Week 11 Case 28 G.R. No. 211850 Flashcards
Natrapharm: First to register in good faith of ZYNAPSE
Zuneca: First user of ZYNAPS
What was the Court’s ruling?
Petitioners ZUNECA PHARMACEUTICAL AND/OR AKRAM ARAIN AND/OR VENUS ARAIN, M.D., AND STYLE OF ZUNECA PHARMACEUTICAL as the prior users in good faith of the “ZYNAPS” mark and accordingly protected under Section 159.1 of the Intellectual Property Code of the Philippines.
What was the Court’s additional order?
ZUNECA PHARMACEUTICAL AND/OR AKRAM ARAIN AND/OR VENUS ARAIN, M.D., AND STYLE OF ZUNECA PHARMACEUTICAL and NATRAPHARM, INC. are likewise ORDERED to:
(1) indicate on their respective packaging, in plain language understandable by people with no medical background or training, the medical conditions that their respective drugs are supposed to treat or alleviate and a warning indicating what “ZYNAPS” is not supposed to treat and what “ZYNAPSE”
is not supposed to treat; and
(2) submit to the Court a written report showing compliance with this directive within thirty (30)
days from receipt of this Decision.
What are the five (5) elements in trademark infringement?
To establish trademark infringement, the following elements must be proven:
(1) the trademark being infringed is registered in the IPO;
(2) the trademark is reproduced, counterfeited, copied, or colorably imitated by the infringer;
(3) the infringing mark is used in
connection with the sale, offering for sale, or advertising of any goods, business, or services; or the infringing mark is applied to labels, signs, prints, packages, wrappers, receptacles, or advertisements intended to be used upon or in connection with such goods, business, or services;
(4) the use or application of the infringing mark is likely to cause confusion or mistake or to
deceive purchasers or others as to the goods or services themselves or as to the source or origin of such goods or services or the identity of such business; and
(5) it is without the consent of the trademark owner or the assignee thereof.
Why did the Court upheld the RTC and CA’s ruling that Natrapharm, as the owner of ‘ZYNAPSE’, has the right to prevent others from registering and/or using a confusingly similar mark?
The Court holds that Zuneca’s argument has no merit because:
(i) the language of the IP Code provisions clearly conveys the rule that ownership of a mark is acquired through registration;
(ii) the intention of the lawmakers was to abandon
the rule that ownership of a mark is acquired through use; and
(iii) the rule on ownership used in Berris and E.Y. Industrial
Sales, Inc. is inconsistent with the IP Code regime of acquiring ownership through registration.
What is the jurisprudential definition of bad faith and fraud in intellectual property rights?
What constitutes fraud or bad faith in trademark registration?
Bad faith means that the applicant or registrant has
knowledge of prior creation, use and/or registration by another of an identical or similar trademark. In other words, it is
copying and using somebody else’s trademark.
Fraud, on the other hand, may be committed by making false claims in
connection with the trademark application and registration, particularly, on the issues of origin, ownership, and use of the
trademark in question, among other things.
How is bad faith and good faith in IP registration discussed and reconciled by the Court?
To emphasize, the presence of bad faith alone renders void the trademark registrations. Accordingly, it follows as a
matter of consequence that a mark registered in bad faith shall be cancelled by the IPO or the courts, as the case may be,
after the appropriate proceedings.
This concept of bad faith, however, does not only exist in registrations. To the mind of the Court, the definition of bad
faith as knowledge of prior creation, use and/or registration by another of an identical or similar trademark is also applicable in the use of trademarks without the benefit of registration. Accordingly, such bad faith use is also appropriately punished in
the IP Code as can be seen in its unfair competition provisions.
Being the first-to-file registrant in good faith allows the registrant to acquire all the rights in a mark. This can be seen in Section 122 vis-Ã -vis the cancellation provision in Section 155.1 of the IP Code.
Reading these two provisions together, it is clear that when there are no grounds for cancellation — especially the registration being obtained in bad faith or contrary to
the provisions of the IP Code, which render the registration void — the first-to-file registrant acquires all the rights in a mark.
How did the Court reconcile the issue of first registrant in good faith versus first user in good faith?
Read as a whole, Section 159.1 of the IP Code clearly contemplates that a prior user in good faith may continue to
use its mark even after the registration of the mark by the first-to-file registrant in good faith, subject to the condition that any transfer or assignment of the mark by the prior user in good faith should be made together with the enterprise or business or with that part of his enterprise or business in which the mark is used. The mark cannot be transferred independently of the enterprise and business using it.
From the provision itself, it can be gleaned that while the law recognizes the right of the prior user in good faith to the
continuous use of its mark for its enterprise or business, it also respects the rights of the registered owner of the mark by
preventing any future use by the transferee or assignee that is not in conformity with Section 159.1 of the IP Code.
