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Shangrila V CA GR 111580 & 114802 June 21, 2001

The Shangri-La Group filed a petition to cancel the registration of the "Shangri-La" mark and logo registered to the Developers Group. The Developers Group then filed an infringement case against the Shangri-La Group. The issue is whether the infringement case can proceed despite the pending cancellation case before the IP office. The Supreme Court ruled that yes, the infringement case can proceed independently based on the IP Code provision that a cancellation case does not preclude an infringement case involving the same registered mark. However, the infringement court's ruling on validity of registration would make the cancellation case moot, so the cancellation case was suspended pending resolution of the infringement case.

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105 views2 pages

Shangrila V CA GR 111580 & 114802 June 21, 2001

The Shangri-La Group filed a petition to cancel the registration of the "Shangri-La" mark and logo registered to the Developers Group. The Developers Group then filed an infringement case against the Shangri-La Group. The issue is whether the infringement case can proceed despite the pending cancellation case before the IP office. The Supreme Court ruled that yes, the infringement case can proceed independently based on the IP Code provision that a cancellation case does not preclude an infringement case involving the same registered mark. However, the infringement court's ruling on validity of registration would make the cancellation case moot, so the cancellation case was suspended pending resolution of the infringement case.

Uploaded by

Arah Salas Palac
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Shangrila v CA

GR 111580 & 114802


June 21, 2001

FACTS:
On June 21, 1988, the Shangri-La International Hotel Management, Ltd.,
Shangri-La Properties, Inc., Makati Shangri-La Hotel and Resort, Inc. and Kuok
Philippine Properties, Inc. (hereinafter collectively referred as the "Shangri-La
Group"), filed with the Bureau of Patents, Trademarks and Technology Transfer
(BPTTT) a petition, praying for the cancellation of the registration of the "Shangri-
La" mark and "S" device/logo issued to the Developers Group of Companies,
Inc., on the ground that the same was illegally and fraudulently obtained and
appropriated for the latter's restaurant business. The Shangri-La Group alleged
that it is the legal and beneficial owners of the subject mark and logo; that it has
been using the said mark and logo for its corporate affairs and business since
March 1962 and caused the same to be specially designed for their
international hotels in 1975, much earlier than the alleged first use thereof by the
Developers Group in 1982. Likewise, the Shangri-La Group filed with the BPTTT its
own application for registration of the subject mark and logo. The Developers
Group filed an opposition to the application. Almost three (3) years later, or on
April 15, 1991, the Developers Group instituted a complaint for infringement and
damages with prayer for injunction, against the Shangri-La Group. On January 8,
1992, the Shangri-La Group moved for the suspension of the proceedings in the
infringement case on account of the pendency of the administrative
proceedings before the BPTTT. This was denied, as well as the Motion for
Reconsideration, by the trial court. The Shangri-La Group filed a petition for
certiorari before the Court of Appeals. The Court of Appeals affirmed the
decision of the trial court.

ISSUE:
Whether or not despite the institution of an Inter Partes case for
cancellation of a mark with the BPTTT (now the Bureau of Legal Affairs,
Intellectual Property Office) by one party, the adverse party can file a
subsequent action for infringement with the regular courts of justice in
connection with the same registered mark.

HELD:
YES. Section 151.2 of the Intellectual Property Code substantially provides
that the earlier filing of petition to cancel the mark with the Bureau of Legal
Affairs shall not constitute a prejudicial question that must be resolved before an
action to enforce the rights to same registered mark may be decided. Hence,
as applied in the case at bar, the earlier institution of an Inter Parties case by the
Shangri-La Group for the cancellation of the "Shangri-La" mark and "S"
device/logo with the BPTTT cannot effectively bar the subsequent filing of an
infringement case by registrant Developers Group. The law and the rules are
explicit.

The rationale is plain: Certificate of Registration No. 31904, upon which the
infringement case is based, remains valid and subsisting for as long as it has not
been cancelled by the Bureau or by an infringement court. As such, Developers
Group's Certificate of Registration in the principal register continues as "prima
facie evidence of the validity of the registration, the registrant's ownership of the
mark or trade-name, and of the registrant's exclusive right to use the same in
connection with the goods, business or services specified in the certificate."
Since the certificate still subsists, Developers Group may thus file a
corresponding infringement suit and recover damages from any person who
infringes upon the former's rights. Furthermore, the issue raised before the BPTTT is
quite different from that raised in the trial court. The issue raised before the BPTTT
was whether the mark registered by Developers Group is subject to
cancellation, as the Shangri-La Group claims prior ownership of the disputed
mark.

On the other hand, the issue raised before the trial court was whether the
Shangri-La Group infringed upon the rights of Developers Group within the
contemplation of Section 22 of Republic Act 166. Following both law and the
jurisprudence enunciated in Conrad and Company, Inc. v. Court of Appeals,
the infringement case can and should proceed independently from the
cancellation case with the Bureau so as to afford the owner of certificates of
registration redress and injunctive writs. In the same light, so must the
cancellation case with the BPTTT (now the Bureau of Legal Affairs, Intellectual
Property Office) continue independently from the infringement case so as to
determine whether a registered mark may ultimately be cancelled.

However, the Regional Trial Court, in granting redress in favor of


Developers Group, went further and upheld the validity and preference of the
latter's registration over that of the Shangri- La Group. There can be no denying
that the infringement court may validly pass upon the right of registration, as
provided under Section 161 of the Intellectual Property Code. With the decision
of the Regional Trial Court upholding the validity of the registration of the service
mark "Shangri-La" and "S" logo in the name of Developers Group, the
cancellation case filed with the Bureau hence becomes moot. To allow the
Bureau to proceed with the cancellation case would lead to a possible result
contradictory to that which the Regional Trial Court has rendered, albeit the
same is still on appeal. Such a situation is certainly not in accord with the orderly
administration of justice.

In any event, the Court of Appeals has the competence and jurisdiction
to resolve the merits of the said RTC decision. To provide a judicious resolution of
the issues at hand, The Court finds it appropriate to order the suspension of the
proceedings before the Bureau pending final determination of the infringement
case, where the issue of the validity of the registration of the subject trademark
and logo in the name of Developers Group was passed upon.

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