~iPINTELLECTUAL PROPERTY PHILIPPINES

OFFICE OF THE DIRECTOR GENERAL

SAINT-GOBAIN ABRASIVES, INC., Appeal No. 14-08-31 Appellant,

Inter Partes Case No. 14-2007-00025 Opposition to: Application No. 4-2004-000513

- versus - Date Filed: 19 January 2004 Trademark: "NORTON PREMIUM AND

DESIGN"-KAVAMANAN PRODUCTS, INC.,

-. Appellee. X--,~:3'--------------------------------------------X

NOTICE OF DECISION j

L~NY B. RAZ tfI1l.~jH. Director y{ Y/ v-, Bureau of Trademarks Intellectual Property Office, Makati City

8741 Paseo de Roxas, Makati City

SOCI ES IP PHILIPPINES LIBRARY REC~~\fS)or Respondent-Appel e Documentation, Information & slosONJ~l~\'#.Ci\f3JtI$lSOOI~lfMe ower Technology Transfer Bureau

ADB Ave. cor. Garnet & Sapph e Roads Intellectual Property Office, Makati City Ortigas Ce er P . City

ROMULO MABANTA BUENAVENTURA SAYOC & DE LOS ANGELES Counsel for Opposer-Appellant so" Floor, Citibank Tower Building

GREETINGS:

Please be informed that on 01 June 2009, the Office of the Director General rendered a DECISION in the above-titled case (copy attached).

Makati City, 01 June 2009.

Very truly yours,

CERTIFIED TRUE COPY: Attor y VI Head, Office of the Legal Counsel ATTY. ~:r. ANIEL S. AREVALO

~ Offi e of the Director General Rober! Nereo B. Samson

Attorney IV Office of the Director General Republic of the Philippines

~iPINTELLECTUAL PROPERTY PHILIPPINES

OFFICE OF THE DIRECTOR GENERAL

SAINT-GOBAIN ABRASIVES, INC., Appellant,

- versus ­

KAYAMANAN PRODUCTS, INC., Appellee.

X--------------------------------------------------X

Appeal No. 14-08-31

Inter Partes Case No. 14-2007-00025 Opposition to: Application No. 4-2004-000513 Date Filed: 19 January 2004 Trademark: "NORTON PREMIUM AND

DESIGN"

NOTICE OF DECISION

ROMULO MABANTA BUENAVENTURA SAYOC & DE LOS ANGELES Counsel for Opposer-Appellant 30th Floor, Citibank Tower Building 8741 Paseo de Roxas, Makati City

SIOSON SIOSON & ASSOCIATES Counsel for Respondent-Appellee Unit 903 AIC Burgundy Empire Tower ADB Ave. cor. Garnet & Sapphire Roads Ortigas Center Pasig City

ESTRELLITA B. ABELARDO Director Bureau of Legal Affairs Intellectual Property Office, Makati City

GREETINGS:

LENY B. RAZ Director Bureau of Trademarks Intellectual Property Office, Makati City

IP PHILIPPINES LIBRARY Documentation, Information & Technology Transfer Bureau Intellectual Property Office, Makati City

! Please be informed that on 01 June 2009, the Office of the Director General rendered a DECISION in the above-titled case (copy attached). I

I Makati City, 01 June 2009.

Very truly yours,

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I Republic of the Philippines

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INTELLECTUAL PROPERTY PHILIPPINES

OFFICE OF THE DIRECTOR GENERAL

SAINT-GOBAIN ABRASIVES, INC., Appeal No. 14-08-31 Appellant,

Inter Partes Case No. 14-2007-00025 -versus- Opposition to:

Application No. 4-2004-000513 KAYAMANAN PRODUCTS, INC., Date Filed: 19 January 2004

Appellee. Trademark: NORTON PREMIUM AND DESIGN

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DECISION

SAINT-GOBAIN ABRASIVES, INC. ("Appellant") appeals Decision No. 2008-80, dated 02 May 2008, of the Director of the Bureau of Legal Affairs ("Director"). The Director sustained the opposition of KAYAMANAN PRODUCTS, INC. ("Appellee") to the Appellant's application for the registration of the mark "NORTON PREMIUM AND DESIGN".

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Ii ~ Records show that the Appellant filed on 19 January 2004 its trademark application

covering power operated grinding wheels which fall under Class 7 of the Nice Classification.' The j

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application was published for opposition on 17 November 2006 in the "IPO e-Gazette" for Trademarks. On 16 January 2007, the Appellee filed a "VERIFIED NOTICE OF OPPOSITION" alleging the following:

1. The mark "NORTON" is duly registered in its favor under Reg. No. 4-2001-005727 effective 31 March 2006 and is used also on grinding wheels;

2. It has not abandoned the use of the mark and has continued its use as shown in the affidavit of its General Manager Peter C. Uy and the commercial documents attached thereto;

3. The Appellant's mark is identical to the Appellee's;

4. The goods covered by the Appellant's mark are identical to and/or related to the goods covered by the Appellee's mark;

1 The Nice Classification is a classification of goods and services for the purpose of registering trademarks and service marks, based on a multilateral treaty administered by the World Intellectual Property Organization. This treaty is called the Nice Agreement Concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks concluded in 1957.

..._T Republic of the Philippines '1' --. 'I' _........................ ..~;_~__1-.._;_ •• _ 1._ •• _ .W

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5. The Appellant is not entitled to register its mark as the approval of its application is contrary to Sec. 123.1 (d) of the IP Code and would violate the Appellee's right to the exclusive use of NORTON;

6. The approval of the Appellant's application has caused and will continue to cause great and irreparable damage and injury to the Appellee; and

7. The Appellant is estopped to challenge the validity of its earlier issued trademark registration.

The Appellant filed its "ANSWER" on 25 May 2007 alleging the following:

1. "NORTON EMERY WHEEL COMPANY" was incorporated under the laws of the Commonwealth of Massachussetts on 20 June 1885 which was changed to

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"NORTON COMPANY" on 02 June 1906, and later on, on 01 June 2001, to the current name of the Appellant;

2. It is the true owner of the marks NORTON, "NORTON AND DESIGN", "NORTON DESIGN", "NORTON INDUSTRIAL LINE AND DESIGN", and NORTON PREMIUM AND DESIGN and is the only one entitled to register NORTON AND DESIGN in the Philippines;

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3. It will be damaged by the registration of the Appellee's NORTON and files a f

counter-petition for cancellation of such registration;

4. Its predecessor NORTON COMPANY owned, first used and previously registered in the Philippines the mark NORTON;2

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5. The Appellee's application for NORTON was filed only on 07 August 2001 and first used on 06 December 2001 which is more than 20 years after the Appellant's marks were registered in the Philippines;

6. It has used and continues to use NORTON since 1885 and it has manufactured or authorized the manufacture of the products bearing the mark and distributing them to the Philippines and various countries around the world;

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I7. It has pending applications and registrations for NORTON around the world under ~-its name and/or its affiliates and related entities;

2 Application No. 4-1994-97914 for the mark NORTON was filed on 12 October 1994 covering the following goods: oilstones, abrasive stones, cleaning stones, sharpening stones, hones, whet stones, tool and knife sharpeners, scythe stones, bench stones, axe stones, pocket stones, breaker point stones, abrasive engraving points, pencils and stones, abrading, lapping and polishing grains and powders, oilstones, wheels, grinding wheels, and abrading, lapping and polishing stones and wheels while Application No. 02753 was filed on 31 May 1979 for pressure sensitive adhesive tapes also for the mark NORTON. The Appellant filed Application No. 4-2004-000514 for NORTON AND DESIGN on 19 January 2004 for use on power operated grinding wheels and hand operated grinding wheels.

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8. It has spent millions of dollars in worldwide advertising and promotion costs yearly for its NORTON products and have generated sales in the hundred of millions of dollars annually;

9. Its mark is used in relation to a range of abrasive products including grinding stones, grinding and cutting wheels and discs which are identical and/or closely related to the goods of the Appellee such that the public will be confused and may assume that its goods are the goods of the Appellee or at least originate from it;

10. By virtue of its prior use and registration of its marks in the Philippines and in other parts of the world, its marks have become popular and internationally well­known and have established goodwill with the public which has identified it as the source of goods bearing the mark NORTON;

11. The strong and distinctive goodwill of its marks will now be diluted, whittled away, diminished, if not tarnished by the Appellee's mark;

12. The Appellee's mark is an identical/flagrant imitation of the Appellant's that will mislead and give the impression that the Appellee's goods are the same or connected with the Appellant and falsely suggest a connection with its business resulting in the defrauding of the Appellant's long established business;

13. The Appellee adopted and used NORTON in complete and utter bad faith and fraudulently applied for its registration although so confusingly similar, if not identical as pronunciation, appearance and presentation to the Appellant's;

14. The goods covered by its marks move in the same channels of trade as the Appellee's thus, making confusion more likely;

15. The registration of the Appellee's mark violates and runs counter to Sec. 123.1(d), (e) and (f) ofthe IP Code and Art. 6bis ofthe Paris Convention forthe Protection of Industrial Property ("Paris Convention"); and

16. The Appellee has violated the Appellant's right to the exclusive use of NORTON, thus, inevitably, the Appellee's registered mark should be canceled pursuant to Sec. 147 of the IP Code, the cancellation being within the prescribed period under Sec. 151.1 (a) ofthe IP Code and the Regulations on Inter Partes Proceedings.

The Appellee submitted the following pieces of evidence in support of its opposition:

1. Affidavit of Peter C. Uy executed on 16 January 2007;3 2. Copy of Reg. No. 4-2001-005727 for NORTON;4

3 Exhibit "A". , Exhibit "B".

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3. Copy of Order No. 2006-36 (D), dated 24 February 2006 in MNO 2005-148 giving 1 due course to the Appellee's Trademark Application No. 4-2001-005727;5

4. Copy of the Appellee's Declaration of Actual Use for NORTON with attachments." 5. Commercial invoices showing the sales of goods bearing the brand NORTON.7

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On the other hand, the evidence of the Appellant consists of the following:

1. Affidavit of Carol M. Gray executed on 24 April 2007;8 2. Copies of products labeled with NORTON;9 3. Copy of the company records showing the change of the name of Norton Company

to Saint-Gobain Abrasives, Inc.:" 4. Copies of the registration of NORTON in the U.S.A. and other countries;" 5. Copies of invoices showing the sales in the Philippines of the Appellant's I•products:" ~ 6. Copy of Cert. of Reg. No. 4-1994-97914 for NORTON issued in favor of the t

Appellant on 09 November 1999;13 f

7. Copy ofCert. of Renewal of Reg. No. 27530 for NORTON issued on 31 May 1999 to the Appellant:"

8. Recordal of change of name from NORTON COMPANY to SAINT-GOBAIN ABRASIVES, INc.;15

9. Examples of company stationery, price lists and brochure:" 10. Sample exhibition stands and displays at various international trade shows for

NORTON;17 and

11. Samples of worldwide print brochures, advertisements and give away products bearing the mark NORTON.18

In deciding for the Appellee, the Director ruled that the Appellant's mark is identical or at the very least confusingly similar to the Appellee's and therefore, its registration is contrary to Sec. 123.1(d) of the IP Code. She also held that the Appellant's mark is not well-known internationally and in the Philippines.

The Appellant filed an "APPEAL MEMORANDUM" on 07 July 2008 alleging the following:

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5 Exhbit "C".

6 Exhibits "D" to "D-S". 7 Exhibits "E" to "E-2"

8 Attached to the Appellant's ANSWER. 9 Exhibits "1" to "4". 10 Exhibit "5". 11 Exhibits "6", "13" to "27". 12 Exhibits "7" to "12".

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13 Exhibit "13". 14 Exhibit "29". 15 Exhibit "28".

16 Exhibits "30" to "32".

17 Exhibits "33" to "35". 18 Exhibits "36" to "39".

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1. The Director committed a monumental mistake when she disregarded the Appellant's prior existing registered marks for NORTON in the Philippines;

2. It applied for the registration of NORTON as early as 1979 and was issued registrations that were subsequently renewed in 1999 while the Appellee's application for NORTON was filed only in 2001;

3. Its Reg. No. 4-1994-97914, dated 19 November 1999, covers grinding wheels under Class 7 which is identical to the goods covered by the Appellee's mark;

4. The Appellee has illegally registered NORTON and, thus, its opposition was completely baseless and should have been dismissed outright;

5. The Appellee maliciously copied the Appellant's mark for the same goods in Class 7 to receive undue mileage and benefits from the latter's international goodwill and its corresponding promotional efforts and huge advertising expenses;

6. The Appellee's registration of NORTON contravenes Art. 6bis and 8 of the Paris Convention and Art. 16 of the Agreement on Trade-Related Aspects ofIntellectual Property Rights ("TRIPS Agreement");

7. Its counter petition to cancel the Appellee's registration for NORTON was timely and properly made; and

8. Its marks are well-known and the Appellee's mark is identical to its marks and the Appellee's packaging materials are copied from the receptacles of its products.

The Appellee filed its "COMMENT" dated 22 August 2008 alleging the following:

1. The appeal should be denied and dismissed for lack of merit and Decision No. 2008-80 should be affirmed;

2. The Appellant's application case was filed on 19 January 2004 for the registration of NORTON PREMIUM AND DESIGN for use on power operated grinding wheels falling under Class 7;

3. The Appellant also filed Application No. 4-2004-000514 on 19 January 2004 for the registration of "NORTON AND DESIGN" for use on power operated grinding wheels falling under Class 7 and hand operated grinding tools falling under Class 8;

4. It has earlier filed on 07 August 2001 Application No. 4-2001-005727 for the registration of NORTON for use on grinding wheels and was issued Cert. of Reg. No. 4-2001-005727 on 11 September 2006;

5. It filed its opposition to the Appellant's Application No. 4-2004-000514 which was sustained by the Director in her Decision No. 2007-129 issued on 24 September 2007 and to which a corresponding Entry of Judgment has already been issued;

6. Decision No. 2007-129 constitutes res judicata in so far as the instant case IS

concerned;

7. The Director correctly found out that the Appellant's mark is not well-known internationally and in the Philippines according to the criteria laid down in Rule 102 of the Trademark Regulations;

8. Philippine Registration No. 27530 had already lapsed for failure of the Appellant to file the required affidavit of use;

9. Its Reg. No. 4-2001-005727 is prima facie valid pursuant to Sec. 138 of the IP Code;

and

10. The Appellant is now estopped to seek the cancellation of Reg. No. 4-2001-005727 pursuant to the Order dated 24 February 2006 dismissing MNO 2006-148.

The issue to be resolved in this appeal is whether the Director was correct in sustaining the Appellee's opposition and in rejecting the Appellant's trademark application.

The Appellee anchors his opposition on Sec. 123.1 (d) of the IP Code, which provides that a mark cannot be registered if it:

(d) Is identical with a registered mark belonging to a different proprietor or a mark with an earlier filing or priority date, in respect of:

(i) The same goods or services, or (ii) Closelyrelated goods or services, or (iii) If it nearly resembles such a mark as to be likely to deceive or cause confusion;

It argues, as sustained by the Director, that the Appellant's application should be rejected because it has an existing and earlier registration for the mark NORTON (Reg. No. 4-2001-005727).

In this regard, the Appellee's and the Director's reliance on Sec. 123.1(d) of the IP Code would have been correct if the evidence would show that the Appellant's mark sought for registration is identical with a registered mark belonging to a different proprietor and used on similar goods.

A scrutiny of the records reveals that the Appellant submitted in evidence copy of Cert. of Reg. No. 4-1994-97914 for NORTON issued in its favor on 09 November 1999!9 The registration covers oilstones, abrasive stones, cleaning stones, sharpening stones, hones, whetstones, tool and knife sharpeners, scythe stones, bench stones, axe stones, pocket stones, breaker point stones,

19 Exhibit "13".

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abrasive engraving points, pencils and stones, abrading, lapping and polishing grains and powders, oilstones wheels, grinding wheels, and abrading, lapping, and polishing stones and wheels which fall under Class 7. The registration has a duration of twenty (20) years from 09 November 1999 and is, therefore, still valid and existing.

Also, the Appellant submitted a copy of Cert. of Renewal of Reg. No. 27530 for NORTON issued on 31 May 1999 20 covering pressure sensitive adhesive tapes falling under Class 1. This renewal registration has a term of ten (10) years from 31 May 1999 and thus, still valid and existing up to 30 May 2009.

This Office noticed that the Director did not discuss in the appealed decision the relevance to this case of the aforementioned registrations issued to the Appellant. These registrations can even be taken cognizance of by way of judicial notice. Subjects found in the Trademark Registry including the list of registered trademarks as well as pending applications and statuses are matters that this Office can and should take cognizance of even if not raised as an issue by the parties.

The existence of Reg. No. 4-1994-97914 is crucial to this case because while the Appellee was correct as to the fact that there was an earlier registration for a mark identical to the Appellant's mark for use on identical or closely related goods, that earlier registration does not refer to the Appellee's Reg. No. 4-2001-005727. The earlier registration belongs to the Appellant itself. Hence, Sec. 123.1(d) of the IP Code would not bar the registration of the Appellant's mark. The provision applies only if the earlier registration belongs to a different proprietor.

The Director also gravely erred in holding that the Appellee was the first to use NORTON in commerce in the Philippines and the owner thereof. The Appellant submitted substantial evidence to prove that it is the real owner and prior user of the mark NORTON. It showed that through its predecessor in interest, it is engaged in the manufacture, sale and distribution of abrasive products bearing the mark as early as 1885 in the United States. Since then, it has manufactured and distributed products bearing the mark NORTON, has applied and secured the registration thereof in different countries long before the Appellee filed a trademark application in the Philippines in 2001, and has spent millions of dollars in worldwide advertising and promotions.

The existence of Reg. No. 4-1994-97914 as well as Reg. No. 27530 bolsters the position of ,the Appellant as the first user of the mark even in the Philippines. These registrations were issued under the old Law on Trademarks which require prior use in the Philippines as a condition sine qua non for registration. Aptly, a certificate of registration of a mark shall be prima facie evidence of the validity of the registration, the registrant's ownership of the mark, and of the registrant's exclusive right to use the same in connection with the goods or services and those that are related thereto specified in the certificate."

20 Exhibit "29".

21 Sec. 138 of the IP Code.

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The mark NORTON PREMIUM AND DESIGN for use on power operated grinding wheels and subject of the opposed Appellant's trademark application is just a variation of the mark NORTON owned and already registered by the Appellant prior to the Appellee's filing of the I trademark application which led to the issuance of Reg. No. 4-2001-005727. There is nothing in the records indicating that the Appellant has abandoned the use of NORTON or its registrations has ceased to be valid.

I In fact, the Appellee's trademark application for NORTON for use on grinding wheel on

07 August 2001 should have been rejected pursuant to Sec. 123.1(d) of the IP Code. At that time, it is very clear that there is already an existing registration for the same mark for use on similar goods issued to a different proprietor, the Appellant.

I Consequently, this Office finds untenable the Appellee's argument" that Decision No.

2007-129 of the Director on 24 September 2007 in Inter Partes Case No. 14-20060014123

I constitutes res judicata. Res judicata is an absolute bar to a subsequent action for the same cause and its requisites are: (a) the former judgment or order must be final; (b) the judgment or order must be one on the merits; (c) it must have been rendered by a court having jurisdiction over the

I subject matter and parties; (d) there must be between the first and second actions, identity of parties, of subject matter and of causes of action."

In this instance, the issue of the validity of Reg. No. 4-2001-005727 is raised by the Appellant in defense of its trademark application. The Appellant also seeks the cancellation of the Appellee's registration. This issue was not passed upon in Inter Partes Case No. 14-200600141. The Appellant correctly pointed out:

68. Indeed, as was held in Mirpuri vs. Court of Appeals (318 SCRA 516), res judicata does not apply to rights, claims or demands, although growing out of the same subject matter, which

constitute separate or distinct causes of action and were not put in issue in the former action.

69. As is obvious, the cause of action in Decision No. 2007-129 revolved around the registrability of St. Gobain's NORTON and DESIGN mark.

69.1. In the instant proceedings, however, the cause of action revolves around: (i) the validity of the registration of Kayamanan's NORTON mark; and, (ii) the consequent registrability of St. Gobain's NORTON PREMIUM and DESIGN mark."

It is emphasized that a certificate of registration is only a prima facie evidence of the validity of the registration which can be overcome by contrary evidence. In this instance, substantial evidence shows that the mark NORTON should not have been registered in favor of the Appellee at all. Reg. No. 4-2001-005727 is, therefore, null and void.

22 COMMENT,dated 22 Aug. 2008, page 3. 23 This Inter Partes Case involves the Appellant's trademark application for "NORTON AND DESIGN" which was opposed by the Appellee. 24 Pribhdas J. Mirpuri v. Court ofAppeals, supra. 25 MEMORANDUM, dated 30 Sept. 2008, page 21.

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Accordingly, to allow Reg. No. 4-2001-005727 to remain in the Trademark Registry would nullify the exclusive rights of the Appellant to use and appropriate the mark NORTON for grinding wheels and thus, undermine the rationale for trademark registration. The records and

evidence in this case have already established the Appellant's ownership of the mark NORTON. A

separate petition for cancellation of the Appellee's mark would only duplicate the instant

proceedings considering that it involves similar facts and issues.

Significantly, while Sec. 151.1 of the IP Code provides for the filing of a petition for

cancellation of a registered mark, Sec. 151.2 states:

Notwithstanding the foregoing provisions. the court or the administrative agency vested with jurisdiction to hear and adjudicate any action to enforce the rights to a registered mark shall likewise exercise jurisdiction to determine whether the registration of said mark may be cancelled in accordance with this Act.... (Underscoring/emphasis supplied)

The filing of an opposition to a trademark application on the ground of prior registration

of the identical or confusingly similar mark by another proprietor is a form of enforcement of the

rights to a registered mark through administrative proceedings. Accordingly, the validity of the

claimed prior registration may be put into issue especially if raised by the other party.

Moreover, the fact that the Office had issued Cert. of Reg. No. 4-2001-005727 does not mean that its "hands" are tied so as to correct an obvious mistake on its part. In Sy v. Central Bank ofthe Philippines, et al. 26 the Supreme Court held,

The long- settled jurisprudence states that the "doctrine of estoppel" does not operate against the Government, of which the Central Bank is an instrumentality. in its capacity as sovereign or asserting governmental rights; the Government is never estopped by the mistake or errors on the part of its agents. Moreover, estoppel cannot give validity to an act that is prohibited by law or against public policy. The erroneous application of the statute and enforcement of the law do not block subsequent correct application thereof or bar a future action in accordance with law.

The registration of a mark, hence granting the registrant exclusive use thereof, is an act ur

exercise of sovereignty by the State, a privilege that is akin to granting licenses or permit.

Correlative to the power of conferring such privilege is the inherent power of that granting

authority to revoke or recall the same.

To conclude, it must be emphasized that the essence of trademark registration is to give

protection to the owners of trademarks. The function of a trademark is to point out distinctly the

origin or ownership of the goods to which it is affixed; to secure to him, who has been

instrumental in bringing into the market a superior article of merchandise, the fruit of his industry and skill; to assure the public that they are procuring the genuine article; to prevent

26 G.R. No. L-41480, 30 Apr. 1976 citing Auyong Hian v. Court of Tax Appeals, L-28782, 12 Sept. 1974; Republic v. Marcos, L-32941, 31 Jul. 1973, 52 SCRA 244; United Christian Missionary Society v. SSC, L-26712-16, 27 Dec. 1969,30 SCRA 990; and Zamora v. Court ofTax Appeals, L-23272, 26 Nov. 1970,36 SCRA 85.

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fraud and imposition; and to protect the manufacturer against substitution and sale of an inferior and different article as his product."

WHEREFORE, premises considered, the appeal is hereby GRANTED. The Appellant's Trademark Application No. 4-2004-000513 for the mark NORTON PREMIUM AND DESIGN for use on power operated grinding wheels is hereby GIVEN DUE COURSE. Accordingly, Cert. of Reg. No. 4-2001-005727 for the mark NORTON issued in favor of the Appellee is ordered CANCELLED.

Let a copy of this Decision as well as the trademark application and records be furnished and returned to the Director of the Bureau of Legal Affairs for appropriate action. Further, let also the Director of the Bureau of Trademarks and the library of the Documentation, Information and Technology Transfer Bureau be furnished a copy of this Decision for information, guidance, and records purposes.

SO ORDERED.

JUN 0 1 2009 Makati City

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27 Pribhdas J. Mirpuri v. Court ofAppeals, supra.