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07 March 2016
Both the Court of Appeals and the Supreme Court have confirmed that recent decisions of the director general of the Intellectual Property Office have shown its continued adherence to the protection of IP rights.
Starwood Hotel & Resorts Worldwide Inc, owner and operator of the world-renowned W Hotels, filed an opposition against the application for trademark registration of the mark 'W' filed by W Land Holdings Inc in the Philippines for the latter's real estate business (ie, condominium development). Starwood presented evidence to prove that:
The director of trademarks ruled in favour of Starwood and, as a result, W Land elevated the matter to the director general. W Land claimed, among other things, that no confusion would result from a registration of its mark since Starwood's mark would be used for:
"entertainment services including live entertainment services, hotel, motel, resort hotel and motor inn services, hotel reservation services, restaurant, bar and catering services, food and beverage preparation services, cafe and cafeteria services, provisions of information relating to holidays, provision of conference, meeting and social function facilities, beauty salon and hair dressing services."
W Land's application covered its real estate development.
In January 2014 the director general ruled that the similarity between the marks was undeniable. The director general emphasised that the "function of a trademark is to point out distinctly the origin and ownership of the goods to which it is affixed", among other things. To allow registration of W Land's mark would lead to confusion, despite the alleged dissimilarity between the goods and services offered by the parties.
The director general further noted that the scope of protection afforded to registered trademark owners is not limited to protection from infringers with identical goods. The scope of protection extends to protection from infringers with related goods and to market areas that are within the normal expansion of business of the registered trademark owners. In this case, the scope of protection to Starwood extended to related goods and services (eg, real estate developments).
The case was elevated by W Land to the Court of Appeals. On November 12 2014 the court affirmed the director general's ruling that the marks are confusingly similar. It noted that the IP Code recognises the 'expansion of business' rule and protects Starwood, as the owner of the registered trademark, from W Land's use of a similar mark on goods and services related to those specified in its certificates of registration. The court also recognised that Starwood has expanded its business by engaging in real estate affairs through W Residences. The court noted that W Land had failed to explain why it suddenly began to use the W trademark in its real estate business, which thereby amounted to bad faith. As a result, W Land had no right to apply for registration of the trademark.
W Land filed a motion for reconsideration against the Court of Appeals decision, but it was denied on April 24 2015.
W Land then filed a petition for review with the Supreme Court, but on July 29 2015 this too was denied through a minute resolution "for failure to sufficiently show any reversible error in the challenged decision and resolution as to warrant the exercise of the Court's discretionary appellate jurisdiction".
W Land went on to file a motion for reconsideration of the resolution with the Supreme Court, but it was once again denied with finality on December 7 2015, as "no substantial arguments were raised to warrant its reconsideration".
The director general recently granted the appeal filed by Starwood against the decision of the Bureau of Legal Affairs of the Intellectual Property Office ordering cancellation of the registration of Starwood's W mark. In upholding the registration of Starwood's W mark, the director general held that Starwood had submitted sufficient evidence to prove actual use of the W mark in the Philippines. The director general ruled that the absence of Starwood's hotel establishment in the Philippines should not be equated to the absence of use of its mark in the country. Citing a Supreme Court decision, the director general noted that the advancement of communications technology (particularly the Internet) has allowed trademark owners to extend goodwill to territories without actual market penetration. The director general thus held that since Starwood had shown that it maintained an interactive website which allowed residents in the Philippines to make bookings for its hotel services, Starwood had actually used its W mark in the Philippines.
This case was also elevated by W Land to the Court of Appeals. On June 22 2015 the court affirmed the director general's ruling that Starwood's interactive websites indicate the trademark's actual use in the Philippines. It noted that Starwood is clearly the owner of the mark and absent any demonstration that Starwood has abandoned the W trademark, its trademark registration must remain valid.
W Land filed a motion for reconsideration of the decision, but it was denied on January 7 2016 for lack of merit.
W Land has stated that it will elevate the case to the Supreme Court.
For further information on this topic please contact Lee Benjamin Z Lerma at Romulo Mabanta Buenaventura Sayoc & De Los Angeles by telephone (+63 2 848 0114) or email (firstname.lastname@example.org). The Romulo Mabanta Buenaventura Sayoc & De Los Angeles website can be accessed at www.romulo.com.
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Benjamin Z Lerma