ASARI YOKO CO., LTD., PETITIONER VS. KEE BOC AND CELEDONIO AGRAVA, DIRECTOR OF PATENTS, RESPONDENTS.

This is a petition for the review of a decision of the Director of
Patents finding Kee Boc, respondent herein, the first user of the trade
mark “RACE” and design (representation of three men running a race) and
therefore the owner of this trade mark, and, dismissing the opposition
of Asari Yoko Co., Ltd., petitioner herein, on the ground that it will
not be damaged by the registration of said trade mark.

On
August 27, 1953, Kee Boc, a Chinese citizen, filed a petition for the
registration of the trade mark “Race” and design to be used in shirts
and undershirts manufactured by him. He claims to have first used the
trade mark in commerce on May 17, 1952, basing the design on a movie
picture (t.s.n., 690) he had seen with Domingo Cabatingan, his
employee, who corroborated to this fact (t.s.n., 674).

Opposition was interposed by Asari Yoko Co., Ltd., a Japanese
corporation, on the ground that it is the owner of the trade mark
because the same is registered in Japan arid in the Philippines,
registration in the latter having been made in August, 1929, under the
provisions of Act No. 666 and is valid for 30 years; that the trademark
has been in continuous use in commerce in, and trade with, the
Philippines since its registration until the early part of 1942, and
then again after the liberation of the Philippines up to the present;
that the trade mark was never abandoned by the registrant and that it
will be damaged by the registration of the same.

After due
hearing, the Director of Patents dismissed the opposition and adjudged
applicant Kee Boc the owner of the trade mark. Hence this petition for
review.

Petitioner assigns seven errors committed by the Director of Patents, to wit—

“1.
The Director of Patents erred in holding that the petitioner has failed
to prove registration in the Philippines of the subject trade mark
before World War II.

2. The Director of Patents erred
in holding that petitioner “has failed to establish satisfactorily its
claim of ‘prior’ use” of the subject trade mark in the Philippines
before World War II.

3. The Director of Patents erred in holding that granting that
petitioner “did have such ‘prior use’ its rights acquired by such
‘prior use’ were automatically forfeited or lost by it by reason of the
war.”

4. The Director of Patents erred in holding that there could not have
been use by petitioner of the subject trade mark in “trade” or
“commerce” after the termination of hostilities in World War II,
notwithstanding the existence of a trade arrangement or agreement
entered into between the Philippines and Japan through the Supreme
Commander for the Allied Powers.

5. The Director of Patents erred in holding that petitioner “will not
be damaged by the registration of the trade mark and design in favor of
applicant Kee Boc.”

6. The Director of Patents erred in holding that respondent Kee Boc is
the “first user” of the subject trade mark in the Philippines.

7. The Director of Patents erred in dismissing the petitioner’s
opposition to the application of respondent Kee Boc for the
registration of the trade mark “race” and “design.”

There is no question that the trade mark “RACE BRAND” applied for is
exactly the same as the trade mark”RACE BRAND” registered in Tokyo,
Japan on June 11, 1937 by Kojiro Asari (Exhibits “G” and “G-1”). Not
only is the trade mark sought to be registered the actual trade mark,
for Japanese shirts and undershirts, belonging to Kojiro Asari, but the
very names printed on the boxes containing shirts and undershirts sold
by petitioner—”Race Brand Gentlemen’s Underwear”—are exactly identical
to those appearing in. the boxes used by applicant for the underwear he
manufactures.

The original facsimile of the trade mark,
Exhibit “10” (5 copies), shows clearly two thin sheets of white paper
pasted thereon, to the left side of the design. When these pasted
sheets of white paper were removed, in the course of the hearing, from
one of the exhibits (Exhibit “10-b”), it was found that said papers
covered the following words, (1) “Registered Trade Mark” in big capital
letters, and, (2) “Made in Occupied Japan” in small capital letters.
These findings are conclusive evidence that the trade mark applied for
is the very trade mark on manufactured goods made in Japan and imported
into the Philippines. So the issues submitted to the Director of
Patents were, (1) whether this trade mark is registered in the
Philippines prior to the application of the respondent-applicant, and,
(2) whether petitioner-oppositor had actually used this trade mark for
Japanese goods in the Philippines prior to that of the applicant.

Some employees of the former Bureau of Commerce testified that they had
seen similar trade marks in the office of the said bureau before the
war, but they could not assert definitely that a registered certificate
therefor was issued by the Director of Patents. We therefore agree with
the latter that the evidence of prior registration of the trade mark in
the Philippines has not been established by sufficient evidence.

But as to the prior use of the trade mark by the oppositor, we find the
evidence to be conclusive in favor of the petitioner. The very
facsimile of the trade mark filed by the applicant before the director
in connection with his petition for registration, was taken from a mark
actually used on goods imported from Japan to the Philippines, except
that the former does not contain the inscriptions “REGISTERED TRADE
MARK” and “Made in Occupied Japan”, because the inscriptions are
covered by a thin piece of paper pasted on the inscriptions. The trade
mark sought to be registered already belongs to Kojiro Asari, as shown
by the certificate of registration thereof in Tokyo, Japan, on February
27, 1937 and June 11, 1937 (Exhibits “G” and “G-1” respectively). The
trade mark sought to be registered is actually used on boxes of shirts
and undershirts imported to the Philippines from Japan (see Exhibits
“F”, “F-1” up to “F-5”). Shirts and undershirts bearing said trade mark
appear to have been imported to the Philippines as early as 1949 (see
Exhibits “E-4” up to “E-11). Shirts and undershirts bearing said trade
mark were also imported by Wan Lian Trading of Manila subsequently, as
evidenced by shipping documents, Exhibits “C”, “C-4” dated October 27,
1953, and shipping documents Exhibits “D”, “D-1” up to “D-4” dated
September 11, 1953.

We are therefore satisfied that the
trade marks sought to be registered are registered in Tokyo, Japan on
February, 1937 and June, 1937, and the same have been used on shirts
and undershirts imported into the Philippines as early as the year
1949, and continuously up to the date of the trial. We therefore find
that the Director of Patents committed the second and sixth assignments
of error.

The third assignment of error is also well taken.
There is no evidence that the trade mark in question was confiscated by
the United States in conformity with the Trading With The Enemy Act.
Furthermore, as it was not found that the trade mark was registered in
the Philippines by a Japanese before the war, it could not have been
confiscated under the Trading With The Enemy Act. How can a
non-existent property or trade mark be confiscated?

We also
find merit in the fourth assignment of error. It appears that even
prior to the trade agreement between Supreme Commander for the Allied
Powers (SCAP) and the Republic of the Philippines, the first of which
was entered into on March 3, 1951, goods bearing the trade mark in
question have already come into the Philippines as evidenced by
Exhibits “E-4” to “E-11” inclusive, all of which bear date 1949. During
that year the agreement between Occupied Japan and the Philippines had
not yet been entered into. But Japan was occupied by the United States
since 1945 and was therefore under its lawful control; and since this
country has always had commercial relations with the United States, it
can not be said that the entry of goods from Occupied Japan to the
Philippines is illegal, or is not legitimate trade or commerce which
can give rise to any rights to trade marks. The view of this subject by
the Director of Patents, that the trade relations between Japan and the
Philippines is not lawful or legal, is so narrow to be justified by the
relations existing between the United States and the Philippines. Since
1949 up to the present time, commercial relations with Japan had
existed and continued, and the importation of commodities bearing the
trade mark in question into the Philippines taken place. The lawful
entry into the Philippines of goods bearing the trade mark since 1949
should entitle the owner of the trade mark to the right to use the same
to the exclusion of others. Modern trade and commerce demands that
depredations on legitimate trade marks of non-nationals should not be
countenanced. The strict condition imposed in the decision of the
Director of Patents that a formal commercial agreement between two
nations must exist before the trade mark of one may be recognized in
the other, is inconsistent with the freedom of trade recognized in
modern times. We therefore find that the fourth assignment of error is
meritorious.

The fifth assignment of error is also
sustained. It follows from all the above that as petitioner-oppositor
was the first user of the trade mark in question in the Philippines, it
will be damaged by the registration of the trade mark in the name of
applicant-respondent.

Wherefore, the decision sought to be
reviewed is hereby reversed, and the application for registration of
the trade mark by Kee Boc is hereby dismissed, with costs against the
respondent-applicant Kee Boc.

Paras, C. J., Bengzon, Padilla, Bautista Angelo, Concepcion, Reyes, J. B. L., Barrera, Gutierrez David, Paredes, and Dizon, JJ., concur.