Contado, Jolly Rose S.
IN-N-OUT BURGER, INC., petitioner,
vs. SEHWANI, INCORPORATED AND/OR BENITA’S FRITES, INC., respondents.
DOCTRINE:
While Section 163 of the Intellectual Property Code vests in civil courts jurisdiction
over cases of unfair competition, nothing in the said section states that the regular courts
have sole jurisdiction over unfair competition cases, to the exclusion of administrative
bodies. On the contrary, Sections 160 and 170, which are also found under Part III of the
Intellectual Property Code, recognize the concurrent jurisdiction of civil courts and the IPO
over unfair competition cases.
FACTS:
Petitioner, In-N-Out Burger, Inc. is a California-based restaurant business, has
never operated in the Philippines but is a signatory to the Convention of Paris on
Protection of Industrial Property and the Agreement on Trade Related Aspects of
Intellectual Property Rights (TRIPS).
Respondents Sehwani, Inc. and Benita Frites, Inc. are Philippine
Corporations. Respondent Sehwani, Inc. registered its “IN-N-OUT” (the inside of the
letter "O" formed like a star) mark and licensed it to Benita Frites, Inc. When petitioner
filed trademark and service mark applications for its "IN-N-OUT" and "IN-N-OUT
Burger & Arrow Design" before the Bureau of Trademarks (BOT) of the Intellectual
Property Office (IPO), it discovered the prior registration. This led to an administrative
complaint against the respondents with the Bureau of Legal Affairs (BLA-IPO) for unfair
competition and cancellation of trademark registration.
The IPO Director of Legal Affairs ruled in favor of petitioner, recognizing the
world-wide registration of its mark “IN-N-OUT” and its status as a signatory to the
Convention of Paris on Protection of Industrial Property. But she found respondents
not guilty of unfair competition.
Petitioner then filed a partial motion for reconsideration which was granted by
the IPO Director General. He ruled respondents were guilty of unfair competition. The
CA later overturned this. It declared that Sec. 163 of the Intellectual Property Code
(IPC) confers upon regular courts, not the BLA-IPO, sole jurisdiction to hear and decide
cases involving provisions of the IPC, particularly trademarks. Consequently, the IPO
Director General had no jurisdiction to rule on the appeal of BLA-IPO’s decision on
supposed violations of these provisions of the IPC.
ISSUE:
Whether or not the Intellectual Property Office (IPO) has jurisdiction over
administrative complaints for intellectual property rights violations.
RULING:
Yes. IPO Director of Legal Affairs had jurisdiction to decide the petitioner’s
administrative case against respondents and the IPO Director General had exclusive
jurisdiction over the appeal of the judgment of the IPO Director of Legal Affairs.
Section 10 of the Intellectual Property Code specifically identifies the functions
of the Bureau of Legal Affairs, thus:
Section 10. The Bureau of Legal Affairs.–The Bureau of Legal Affairs shall
have the following functions:
10.1 Hear and decide opposition to the application for registration of marks;
cancellation of trademarks; subject to the provisions of Section 64…
10.2 (a) Exercise original jurisdiction in administrative complaints for
violations of laws involving intellectual property rights;…
Unquestionably, petitioner’s complaint, which seeks the cancellation of the
disputed mark in the name of respondent Sehwani, Inc. and damages for violation of
petitioner’s intellectual property rights, falls within the jurisdiction of the IPO Director
of Legal Affairs.
The Intellectual Property Code also expressly recognizes the appellate
jurisdiction of the IPO Director General over the decisions of the IPO Director of Legal
Affairs, to wit:
Section 7. The Director General and Deputies Director General. 7.1
Functions.–The Director General shall exercise the following powers and
functions:
b) Exercise exclusive appellate jurisdiction over all decisions rendered by
the Director of Legal Affairs, the Director of Patents, the Director of
Trademarks, and the Director of Documentation, Information and Technology
Transfer Bureau….
While Section 163 thereof vests in civil courts jurisdiction over cases of unfair
competition, nothing in the said section states that the regular courts have sole
jurisdiction over unfair competition cases, to the exclusion of administrative bodies.
On the contrary, Sections 160 and 170, which are also found under Part III of the
Intellectual Property Code, recognize the concurrent jurisdiction of civil courts and the
IPO over unfair competition cases.
