The Philippines Supreme Court’s Decision in Case Number G.R. No. 210693 (2017) found the principle of conclusiveness of judgment (Res Judicata) applies in trademark cases where there exist an identity of issues between an earlier judgment and the issues in a later case.

Procedural History

This case centered on The H.D. Lee Company, Inc. (“Lee”)’s trademark application filed on December 21, 2001 for the mark "LEE & OGIVE CURVE DESIGN" for “jeans” and other clothing items in Class 25. Lee claimed that it had been using this mark in the Philippines since October 31, 1996. Lee’s mark was published for opposition on January 5, 2007.

Emerald Garment Manufacturing Corporation (“Emerald”) opposed the “LEE & OGIVE CURVE DESIGN” mark arguing the Intellectual Property Code would be breached because the "LEE & OGIVE CURVE DESIGN” mark is confusingly similar or identical to Emerald’s "DOUBLE CURVE LINES” mark previously registered in 1982 in Class 25 for “jeans” and other clothing products.

The IPO’s Director of the Bureau of Legal Affairs ("BLA") ruled in favor of Emerald. In making its Decision, the BLA highlighted Emerald had used its mark since 1980, had successfully registered its mark in 1982 and had applied for its re-registration in 1988, while Lee failed to provide sufficient evidence of use of its mark in the Philippines or anywhere else in the world before October 1996.

On appeal brought by Lee, the Director-General of the IPO reversed the earlier BLA Decision based on its finding Lee had submitted sufficient evidence to show its mark had become well-known.

Emerald subsequently appealed to the Court of Appeals (“CA”). The CA denied Emerald’s petition to review the IPO Director-General’s Decision. Emerald moved for reconsideration of the CA’s Decision. The Motion for Reconsideration was denied in a Resolution dated January 6, 2014.

Finally, Emerald petitioned the Supreme Court for review of the CA’s Decision and the Resolution that denied Emerald’s petition to review the IPO’s Director-General’s decision.

Supreme Court Decision

Emerald’s argument of who between the two parties, had the better right to its mark such that they could prevent the other party from registering the other party’s own mark on grounds of confusing similarity -- had already been resolved with finality in an earlier case. The Supreme Court agreed finding the issue of confusing similarity between the respective marks had already been determined in an earlier opposition Lee brought against applications filed by Emerald, one of which was for Emerald’s "DOUBLE CURVE LINES” mark.

In that prior case, involving arguments based on each party’s claim to the same marks as in the present case, the Supreme Court noted that Emerald had begun use of its marks in 1973, while Lee’s use of its mark in the Philippines only dated from 1996. Further, the Supreme Court found Lee’s evidence was not sufficient to prove any local or international well-known status of its mark subsisting when or before Emerald began using its marks. Consequently, the Supreme Court took note that in the earlier case it was decided Emerald’s ownership of its mark predated Lee’s, which gave Emerald the better right to register its mark.

In the present instance, Lee argued no identity of issues existed between the two cases, as the legal question in Emerald’s opposition of Lee’s application centered on proving the international well-known status of Lee’s mark, while in the separate opposition by Lee of Emerald’s applications, the focus was on Emerald’s goodwill and prior use of its marks in the Philippines. Such distinction, which was drawn based on the nature of arguments and the identity of the party making them, was rejected by the Supreme Court. Rather, the Supreme Court found the primary question in the two legal actions was the registrability of confusing similar marks the ownership of which was claimed by two different parties.

Thus, the Supreme Court granted Emerald’s petition in the present case based on the consideration that the CA had not abided by the authority of the Supreme Court’s judgment on the same point in a different instance.

According to the doctrine of res judicata, it was highlighted “a final judgment or decree on the merits by a court of competent jurisdiction is conclusive of the rights of the parties or their privies in all later suits on all points and matters determined in the former suit.”

The elements for res judicata to apply were found as follows:

(a) the former judgment was final;

(b) the court that rendered it had jurisdiction over the subject matter of the parties;

(c) the judgment was based on the merits;

and (d) between the first and the second actions, there was an identity of parties, subject matters, and causes of action.

Further, it was highlighted res judicata embraces two concepts:

(1) bar by prior judgment and

(2) conclusiveness of judgment.

Bar by prior judgment exists "when, as between the first case where the judgment was rendered and the second case that is sought to be barred, there is identity of parties, subject matter, and causes of action."

On the other hand, the concept of conclusiveness of judgment finds application "when a fact or question has been squarely put in issue, judicially passed upon, and adjudged in a former suit by a court of competent jurisdiction." This principle only needs identity of parties and issues to apply.

H.D. Lee argued the principle of conclusiveness of judgment did not apply since no identity of issue existed between the petition before the Supreme Court, on one hand, and the earlier Case. The Supreme Court rejected this argument as it found the issues all point to the registrability of the confusingly similar marks.

This article is an extract from Spruson & Ferguson’s Asia-Pacific Regional Trade Mark Update. You can view the entire summary here.