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EN BANC

G.R. No. L-11818 July 31, 1959

LA ESTRELLA DISTILLERY, INC., Petitioner, vs. THE DIRECTOR OF PATENTS, CHENG CHIONG, and FOO U. CHING and CO., Respondents.

Carlos, Yumol and Crisologo for petitioners.
Pacunayen and Aguilar for respondent Company.
Assistant Solicitor General E. Torres and Solicitor H. C. Fule for respondent Director of Patents.

BARRERA, J.: chanrobles virtual law library

La Estrella Distillery, Inc. (hereinafter referred to as La Estrella) and Cheng Chiong & Foo U. Ching Company (Cheng Chiong for short) are both holders of Supplemental Registration label trademarks.chanroblesvirtualawlibrary chanrobles virtual law library

Before the Patent Office, proceedings for the cancellation of La Estrella's label by trademark registration No. SR-13 were instituted by Cheng Chiong under Section 19-A of Republic Act No. 166. After answer by La Estrella and after trial on the merits, the Director of Patents found that the two label trademarks are distinctly differently in appearance and possess different identifying marks which make each satisfy the statutory requirement for registration - the requirement of being capable of distinguishing the particular goods upon which each is used. The Director accordingly held that no damage to Cheng Chiong could possibly result from La Estrella's registration and use of its own label trademark and dismissed the petition for its cancellation.chanroblesvirtualawlibrary chanrobles virtual law library

Despite this favorable decision, La Estrella moved for its reconsideration praying for the elimination of "the findings made therein that the label trademarks of the petitioner and respondents are distinctly different" and "that in lieu thereof a pronouncement be made to the effect that said label trademarks are similar." The reason given for this motion for reconsideration is that the matter of similarly or dissimilarity has not been raised in issue and that in fact the parties have impliedly admitted that the labels are similar.chanroblesvirtualawlibrary chanrobles virtual law library

Its motion for reconsideration having been denied, La Estrella has taken the present appeal and here urges the same contention that the Director of Patents has committed error in making a pronouncement in his decision that the two labels in question are not similar, contrary to the pleadings and evidence presented by the parties.chanroblesvirtualawlibrary chanrobles virtual law library

This appeal is without merit. While appellant attacks the grounds upon which the decision of the Director of Patents is based, it does not question the dispositive part thereof because it is favorable to it. Appellant claims that the matter of dissimilarity of the two labels has never been put in issue. This is not true. The whole theory upon which this case was presented, tried and decided in the Patent Office was predicated mainly on this question.chanroblesvirtualawlibrary chanrobles virtual law library

The pleadings of the parties disclose their respective contentions. The petition for cancellation alleges, among others:chanrobles virtual law library

(1) That La Estrella's label "is not and cannot be a trademark as defined by law" because it is a "common label affixed to rice wine, Chinese wine and similar goods and also to other kinds of goods."chanrobles virtual law library

(2) That "it is also used by petitioner (Cheng Chiong) and other manufacturers of same or similar products."chanrobles virtual law library

(3) That therefore petitioners (Cheng Chiong) deem themselves "prejudiced and/or injured damage by said registration."chanrobles virtual law library

The answer of La Estrella avers:chanrobles virtual law library

(1) That its trademark "meets all the necessary elements of a valid trademark" in that it is "so disposed as to attract attention, impress the memory, and advertises more effectually the origin of the article to which it is attached."chanrobles virtual law library

(2) That it has been long and continuously used by it "for no other purpose than to further distinguish the products of said respondent (La Estrella) from those of its competitors."chanrobles virtual law library

(3) "That the trademark in question is the original and exclusive creation of respondent" (La Estrella).chanroblesvirtualawlibrary chanrobles virtual law library

During the trial, Cheng Chiong, in support of their claim that La Estrella's label trademark is "publici juris" and therefore incapable of distinguish La Estrella's goods, presented over a dozen labels of different merchants including his own. To counteract this, La Estrella exhibited its own label in color and other evidence to prove that its trademark sufficiently identifies and differentiates its merchandise from those of its competitors.chanroblesvirtualawlibrary chanrobles virtual law library

The record disclose similar testimonies of witnesses and statements of counsel of both parties sustaining respectively their opposing stands.chanroblesvirtualawlibrary chanrobles virtual law library

In disposing of and denying the motion for reconsideration of appellant La Estrella, the Director of Patents correctly ruled:

It is alleged in said motion that the Director of Patents erred (1) in finding that the label trade-mark of the petitioner and of the respondent-registrant are not similar, and (2) in making pronouncement on why they are not similar.chanroblesvirtualawlibrary chanrobles virtual law library

Under Sec. 19-A Rep. Act 166, as amended, a label, used as a trademark, may be registered on the Supplemental Register provided (1) it is not a mark prescribed or prohibited under paragraph (a), (b), (c) and (d) of Sec. 4 of the same acts; (2) it is capable of distinguishing the goods upon it is used; (3) it had been used by the applicants for registration for one year next preceding the filing of the application.chanroblesvirtualawlibrary chanrobles virtual law library

Under the same Sec. 19-A, a person may petition for the cancellation of the registration on the Supplementary Register was not label, used as a trademark, provided (1) the registrant was not entitled to register the mark at the time he filed his application for its registration; and (2) provided the register of the registered mark.chanroblesvirtualawlibrary chanrobles virtual law library

Under the same Sec. 19-A, among the facts that they may be established to show that the registrant was not entitled to the registration of the mark sought to be cancelled are (1) the mark was prescribed under paragraph (a), (b), (c) and (d), of Sec. 4 of the Rep. Act 166, as amended; (2) the mark was and is not capable of distinguishing the registrant's goods; (3) the registrants had never used the mark or had not actually used the mark for one year next preceding the filing of his application for registration; and (4) the registrants had abandoned his mark after registration. But although the petitioner for cancellation may succeed in establishing one or all of the above four facts, his petition for cancellation will nevertheless be dismissed, under the same Sec. 19-A unless he is able clearly to establish that he will damaged by the continuance on the register of the mark he seeks to cancel.chanroblesvirtualawlibrary chanrobles virtual law library

Of the two grounds alleged by the petitioner for cancellation (loser in this case, for canceling the respondent's mark, the one pertinent to the instant motion of the respondent (winner in this case) for reconsideration, is the following that respondent's label trademark was and is common to the trade, being used not only by the respondent, but by the petitioner and by the New Occidental Distillery as well. If this allegation be true, then the respondent's trademark is not only incapable of distinguishing respondent's goods, but its continuance on the register will damage the petitioner for cancellation.chanroblesvirtualawlibrary chanrobles virtual law library

To determine whether respondent's label trademark was incapable of distinguishing respondent's goods and whether its continuance on the register would damage the petitioner for cancellation, it was necessary for this tribunal to examine the label trademark of the respondent, the petitioner, and the New Occidental Distillery and to make a finding thereon. The finding was that the label trademark were different; that therefore, respondent's goods, the petitioner for cancellation would not be damaged by the continuance on the registers of the respondent's label trademark, and petitioner's petition for cancellation should be dismissed.

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It is urged by the respondent's that the similarity of the label trademark having been admitted the only issue to be decided were - chanrobles virtual law library

1. Whether or not the label trademark of the respondent constitutes a valid trademark as defined by law; andchanrobles virtual law library

2. Whether or nor not the registration of respondent's trademark in the Supplemental Register had been obtained trough fraud and false representation.chanroblesvirtualawlibrary chanrobles virtual law library

and, because these were the only issues, it was an error, for this tribunal to disregard them and to pass on the questions of the similarity of dissimilarity of the label trademark.chanroblesvirtualawlibrary chanrobles virtual law library

These two issues are not important. What if the respondent's label trademark was not valid trademark, not registerable under Sec. 19-A of Rep. Act No. 166? What if the registration of the respondent's label trademark was obtained thru the misrepresentation that respondent had been using the same since 1905? Even if proved, these two facts were not sufficient to warrant the cancellation of the respondent's label trademark. In order that these two facts produce cancellation, it was necessary that they he coupled with a showing that the maintenance of the respondent's label trademark on the register would damage the petitioner. The continuance of the respondent's label trademark and petitioner's on the register would damage the petitioner for cancellation only if the respondent's mark were similar. Hence the necessity and the importance of this tribunal making a finding on the similarity or dissimilarity between the two marks.chanroblesvirtualawlibrary chanrobles virtual law library

For the above reasons it is ruled that this tribunal committed no error as alleged in the instant motion for reconsideration. The motion for reconsideration is, therefore, denied.

We find no error either in the reasoning or in the conclusion reached by the Director of Patents.chanroblesvirtualawlibrary chanrobles virtual law library

Wherefore, the present petition for review is hereby dismissed, with costs against the petitioner. It is so ordered.chanroblesvirtualawlibrary chanrobles virtual law library

Paras, C.J., Bengzon, Padilla, Montemayor, Bautista Angelo, Labrador, Concepcion and Endencia, JJ., concur.