Can the owner of an unregistered trade name sue for infringement? This was the main issue tackled by the Supreme Court in its decision issued on March 3 2010, in the case of Coffee Partners Inc vs San Francisco Coffee & Roastery, Inc (GR no 169504). Coffee Partners, a domestic corporation registered with the Securities and Exchange Commission (SEC) in January 2001, has a franchise agreement with Coffee Partners, a British Virgin Islands company organised in 1997, to operate coffee shops using the trade mark San Francisco Coffee. San Francisco Coffee and Roastery is also a domestic corporation engaged in the wholesale and retail sale of coffee, registered with the SEC in May 1995. It registered the business name San Francisco Coffee & Roastery Inc with the Department of Trade and Industry in June 1995, but not with the Intellectual Property Office (IPOPhil).
In June 2001, San Francisco Coffee and Roastery sent a letter to Coffee Partners for the latter to stop using the name San Francisco Coffee and filed an action for infringement and unfair competition with claims for damages with the Bureau of Legal Affairs (BLA) of IPOPhil. Coffee Partners countered that it was not infringing because its San Francisco Coffee mark was not confusingly similar with the mark of San Francisco Coffee and Roastery due to difference in appearance and wide divergence in the channels of trade. Coffee Partners further argued that San Francisco Coffee and Roastery had stopped operating under the trade name San Francisco Coffee when it formed a joint venture with Boyd Coffee USA in 1998; that when a trade name is not registered with the IPOPhil, a suit for infringement is not available; and that the proper noun San Francisco and the generic term coffee are not capable of exclusive appropriation.
In its decision, the BLA held that Coffee Partners' San Francisco Coffee trade mark infringed on the trade name of San Francisco Coffee and Roastery because of its confusing similarity to the dominant element of its trade name, San Francisco, and the right to the exclusive use of a trade name is determined from priority of adoption. The BLA found that San Francisco Coffee and Roastery registered its business name with the Department of Trade and Industry in 1995, earlier than 2001, the application date of its trade mark for San Francisco Coffee in the Philippines, and 1997 in other countries.
On appeal, the Director General of IPOPhil reversed the ruling of the BLA and held that there was no infringement because San Francisco Coffee and Roastery had stopped using its trade name in 1998, while Coffee Partners had continuously used San Francisco Coffee since 2001. That between a subsequent user of a trade name in good faith and a prior user who had stopped using the trade name, it would be inequitable to rule in favour of the latter.
The Court of Appeals, however, reinstated the decision of the BLA finding infringement. Finally, the Supreme Court affirmed the decision of the Court of Appeals, ruling that a trade name need not be registered with the IPOPhil before an infringement suit may be filed by its owner as provided by Section 165, which states that notwithstanding any laws or regulations providing for any obligation to register trade names, such names shall be protected, even before or without registration, against any unlawful act committed by third parties and all that is required is that the trade name is previously used in trade and commerce in the Philippines.
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| Editha R Hechanova |
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