In 2005, Mr. Zulueta ("Mr. Zulueta") claimed that he invited Raoul Goco ("Mr. Goco") to open a Greek restaurant in the Philippines, and they conceptualized the name of the restaurant to be CYMA while on vacation in Greece. Their first branch was a test kitchen in D Mall, Boracay. To formalize the arrangement, they decided to form and register a partnership called "Cyma Greek Taverna Company".
A year after the formalization of the partnership, Mr. Zulueta filed a trademark application in his own name for the mark CYMA. Mr. Zulueta alleged that while he was out of the country, Mr. Goco and his sister, Anna Goco ("Ms. Goco"), fraudulently transferred Mr. Zulueta's partnership interests to Ms. Goco, hence, he had to file the application independently.
Five months after this filing, the partnership also filed a trademark application for the nearly identical mark, except that it includes the words "Greek Taverna" in it. The disputed marks are shown below:
Manuel Zulueta's
Cyma Greek Taverna's
The Intellectual Property Office eventually approved the partnership's trademark application, a ruling which was subsequently upheld by the Court of Appeals.
In an Opposition filed by the partnership, it was claimed that Mr. Zulueta falsely represented that he was the originator of the mark.
Who owns the disputed trademark "CYMA"?
The Supreme Court acknowledged that the partnership itself had used the trademark in its commercial dealings, way back since 2005. In fact, Mr. Zulueta himself had admitted that the name was intended to be exclusive used by the partnership.
In its Decision, the Supreme Court emphasized that while the general rule is that ownership of a mark is acquired through the "first-to-file" rule, applications tainted with bad faith are void from the beginning.
Registration of trademark applications which are tainted by bad faith or fraud are void ab initio, i.e., invalid from the very beginning. In relation to trademark registration, the term bad faith is defined as "one who has knowledge of a prior creation, use and/or registration by another of an identical or similar trademark", while the term fraud is defined as "one who makes false claims in connection to trademark applications and registration".
To determine the existence of bad faith in the course of a trademark application, the Supreme Court enumerated circumstances or conditions, that if found, the application will be considered unregistrable and will consequently be denied if:
- An entity (person A) has prior use, creation and/or registration of a trademark, and
- The applicant (person B) has knowledge of the said prior use, creation and/or registration.
In this case, the applicant, Mr. Zulueta, was found by the Court to have registered his trademark application in bad faith. It is without doubt that he was aware of the prior use of the trademark by the partnership. He and Mr. Goco conceptualized the trademark together, he further knew that it had been in use since 2005 at a test kitchen restaurant in Boracay. Moreover, he was also aware that he formed part of the same partnership. Therefore, if Mr. Zulueta, as alleged, was the first to file a trademark application, his knowledge of the trademark's prior use by the partnership meant that the application was filed in bad faith.
Originally published February 7, 2024
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
