Fredco Manufacturing Corporation vs. President and Fellows of Harvard College

A well-known international mark is entitled to protection in the Philippines under the Paris Convention and domestic law even without prior local use or registration, and a local registrant's use of such mark with indicia of the foreign owner's origin constitutes a false suggestion of connection warranting cancellation.

Harvard University, founded in 1636 and named "Harvard College" in 1639, has used the mark "Harvard" in commerce since 1872 and for Class 25 goods since 1953, registering it in over 50 countries. In the Philippines, New York Garments, Fredco Manufacturing Corporation's predecessor-in-interest, began using the mark "Harvard" for clothing in 1982 and registered it in 1988, though this registration was cancelled in 1998 for failure to file an affidavit of use. Fredco subsequently manufactured clothing under the mark "Harvard Jeans USA" within an oblong logo bearing the words "Cambridge, Massachusetts," "Established in 1936," and "USA."

• Harvard University's Mark: The institution was named "Harvard College" in 1639 and has used the mark in commerce since 1872. Its first commercial use of the mark for Class 25 goods in the United States was on December 31, 1953. Harvard University has registered the name and mark in at least 50 countries. In the Philippines, it registered the "Harvard Veritas Shield Symbol" under Registration No. 56561 on November 25, 1993, for goods under Classes 16, 18, 21, 25, and 28, based on home registration.
• Fredco's Mark: Fredco's predecessor-in-interest, New York Garments, started using the mark "Harvard" in the Philippines on January 2, 1982, and filed for registration under Class 25 on January 24, 1985, which matured into a registration on December 12, 1988. This registration was cancelled on July 30, 1998, due to the failure to file an affidavit of use/non-use on the fifth anniversary of the registration. Fredco was formed in 1995 and handled the manufacture and marketing of "Harvard" clothing.
• The Dispute: On August 10, 2005, Fredco filed a Petition for Cancellation of Harvard University's Registration No. 56561, alleging that its predecessor had prior actual use and registration of the mark "Harvard" in the Philippines for Class 25 goods. Harvard University countered that it is the lawful owner worldwide, having established the Harvard Trademark Licensing Program in 1989, and that Fredco's use of the mark on its website and clothing constituted infringement and unfair competition. Fredco utilized an oblong logo containing the mark "Harvard Jeans USA®," "Established 1936," and "Cambridge, Massachusetts."

• Prior Local Use: Petitioner argued that the date of actual use in the Philippines should prevail on the issue of who has the better right to register the marks.
• Lack of Prior Local Use by Respondent: Petitioner maintained that Harvard University did not have actual prior use in the Philippines before its application for registration, which is required under Section 2 of Republic Act No. 166.
• Justification for Logo: Petitioner claimed that the use of "Cambridge, Massachusetts," "Established in 1936," and "USA" was intended to evoke a "lifestyle" or suggest a "desirable aura" for its clothing lines, not to deceive.

• Home Registration: Respondent countered that registration based on a home certificate of registration under Section 37 of Republic Act No. 166 does not require proof of use in Philippine commerce for applicants from Paris Convention member countries.
• Ownership and Bad Faith: Respondent argued that the right to register a trademark is based on ownership, and because Fredco is not the owner, it has no right to register the mark. Respondent maintained that Fredco's use of the mark and origin-indicating words constitutes imitation and bad faith, barring it from seeking cancellation against the true owner under the doctrine of unclean hands.

• Prior Local Use vs. Home Registration: Whether actual prior use in the Philippines prevails over registration based on home registration under the Paris Convention and Republic Act No. 166.
• Well-Known Marks: Whether "Harvard" is a well-known mark entitled to protection in the Philippines even without local use or registration.
• False Connection: Whether Fredco's use of the mark "Harvard" with indicia of Harvard University's origin falsely suggests a connection with the institution in violation of Section 4(a) of Republic Act No. 166.

• Prior Local Use vs. Home Registration: Actual prior use in the Philippines does not prevail over a foreign registrant's home registration. Under Section 37 of Republic Act No. 166, an applicant from a Paris Convention country can register a mark based on its home country registration without needing to prove prior local use. Furthermore, Section 239.2 of Republic Act No. 8293 cures any defect arising from the absence of actual prior use in the Philippines for marks registered under the old law, as they are deemed granted under the new law.
• Well-Known Marks: "Harvard" was declared a well-known mark. Under Article 6bis and Article 8 of the Paris Convention, as well as Section 123.1(e) of Republic Act No. 8293, well-known marks are protected in the Philippines even without local use or registration. Internationally well-known marks are an exception to the territoriality principle requiring local commercial use.
• False Connection: Fredco's use of "Harvard" and "Cambridge, Massachusetts" falsely suggests a connection with Harvard University, violating Section 4(a) of Republic Act No. 166, which prohibits marks that falsely suggest a connection with institutions. Fredco's justification of evoking a "desirable aura" confirms the commercial exploitation of Harvard's goodwill without consent, warranting the cancellation of its registration under Section 17(c) of Republic Act No. 166.

• Protection of Well-Known Marks — Internationally well-known marks are protected in member countries even without local registration or use. Article 6bis and Article 8 of the Paris Convention, implemented locally via Section 37 of Republic Act No. 166 and Section 123.1(e) of Republic Act No. 8293, mandate this protection. The Court applied this doctrine to declare "Harvard" a well-known mark entitled to protection despite Fredco's prior local use.
• False Suggestion of Connection — Under Section 4(a) of Republic Act No. 166, a mark that may disparage or falsely suggest a connection with persons, living or dead, institutions, beliefs, or national symbols cannot be registered. The Court applied this to Fredco's use of "Harvard" and "Cambridge, Massachusetts," finding that it falsely suggested a connection with Harvard University.
• Home Registration Exception — Under Section 37 of Republic Act No. 166, an applicant from a Paris Convention country can register a mark based on its home country registration without needing to prove prior local use. The Court relied on this to uphold Harvard University's registration despite the lack of prior local commercial use.

• "Since the mark 'Harvard Veritas Shield Symbol' is now deemed granted under R.A. No. 8293, any alleged defect arising from the absence of actual prior use in the Philippines has been cured by Section 239.2."
• "Thus, while under the territoriality principle a mark must be used in commerce in the Philippines to be entitled to protection, internationally well-known marks are the exceptions to this rule."

• Shangri-La International Hotel Management, Ltd. v. Developers Group of Companies, Inc. — Cited for the doctrine that one who imitates a trademark cannot bring an action for infringement against the true owner due to unclean hands; priority is of no avail to a bad faith plaintiff.
• Mirpuri v. Court of Appeals — Cited for the rule that the essential requirement under Article 6bis of the Paris Convention is that the trademark be "well-known" in the country where protection is sought, and the power to determine this lies with the competent authority.
• Sehwani, Incorporated v. In-N-Out Burger, Inc. — Cited for the expanded scope of protection under the WIPO Joint Recommendation, where a well-known mark should be protected even if neither registered nor used in that country.
• La Chemise Lacoste, S.A. v. Hon. Fernandez — Cited for the Philippines' obligation to afford effective protection to nationals of Paris Convention countries.

• Section 2, Republic Act No. 166 — Requires actual use in commerce in the Philippines for at least two months prior to application. Held inapplicable due to the home registration exception and Republic Act No. 8293.
• Section 4(a), Republic Act No. 166 — Prohibits registration of marks that falsely suggest a connection with institutions. Applied to cancel Fredco's registration.
• Section 17(c), Republic Act No. 166 — Provides grounds for cancellation, including registration obtained contrary to Section 4.
• Section 37, Republic Act No. 166 — Allows registration based on home registration without local use; protects trade names without obligation of filing or registration.
• Section 123.1(e), Republic Act No. 8293 — Prohibits registration of a mark well-known internationally and in the Philippines, whether or not it is registered locally.
• Section 239.2, Republic Act No. 8293 — Provides that marks registered under Republic Act No. 166 are deemed granted under Republic Act No. 8293, curing any defect from lack of prior local use.
• Article 6bis, Paris Convention — Requires member countries to refuse or cancel registration and prohibit use of a mark that constitutes a reproduction or imitation of a well-known mark.
• Article 8, Paris Convention — Protects trade names without obligation of filing or registration.

Nachura, Peralta, Abad, Mendoza