Philippine Supreme Court rules trademark application made in bad faith

A partnership gone sour. More than 16 years after the filing of the opposition, the Supreme Court of the Philippines (SC), in the case of Manuel T. Zulueta v Cyma Greek Taverna Co. (G.R. No. 205699, promulgated on January 23 2023, and published by the SC on October 20 2023), finally decided on the ownership of the ‘Cyma’ mark used on a popular Greek restaurant in the Philippines.

According to the petitioner, Zulueta, he is the owner of the mark ‘Cyma’ and was the first to file the application for registration with the Intellectual Property Office of the Philippines (IPOPHL). He said that he invited Raoul Robert Goco, a chef, to come up with a menu for the first Cyma restaurant to be opened in Boracay, an iconic island in the Philippines. They formed the Cyma Greek Taverna Company, a partnership, and later opened a Cyma branch at the EDSA Shangri-La Plaza mall.

Zulueta also claimed that while he was abroad, Goco, with his sister Maria, issued a fraudulent deed of assignment ceding his interest in the partnership to Maria in the amount of PHP 500,000 (about $9,000 at the current exchange rate).

In March 2007, the partnership Cyma Greek Taverna Company (the Cyma Partnership) filed its own application for the mark ‘Cyma Greek Taverna and Logo’, which, since it was not opposed, was granted registration in December 2007.

The Cyma marks as filed by the Zulueta and Cyma partnerships are shown below:

Obviously, the dominant element of the mark is ”Cyma”, which appears on both applications. Affirming the decision of the IPOPHL, which rejected Zulueta’s application, the SC held that the first-to-file rule should not be taken to mean that the first application to be filed should be the application that is granted.

What was not explained, however, was why Zulueta’s application, filed more than five months earlier than that of the Cyma Partnership, was not processed first by the IPOPHL.

In any case, Zulueta was not able to prove that the registration of Cyma Greek Taverna in favour of the Cyma Partnership was obtained in bad faith. The Intellectual Property Code of the Philippines provides that ownership of a mark is acquired through registration and is prima facie evidence of such ownership. The findings of the IPOPHL showed that the Cyma Partnership was able to demonstrate that it was the first to have bona fide used the ‘Cyma’ mark, which pre-dated Zulueta’s trademark application filing date.

Furthermore, the SC said that even if it were to believe that Zulueta and not Goco conceived the ‘Cyma’ mark, it is clear from Zulueta’s narrative that the mark had been conceived for the exclusive use of the partnership, and its sister company Cyma Greek Taverna Shangri-La Corporation.

The SC also noted that Zulueta never used the ‘Cyma’ mark in his individual capacity, and that despite the fact that Zulueta was the first to file the trademark application, his knowledge of the prior use of the trademark by the Cyma Partnership meant that he filed his application in bad faith, and, as a consequence, his trademark application cannot be granted.