisasignatory,youareherebydirectedtoimplement
measuresnecessarytoeffectcompliancewithourobligationsundersaidConventioningeneral,and,more
specifically,tohonorourcommitmentunderSection6bis[57]thereof,asfollows:
1.WhetherthetrademarkunderconsiderationiswellknowninthePhilippinesorisamarkalreadybelongingto
apersonentitledtothebenefitsoftheCONVENTION,thisshouldbeestablished,pursuanttoPhilippinePatent
Officeproceduresininterpartesandexpartecases,accordingtoanyofthefollowingcriteriaorany
combinationthereof:
(a)adeclarationbytheMinisterofTradeandIndustrythatthetrademarkbeingconsideredisalreadywell
knowninthePhilippinessuchthatpermissionforitsusebyotherthanitsoriginalownerwillconstitutea
reproduction,imitation,translationorotherinfringement
(b)thatthetrademarkisusedincommerceinternationally,supportedbyproofthatgoodsbearingthetrademark
aresoldonaninternationalscale,advertisements,theestablishmentoffactories,salesoffices,distributorships,
andthelike,indifferentcountries,includingvolumeorothermeasureofinternationaltradeandcommerce
(c)thatthetrademarkisdulyregisteredintheindustrialpropertyoffice(s)ofanothercountryorcountries,
takingintoconsiderationthedateofsuchregistration
(d)thatthetrademarkhaslongbeenestablishedandobtainedgoodwillandinternationalconsumerrecognition
asbelongingtooneownerorsource
(e)thatthetrademarkactuallybelongstoapartyclaimingownershipandhastherighttoregistrationunderthe
provisionsoftheaforestatedPARISCONVENTION.
2.Thewordtrademark,asusedinthisMEMORANDUM,shallincludetradenames,servicemarks,logos,signs,
emblems,insigniaorothersimilardevicesusedforidentificationandrecognitionbyconsumers.
3.ThePhilippinePatentOfficeshallrefuseallapplicationsfor,orcanceltheregistrationof,trademarkswhich
constituteareproduction,translationorimitationofatrademarkownedbyaperson,naturalorcorporate,whois
acitizenofacountrysignatorytothePARISCONVENTIONFORTHEPROTECTIONOFINDUSTRIAL
PROPERTY.
4.ThePhilippinePatentOfficeshallgiveduecoursetotheOppositionincasesalreadyorhereafterfiledagainst
theregistrationoftrademarksentitledtoprotectionofSection6bisofsaidPARISCONVENTIONasoutlined
above,byremandingapplicationsfiledbyonenotentitledtosuchprotectionforfinaldisallowancebythe
ExaminationDivision.
5.AllpendingapplicationsforPhilippineregistrationofsignatureandotherworldfamoustrademarksfiledby
applicantsotherthantheiroriginalownersorusersshallberejectedforthwith.Wheresuchapplicantshave
alreadyobtainedregistrationcontrarytotheabovementionedPARISCONVENTIONand/orPhilippineLaw,
theyshallbedirectedtosurrendertheirCertificatesofRegistrationtothePhilippinePatentOfficeforimmediate
cancellationproceedings.
xxx."[58]
In the Villafuerte Memorandum, the Minister of Trade instructed the Director of Patents to reject all
pendingapplicationsforPhilippineregistrationofsignatureandotherworldfamoustrademarksbyapplicants
other than their original owners or users. The Minister enumerated several internationallyknown trademarks
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andorderedtheDirectorofPatentstorequirePhilippineregistrantsofsuchmarkstosurrendertheircertificates
ofregistration.
IntheOngpinMemorandum,theMinisterofTradeandIndustrydidnotenumeratewellknowntrademarks
butlaiddownguidelinesfortheDirectorofPatentstoobserveindeterminingwhetheratrademarkisentitledto
protectionasawellknownmarkinthePhilippinesunderArticle6bisoftheParisConvention.Thiswastobe
establishedthroughPhilippinePatentOfficeproceduresininterpartesandexpartecasespursuanttothecriteria
enumerated therein. The Philippine Patent Office was ordered to refuse applications for, or cancel the
registrationof,trademarkswhichconstituteareproduction,translationorimitationofatrademarkownedbya
person who is a citizen of a member of the Union.All pending applications for registration of worldfamous
trademarksbypersonsotherthantheiroriginalownersweretoberejectedforthwith.TheOngpinMemorandum
was issued pursuant to Executive Order No. 913 dated October 7, 1983 of then President Marcos which
strengthened the rulemaking and adjudicatory powers of the Minister of Trade and Industry for the effective
protectionofconsumersandtheapplicationofswiftsolutionstoproblemsintradeandindustry.[59]
BoththeVillafuerteandOngpinMemorandaweresustainedbytheSupremeCourtinthe1984landmark
caseofLaChemiseLacoste,S.A.v.Fernandez.[60]ThiscourtruledthereinthatundertheprovisionsofArticle
6bis of the Paris Convention, the Minister ofTrade and Industry was the "competent authority" to determine
whetheratrademarkiswellknowninthiscountry.[61]
The Villafuerte Memorandum was issued in 1980, i.e., fifteen (15) years after the adoption of the Paris
Conventionin1965.Inthecaseatbar,thefirstinterpartes case, IPC No. 686, was filed in 1970, before the
Villafuerte Memorandum but five (5) years after the effectivity of the Paris Convention. Article 6bis was
already in effect five years before the first case was instituted. Private respondent, however, did not cite the
protectionofArticle6bis,neitherdiditmentiontheParisConventionatall.Itwasonlyin1981whenIPCNo.
2049wasinstitutedthattheParisConventionandtheVillafuerteMemorandum,and,duringthependencyofthe
case,the1983OngpinMemorandumwereinvokedbyprivaterespondent.
TheSolicitorGeneralarguesthattheissueofwhethertheprotectionofArticle6bisoftheConventionand
thetwoMemorandaisbarredbyresjudicatahasalreadybeenansweredinWolverineWorldwide,Inc.v.Court
ofAppeals.[62]Inthiscase,petitionerWolverine,aforeigncorporation,filedwiththePhilippinePatentOfficea
petitionforcancellationoftheregistrationcertificateofprivaterespondent,aFilipinocitizen,forthetrademark
"Hush Puppies" and "Dog Device." Petitioner alleged that it was the registrant of the internationallyknown
trademark in the United States and other countries, and cited protection under the Paris Convention and the
OngpinMemorandum.The petition was dismissed by the Patent Office on the ground of res judicata. It was
foundthatin1973petitioner'spredecessorininterestfiledtwopetitionsforcancellationofthesametrademark
againstrespondent'spredecessorininterest.ThePatentOfficedismissedthepetitions,orderedthecancellation
of registration of petitioner's trademark, and gave due course to respondent's application for registration. This
decision was sustained by the Court ofAppeals, which decision was not elevated to us and became final and
executory.[63]
WolverineclaimedthatwhileitspreviouspetitionswerefiledunderR.A.No.166,theTrademarkLaw,its
subsequentpetitionwasbasedonanewcauseofaction,i.e.,theOngpinMemorandumandE.O.No.913issued
in1983,afterfinalityofthepreviousdecision.WeheldthatthesaidMemorandumandE.O.didnotgrantanew
cause of action because it did "not amend the Trademark Law," x x x "nor did it indicate a new policy with
respecttotheregistrationinthePhilippinesofworldfamoustrademarks."[64]Thisconclusionwasbasedonthe
findingthatWolverine'stwopreviouspetitionsandsubsequentpetitiondealtwiththesameissueofownership
ofthetrademark.[65]Inotherwords,sincethefirstandsecondcasesinvolvedthesameissueofownership,then
thefirstcasewasabartothesecondcase.
In the instant case, the issue of ownership of the trademark "Barbizon" was not raised in IPC No. 686.
Privaterespondent'soppositionthereinwasmerelyanchoredon:
(a)"confusingsimilarity"ofitstrademarkwiththatofEscobar's
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(b)thattheregistrationofEscobar'ssimilartrademarkwillcausedamagetoprivaterespondent'sbusiness
reputationandgoodwilland
(c)thatEscobar'suseofthetrademarkamountstoanunlawfulappropriationofamarkpreviouslyusedinthe
PhilippineswhichactispenalizedunderSection4(d)oftheTrademarkLaw.
InIPCNo.2049,privaterespondent'soppositionsetforthseveralissuessummarizedasfollows:
(a)asearlyas1933,itadoptedtheword"BARBIZON"astrademarkonitsproductssuchasrobes,pajamas,
lingerie,nightgownsandslips
(b)thatthetrademark"BARBIZON"wasregisteredwiththeUnitedStatesPatentOfficein1934and1949and
thatvariationsofthesametrademark,i.e.,"BARBIZON"withBeedesignand"BARBIZON"withthe
representationofawomanwerealsoregisteredwiththeU.S.PatentOfficein1961and1976
(c)thatthesemarkshavebeeninuseinthePhilippinesandinmanycountriesallovertheworldforoverforty
years."Barbizon"productshavebeenadvertisedininternationalpublicationsandthemarksregisteredin36
countriesworldwide
(d)Escobar'sregistrationofthesimilartrademark"BARBIZON"in1974wasbasedonfraudandthis
fraudulentregistrationwascancelledin1979,strippingEscobarofwhatsoeverrightshehadtothesaidmark
(e)Privaterespondent'strademarkisentitledtoprotectionasawellknownmarkunderArticle6bisoftheParis
Convention,ExecutiveOrderNo.913,andthetwoMemorandadatedNovember20,1980andOctober25,1983
oftheMinisterofTradeandIndustrytotheDirectorofPatents
(f)Escobar'strademarkisidenticaltoprivaterespondent'sanditsuseonthesameclassofgoodsasthelatter's
amountstoaviolationoftheTrademarkLawandArticle189oftheRevisedPenalCode.
IPCNo.2049raisedtheissueofownershipofthetrademark,thefirstregistrationanduseofthetrademarkin
the United States and other countries, and the international recognition and reputation of the trademark
established by extensive use and advertisement of private respondent's products for over forty years here and
abroad.These are different from the issues of confusing similarity and damage in IPC No. 686. The issue of
priorusemayhavebeenraisedinIPCNo.686butthisclaimwaslimitedtoprioruseinthePhilippinesonly.
Prior use in IPC No. 2049 stems from private respondent's claim as originator of the word and symbol
"Barbizon,"[66] as the first and registered user of the mark attached to its products which have been sold and
advertisedworldwideforaconsiderablenumberofyearspriortopetitioner'sfirstapplicationforregistrationof
hertrademarkinthePhilippines.Indeed,thesearesubstantialallegationsthatraisednewissuesandnecessarily
gave private respondent a new cause of action. Res judicata does not apply to rights, claims or demands,
althoughgrowingoutofthesamesubjectmatter,whichconstituteseparateordistinctcausesofactionandwere
notputinissueintheformeraction.[67]
Respondentcorporationalsointroducedinthesecondcaseafactthatdidnotexistatthetimethefirstcase
wasfiledandterminated.Thecancellationofpetitioner'scertificateofregistrationforfailuretofiletheaffidavit
of use arose only after IPC No. 686. It did not and could not have occurred in the first case, and this gave
respondentanothercausetoopposethesecondapplication.Resjudicataextendsonlytofactsandconditionsas
theyexistedatthetimejudgmentwasrenderedandtothelegalrightsandrelationsofthepartiesfixedbythe
factssodetermined.[68]Whennewfactsorconditionsintervenebeforethesecondsuit,furnishinganewbasis
fortheclaimsanddefensesoftheparties,theissuesarenolongerthesame,andtheformerjudgmentcannotbe
pleadedasabartothesubsequentaction.[69]
Itisalsonotedthattheoppositionsinthefirstandsecondcasesarebasedondifferentlaws.Theopposition
in IPC No. 686 was based on specific provisions of the Trademark Law, i.e., Section 4 (d)[70] on confusing
similarity of trademarks and Section 8[71] on the requisite damage to file an opposition to a petition for
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registration. The opposition in IPC No. 2049 invoked the Paris Convention, particularlyArticle 6bis thereof,
E.O. No. 913 and the two Memoranda of the Minister of Trade and Industry. This opposition also invoked
Article189oftheRevisedPenalCodewhichisastatutetotallydifferentfromtheTrademarkLaw.[72]Causesof
actionwhicharedistinctandindependentfromeachother,althougharisingoutofthesamecontract,transaction,
orstateoffacts,maybesuedonseparately,recoveryononebeingnobartosubsequentactionsonothers.[73]
Themerefactthatthesamereliefissoughtinthesubsequentactionwillnotrenderthejudgmentintheprior
actionoperativeasresjudicata,suchaswherethetwoactionsarebasedondifferentstatutes.[74]Resjudicata
thereforedoesnotapplytotheinstantcaseandrespondentCourtofAppealsdidnoterrinsoruling.
Intellectual and industrial property rights cases are not simple property cases. Trademarks deal with the
psychologicalfunctionofsymbolsandtheeffectofthesesymbolsonthepublicatlarge.[75]Trademarksplaya
significantroleincommunication,commerceandtrade,andservevaluableandinterrelatedbusinessfunctions,
bothnationallyandinternationally.Forthisreason,allagreementsconcerningindustrialproperty,likethoseon
trademarks and tradenames, are intimately connected with economic development.[76] Industrial property
encouragesinvestmentsinnewideasandinventionsandstimulatescreativeeffortsforthesatisfactionofhuman
needs.Theyspeeduptransferoftechnologyandindustrialization,andtherebybringaboutsocialandeconomic
progress.[77] These advantages have been acknowledged by the Philippine government itself. The Intellectual
PropertyCodeofthePhilippinesdeclaresthat"aneffectiveintellectualandindustrialpropertysystemisvitalto
the development of domestic and creative activity, facilitates transfer of technology, it attracts foreign
investments, and ensures market access for our products."[78] The Intellectual Property Code took effect on
January1,1998andbyitsexpressprovision,[79]repealedtheTrademarkLaw,[80]thePatentLaw,[81] Articles
188and189oftheRevisedPenalCode,theDecreeonIntellectualProperty,[82]andtheDecreeonCompulsory
ReprintingofForeignTextbooks.[83]TheCodewasenactedtostrengthentheintellectualandindustrialproperty
systeminthePhilippinesasmandatedbythecountry'saccessiontotheAgreementEstablishingtheWorldTrade
Organization(WTO).[84]
The WTO is a common institutional framework for the conduct of trade relations among its members in
matters related to the multilateral and plurilateral trade agreements annexed to the WTO Agreement.[85] The
WTOframeworkensuresa"singleundertakingapproach"totheadministrationandoperationofallagreements
andarrangementsattachedtotheWTOAgreement.AmongthoseannexedistheAgreementonTradeRelated
AspectsofIntellectualPropertyRightsorTRIPs.[86]MemberstothisAgreement"desiretoreducedistortions
and impediments to international trade, taking into account the need to promote effective and adequate
protection of intellectual property rights, and to ensure that measures and procedures to enforce intellectual
propertyrightsdonotthemselvesbecomebarrierstolegitimatetrade."Tofulfilltheseobjectives,themembers
haveagreedtoadheretominimumstandardsofprotectionsetbyseveralConventions.[87]TheseConventions
are:theBerneConventionfortheProtectionofLiteraryandArtisticWorks(1971),theRomeConventionorthe
International Convention for the Protection of Performers, Producers of Phonograms and Broadcasting
Organisations,theTreatyonIntellectualPropertyinRespectofIntegratedCircuits,andtheParisConvention
(1967),asrevisedinStockholmonJuly14,1967.[88]
Amajorproportionofinternationaltradedependsontheprotectionofintellectualpropertyrights.[89] Since
the late 1970's, the unauthorized counterfeiting of industrial property and trademarked products has had a
considerable adverse impact on domestic and international trade revenues.[90]The TRIPsAgreement seeksto
grant adequate protection of intellectual property rights by creating a favorable economic environment to
encouragetheinflowofforeigninvestments,andstrengtheningthemultilateraltradingsystemtobringabout
economic,culturalandtechnologicalindependence.[91]ThePhilippinesandtheUnitedStatesofAmericahave
acceded to the WTO Agreement. This Agreement has revolutionized international business and economic
relationsamongstates,andhaspropelledtheworldtowardstradeliberalizationandeconomicglobalization.[92]
Protectionism and isolationism belong to the past.Trade is no longer confined to a bilateral system. There is
now"aneweraofglobaleconomiccooperation,reflectingthewidespreaddesiretooperateinafairerandmore
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open multilateral trading system."[93] Conformably, the State must reaffirm its commitment to the global
communityandtakepartinevolvinganewinternationaleconomicorderatthedawnofthenewmillenium.
INVIEWWHEREOF,thepetitionisdeniedandtheDecisionandResolutionoftheCourtofAppealsin
CAG.R.SPNo.28415areaffirmed.
SOORDERED.
Davide,Jr.,C.J.,(Chairman),Kapunan,Pardo,andYnaresSantiago,JJ.,concur.
[1]DecisionNo.804datedJune18,1974oftheDirectorofPatents,Rollo,p.36.
[2]Rollo,p.38.
[3]CertificateofRegistrationNo.21920,Annex"E"toMemorandumofPetitioner,Rollo,p.211.
[4] TheMemorandumoftheMinisterofTradetotheHonorableDirectorofPatentsshouldhavebeendated20November1980
MemorandumofthePrivateRespondent,p.11,Rollo,p.227.
[5]CommentoftheSolicitorGeneral,pp.58,Rollo,pp.116119.
[6]CADecision,p.4,Rollo,p.27.
[7]Id.
[8]CADecision,p.31.ThedecisionwaspennedbyJusticeFidelPurisima,nowamemberofthisCourt,andconcurredinbyJustices
JesusM.ElbiniasandAngelinaS.Gutierrez.
[9]Rollo,pp.3435.
[10]Petitioner,pp.56,Rollo,pp.1112.
[11]Sec.38,par.2,R.A.166.
[12]Sec.121.1,PartIII,R.A.8293.
[13]Gabrielv.Perez,55SCRA406,417[1974]citing52AmJur,p.508Etephav.DirectorofPatents,16SCRA495,497[1966]see
alsoPhil.RefiningCo.,Inc.v.NgSam,115SCRA472,476477[1982]alsocitedinAgpalo,TrademarkLawandPracticeinthe
Philippines,p.5[1990].
[14] DissentingOpinionofJusticeFlorentinoFelicianoinPhilipMorris,Inc.v.CourtofAppeals,224SCRA576,624[1993]see
William Jay Gross, The Territorial Scope of Trademark Rights, Univ.ofMiamiLawReview,vol44:1075[March1990]seealso
RudolfCallmann,TheLawofUnfairCompetitionandTrademarks,vol.2,pp.804814[1945].
[15] Harry D. Nims, The Law of Unfair Competition and Trademarks, 4th ed., pub. by Baker, Voorhis & Co., Inc., vol. 1, p. 509
[1947].
[16] Frank H. Foster and Robert L. Shook, Patents, Copyrights, and Trademarks, pub. by John Wiley & Sons, Inc., 2d ed. p. 19
[1993].1
[17]StephenP.Ladas,Patents,Trademarks,andRelatedRights,NationalandInternationalProtection(HarvardUniversityPress),vol.
1,pp.34[1975].
[18]FosterandShook,supra,at20.
[19] Id.,at2021Ladas,supra,vol.1,at45seeFrankI.Schechter,TheRationalBasisofTrademarkProtection,40HarvardLaw
Review, 813, 814 [1927] Callmann, supra, vol. 2, p. 807 see also Richard Wincor and Irving Mandell, Copyright, Patents and
Trademarks:TheProtectionofIntellectualandIndustrialProperty,at72[1980].
[20]FosterandShook,supra,at20Schechter,supra,at814.
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[21]Callmann,supra,vol.2,at808.
[22]FosterandShook,supra,at2223Nims,supra,at511.
[23]Callmann,supra,vol.2,at809910.
[24]FosterandShook,supra,at2122.
[25]JusticeHolmesinChadwickv.Covell,151Man190,23NE1068,1069[1890]alsocitedinNims,supra,at37.
[26]Ladas,supra,vol.1,at8.
[27]SeealsoDissentingOpinionofJusticeFelicianoinPhilipMorris,supra,at624625.
[28]Schechter,supra.Trademarkshavebecomeproductsintheirownright,valuedasstatussymbolsandindicatorsofthepreferences
andaspirationsofthosewhousethemAlexKozinski,TrademarksUnplugged,NewYorkUniversityLawReview,vol.68:960,
965966[Oct.1993].
[29] Kozinski,supra,at965966Callmann,supra,vol.2,at881812[1945],citingSchechter,TheHistoricalFoundationsofthe
LawRelatingtoTrademarks[1925],Note15,p.64.
[30]Gross,supra,at10991100seealsoDissentingopinionofJusticeFelicianoinPhilipMorris,supra,at625626.
[31] The Internet is a decentralized computer network linked together through routers and communications protocols that enable
anyoneconnectedtoittocommunicatewithotherslikewiseconnected,regardlessofphysicallocation.UsersoftheInternethavea
wide variety of communication methods available to them and a tremendous wealth of information that they may access. The
growingpopularityoftheNethasbeendriveninlargepartbytheWorldWideWeb,i.e.,asystemthatfacilitatesuseoftheNetby
sortingthroughthegreatmassofinformationavailableonit.AdvertisingontheNetandcybershoppingareturningtheInternetinto
acommercialmarketplace.MaureenO'Rourke,FencingCyberspace:DrawingBordersinaVirtualWorld,MinnesotaLawReview,
vol.82:609611,615618[Feb.1998].
[32]Petition,pp.910,Rollo,pp.1516.
[33]Id.
[34]46AmJur2d,"Judgments,"Sec.394[1969ed.].
[35] Section 49 (b), Rule 39 of the Revised Rules of Court now Section 47 (b), Rule 39 of the 1997 Rules of Civil Procedure
Gabuyav.Layug,250SCRA218,221[1995]Vda.deCruzov.Carriaga,Jr.,174SCRA330,338[1989].
[36] De Knecht v. Court of Appeals, 290 SCRA 223, 237238 [1998] De Ramos v. Court of Appeals, 213 SCRA 207, 214215
[1992]AmericanInterFashionCorp.v.OfficeofthePresident,197SCRA409,417[1991]WolverineWorldwide,Inc.v.Courtof
Appeals,169SCRA627,630[1989].
[37]Petition,pp.810,Rollo,pp.1416CommentoftheSolicitorGeneral,pp.1519,Rollo,pp.126130.
[38]Rollo,pp.3738.
[39]Mendiolav.CourtofAppeals,258SCRA492,500[1996].
[40]Mendiolav.CourtofAppeals,supra,at500501Nabusv.CourtofAppeals,193SCRA732,740[1991]citing50C.J.S.5153.
[41]Article1,ParisConvention,61O.G.8010[1965].
[42]R.Agpalo,TrademarkLawandPracticeinthePhilippines,p.200[1990].
[43]Agpalo,supra,at200201.
[44]RudolfCallmann,TheLawofUnfairCompetitionandTradeMarks,vol.2,p.1723[1945].
[45]Belgium,Brazil,France,Guatemala,Italy,theNetherlands,Portugal,Salvador,Serbia,SpainandSwitzerland.
[46]61O.G.8011.
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[47] Note 18, Dissenting Opinion of Justice Florentino Feliciano in Philip Morris, Inc. v. Court of Appeals, 224 SCRA 599, 615
[1993].ThePresidentofthePhilippinessignedtheinstrumentofadherenceonJuly21,1965Agpalo,supra,at201.
[48]IdseealsoNote9,SmithKline&FrenchLaboratories,Ltd.v.CourtofAppeals,276SCRA224,236[1997]ConverseRubber
Corp.v.UniversalRubberProducts,147SCRA154,165[1987].
[49]LaChemiseLacoste,S.A.v.Fernandez,129SCRA373,389[1984].
[50]AsrevisedundertheLisbonActof1958.AtthetimethePhilippinesratifiedtheParisConventionin1965,thelastrevisionwas
theLisbonAct.Atpresent,thelatestrevisionistheStockholmActpassedonJuly14,1967andamendedonOctober2,1979.The
PhilippinesaccededtotheStockholmActonMarch25,1980butonlywithrespecttoArticles1330.TheStockholmActtookeffect
inthePhilippinesonJuly16,1980,exceptastoitsArticles112EstebanB.Bautista,TheTRIPSAgreementandthePhilippines'
ExistingTreatyObligationsonIntellectualProperty,TheWorldBulletin,pub.bytheInstituteofInternationalandLegalStudies,UP
LawCenter,vol.12:50[JanJune1996]IntellectualPropertyinthePhil.,ACompilationofPhil.LawsandInternationalDocuments
PertainingtoIntellectualProperty,ed.byAnianoL.Luzung,pub.byRexBookstore,p.416[1995].WiththePhilippines'adhesionto
theWTOandtheTRIPSAgreementin1995,however,thecountryobligateditselftocomplywithArticles112and19oftheParis
ConventionArticle2(1),TRIPsAgreement.
[51] Stephen P. Ladas, Patents, Trademarks, and Related Rights, National and International Protection, pub. by the Harvard
UniversityPress,vol.2,at12511252[1975].
[52]TheParisConventionhas3classesofprovisions:(1)provisionsobligatingmembersoftheUniontocreateandmaintaincertain
nationallaworregulations(2)provisionsmerelyreferringtothenationallawofeachcountryandmakingitapplicableorpermitting
eachcountrytopasssuchlegislationasitmaychooseand(3)provisionsestablishingcommonlegislationforallmembersofthe
UnionandobligatingthemtogranttopersonsentitledtothebenefitsoftheConventiontherightsandadvantagesspecifiedinsuch
provisions,notwithstandinganythingintheirnationallawtothecontraryLadas,supra,at209seealsoCallman,supra,vol.2,at
17231724.ProvisionsunderthethirdclassareselfexecutingandArticle6bisisoneofthemLadas,supra,vol.1,at209.
[53]Ladas,supra,vol.1,p.233.
[54]Ladas,supra,vol.2,pp.12521254.
[55]AlsoquotedinLaChemiseLacoste,S.A.v.Fernandez,supra,at389390.
[56]ThisCAdecision,pennedbythenCAJusticeVicenteV.Mendoza,nowamemberofthisCourt,wasthesamedecisionaffirmed
bytheSupremeCourtinLaChemiseLacostev.Fernandez,G.R.Nos.L6379697andL65659,129SCRA373[1984].
[57]Shouldhavebeen"Article"6bis.
[58]AlsoquotedinLaChemiseLacoste,S.A.v.Fernandez,supra,at401403.
[59] E.O. No. 913 is entitled "Strengthening the RuleMaking and Adjudicatory Powers of the Minister of Trade and Industry in
OrdertoFurtherProtectConsumers."
[60]129SCRA373[1984].
[61] Id. at 396 see also Ignacio S. Sapalo, Background Reading Material on the Intellectual Property System of the Philippines,
reviseded.,pub.byWorldIntellectualPropertyOffice(WIPO),p.76[1994].I.Sapalo was the Director of the Bureau of Patents,
TrademarksandTechnologyTransfer(BPTTT),DepartmentofTradeandIndustry(DTI)from1987to1996.
[62]169SCRA627[1989].
[63]Id.at631.
[64]Id.at633.
[65]Id.at634.
[66] PrivaterespondentpresentedevidencebeforetheDirectorofPatentsshowingthattheword"Barbizon"wasderivedfromthe
nameofavillageinFrance.Inthisvillage,amid19thcenturyschoolofFrenchpaintingdevelopedanartstyledepictinglandscape
and rural genre subjects from a direct observation of nature, with much attention to the expression of light and atmosphere.
"Barbizon"wasappropriatedasatrademarkin1933byGarfinkleandRitter,privaterespondent'spredecessor,toidentifyitsgoods
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withthesamesoftandwarmatmospheredepictedinthebarbizonstyleofpaintingExhibits"B"and"I,"seePetitionforReview,
CourtofAppealsRollo,p.3.
[67]Cainav.CourtofAppeals,239SCRA252,264[1994]citingLordv.Garland,168P.2d5[1946]seealsoMartinezv.Courtof
Appeals,139SCRA558,564[1985].
[68]Cainav.CourtofAppeals,supra,at263[1994]seealsoGuevarav.Benito,247SCRA570,573[1995].
[69]Id.,citingLordv.Garland,168P.2d[1946]Rhodesv.VanSteenberg,225F.Supp.113[1963]Cowanv.GulfCityFisheries,
Inc.,381So.2d158[1980]seealso46AmJur2d,"Judgments,"Secs.443,444[1969ed.]
[70]Section4(d),R.A.166reads:
"Sec.4.Registrationoftrademarks,tradenamesandservicemarksontheprincipalregister.Thereisherebyestablishedaregisterof
trademarks,tradenamesandservicemarkswhichshallbeknownastheprincipalregister.Theownerofatrademark,tradenameor
servicemarkusedtodistinguishhisgoods,businessorservicesfromthegoods,businessorservicesofothersshallhavetherightto
registerthesameontheprincipalregister,unlessit:
xxx
(d)ConsistsoforcomprisesamarkortradenamewhichsoresemblesamarkortradenameregisteredinthePhilippinesoramarkor
tradenamepreviouslyusedinthePhilippinesbyanotherandnotabandoned,astobelikely,whenappliedtoorusedinconnection
withthegoods,businessorservicesoftheapplicant,tocauseconfusionormistakeortodeceivepurchasersxxx."
[71]Section8,R.A.166reads:
"Sec.8.Opposition.Anypersonwhobelievesthathewouldbedamagedbytheregistrationofamarkortradenamemay,upon
paymentoftherequiredfeeandwithinthirtydaysafterthepublicationunderthefirstparagraphofsection7hereof,filewiththe
Directoranoppositiontotheapplication.xxx."
[72]TheParisConventionbecamepartoftheTrademarkLawonlybyreferenceinSection37ofthelatter.Ofandbyitself,theParis
Conventionisaseparatelegalcovenant.
[73] Nabusv.CourtofAppeals,193SCRA732,743,746[1991]seealso50C.J.S."Judgments,Sec.674alsocitedinNabus,at
743.
[74]Nabus,supra,at743seealso50C.J.S."Judgments,"Secs.649,655alsocitedinNabus.
[75]MishawakaR.&W.Mfg.Co.v.S.S.KresgeCo.,86Led1381,316U.S.203,205[1942]seealsoGordonV.Smith,Trademark
Valuation,pub.byJohnWiley&Sons,Inc.,pp.3839[1997].
[76]Ladas,supra,vol.1,at13.
[77]Id.
[78]Section2,R.A.8293,theIntellectualPropertyCodeof1998.
[79]Section239,R.A.No.8293.
[80]R.A.No.166.
[81]R.A.No.165.
[82]PresidentialDecree(P.D.)No.49.
[83]P.D.No.285.
[84]EmmaC.Francisco,ThePolicyofIntellectualPropertyProtectioninthePhilippines,TheWorldBulletin,pub.bytheUPLaw
Center,vol.12:1[JanJune1996]Ms.FranciscowastheDirectoroftheBPTTTin1996.
[85] MichaelBlakeney,TradeRelatedAspectsofIntellectualPropertyRights:AConciseGuidetotheTRIPsAgreement,pub.by
Sweet&MaxwellLtd,at37[1996]TheWTOwascreatedattheUruguayRoundofmultilateraltradenegotiationssponsoredbythe
General Agreement on Tariffs and Trade (GATT) in 1994. The GATT was established in 1947 to promote a multilateral trading
system among countries through nondiscriminatory trade liberalization, and through fair and effective rules and disciplines. The
GATTwascomposedof120contractingpartiesandobserversthataccountforabout90%oftheworldtrade.It,however,dealtwith
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trade in tangible goods alone.As successor of the GATT, theWTO also covers trade in services, intellectual property rights and
providesforaneffectivemechanismfordisputesettlementGrowthOpportunitiesIntothe21stCentury,AQuestionandAnswer
Primer Prepared by the Bureau of International Trade Relations, Department of Trade and Industry, pp. 1, 37 [1994], hereinafter
referredtoasDTIBITRPrimerseeNewsoftheUruguayRoundofMultilateralTradeNegotiations,issuedbytheInformationand
MediaRelationsdivisionoftheGATT,Geneva,p.5[5April1994]seealsoTanadav.Angara,272SCRA18[1997].
[86]TheTRIPSAgreementissaidtobethemostcomprehensivemultilateralagreementonintellectualproperty.Itaddressesnotonly
and more explicitly the primary regimes of intellectual property, viz., patent including the protection of new varieties of plants,
trademarks including service marks, and copyright and its related rights but also the nontraditional categories of geographical
indications including appellations of origin, industrial design, layout design of integrated circuits, and undisclosed information
includingtradesecrets.Italsoestablishesstandardsofprotectionandrulesofenforcementandprovidesfortheuniformapplicability
oftheWTOdisputesettlementmechanismtoresolvedisputesamongmemberstates.AnitaS.Regalado,WTODisputeSettlement
Procedure:ItsImpactonCopyrightProtection,TheCourtSystemsJournal,vol.3:67,78[March1998].
[87] Ma.RowenaR.Gonzales,OptimizingRomeinTRIPs:FindingtheAppianWay,WorldBulletin,pub.bytheUPLawCenter,
vol.12:13,18[Jan.June1996].
[88]TRIPSAgreement,Article1,par.3.
[89]AsacknowledgedintheUruguayRoundoftheGATTDTIBITRPrimer,supra,atp.34.
[90] Id.Blakeney,supra,at1Investorsabandonedorpostponedtheirinvestmentsincountriesthatdidnotaffordprotectionfrom
intellectualpiracy(DTIBITRPrimer,supra,at34)Worse,inadequateintellectualprotectionincertaincountriesgaverisetotrade
retaliationunilaterallyimposedbyrichtradingpartnersDTIBITRPrimer,supra,at36Blakeney,supra,at46.TheUnitedStates,
inthe1984amendmenttoSection301oftheTradeActof1974,andlater,Special301oftheOmnibusTradeandCompetitiveness
Actof1988,authorizedtheU.S.TradeRepresentative(USTR)toidentifypriorityforeigncountrieswhichdenyadequateprotection
ofintellectualpropertyrightstoU.S.traders.Those countries were placed on a watchlist, with a view to fasttrack investigation,
followedbytraderetaliationintheformofincreaseddutiesandimportrestrictions.TraderestrictionswereimposedonKoreaand
Brazilin1985,Brazilagainin1988andIndiain1992Blakeney,supra,at46.Bytheseacts,anytradingpartneroftheU.S.became
vulnerabletounilateralpressureTheGATT,theUruguayRoundandthePhilippines,SpeechofJ.AntonioBuencamino,Director,
BureauofInternationalTradeRelations,DTI,p.4.
[91]SpeechofJ.AntonioBuencamino,Director,DTIBITR,supra,at45DTIBITRPrimer,supra,at3436.

[92]Tanadav.Angara,272SCRA18,28[1997].
[93]Blakeney,supra,at3637citingTheMarrakeshDeclarationof15April1995,par.2.

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