BIRKENSTOCK ORTHOPAEDIE GMBH AND CO.

KG (formerly BIRKENSTOCK ORTHOPAEDIE GMBH)

FACTS:
Petitioner, a corporation duly organized and existing under the laws of Germany, applied for various
trademark registrations before the IPO, namely: (a) "BIRKENSTOCK" falling under Class 25 of the Nice
Classification; (b) "BIRKENSTOCK BAD HONNEF -RHEIN & DEVICE COMPRISING OF ROUND COMPANY
SEAL AND REPRESENTATION OF A FOOT, CROSS AND SUNBEA M" under Class 25 of the Nice
Classification; and (c) "BIRKENSTOCK BAD HONNEF-RHEIN & DEVICE COMPRISING OF ROUND
COMPANY SEAL AND REPRESENTATION OF A FOOT, CROSS AND SUNBEAM" falling under Class 10 of
the Nice Classification.

However, registration proceedings of the subject applications were suspended in view of an existing
registration of the mark "BIRKENSTOCK AND DEVICE" under Registration No. 56334 in the name of
Shoe Town International and Industrial Corporation, the predecessor-in-interest of respondent
Philippine Shoe Expo Marketing Corporation.

In this regard, petitioner filed a petition for cancellation of Registration No. 56334 on the ground that
it is the lawful and rightful owner of the Birkenstock marks (Cancellation Case). During its pendency,
however, respondent failed to file the required 10th Year Declaration of Actual Use (10th Year DAU)
for Registration No. 56334 on or before October 21, 2004, thereby resulting in the cancellation of
such mark. Accordingly, the cancellation case was dismissed for being moot and academic.

The aforesaid cancellation of Registration No. 56334 paved the way for the publication of the subject
applications in the IPO e-Gazette. In response, respondent filed three (3) separate verified notices of
oppositions to the subject applications claiming, inter alia, that: (a) it, together with its predecessor-
in-interest, has been using Birkenstock marks in the Philippines for more than 16 years through the
mark "BIRKENSTOCK AND DEVICE"; (b) the marks covered by the subject applications are identical to
the one covered by Registration No. 56334 and thus, petitioner has no right to the registration of
such marks; (c) on November 15, 1991, respondent’s predecessor-in-interest likewise obtained a
Certificate of Copyright Registration No. 0-11193 for the word "BIRKENSTOCK" ; (d) while respondent
and its predecessor-in-interest failed to file the 10th Year DAU, it continued the use of "BIRKENSTOCK
AND DEVICE" in lawful commerce; and (e) to record its continued ownership and exclusive right to
use the "BIRKENSTOCK" marks, it has filed TASN 4-2006-010273 as a " re-application " of its old
registration, Registration No. 56334.13

The BLA, in its Decision sustained respondent’s opposition, thus, ordering the rejection of the subject
applications. It ruled that the competing marks of the parties are confusingly similar. It found
respondent and its predecessor-in-interest as the prior user and adopter of "BIRKENSTOCK" in the
Philippines, while on the other hand, petitioner failed to present evidence of actual use in the trade
and business in this country.

Aggrieved, petitioner appealed to the IPO Director General. It reversed and set aside the ruling of the
BLA, thus allowing the registration of the subject applications. He held that with the cancellation of
Registration No. 56334 for respondent’s failure to file the 10th Year DAU, there is no more reason to
reject the subject applications on the ground of prior registration by another proprietor.

Respondent filed a petition for review with the CA. The CA reversed and set aside the ruling of the
IPO Director General and reinstated that of the BLA.

The petitioner filed a MR, which was denied. Hence, this petition.

ISSUE:
Whether or not the subject marks should be allowed registration in the name of petitioner.

HELD:
YES. Republic Act No. (RA) 166, the governing law for Registration No. 56334, requires the filing of a
DAU on specified periods, to wit:

Section 12. Duration. – Each certificate of registration shall remain in force for twenty years: Provided,
That registrations under the provisions of this Act shall be cancelled by the Director, unless within
one year following the fifth, tenth and fifteenth anniversaries of the date of issue of the certificate of
registration, the registrant shall file in the Patent Office an affidavit showing that the mark or trade-
name is still in use or showing that its non-use is due to special circumstance which excuse such non-
use and is not due to any intention to abandon the same, and pay the required fee.

The aforementioned provision clearly reveals that failure to file the DAU within the requisite period
results in the automatic cancellation of registration of a trademark. In turn, such failure is tantamount
to the abandonment or withdrawal of any right or interest the registrant has over his trademark.36

In this case, respondent admitted that it failed to file the 10th Year DAU for Registration No. 56334
within the requisite period. As a consequence, it was deemed to have abandoned or withdrawn any
right or interest over the mark "BIRKENSTOCK." Neither can it invoke Section 236 of the IP Code which
pertains to intellectual property rights obtained under previous intellectual property laws, e.g., RA
166, precisely because it already lost any right or interest over the said mark.

Besides, petitioner has duly established its true and lawful ownership of the mark "BIRKENSTOCK."
Under Section 2 of RA 166, which is also the law governing the subject applications, in order to
register a trademark, one must be the owner thereof and must have actually used the mark in
commerce in the Philippines for two (2) months prior to the application for registration.

Section 2-A of the same law sets out to define how one goes about acquiring ownership thereof.
Under the same section, it is clear that actual use in commerce is also the test of ownership but the
provision went further by saying that the mark must not have been so appropriated by another.
Significantly, to be an owner, Section 2-A does not require that the actual use of a trademark must
be within the Philippines. Thus, under RA 166, one may be an owner of a mark due to its actual use
but may not yet have the right to register such ownership here due to the owner’s failure to use the
same in the Philippines for two (2) months prior to registration.
It must be 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 prima facie presumption of the validity of the registration,
of the registrant’s ownership of the trademark, and of the exclusive right to the use thereof.

In the instant case, petitioner was able to establish that it is the owner of the mark "BIRKENSTOCK."
It submitted evidence relating to the origin and history of "BIRKENSTOCK" and its use in commerce
long before respondent was able to register the same here in the Philippines. It has sufficiently proven
that "BIRKENSTOCK" was first adopted in Europe in 1774 by its inventor, Johann Birkenstock, a
shoemaker, 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 became the entity now known as the petitioner. Petitioner also submitted
various certificates of registration of the mark "BIRKENSTOCK" in various countries and that it has
used such mark in different countries worldwide, including the Philippines.

On the other hand, aside from Registration No. 56334 which had been cancelled, respondent only
presented copies of sales invoices and advertisements, which are not conclusive evidence of its claim
of ownership of the mark "BIRKENSTOCK" as these merely show the transactions made by respondent
involving the same.

In view of the foregoing circumstances, the Court finds the petitioner to be the true and lawful owner
of the mark "BIRKENSTOCK" and entitled to its registration, and that respondent was in bad faith in
having it registered in its name.