July 31, 2016

The Bureau of Legal Affairs recently cancelled a trademark registration, which it deemed to have been obtained maliciously and in bad faith.

The case stemmed from a Petition for Cancellation filed by Japanese Company Toyoda Gosei (“Petitioner”).  In the Petition, Petitioner alleged that the registered mark “TG & Design” owned by local Philippine company JRD Dynamics Co. (“Respondent”) is identical and confusingly similar to its trade name and its trademarks “TOYODA GOSEI” and “TG”.  The Bureau agreed with Petitioner and found that even though there are differences in the design of the marks, the fact that the registered mark includes the word “TOYODA GOSEI” clearly proves that Respondent copied Petitioner’s trademark deliberately, with malice and in bad faith.  This fact is even more apparent especially because there was no explanation from Respondent as to how it came up with the words “TOYODA GOSEI” in its mark.

In addition to finding bad faith, the Bureau also emphasized that it is not the registration that confers ownership to a mark.  The presumption of validity given to a trademark registration can be controverted by evidence of a prior or better right to a mark.  Furthermore, the Bureau cited Section 165 and the corresponding Supreme Court case of Philips Export B.V. v. Court of Appeals for the proposition that the right to the exclusive use of a corporate name stems from priority of adoption.  In this case, Petitioner has proven that it is the prior user and adopter of the name Toyoda Gosei since 1973.  Based on such findings, the Bureau cancelled the registration for “TG & Design”.

This case exemplifies how a  registration can be cancelled if obtained maliciously and in bad faith.  The facts clearly show that the Registrant had bad faith intentions when it copied the trade name of the Petitioner in its mark.  Moreover, this case is a good illustration of how the IPO uses Section 165 of the IP Code and the prohibition against copying of trade names.  Under Section 165, trade names (whether they are registered or not) are protected against a confusingly similar trade name or mark.  One needs to only prove that it is the prior user or adopter of such trade name.  This Section of the IP Code provides IP owners with yet another tool to combat against copycats and infringers of their trade names and trademarks.