Kabushi Kaisha Isetan Vs Iac

KABUSHI KAISHA ISETAN vs.
IAC
Facts: Kabushi Kaisha Isetan is a foreign corporation organized and existing under the laws of Japan and the owner
of the trademark "Isetan" and the "Young Leaves Design". Private respondent Isetann Department Store, on the other
hand, is a domestic corporation organized and existing under the laws of the Philippines. Petitioner alleges that it has
been using its trademark ISETAN since November 5, 1936 and claims to have expanded its line of business
internationally until 1974. It was only in May 1980 did private respondent registered “Isetann Department Store, Inc.”
Petitioner filed with the Philippine Patent Office two petitions for the cancellation of the private respondents’ certificates,
stating among others that, except for the additional letter “N”, the mark registered by the registrant is exactly the same
as the trademark ISETAN owned by the petitioner and that the young leaves registered by the registrant is exactly the
same as the young leaves design owned by the petitioner.
The petitioner further alleged that private respondent's act of registering a trademark which is exactly the same as its
trademark and adopting a corporate name similar to that of the petitioner were with the illegal and immoral intention of
cashing in on the long established goodwill and popularity of the petitioner's reputation, thereby causing great and
irreparable injury and damage to it. It argued that both the petitioner's and respondent's goods move in the same
channels of trade, and ordinary people will be misled to believe that the products of the private respondent originated
or emanated from, are associated with, or are manufactured or sold, or sponsored by the petitioner by reason of the
use of the challenged trademark.
Petitioner likewise filed with the SEC a petition to cancel the mark ISETAN in the registered corporate name, however
this petition was denied. On appeal, the Commission reversed the decision of the Hearing Officer. It directed the private
respondent to amend its Articles of Incorporation within 30 days from finality of the decision. However, respondent
Isetann Department Store filed a motion for reconsideration which led to the reversal by the Commission of its decision,
stating that the petitioner's trademark and tradename have never been used in commerce on the petitioner's products
marketed in the Philippines, the trademark or tradename have not acquired a reputation and goodwill deserving of
protection from usurpation by local competitors.
Issue: WON petitioner has a claim under Trademark Laws
Ruling: No. The SC declined to disturb the rulings of the Patent Office and the Court of Appeals. A fundamental
principle of Philippine Trademark Law is that actual use in commerce in the Philippines is a pre-requisite to the
acquisition of ownership over a trademark or a tradename. In fact, a prior registrant cannot claim exclusive use of the
trademark unless it uses it in commerce.The records show that the petitioner has never conducted any business in the
Philippines. It has never promoted its tradename or trademark in the Philippines. It has absolutely no business goodwill
in the Philippines. It is unknown to Filipinos except the very few who may have noticed it while travelling abroad. It has
never paid a single centavo of tax to the Philippine government. Under the law, it has no right to the remedy it seeks.
Any goodwill, reputation, or knowledge regarding the name Isetann is purely the work of the private respondent.
It might be pertinent at this point to stress that what is involved in this case is not so much a trademark as a tradename.
Isetann Department Store, Inc. is the name of a store and not of product sold in various parts of the country. This case
must be differentiated from cases involving products bearing such familiar names as "Colgate", "Singer". "Toyota", or
"Sony" where the products are marketed widely in the Philippines. There is no product with the name "Isetann"
popularized with that brand name in the Philippines. Unless one goes to the store called Isetann in Manila, he would
never know what the name means. Similarly, until a Filipino buyer steps inside a store called "Isetan" in Tokyo or
Hongkong, that name would be completely alien to him. The records show that among Filipinos, the name cannot claim
to be internationally well-known.
The mere origination or adoption of a particular tradename without actual use thereof in the market is insufficient to
give any exclusive right to its use, even though such adoption is publicly declared, such as by use of the name in
advertisements, circulars, price lists, and on signs and stationery.
The respondent registered its trademark in 1979. It has continuously used that name in commerce. It has established
a goodwill through extensive advertising. The people who buy at Isetann Store do so because of Isetann's efforts.
There is no showing that the Japanese firm's registration in Japan or Hongkong has any influence whatsoever on the
Filipino buying public.
APPLIED PROVISIONS:
The trademark Law, Republic Act No. 166, as amended, under which this case heard and decided provides:
SEC. 2. What are registrable.- Trademark, tradenames and service marks owned by persons, corporation,
partnerships or associations domiciled in the Philippines and by persons, corporations, partnerships or
associations domicided in any foreign country may be registered in accordance with the provisions of this Act:
Provided, That said trademarks, tradenames, or service marks are actually in use in commerce and services
not less than two months in the Philippines before the time the applications for registration are filed: And
provided, further, That the country of which the applicant for registration is a citizen grants by law substantially
similar privileges to citizens of the Philippines, and such fact is officially certified, with a certified true copy of
the foreign law translated into the English language, by the government of the foreign country to the
Government of the Republic of the Philippines. (As amended by R.A. No. 865).
SEC. 2-A. Ownership of trademarks, tradenames and service marks; how acquired. - Anyone who lawfully
produces or deals in merchandise of any kind or who engages in any lawful business, or who renders any
lawful service in commerce, by actual use thereof in manufacture or trade, in business, and in the service
rendered, may appropriate to his exclusive use a trademark, a tradename, or a service mark not so
appropriated by another, to distinguish his merchandise, business or service from the merchandise, business
or service of others. The ownership or possession of a trademark, tradename, service mark, heretofore or
hereafter appropriated, as in this section provided, shall be recognized and protected in the same manner and
to the same extent as are other property rights known to the law. (As amended by R.A. No. 638)"

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KABUSHI KAISHA ISETAN vs.

Issue: WON petitioner has a claim under Trademark Laws

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