Manila Hotel Corporation vs. Office of the Director of the Bureau of Legal Affairs of the Intellectual Property Office of the Philippines and Le Comité Interprofessionel du Vin de Champagne

An extension of time to file an appeal to the IPO-BLA Director is not proscribed under the Revised Inter Partes Rules where the rules expressly make only the period to file a comment non-extendible; administrative rules of procedure are liberally construed, and quasi-judicial and administrative bodies such as the IPO are not strictly bound by technical rules.

Le Comité Interprofessionel du Vin de Champagne (CIVC) is a public service body established by the French Parliament engaged in the protection and development of the champagne market in general. Manila Hotel Corporation is the applicant for the trademark “CHAMPAGNE ROOM” in the proceedings below. The dispute is governed by Republic Act No. 8293, the Intellectual Property Code of the Philippines, which created the Intellectual Property Office and its Bureau of Legal Affairs, and by the Revised Rules and Regulations on Inter Partes Proceedings promulgated pursuant thereto. The IPO-BLA hears and decides oppositions to applications for registration of marks, among other matters.

Manila Hotel Corporation applied with the Intellectual Property Office of the Philippines on March 19, 2013 to register the trademark “CHAMPAGNE ROOM” for restaurant, food and beverage services, docketed as Application No. 4-2013-003052. Le Comité Interprofessionel du Vin de Champagne (CIVC), a public service body established by the French Parliament engaged in the protection and development of the champagne market in general, filed a Notice of Opposition received by Manila Hotel Corporation on November 7, 2013. The case was docketed as Inter Partes Case No. 14-2013-00372. CIVC alleged that “Champagne” is protected as a controlled appellation of origin worldwide; that petitioner’s mark falsely suggests a connection with CIVC because it incorporates the distinctive and valuable component of CIVC’s trade name, Champagne; that the mark misleads the public as to the quality, characteristics, and geographical origin of the services covered; and that the mark is confusingly similar to CIVC’s trade name.

On December 22, 2017, IPO Adjudication Officer Atty. Adoracion U. Zare rendered a Decision dismissing CIVC’s opposition. The Adjudication Officer held that petitioner’s adoption of the mark “CHAMPAGNE ROOM” did not suggest a connection to CIVC or its appellation of origin, and neither did it mislead the buying public or consumers as to the geographical origin or the trade name of CIVC. The Adjudication Officer observed that the word “CHAMPAGNE” had become generic, citing various entities using the word in arbitrary, fanciful, and descriptive manners, such as CHAMPAGNE PEARLS, CHAMPAGNE ROLEX, and CHAMPAGNE IPHONE, and noted that the United States had classified the term as semi-generic. The Adjudication Officer further found that petitioner’s use of the mark for “restaurant, food and beverages” services would not lead to an association with the production of sparkling wine in the Champagne region in France, and that “Champagne Room” appeared commonplace in hotels and bars.

CIVC received a copy of the Decision on February 2, 2018. On February 9, 2018, CIVC filed a Motion for Extension of Time to File Appeal to the IPO-BLA Director, praying for an extension of ten days from February 12, 2018, or until February 22, 2018, within which to file an appeal. CIVC averred that Section 2(a), Rule 9 of the Revised Rules and Regulations on Inter Partes Proceedings does not prohibit the filing of a motion for extension to file an appeal. Manila Hotel Corporation filed an Opposition, asserting that the Revised Inter Partes Rules do not provide for an extension of the period within which to appeal the decision of the IPO Adjudication Officer to the IPO-BLA Director. In an Order dated February 13, 2018, the IPO-BLA Director granted CIVC’s motion, but only for an additional period of ten days, or until February 22, 2018, and stated that no further extension would be allowed. CIVC thereafter filed its Appeal Memorandum on February 22, 2018. On March 12, 2018, the IPO-BLA Director issued a second Order directing Manila Hotel Corporation to file its comment on the appeal within a non-extendible period of ten days from receipt, and deemed the appeal submitted for decision after the lapse of that period with or without the comment.

Manila Hotel Corporation then filed before the Court of Appeals a Petition for certiorari and prohibition with an urgent application for a temporary restraining order and/or writ of preliminary injunction under Rule 65, docketed as CA-G.R. SP No. 155049, assailing the Orders of the IPO-BLA Director. Manila Hotel Corporation maintained that the IPO-BLA Director committed grave abuse of discretion amounting to lack or excess of jurisdiction in granting an extension of time to file an appeal and giving due course to CIVC’s appeal. In its April 13, 2018 Resolution, the CA dismissed the petition and denied the application for injunctive relief, concluding that the IPO-BLA Director did not commit jurisdictional error in granting the motion for extension and giving due course to the appeal. The CA denied Manila Hotel Corporation’s motion for reconsideration in a Resolution dated July 23, 2018. The Adjudication Officer had found that petitioner’s mark did not suggest a connection to CIVC and did not mislead the public, while the CA found that CIVC filed its appeal memorandum within the period allowed by the IPO.

• Liberal Interpretation of Appeal Rules Erred: Petitioner argued that the CA erred in its liberal interpretation of the rules on appeal in inter partes cases, and that the IPO-BLA Director clearly committed grave abuse of discretion in entertaining and granting CIVC’s Motion for Extension of Time to File Appeal.
• No Extension Under the Revised Inter Partes Rules: Petitioner submitted that under the Revised Inter Partes Rules, an appeal to the IPO-BLA Director is not one of the instances where an extension beyond the reglementary period may be obtained, and that the period to appeal is inextendible because the period of ten days during which the prevailing appellee may comment on the appeal is inextendible.
• Mandatory Periods and Efficient Resolution: Petitioner maintained that to liberally construe the period to appeal to the IPO-BLA Director would be contrary to the express language of the mandatory periods in Section 2(a), Rule 9 of the Revised Inter Partes Rules, as well as the overreaching goal of the IPO-BLA to achieve a more efficient and expeditious resolution of inter partes cases; the proper interpretation is that no extension of time to appeal is allowed.
• Finality of the Adjudication Officer’s Decision: Petitioner asserted that because no extension of time to appeal is allowed, CIVC’s submission of its Appeal Memorandum on February 22, 2018 went beyond the reglementary period, and the Decision of the Adjudication Officer already attained finality.
• Casus Omissus Not Applicable: In its Reply, petitioner asserted that the casus omissus rule does not apply, and that rules for perfecting administrative appeals, being merely statutory, must be observed to the letter; parties cannot enlarge the constricted manner by which an appeal is perfected using a liberal interpretation of the rules.
• No Discretion to Expand the Rules: Petitioner countered that the IPO-BLA Director does not have any discretion to expand the Revised Inter Partes Rules, and that the Director’s act of giving due course to CIVC’s appeal is tainted with grave abuse of discretion.
• Lack of Guidance: Petitioner argued that without a specific provision allowing such extension, litigants in the IPO-BLA will not have proper guidance on how to proceed following notice of an adverse decision of the IPO Adjudication Officer.

• Extension Allowed by the Rules: Respondent CIVC countered that the Inter Partes Rules allow an extension of time to file an appeal, pointing out that Section 2(a), Rule 9 of the Revised Inter Partes Rules treats the period for filing an appeal with the IPO-BLA Director and the period for filing a comment on the appeal differently, because the provision expressly states that the period for filing a comment is non-extendible but does not mention any such limitation on the period for filing an appeal.
• Casus Omissus: Respondent CIVC argued that the statutory construction rule of casus omissus instructs that a thing omitted must be considered to have been omitted intentionally; hence, the omission of the term “non-extendible” as to the period for filing an appeal must be deemed deliberate, because if the Inter Partes Rules intended to prohibit extensions of the period for filing appeals with the IPO-BLA Director, the Rules would have explicitly stated that the period is “non-extendible.”
• Deference to the IPO-BLA Director: Respondent CIVC posited that the IPO-BLA Director’s interpretation of the rules is entitled to great weight because he is in the best position to interpret the rules governing proceedings before his office.

• Extension of Time to Appeal: Whether the CA erred in affirming the Orders of the IPO-BLA Director granting respondent CIVC’s Motion for Extension of Time to File Appeal from the Decision of the IPO Adjudication Officer.

• Extension of Time to Appeal: No. The CA did not err in affirming the IPO-BLA Director’s Orders. The Revised Inter Partes Rules do not expressly prohibit an extension of time to file an appeal to the IPO-BLA Director; only the period to file a comment is expressly non-extendible, and administrative bodies are not strictly bound by technical rules of procedure.

• Extension of Time to Appeal: The CA did not err in affirming the IPO-BLA Director’s Orders. The right to appeal, being merely a statutory privilege, should be exercised in the manner prescribed by law, but in proceedings before administrative bodies the general rule has always been liberality. Administrative rules of procedure should be construed liberally in order to promote their object of assisting the parties in obtaining a just, speedy, and inexpensive determination of their respective claims and defenses.
• Text of Section 2(a), Rule 9: The rule allows a party to file an appeal to the Director within ten days after receipt of the decision or final order, together with payment of the applicable fees, and provides that the appeal shall be immediately denied if filed out of time and/or not accompanied by the payment of the applicable fee. It expressly makes the adverse party’s ten-day period to file a comment non-extendible. It does not contain a similar express prohibition on moving for an extension of time to file an appeal. Because the rules did not categorically and explicitly prohibit the filing of a motion for extension of time to file an appeal, the grant of such extension is not proscribed by law. Had the Inter Partes Rules intended to strictly prohibit and disallow such a motion, it would have expressly and unequivocally stated such prohibition, in the same manner that it had explicitly disallowed the extension of the ten-day period to file a comment.
• Liberal Construction and Administrative Bodies: Palao vs. Florentino III International, Inc. held that the IPO, in its Inter Partes proceedings, shall not be bound by the strict technical rules of procedure and evidence; administrative bodies are not bound by the technical niceties of law and procedure and the rules obtaining in courts of law, and administrative tribunals exercising quasi-judicial powers are unfettered by the rigidity of certain procedural requirements, subject to the observance of fundamental and essential requirements of due process. Birkenstock Orthopaedie GmbH and Co. KG vs. Phil. Shoe Expo Marketing Corp. emphasized that rules of procedure are mere tools aimed at facilitating the attainment of justice rather than its frustration, and that a strict and rigid application of the rules must always be eschewed when it would subvert the primary objective of the rules; technicalities should never be used to defeat the substantive rights of the other party, especially with quasi-judicial and administrative bodies such as the IPO.
• Application: The grant of CIVC’s Motion for Extension of Time to File Appeal by the IPO-BLA Director was a valid exercise of his discretion considering that the IPO-BLA Director is not strictly bound by the technical rules of procedure. Because moving for an extension of time to file an appeal is not expressly and explicitly proscribed under the Revised Inter Partes Rules, the IPO-BLA Director acted within his authority when he allowed CIVC an extension of time, considering that CIVC was able to file the Appeal Memorandum within the period allowed. Corollarily, the CA was correct in ruling that the IPO-BLA Director did not act with grave abuse of discretion amounting to lack of jurisdiction in issuing the Order granting the extension and giving due course thereto.
• Grave Abuse of Discretion: Grave abuse of discretion is defined as a capricious and whimsical exercise of judgment so patent and gross as to amount to an evasion of a positive duty or a virtual refusal to perform a duty enjoined by law, as where the power is exercised in an arbitrary and despotic manner because of passion or hostility. No evidence of such arbitrary and whimsical exercise of judgment can be imputed to the IPO-BLA Director. On the contrary, the Orders of the IPO-BLA Director allowing the appeal would serve the highest interest of justice as this would provide both parties the opportunity to thresh out the issues between them based on merit and not on technicalities. If a stringent application of the rules would hinder rather than serve the demands of substantial justice, the former must yield to the latter.
• Clarificatory Amendment: The IPO later issued Memorandum Circular No. 2019-024, entitled “Amendments to the Rules and Regulations on Inter Partes Proceedings,” effective February 15, 2020, which clarified the ambiguity in Section 2 of Rule 9. The amended provision expressly allows the period to file an appeal to be extended upon motion of the party concerned stating a meritorious ground, provided the motion is filed within the period to file the appeal and is accompanied by payment of the appeal fee and other applicable fees; the period to file comment may likewise be extended upon motion of the appellee stating a meritorious ground, filed within the period to file comment and accompanied by payment of applicable fees. With this amendment, the confusion and ambiguity in the procedure for an appeal from the Decision of the IPO Adjudication Officer to the IPO-BLA Director is now removed.

• Liberal Construction of Administrative Rules of Procedure — Administrative rules of procedure should be construed liberally in order to promote their object of assisting the parties in obtaining a just, speedy, and inexpensive determination of their respective claims and defenses. Quasi-judicial and administrative bodies, such as the IPO, are not bound by the strict technical rules of procedure and evidence. In this case, the Court applied the doctrine to uphold the IPO-BLA Director’s grant of an extension of time to file an appeal, because a strict and rigid application of the rules would subvert the primary objective of enhancing fair trials and expediting justice.
• Non-Extendibility Must Be Expressly Stated — Where the Revised Inter Partes Rules expressly make the ten-day period to file a comment to an appeal non-extendible but do not contain a similar express prohibition on moving for an extension of time to file an appeal, the grant of such extension is not proscribed by law. The Court reasoned that had the rules intended to strictly prohibit and disallow such a motion for extension, it would have expressly and unequivocally stated such prohibition in the same manner that it had explicitly disallowed the extension of the period to file a comment.
• Grave Abuse of Discretion — Grave abuse of discretion is a capricious and whimsical exercise of judgment so patent and gross as to amount to an evasion of a positive duty or a virtual refusal to perform a duty enjoined by law, as where the power is exercised in an arbitrary and despotic manner because of passion or hostility. The Court found no such abuse in the IPO-BLA Director’s Orders granting the extension and giving due course to the appeal, because the Director acted within authority and the Orders served the highest interest of justice.
• Right to Appeal as a Statutory Privilege — The right to appeal, being merely a statutory privilege, should be exercised in the manner prescribed by law. However, in proceedings before administrative bodies, the general rule has always been liberality. The Court applied this doctrine by allowing the extension of time to file an appeal despite the statutory nature of the right, because the rules did not expressly prohibit the extension and administrative proceedings are not governed by strict technical rules.
• Substantial Justice Over Technicalities — If a stringent application of the rules would hinder rather than serve the demands of substantial justice, the former must yield to the latter. The Court applied this principle in upholding the IPO-BLA Director’s Orders, which allowed the appeal to proceed so that the issues between the parties could be threshed out on the merits rather than on technicalities.

• "An assiduous reading of Section 2(a) of Rule 9 would readily show that while the rules expressly state that the 10-day period for filing a comment to the appeal is non-extendible, there is no similar express prohibition on moving for an extension of time for filing an appeal. Similarly, the same rule is silent as to whether an extension of time for filing an appeal is allowed and merely states that the appeal shall be immediately denied if it is filed out of time and/or not accompanied by the payment of the applicable fee. Because the rules did not categorically and explicitly prohibit the filing of a motion for extension of time to file an appeal, the grant of such extension is not proscribed by law." — This passage states the ratio decidendi: the absence of an express prohibition on extending the appeal period, contrasted with the express non-extendibility of the comment period, means the IPO-BLA Director may grant such an extension.
• "In the present case, the grant of CIVC's Motion for Extension of Time to File Appeal by the respondent IPO-BLA Director was a valid exercise of his discretion considering that the IPO-BLA Director is not strictly bound by the technical rules of procedure. Because moving for an extension of time to file an appeal is not expressly and explicitly proscribed under the Revised Inter Partes Rules, the IPO-BLA Director acted within his authority when he allowed respondent CIVC an extension of time considering that respondent CIVC was able to file the Appeal Memorandum within the period allowed." — This passage applies the Court’s interpretation to the facts and confirms that no grave abuse of discretion attended the IPO-BLA Director’s Orders.
• "The term grave abuse of discretion is defined as a capricious and whimsical exercise of judgment so patent and gross as to amount to an evasion of a positive duty or a virtual refusal to perform a duty enjoined by law, as where the power is exercised in an arbitrary and despotic manner because of passion or hostility." — This passage supplies the canonical definition of grave abuse of discretion used by the Court to reject petitioner’s Rule 65 challenge.
• "If a stringent application of the rules would hinder rather than serve the demands of substantial justice, the former must yield to the latter." — This passage encapsulates the Court’s controlling equitable principle for allowing liberal construction of administrative procedural rules in this case.

• Palao vs. Florentino III International, Inc., 803 Phil. 393 (2017) — Controlling precedent cited for the rule that the IPO, in its Inter Partes proceedings, shall not be bound by the strict technical rules of procedure and evidence; the Court noted that it was an error for the Director General of the Intellectual Property Office to have been so rigid in applying a procedural rule and dismissing respondent’s appeal.
• Birkenstock Orthopaedie GmbH and Co. KG vs. Phil. Shoe Expo Marketing Corp., 721 Phil. 867 (2013) — Cited to emphasize that quasi-judicial and administrative bodies, such as the IPO, are not bound by the strict rules of procedure; rules of procedure are mere tools aimed at facilitating the attainment of justice rather than its frustration, and technicalities should never be used to defeat substantive rights.
• Besaga vs. Spouses Acosta, 758 Phil. 339 (2015) — Cited for the propositions that the right to appeal is merely a statutory privilege that should be exercised in the manner prescribed by law, but that in proceedings before administrative bodies the general rule has always been liberality, and that administrative rules of procedure should be construed liberally.
• Samalio vs. Court of Appeals, 494 Phil. 456 (2005) — Cited in Palao for the rule that administrative bodies are not bound by the technical niceties of law and procedure and the rules obtaining in courts of law, and that administrative tribunals exercising quasi-judicial powers are unfettered by the rigidity of certain procedural requirements, subject to due process.
• Cruz vs. People, 812 Phil. 166 (2017) — Cited for the definition of grave abuse of discretion as a capricious and whimsical exercise of judgment so patent and gross as to amount to an evasion of a positive duty or a virtual refusal to perform a duty enjoined by law.
• Chua vs. People, 821 Phil. 271 (2017) — Cited for the definition of grave abuse of discretion, particularly the formulation that the power is exercised in an arbitrary and despotic manner because of passion or hostility.
• B.E. San Diego, Inc. vs. Bernardo, G.R. No. 233135, December 5, 2018 — Cited for the principle that if a stringent application of the rules would hinder rather than serve the demands of substantial justice, the former must yield to the latter.

• Section 2(a), Rule 9, Revised Rules and Regulations on Inter Partes Proceedings (IPO Memorandum Circular No. 16-007) — Provides that within ten days after receipt of the decision or final order, a party may file an appeal to the Director together with payment of applicable fees; the appeal shall be immediately denied if filed out of time and/or not accompanied by payment of the applicable fee. After receipt of the appeal, the Director shall issue an order for the adverse party to file comment within a non-extendible period of ten days from receipt of the order. The Director shall decide on the appeal within thirty days from the lapse of the period for filing a comment. Within thirty days after receipt of the Director’s decision, a party may file an appeal to the Director General. The Court read the express non-extendibility of the comment period, and the absence of a similar express prohibition for the appeal period, as permitting an extension of time to file an appeal.
• Section 6, Rule 9, as amended by IPO Memorandum Circular No. 2019-024 — Amended Section 2 of Rule 9 to expressly allow the period to file an appeal to be extended upon motion of the party concerned stating a meritorious ground, provided the motion is filed within the period to file the appeal and is accompanied by payment of the appeal fee and other applicable fees. The period to file comment may likewise be extended upon motion of the appellee stating a meritorious ground, filed within the period to file comment and accompanied by payment of applicable fees. The Court cited this amendment for guidance and to show that the ambiguity in the procedure had been removed.
• Republic Act No. 8293, Sections 2, 7(a), 10, and 10.1 — The Intellectual Property Code of the Philippines was enacted pursuant to the State policy to streamline administrative procedures of registering patents, trademarks, and copyright, to liberalize registration on the transfer of technology, and to enhance enforcement of intellectual property rights. It created the IPO and its Bureaus, including the Bureau of Legal Affairs headed by the BLA Director, and authorized the BLA to hear and decide oppositions to applications for registration of marks, among other matters. The Revised Inter Partes Rules were promulgated pursuant to RA 8293.
• Rule 45, Rules of Court — The petition before the Supreme Court was filed as a Petition for Review on Certiorari under Rule 45, assailing the CA Resolutions dated April 13, 2018 and July 23, 2018.
• Rule 65, Rules of Court — Manila Hotel Corporation filed before the CA a Petition for certiorari and prohibition with application for a temporary restraining order and/or writ of preliminary injunction under Rule 65, assailing the Orders of the IPO-BLA Director on the ground of grave abuse of discretion amounting to lack or excess of jurisdiction.

Caguioa (Chairperson), Gaerlan, Dimaampao, and Singh, JJ., concur.