E.Y. Industrial Sales, Inc. vs. Shen Dar Electricity and Machinery Co., Ltd.

Ownership of a trademark is acquired by prior and continuous use in commerce, not merely by registration or priority of filing; a prior user can overcome the presumptive ownership of a registrant who filed first.

E.Y. Industrial Sales, Inc. (EYIS), a domestic corporation, and Shen Dar Electricity and Machinery Co., Ltd. (Shen Dar), a Taiwan-based corporation, both claimed rights to the "VESPA" mark for air compressors. From 1997 to 2004, EYIS imported air compressors from Shen Dar, though shipping documents identified the goods by "SD" markings rather than "VESPA."

• Trademark Applications: Shen Dar filed an application for the mark "VESPA" on June 9, 1997. EYIS filed its own application on July 28, 1999. EYIS's COR was issued on January 18, 2004, while Shen Dar's COR was issued on February 8, 2007.
• BLA Proceedings: Shen Dar filed a petition for cancellation of EYIS's COR, claiming prior right as the first filer and true owner of the mark.
• Evidence of Prior Use: EYIS presented 371 sales invoices and commercial documents showing sales of "VESPA" air compressors across the Philippines since the early 1990s, such as Invoice No. 12075 dated March 27, 1995. Shen Dar's evidence—bills of lading and packing lists—described the goods merely as air compressors or "SD" types, with the earliest bill of lading dated May 5, 1997.
• Declarations of Actual Use: Shen Dar declared first use in June 1996. EYIS declared first use on December 22, 1998, although its documentary evidence demonstrated use as early as 1991.

• True Ownership: Petitioner EYIS maintained that it is the true owner and prior user of the "VESPA" mark, supported by extensive sales invoices predating Shen Dar's claimed first use.
• Cancellation Authority: Petitioner argued that the IPO Director General correctly cancelled Shen Dar's COR because the issue of ownership was squarely before the tribunal and Shen Dar's registration was erroneously issued.
• Conflict of Findings: Petitioner contended that the CA erred in reversing the IPO's factual findings, which were supported by substantial evidence, and that the conflicting findings between the CA and IPO warranted a Supreme Court review of factual issues.

• First-to-File Rule: Respondent Shen Dar argued that, having filed the application first, it is entitled to registration under Section 123.1(d) of the IP Code.
• Prior Use: Respondent claimed prior use based on its Declaration of Actual Use (June 1996) and its status as the manufacturer.
• Importer Status: Respondent asserted that EYIS is a mere importer, wholesaler, and retailer, not a manufacturer, and thus cannot claim ownership of the mark it imported.
• Procedural Impropriety: Respondent contended that the IPO Director General could not cancel its COR without a separate petition for cancellation as required by Section 151 of the IP Code.
• Evidence Admissibility: Respondent argued that its evidence attached to the petition should be considered even without a formal offer before the BLA.

• Review of Facts: Whether the Supreme Court may review questions of fact given the conflicting factual findings between the CA and the IPO.
• Admissibility of Evidence: Whether evidence presented before the BLA must be formally offered to be considered.
• Cancellation Authority: Whether the IPO Director General can validly cancel a certificate of registration without a separate petition for cancellation.
• Binding Nature of Findings: Whether the CA was justified in reversing the IPO's factual findings.
• True Ownership: Whether EYIS is the true owner of the "VESPA" mark based on prior and continuous use.

• Review of Facts: Factual issues may be reviewed because the IPO and CA made differing conclusions on ownership, falling under the recognized exception to the rule that the Court is not a trier of facts.
• Admissibility of Evidence: Evidence attached to the petition and properly marked constitutes the evidence for the petitioner under Office Order No. 79; formal offer is not required in BLA proceedings, which are not bound by technical rules of procedure.
• Cancellation Authority: The IPO Director General validly cancelled Shen Dar's COR. Quasi-judicial bodies are not bound by technical rules, and Shen Dar had sufficient opportunity to litigate the ownership issue; due process was observed.
• Binding Nature of Findings: The CA erred in disregarding the IPO's findings. The CA's conclusion that Shen Dar was the prior user based solely on the Declaration of Actual Use was mistaken, as such declarations must be accompanied by proof of actual use. The CA also erred in concluding EYIS was a mere importer based on sales invoices, as invoices need not state the seller's entire business nature.
• True Ownership: EYIS is the true owner. Ownership of a mark is acquired by adoption and use in commerce, not merely by registration. EYIS proved prior and continuous use since the early 1990s, while Shen Dar failed to prove commercial use of the "VESPA" mark in the Philippines prior to its application.

• Prior and Continuous Use vs. First-to-File Rule — While RA 8293 adopts a "first-to-file" rule, it does not mean ownership is based solely on the filing date. Proof of prior and continuous use is necessary to establish ownership. Actual use in commerce prevails over registration without actual use.
• Presumptive Ownership of Registrant — Registration creates a prima facie presumption of ownership, but this is rebuttable by evidence of prior and continuous use by another.
• Exceptions to Conclusiveness of Factual Findings — The factual findings of quasi-judicial bodies are generally conclusive when supported by substantial evidence, but exceptions apply, such as when findings of the CA and the lower body are conflicting.
• Admissibility of Evidence in IPO Proceedings — Under Office Order No. 79, a verified petition with attached and marked affidavits and documents constitutes the entire evidence; formal offer is not required. The BLA is not bound by technical rules of procedure.
• Cancellation of Registration without Separate Petition — The IPO Director General may cancel a certificate of registration even without a separate petition if the issue of ownership has been fully litigated and doing so serves the interests of justice, as quasi-judicial bodies are not bound by strict technical rules.

• "Registration, without more, does not confer upon the registrant an absolute right to the registered mark. The certificate of registration is merely a prima facie proof that the registrant is the owner of the registered mark or trade name. Evidence of prior and continuous use of the mark or trade name by another can overcome the presumptive ownership of the registrant and may very well entitle the former to be declared owner in an appropriate case."
• "Ownership of a mark or trade name may be acquired not necessarily by registration but by adoption and use in trade or commerce. As between actual use of a mark without registration, and registration of the mark without actual use thereof, the former prevails over the latter."
• "While RA 8293 removed the previous requirement of proof of actual use prior to the filing of an application for registration of a mark, proof of prior and continuous use is necessary to establish ownership of a mark. Such ownership constitutes sufficient evidence to oppose the registration of a mark."

• New City Builders, Inc. v. NLRC — Cited to establish exceptions to the rule that the Supreme Court is not a trier of facts.
• Fuentes v. Court of Appeals — Cited to enumerate exceptions to the conclusiveness of the CA's factual findings.
• Villaflor v. Court of Appeals — Applied the Fuentes exceptions to factual findings of quasi-judicial bodies.
• Shangri-la International Hotel Management, Ltd. v. Developers Group of Companies, Inc. — Cited for the doctrine that prior and continuous use can overcome the presumptive ownership of a registrant.
• Chuang Te v. Ng Kian-Guiab — Cited for the rule that an applicant claiming an earlier date of use than declared bears the burden of presenting clear and convincing evidence.
• Aya-ay, Sr. v. Arpaphil Shipping Corp. and Lepanto Consolidated Mining Company v. Dumapis — Cited for the principle that while quasi-judicial bodies are not bound by technical rules, decisions must still be based on substantial evidence.

• Section 123.1(d), Republic Act No. 8293 (IP Code) — Prohibits the registration of a mark identical to a registered mark or a mark with an earlier filing date. Applied to argue that while it prevents registration upon earlier filing, it does not base ownership solely on filing date.
• Section 134, Republic Act No. 8293 (IP Code) — Allows any person who believes they would be damaged by registration to file an opposition. Applied to clarify that the "any person" includes the true owner and prior continuous user.
• Section 151, Republic Act No. 8293 (IP Code) — Requires a petition for cancellation of a trademark registration. Discussed in the context of the IPO Director General's authority to cancel a registration without a separate petition when the issue is already litigated.
• Office Order No. 79, Series of 2005 (Secs. 5, 7.1, 8.1, 9, 12.1) — Regulations on Inter Partes Proceedings. Applied to determine that evidence attached to the petition constitutes the entire evidence without need for formal offer, and that the BLA is not bound by strict technical rules.
• Section 237, National Internal Revenue Code — Requires the issuance of receipts or sales invoices. Applied to refute the CA's conclusion that EYIS was a mere importer based on its sales invoices, as invoices need not state the seller's entire business nature.

Renato C. Corona (Chief Justice, Chairperson), Teresita J. Leonardo-De Castro, Mariano C. Del Castillo, Jose Portugal Perez.