Campbridge Waterproofing Systems, Inc. vs. Greenseal Products [M] Sdn. Bhd.

A trade name used in the Philippines by a national of a Paris Convention country is protected against subsequent use as a trademark, whether or not the trade name is registered, and such use is a ground for cancellation of the trademark registration under Section 165 and Sections 153–156 of the Intellectual Property Code, even if the registrant was the first to file and no bad faith is proven.

Campbridge Waterproofing Systems, Inc. is a Philippine corporation that manufactures and sells sealants. Greenseal Products (M) Sdn. Bhd. is a Malaysian corporation producing waterproofing and sealant products; Greenseal Philippines Corporation, incorporated in 2006, serves as its exclusive Philippine distributor. The Intellectual Property Code (Republic Act No. 8293) took effect on January 1, 1998, changing the general rule for trademark ownership from prior use to registration, but preserving protection for trade names irrespective of registration. The Philippines is a party to the Paris Convention for the Protection of Industrial Property, which requires member states to protect trade names without the obligation of filing or registration.

Greenseal Products (M) Sdn. Bhd. (Greenseal Malaysia), a Malaysian corporation, adopted the trademark “GREENSEAL” for its sealant and waterproofing products on March 27, 1986. It obtained registration for the mark in Malaysia covering Class 17 goods starting November 12, 1993, and subsequently marketed and sold its products internationally, including in the Philippines. The company operated a website under the domain greenseal.com.my and advertised in Philippine newspapers, magazines, and periodicals. According to Greenseal Malaysia, the mark was used in the Philippine market as early as 2004, supported by purchase orders, invoices, packing lists, bills of lading, booking confirmations, advertising materials, and photographs. Greenseal Philippines Corporation was registered with the Philippine Securities and Exchange Commission (SEC) on December 19, 2006, as the exclusive distributor of Greenseal products in the Philippines.

Campbridge Waterproofing Systems, Inc., a Philippine company, had been selling an elastomeric sealant under the brand name “FlexSeal Elastomeric Sealant” since around 1987. It alleged that, sometime in the mid-2000s, it changed the product name to “GREENSEAL,” dropping the words “elastomeric sealant.” No independent evidence was presented to establish when or how this change occurred, nor the origin of the invented term “GREENSEAL.” On February 18, 2009, Campbridge applied for registration of the mark “GREENSEAL” for elastomeric sealant in Class 17. The Intellectual Property Office issued Trademark Registration No. 4-2009-001721 in Campbridge’s name on May 4, 2009.

When Greenseal Malaysia filed an application to register “GREENSEAL” in the Philippines on May 12, 2010, it discovered Campbridge’s pre-existing registration. It then filed a Petition for Cancellation with the Intellectual Property Office–Bureau of Legal Affairs (IPOPHL-BLA), asserting that it was the true prior user and owner of the mark, both internationally and in the Philippines, and that Campbridge’s registration had been obtained through fraud or misrepresentation. The Adjudication Officer credited Greenseal’s evidence of commercial transactions in the Philippines as early as 2004 and noted that Campbridge’s own proofs of use dated back only to 2009. The IPOPHL-BLA found Greenseal to be the prior adopter and user of the mark, and ordered cancellation of the registration.

• Prior Use and First-to-File Rule: Petitioner argued that Greenseal’s use of the mark in the Philippines dates only to 2004, after the first-to-file rule under the Intellectual Property Code took effect, and thus Greenseal acquired no vested right. As the first to file the registration in good faith, petitioner conclusively owns the mark.
• Territoriality and Foreign Registration: Petitioner invoked the principle of territoriality, asserting that Greenseal’s prior use and registration in Malaysia in 1993 confers no rights or protection in the Philippines.
• Zuneca Doctrine: Petitioner contended that Zuneca Pharmaceutical vs. Natrapharm, Inc. abandoned the prior use rule, establishing that ownership of a mark is acquired by registration, and that the exception for prior use before the IP Code does not apply because Greenseal’s confirmed use only began in 2004.
• Misapplication of Reciprocity Provisions: Petitioner argued that the Court of Appeals erred in applying Sections 3 and 131 of the Intellectual Property Code to treat Greenseal’s 1993 Malaysian registration as the effective filing date for priority, as Greenseal never filed an application to register the mark in the Philippines.

• Prior Use and Trade Name Registration: Respondents countered that they were the first to introduce the mark “GREENSEAL” in the Philippines since 2000 and registered the trade name “Greenseal Philippines Corporation” with the SEC in 2006, well before petitioner’s 2009 trademark application.
• Well-Known Mark and Bad Faith: Respondents insisted that “GREENSEAL” is a well-known mark entitled to protection regardless of registration, and that petitioner registered the mark in bad faith, having copied an invented word after using “FlexSeal” for two decades, without explaining its origin, while both parties operated in the same industry.
• Inapplicability of Zuneca: Respondents argued that Zuneca is inapplicable because they hold a valid trademark registration in Malaysia from 1993, and petitioner’s registration was in bad faith and contrary to law.
• Trade Name Protection Without Registration: Respondents claimed that their use of the trade name “GREENSEAL” is protected under Philippine law without need of registration and predates petitioner’s trademark registration.

• Trade Name Protection: Whether petitioner’s trademark registration was contrary to law for appropriating respondents’ trade name, which is protected without registration under Section 165 of the Intellectual Property Code and the Paris Convention.
• Bad Faith: Whether petitioner’s registration was obtained in bad faith, warranting cancellation.
• First-to-File Rule and Zuneca: Whether the first-to-file rule under Zuneca barred cancellation, given that respondents’ proven use in the Philippines began after the effectivity of the Intellectual Property Code.
• Priority Rights under the Paris Convention: Whether respondents could claim priority from their 1993 Malaysian trademark registration under Sections 3 and 131 of the Intellectual Property Code and the Paris Convention.

• Trade Name Protection: Yes. Petitioner’s registration was contrary to law, as it appropriated respondents’ trade name, which is protected without registration under Section 165 of the Intellectual Property Code, the use being likely to mislead the public.
• Bad Faith: No. Bad faith was not established by clear and convincing evidence, as the circumstances did not prove petitioner had knowledge of respondents’ prior creation, use, or registration, nor that fraudulent claims were made.
• First-to-File Rule and Zuneca: The first-to-file rule does not bar cancellation. While ownership is generally acquired by registration, a registration may still be cancelled if it was obtained contrary to law, which is the ground here, not prior use.
• Priority Rights under the Paris Convention: The Court of Appeals misapplied these provisions. Respondents cannot claim priority based on the 1993 Malaysian registration because any priority claim must be filed within six months of the foreign filing, and the 2010 Philippine application far exceeded that period.

• Trade Name Protection: Section 165.2 of the Intellectual Property Code protects trade names even prior to or without registration against any unlawful act by third parties, including subsequent use as a mark or trade name that is likely to mislead the public. The remedies in Sections 153 to 156, which include cancellation of registration, apply to such unlawful use. Under the Paris Convention, jurisprudence has consistently held that a trade name of a national of a member state is protected “without the obligation of filing or registration.” Respondents’ trade name “GREENSEAL” was used in the Philippines since 2004 and registered with the SEC as early as 2006, before petitioner’s trademark application in 2009. Petitioner’s use of “GREENSEAL” on identical goods was therefore unlawful as it was likely to mislead the public into believing the goods originated from respondents. Hence, the registration was contrary to law and properly cancelled.

• Bad Faith: Bad faith in trademark registration means knowledge of prior creation, use, and/or registration of an identical or similar mark, while fraud involves intentionally making false claims to take advantage of another’s goodwill. It is a factual issue not generally reviewable under Rule 45, and bad faith is never presumed; it must be proved by clear and convincing evidence. Respondents pointed to petitioner’s unexplained change from “FlexSeal” to “GREENSEAL,” the invented nature of the word, and both parties’ presence in the same industry. These circumstances, however, do not sufficiently demonstrate that petitioner had knowledge of respondents’ prior creation, use, or registration, nor any false claims in the application. Thus, bad faith was not established.

• First-to-File Rule and Zuneca: Zuneca held that ownership of a mark is acquired through registration under the IP Code, but a certificate of registration is only prima facie evidence of validity and ownership and may be cancelled when the registration was done in bad faith or contrary to law. The cancellation here rests on the registration being contrary to law under Section 165, not on a competing claim of prior use. Zuneca does not insulate a registration from cancellation on that independent ground.

• Priority Rights under the Paris Convention: Sections 3 and 131 of the IP Code implement reciprocal rights and priority for applications filed in the Philippines based on earlier foreign filings. However, Article 4(C)(1) of the Paris Convention limits the priority period for trademarks to six months from the date of the first foreign application. IPOPHL Rule 203 similarly requires that an application claiming priority right must be filed within six months from the earliest foreign application. Respondents’ 2010 Philippine application could not validly claim priority from the 1993 Malaysian registration, as the six-month window had expired decades earlier. The Court of Appeals thus erred in giving it priority effect.

• Trade Name Protection Without Registration — Under Section 165 of the Intellectual Property Code and the Paris Convention, a trade name of a national of a member state is protected in the Philippines without need of registration. Any subsequent use of that trade name as a trademark by a third party, if likely to mislead the public, is unlawful and a ground for cancellation of the trademark registration pursuant to Sections 153 to 156 in relation to Section 165.3. The prevailing rule, as restated in Ecole De Cuisine Manille, Inc. vs. Renaud Cointreau & Cie and Fredco Manufacturing Corp. vs. President and Fellows of Harvard College, is that “a trade name of a national of a State that is a party to the Paris Convention, whether or not the trade name forms part of a trademark, is protected ‘without the obligation of filing or registration.’”

• First-to-File Rule and Its Exception — Ownership of a trademark is acquired by registration under the Intellectual Property Code. A certificate of registration is prima facie evidence of validity and ownership but may be cancelled if the registration was obtained in bad faith or contrary to law. Registrations that are contrary to law are void and may be cancelled after proper proceedings, as consistently held from Zuneca Pharmaceutical vs. Natrapharm, Inc. to Medina vs. Global Quest Ventures, Inc.

• Bad Faith in Trademark Registration — Bad faith means the applicant or registrant has knowledge of prior creation, use, and/or registration by another of an identical or similar trademark. Fraud is intentionally making false claims in connection with the application, particularly on origin, ownership, and use. Bad faith is never presumed; it must be established by clear and convincing evidence.

• Priority Right under the Paris Convention — Under Article 4(C)(1) of the Paris Convention and Rule 203 of the IPOPHL Rules and Regulations on Trademarks, an application with a claim of priority right must be filed within six months from the date the earliest foreign application was filed. A foreign registration obtained many years earlier cannot serve as a basis for a priority claim outside that six-month window.

• “[P]etitioner is prohibited from appropriating respondent’s trade name as its trademark. This finds support in Article 165 of the Intellectual Property Code … Analyzing the above provision, the remedies in Sections 153 to 156, which include cancellation of registration, should apply to the unlawful use of trade names as a mark. Petitioner’s use of the mark ‘GREENSEAL’ on its products is unlawful as it is likely to mislead the public, giving the incorrect impression that its products are actually from respondent, when in fact they are not.” — This passage is the ratio decidendi for cancelling the trademark registration on the ground that it unlawfully appropriated a protected trade name.

• “Under Philippine law, a trade name of a national of a State that is a party to the Paris Convention, whether or not the trade name forms part of a trademark, is protected ‘without the obligation of filing or registration.’” — The canonical statement, drawn from Ecole De Cuisine Manille and Fredco Manufacturing, that establishes the baseline of trade name protection applied in this case.

• “Bad faith means that the applicant or registrant has knowledge of prior creation, use and/or registration by another of an identical or similar trademark. … Fraud, on the other hand, may be committed by making false claims in connection with the trademark application and registration, particularly, on the issue of origin, ownership, and use of the trademark in question …” — The controlling definition of bad faith and fraud in trademark cancellation proceedings, as adopted from Zuneca and Zulueta v. Cyma Greek Taverna Co.

• “[T]he certificate of registration remains only prima facie evidence of the validity of registration and the registrant’s ownership of the mark, in recognition of instances when the certificate of registration does not reflect the true owner of the mark, such as, among others, when the registration was done in bad faith or contrary to law.” — This passage from Zuneca clarifies that the first-to-file rule is not absolute; a registration may be cancelled if it is shown to be contrary to law.

• Zuneca Pharmaceutical vs. Natrapharm, Inc., 882 Phil. 278 (2020) — Controlling precedent that established the first-to-file rule under the Intellectual Property Code; relied on for the principle that registration vests ownership but remains prima facie and may be cancelled if done in bad faith or contrary to law. Its prior-use exception was distinguished, and its fraud/bad faith definitions were applied.

• Medina vs. Global Quest Ventures, Inc., 896 Phil. 47 (2021) — Followed; reiterated that under Section 151(b) of the IP Code, a registration done in bad faith or contrary to law may be cancelled, and that bad faith is a factual question not generally reviewable under Rule 45.

• Ecole De Cuisine Manille, Inc. vs. Renaud Cointreau & Cie, 710 Phil. 305 (2013) — Followed; cited for the rule that a trade name of a Paris Convention national is protected in the Philippines without the obligation of filing or registration.

• Fredco Manufacturing Corp. vs. President and Fellows of Harvard College, 665 Phil. 374 (2011) — Followed; similarly cited for the rule on protection of foreign trade names under the Paris Convention.

• Zulueta vs. Cyma Greek Taverna Co., G.R. No. 205699, January 23, 2023 — Cited for the definition of a trademark’s functions and for restating the definitions of bad faith and fraud in trademark registration.

• Section 165, Intellectual Property Code (R.A. No. 8293) — Protects trade names even prior to or without registration; declares unlawful any subsequent use of a trade name by a third party as a mark or trade name that is likely to mislead the public; applies the remedies in Sections 153 to 156, including cancellation, to such unlawful acts. This was the primary legal basis for cancelling petitioner’s registration.

• Sections 153–156, Intellectual Property Code — Provide the remedies for unlawful use of trade names, including the cancellation of a trademark registration obtained contrary to law.

• Section 3, Intellectual Property Code — Grants reciprocal rights to nationals of countries that extend similar rights to Philippine nationals; invoked alongside Section 131 but held to require a timely priority claim within the Paris Convention’s six-month window.

• Section 131, Intellectual Property Code — Establishes priority rights for trademark applications based on earlier foreign filings; subject to the six-month period under Article 4(C)(1) of the Paris Convention and Rule 203 of the IPOPHL regulations.

• Article 4(C)(1), Paris Convention for the Protection of Industrial Property — Limits the priority period for trademarks to six months from the filing date of the first foreign application; prevented respondents from claiming priority based on their 1993 Malaysian registration.

• Rule 203, Rules and Regulations on Trademarks, Service Marks, Tradenames, and Marked or Stamped Containers (as amended by IPOPHL Office Order No. 061-13) — Requires that an application with a claim of priority right be filed within six months from the earliest foreign application; enforced to deny respondents’ claim of priority.

Leonen, SAJ. (Chairperson), Lazaro-Javier, and M. Lopez, JJ., concur. Kho, Jr., J., on official business.