It has been reported that the Philippines Supreme Court issued a ruling affirming a Court of Appeals (CA) decision, which ruled in favor of Daiso Industries Co. Ltd . of Japan (Daiso) in ordering the cancellation of a trademark for DAISO registered in the name of Japan Home, Inc. (Japan Home).

Japan Home, a Philippine corporation, operated DAISO retail stores selling various types of housewares. On 30 April 2007, Japan Home registered the mark DAISO for goods and services in classes 21 and 35.

On 9 February 2009, Daiso, filed a cancellation action at the IPO’s Bureau of Legal Affairs (BLA) against Japan Home’s registration of the DAISO  mark. Daiso argued that it is the prior user and owner of the mark since 1977, that it uses the mark as a trade name worldwide. Daiso said that Japan Home’s registration was fraudulent, intended to ride on the goodwill of Daiso. In response, Japan Home relied on the "first-to-file rule" and challenged the claim that the Japanese company's DAISO mark is well-known.   

The BLA upheld Japan Home’s registration for initially ruling that Daiso failed to show actual prior use and well-known status in the Philippines. On appeal, the IPO’s Office of the Director General (ODG) ruled that the mark is internationally well-known and ordered the cancellation of Japan Home's registration.

Japan Home appealed the decision to CA, which still ruled in favor of Daiso and declared the mark DAISO a well-known mark. The CA stated that Japan Home’s registration only gives a presumption of ownership while the “first-to-file rule” is only a prima facie presumption that the prior mark is superior to any subsequent application. The presumption of ownership and the “first-to-file-rule” must give way to contrary evidence of the earlier registration being made in bad faith or where there is a well-known mark of another or that there is an actual prior and continuous use in good faith by another in the concept of an owner. The CA noted that while the territoriality principle requires that a mark be used in commerce in the Philippines to be entitled to protection, internationally well-known marks are the exception to the rule. Further, as DAISO is also used as a trade name by Daiso, and both Japan and Philippines are parties to the Paris Convention for the Protection of Industrial Property (Paris Convention), Daiso’s trademark and trade name are protected against confusingly similar registrations. The CA also stated that the similarity of Japan Home’s mark to Daiso’s mark suggested bad faith on the part of Japan Home.

This was a long fought battle, but the CA decision appears clear and well reasoned, and we assume the Supreme Court followed similar reasoning.