J.A.B. Bulao & Associates

DISPOSITIVE:

“WHEREFORE, premises considered, the petition is DENIED for lack of merit. Accordingly, the March 27, 2015 Decision and the September 11, 2015 Resolution of the Court of Appeals in CA-G.R. SP No. 133652 are AFFIRMED with the modification that in addition to the payment of exemplary damages and attorney’s fees, petitioner Emzee Foods Inc. is hereby ORDERED to CEASE and DESIST from using “ELARZ LECHON,” “ELAR LECHON,” “PIG DEVICE,” and “ON A BAMBOO TRAY” on its products.

So Ordered.“

SUBJECTS/DOCTRINES/DIGEST:

WHAT HAPPENED IN THIS CASE?

SPOUSES LONTOC SINCE 1970 HAS BEEN USING THE TRADEMARK “ELARS LECHON” FOR ROASTED PIGS. IN 1989 THEY REGISTERED A CORPORATION ELARFOODS INC AND MARKET THEIR ROASTED PIGS UNDER THE MARK “ELARS LECHON”. PETITIONER ALSO USED THE MARK “ELARZ LECHON”. IN 2001, RESPONDENT CORPORATION FILED REGISTRATION OF THEIR MARK. THEREAFTER RESPONDENT SUED PETITIONER FOR UNFAIR COMPETITION AND VIOLATION OF INTELLECTUAL PROPERTY RIGHTS. ULTIMATELY, IPO RULED AGAINST PETITIONER. C.A. AFFIRMED WITH MODIFICATION. PETITIONER ARGUES THAT THE OWNER OF THE MARK WERE THE LONTOC SPOUSES AND SUBSEQUENTLY THEIR ESTATE BECAUSE THERE WAS NO WRITTEN ASSIGNMENT OF INTELLECTUAL PROPERTY RIGHTS TO RESPONDENT CORPORATION. THUS RESPONDENT CORPORATION HAS NO PERSONALITY TO FILE THE COMPLAINT AGAINST THEM. SUPREME COURT SAID SINCE ITS INCORPORATION RESPONDENT CORPORATION HAS BEEN USING SAID MARK. BY REASON OF RIGHT OF FIRST USE, APPLICABLE AT THAT TIME, IT IS THE OWNER OF SAID MARK. ALSO THE ASSIGNMENT OF PROPERTY RIGHTS NEED NOT BE IN WRITING.

It likewise bears stressing that even prior to the registration of the subject trademarks, the respondent has been consistently using said marks since its incorporation in 1989. Hence, even under the law applicable at that time, namely, Section 2-A of R.A. No. 166,69 respondent’s consistent use of the subject trademarks confirms its ownership thereof.

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Notably, this lacuna was filled by IPO Director General Blancaflor who explained that the fact of the transfer may not be disproven by the absence of a written assignment. A trademark, like any incorporeal right may be disposed of not only by way of formal assignment.78 More importantly, the subject trademarks were not yet registered when respondent started doing business under the Elar’s Lechon brand. 79 Neither was there a pending application for the said trademarks. Besides, under Article 162480 of the Civil Code, in relation to Article 147581 of the same Code, the assignment of incorporeal rights, like an unregistered mark, is perfected by mere consent without need of a written contract. Thus, what matters is that from the time of respondent’s incorporation until present, respondent has used and exclusively appropriated the subject trademarks as its own. 82”

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