The Philippines Supreme Court was once again confronted with the issue on ownership of trademark in its recently decided case of Birkenstock Orthopaedie GMBH and Co. KG vs. Philippine Shoe Expo Marketing Corporation (G.R. No. 194307, November 20, 2013). The Court made a pronouncement that it is not the application or registration of a trademark that vests ownership thereof, but it is the ownership of a trademark that confers the right to register the same. The presumption of ownership accorded to a registrant must necessarily yield to superior evidence of actual and real ownership of trademark.

Birkenstock Orthopaedie GMBH and Co. KG (“BOGC”), a corporation duly organized and existing under the laws of Germany, applied with the Intellectual Property Office of the Philippines (“IPOPHL”) for the registration of its three trademarks which was opposed by Philippine Shoe Expo Marketing Corporation (“PSEMC”) on the ground that the latter has been using the mark “BIRKENSTOCK” and device in the Philippines for more than 16 years.  The mark was initially registered by Shoe Town International and Industrial Corporation on 21 October 1993 and subsequently acquired by PSEMC. However, it was later cancelled due to non-filing of the 10th Year Declaration of Actual Use, a requirement in the Philippines to keep the mark active and to maintain the protection of the mark.

The Opposition was denied by the Director General who later allowed the registration of the three marks holding that the cancellation of PSEMC’s mark removed the impediment to grant registration to the subject applications.

To establish ownership of the mark “BIRKENSTOCK,” BOGC submitted various certificates of registration in various countries and evidence relating to the origin and history of the mark and its use in commerce long before PSEMC was able to register the same in the Philippines.  It was proved that “BIRKENSTOCK” was first adopted in Europe in 1774 by its inventor, Johann Birkenstock, on his line of quality footwear and thereafter, numerous generations of his kin continuously engaged in the manufacture and sale of shoes and sandals bearing the mark ”BIRKENSTOCK” until it was passed on to BOGC. 

Having considered the foregoing, the Court found BOGC to be the true and lawful owner of the mark “BIRKENSTOCK” and that PSEMC was in bad faith in having it registered in its name.  The Court was of the opinion that “it is very remote that two persons coined the same or identical marks.  To come up with a highly distinct and uncommon mark previously appropriated by another, for use in the same line of business, and without any plausible explanation, is incredible.  Being in the same line of business, it is highly probable that PSEMC knew of the existence of ‘BIRKENSTOCK’ and its use by the BOGC, before the former appropriated the same mark and had it registered in its name.”

“Failure to file the Declaration of Actual Use (“DAU”) within the requisite period results in the automatic cancellation of registration of a trademark.  Such failure is tantamount to the abandonment or withdrawal of any right or interest the registrant has over his trademark.” 

The Court emphasized that “registration of a trademark, by itself, is not a mode of acquiring ownership.  If the applicant is not the owner of the trademark, he has no right to apply for its registration.  Registration merely creates a rebuttable presumption of the validity of the registration, of the registrant’s ownership of the trademark, and of the exclusive right to the use thereof.”

The Court went on to state that “[a] trademark is an industrial property over which its owner is entitled to property rights which cannot be appropriated by unscrupulous entities that, in one way or another, happen to register such trademark ahead of its owner.”