In a recent decision, the Supreme Court of the Philippines held that a registrant’s failure to file a Declaration of Actual Use (DAU) within the requisite period constituted abandonment or withdrawal of its vested rights in the trademark.Birkenstock Orthopaedie GmbH & Co. KG v. Philippine Shoe Expo Marketing Corp., G.R. No. 194307 (Sup. Ct. Nov. 20, 2013). The trademark BIRKENSTOCK & Device was registered in 1993 in the name of Shoe Town International and Industrial Corporation, the predecessor-in-interest of Philippine Shoe Expo Marketing Corporation (PSEMC), which has been continuously using the mark in the Philippines. (Reg. No. 56334, Oct. 21, 1993.) In 1994, Birkenstock Orthopaedie GmbH & Co. KG (Birkenstock Orthopaedie), a German corporation, filed with the Intellectual Property Office of the Philippines (IPOPHL) applications for the registration of its three BIRKENSTOCK-formative trademarks. The applications were opposed by PSEMC, which claimed that it owned the BIRKENSTOCK mark. Birkenstock Orthopaedie brought an action in 1997 for cancellation of PSEMC’s registration; however, while the action was still pending, PSEMC failed to file the DAU. Accordingly, the mark was cancelled, effective October 21, 2004, as a result of PSEMC’s failure to file the required 10th Year DAU to keep its registration active in the Philippines. The IPOPHL Director General denied the opposition and allowed the registration of the three marks. He held that the cancellation of PSEMC’s mark as a result of the owner’s failure to file a 10th Year DAU removed the impediment to registration of Birkenstock Orthopaedie’s applications.

On appeal, the Court of Appeals reversed the decision of the Director General. The Court held that the non-filing of the DAU did not deprive PSEMC of ownership of the trademark BIRKENSTOCK because the company had submitted substantial evidence showing its continued use, promotion and advertising of the mark up to the present. The Supreme Court, however, adopted the findings of the Director General and found Birkenstock Orthopaedie to be the true and lawful owner of the mark BIRKENSTOCK trademark. The Court noted that the mark was first adopted in Europe in 1774 by Johann Birkenstock for use on his line of quality footwear and that his family had continuously engaged in the manufacture and sale of shoes and sandals bearing the mark until the enterprise became the firm Birkenstock Orthopaedie. The Court further observed that it was very unlikely that two persons would invent the same or identical marks and that to come up with a highly distinctive and uncommon mark that was previously appropriated by another, for use in the same line of business and without any plausible explanation, was incredible. It opined that, as PSEMC was in the same line of business, it was highly probable that PSEMC knew of the existence of the BIRKENSTOCK trademark and its use by the Birkenstock Orthopaedie before it appropriated and registered the same mark. Thus, the Court found that PSEMC had acted in bad faith. The Supreme Court held that the registrant’s failure to file the required DAU was tantamount to its abandonment or withdrawal of any right or interest in its trademark. Hence, the Court ordered 

In a recent decision, the Supreme Court of the Philippines held that a registrant’s failure to file a Declaration of Actual Use (DAU) within the requisite period constituted abandonment or withdrawal of its vested rights in the trademark.Birkenstock Orthopaedie GmbH & Co. KG v. Philippine Shoe Expo Marketing Corp., G.R. No. 194307 (Sup. Ct. Nov. 20, 2013). The trademark BIRKENSTOCK & Device was registered in 1993 in the name of Shoe Town International and Industrial Corporation, the predecessor-in-interest of Philippine Shoe Expo Marketing Corporation (PSEMC), which has been continuously using the mark in the Philippines. (Reg. No. 56334, Oct. 21, 1993.) In 1994, Birkenstock Orthopaedie GmbH & Co. KG (Birkenstock Orthopaedie), a German corporation, filed with the Intellectual Property Office of the Philippines (IPOPHL) applications for the registration of its three BIRKENSTOCK-formative trademarks. The applications were opposed by PSEMC, which claimed that it owned the BIRKENSTOCK mark. Birkenstock Orthopaedie brought an action in 1997 for cancellation of PSEMC’s registration; however, while the action was still pending, PSEMC failed to file the DAU. Accordingly, the mark was cancelled, effective October 21, 2004, as a result of PSEMC’s failure to file the required 10th Year DAU to keep its registration active in the Philippines. The IPOPHL Director General denied the opposition and allowed the registration of the three marks. He held that the cancellation of PSEMC’s mark as a result of the owner’s failure to file a 10th Year DAU removed the impediment to registration of Birkenstock Orthopaedie’s applications.

On appeal, the Court of Appeals reversed the decision of the Director General. The Court held that the non-filing of the DAU did not deprive PSEMC of ownership of the trademark BIRKENSTOCK because the company had submitted substantial evidence showing its continued use, promotion and advertising of the mark up to the present. The Supreme Court, however, adopted the findings of the Director General and found Birkenstock Orthopaedie to be the true and lawful owner of the mark BIRKENSTOCK trademark. The Court noted that the mark was first adopted in Europe in 1774 by Johann Birkenstock for use on his line of quality footwear and that his family had continuously engaged in the manufacture and sale of shoes and sandals bearing the mark until the enterprise became the firm Birkenstock Orthopaedie. The Court further observed that it was very unlikely that two persons would invent the same or identical marks and that to come up with a highly distinctive and uncommon mark that was previously appropriated by another, for use in the same line of business and without any plausible explanation, was incredible. It opined that, as PSEMC was in the same line of business, it was highly probable that PSEMC knew of the existence of the BIRKENSTOCK trademark and its use by the Birkenstock Orthopaedie before it appropriated and registered the same mark. Thus, the Court found that PSEMC had acted in bad faith. The Supreme Court held that the registrant’s failure to file the required DAU was tantamount to its abandonment or withdrawal of any right or interest in its trademark. Hence, the Court ordered that PSEMC’s registration be automatically cancelled.  

This article was first published in INTA Bulletin, Vol. 69 No.6, March 15, 2014.