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19 March 2018
Starwood Hotel & Resorts Worldwide Inc, owner and operator of the world-renowned W Hotels, filed an opposition against the application for registration of the mark 'W' filed by W Land Holdings Inc in the Philippines for the latter's real estate business (ie, condominium development). Starwood presented evidence to prove that:
The director of trademarks ruled in favour of Starwood and, as a result, W Land elevated the matter to the director general. W Land claimed, among other things, that no confusion would result from a registration of its mark since Starwood's mark would be used for:
"entertainment services including live entertainment services, hotel, motel, resort hotel and motor inn services, hotel reservation services, restaurant, bar and catering services, food and beverage preparation services, cafe and cafeteria services, provisions of information relating to holidays, provision of conference, meeting and social function facilities, beauty salon and hair dressing services."
W Land's application covered its real estate development.
In January 2014 the director general ruled that the similarity between the marks was undeniable and to allow registration of W Land's mark would lead to confusion between the goods and services offered by the parties (for further details please see "Opposition against application to register W mark"). The case was elevated by W Land to the Court of Appeals. On November 12 2014 the court affirmed the director general's ruling that the marks are confusingly similar. The court also noted that W Land failed to explain why it had suddenly used the W trademark in its real estate business. Use of the mark amounted to bad faith on its part and W Land therefore had no right to apply for its registration.
W Land filed a motion for reconsideration but was denied by the Court of Appeals on April 24 2015. W Land filed a petition for review with the Supreme Court but was denied again on July 29 2015. It then filed a motion for reconsideration of the Supreme Court resolution but was once again denied with finality on December 7 2015 as "no substantial arguments were raised to warrant its reconsideration".
In a separate case, W Land filed a cancellation action against Starwood, citing that it had not used its W trademark in the Philippines. The Bureau of Legal Affairs ruled in favour of W Land but, on appeal, the director general reversed the Bureau of Legal Affairs' cancellation order. In upholding the continued registration of Starwood's W trademark, the director general held that Starwood submitted sufficient evidence to prove actual use of the W mark in the Philippines. The director general ruled that the absence of Starwood's hotel establishment in the Philippines should not be equated to the absence of use of its mark in the country. Citing a Supreme Court decision, the director general noted that the advancement of communication technology, particularly the Internet, has allowed trademark owners to extend goodwill to territories without actual physical market penetration. The director general thus held that since Starwood had shown that it maintains an interactive website which allows residents in the Philippines to make bookings for its hotel services, Starwood had actually used its W trademark in the Philippines.
W Land elevated the case to the Court of Appeals. On June 22 2015 the court affirmed the director general's ruling. W Land filed a motion for reconsideration but was denied by the Court of Appeals on January 7 2016 for lack of merit (for further details please see "Further opposition against application to register W mark"). On elevation to the Supreme Court, the Court of Appeals decision was also upheld.
In support of its ruling, the Supreme Court cited that the most recent trademark regulations allow downloaded website pages, online receipts and other similar evidence demonstrating that the goods or services are available in the Philippines to be submitted as evidence of trademark use. The court thus opined that "these amendments are but an inevitable reflection of the realities of the times". The court went on to emphasise:
"the use of a registered mark representing the owner's goods or services by means of an interactive website may constitute proof of actual use that is sufficient to maintain the registration of the same. Since the internet has turned the world into one vast marketplace, the owner of a registered mark is clearly entitled to generate and further strengthen his commercial goodwill by actively marketing and commercially transacting his wares or services throughout multiple platforms on the internet… The mark displayed over the website no less serves its functions of indicating the goods or services' origin and symbolizing the owner's goodwill than a mark displayed in the physical market. Therefore, there is no less premium to recognize actual use of marks through websites than their actual use through traditional means. Indeed, as our world evolves, so too should our appreciation of the law… As such, it should not be stagnant but dynamic; it should not be ensnared in the obsolete but rather, sensitive to surrounding social realities."
By ruling in this manner, the Supreme Court recognised that despite the physical absence of use of the W trademark in the Philippines, online bookings via websites constituted sufficient use of the mark in the country. However, the court also noted that such use must be genuine – meaning with a bona fide intent to result in a "commercial interaction or transaction in the ordinary course of trade". To evidence its intent to do business in the Philippines, there must be demonstration of an intent to realise a Philippine sale, which may be evidenced by any of the following:
The court ruled that Starwood's websites easily met all of these elements. This decision is a welcome development in the Philippines, as it recognises the growing trend of trademark use online, rather than through the traditional advertising and sales. The decision is likely to be a useful tool for trademark owners against predators and possible infringers.
For further information on this topic please contact Lee Benjamin Z Lerma at Romulo Mabanta Buenaventura Sayoc & De Los Angeles by telephone (+63 2 848 0114) or email (firstname.lastname@example.org). The Romulo Mabanta Buenaventura Sayoc & De Los Angeles website can be accessed at www.romulo.com.
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Benjamin Z Lerma