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JFFICF COP)

~iP INTELLECTUAL PROPERTY PHILIPPINES

OFFICE OF THE DIRECTOR GENERAL

BSB JUNROSE AUTO PARTS CORP., & ITS Appeal No. 14-07-27 OFFICERS AND BOARD OF DIRECTORS

Appellants, IPC No. 14-2005-00116 Petition for Cancellation: Registration No.: 4-1998-09163 Date Filed: 28 April 2003

- versus ­Trademark: "THREE FIVE & 555 WITH AN

OVAL" NPW INT'L TRAIDING CORP., ET. AL.,

Appellee.

l~ X--------------------------------------------------X

NOTICE OF DECISION _L MAN W FIRM LENY B. RAZ ~ ~ \~ Coun Director'll Suites Bureau of Trademarks

NO.4 '- _ '.~ l.~ '\ ~r 'ATf:t LAW Of f i~~lIectual Property Office, Makati City

'------ ...__ .. ~ :~'" 7.':".~ ~,:;, '. ~;: •• i.~ ~\ ~~ :~.,....., ~~.. IP PHILIPPINES LIBRARY CABRERA AND ASSO~.I.t.!ES;.t~AVJt~~'·::).·~.. t·,

Counsel for Appellee f'\,(~';".,~:~ (, Documentation, Information & Technology Suite 402 ~ar East Asia I' .~';;.'~~' f\ if "'-'l Transfer Bureau 416 Marquina St. corne . .:;'~ •.~. Intellectual Property Office, Makati City Binondo, Manila ~v L ~~ ~

ESTRELLITA B. ABELARDO Director Bureau of Legal Affairs Intellectual Property Office, Makati City

GREETINGS:

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Received by' 41JLf)J

On: (U-7--o-t Time: Office ot the Director

Bureau of Legal Affairs

Please be informed that on 15 September 2008, the Office of the Director General rendered a DECISION in the above-titled case (copy attached)

Makati City, 06 October 2008.

Very truly yours,

;ERTIFIED TPI.JE rOpy

Republic of the Philippines ... ._ ... ~lL. INTELLECTUAL PROPERTY OFFICE

~iP INTELLECTUAL PROPERTY PHILIPPINES

OFFICE OF THE DIRECTOR GENERAL

BSB JUNROSE AUTO PARTS CORP., & ITS

j OFFICERS AND BOARD OF DIRECTORS Appellants,

- versus ­

NPW INT'L TRAIDING CORP., ET. AL., Appellee.

X--------------------------------------------------X

Appeal No. 14-07-27

IPC No. 14-2005-00116 Petition for Cancellation: Registration No.: 4-1998-09163 Date Filed: 28 April 2003

Trademark: "THREE FIVE & 555 WITH AN OVAL"

NOTICE OF DECISION

MANALO-ANG & ASSOCIATES LAW FIRM Counsel for Appellant Suites 303-304 Gee Bee Bldg. No. 428 A. Mabini St. Caloocan City

CABRERA AND ASSOCIATES LAW OFFICE Counsel for Appellee Suite 402 Far East Asia Bldg. 416 Marquina St. corner Dasmarinas St. Binondo, Manila

j

ESTRELLITA B. ABELARDO Director Bureau of Legal Affairs Intellectual Property Office, Makati City

GREETINGS:j

LENY B. RAZ Director Bureau of Trademarks Intellectual Property Office, Makati City

IP PHILIPPINES LIBRARY Documentation, Information & Technology Transfer Bureau Intellectual Property Office, Makati City

Please be informed that on 15 September 2008, the Office of the Director General rendered a DECISION in the above-titled case (copy attached)

Makati City, 06 October 2008.

Very truly yours,

Republic of the Philippines INTELLECTUAL PROPERTY OFFICE

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'5iP I INTELLECTUAL PROPERTY

PHILIPPINES

I OFFICE OF lHE DIRECTOR GENERAL

I BSB JUNROSE AUTO PARTS Appeal No. 14-07-27 CORP., & ITS OFFICERS ANDf

I BOARD OF DIRECTORS Inter Partes Case No. 14-2005-00116

Appellants, Petition for Cancellation Registration No. 4-1998-09163

-versus- Date Issued: 28 April 2003I I NPW INTL TRADING CORP., Trademark: THREE FIVE & 555 WITH

ET AL. AN OVAL I Appellees.

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DECISION j

BSB JUNROSE AUTO PARTS CORP. and its Officers and Board of Directors t ("Appellants") appeal Decision No. 2006-136, dated 30 November 2006, and Resolution ~ No. 2007-11 (D), dated 21 May 2007, of the Director of the Bureau of Legal Affairs

(Director"). The Director ordered the cancellation of Cert. of Reg. No. 4-1998-09163 for the trademark 'THREE FIVE & 555 WITHIN AN OVAL" issued in favor of the Appellants.

Records show that the Appellants filed on 16 December 1998 an application for the registration of the mark THREE FIVE & 555 WITHIN AN OVAL for use on automobile spare parts. The application was allowed and the certificate of registration

-~ was issued on 28 April 2003. On 21 October 2005, Nelson K. Dy, Norman K. Dy,

1~ Napoleon K. Dy, Nora K. Dy, Eugenio M. Mercado, Pinpin Dy, Linday Karen Dy,j Nilibeth K. Dy, Nancy K. Dy, NPW International Trading Corporation and NKD

I International Trading Corporation ("Appellees") filed a "PETITION FOR CANCELLATION" alleging the following:

1. The Appellants fraudulently obtained the registration of the mark

I THREE FIVE & 555 WITHIN AN OVAL as this is owned by SANKEI INDUSTRY CO., LTD. ("SANKEI'). a foreign corporation in Japan.

I 2. SANKEI is the manufacturer of "555" tie rods and other suspension I parts sold in the Philippines since 1980, designed to fit vehicles like Toyota, Nissan, Honda, Isuzu and others, and that up to date, no entity r has been appointed by SANKEI as exclusive distributor of saidI I

l products in the Philippines;

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1 ~ J 3. Because of good name, quality and as alternative to original parts, ,1'j

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Republic of the Philippines 1 INTELLECTUAL PROPERTY OFFICEI 1

businessmen took advantage and invested money on these products;

4. When the Appellants saw high market demand for 555 products, they cunningly registered the mark in their name to unjustly monopolize the sale of the products and apprehend businessmen who are selling the same;

s. The Appellants caused the publication in the newspapers that only 555 products with "BEMOVE" logo are genuine and that absence of which makes the products fake and counterfeit;

6. The Appellants are mere importer and distributor of the products at the time they filed their trademark application and up to this date, thus, have no right to cause its registration;

7. Atty. Vicente B. Amador. an authority in intellectual property laws, opined that the notion of "registered owner" does not mean that ownership is established by mere registration but the registration establishes merely a presumptive right of ownership which cannot. under the TRIPS Agreement. prejudice "any existing prior rights";

8. The Supreme Court in Unno Commercial Enterprises, Incorporated v. General Milling Corporation and Tiburcio S. Valle, in his capacity as Director of Patents! held that only the owner of a trademark. trade name or service mark may apply for its registration and that an importer, broker. indentor or distributor acquires no right to the trademark of the goods he is dealing with in the absence of a valid transfer or assignment of the mark;

9. No assignment or transfer was executed by SANKEI in favor of the Appellants when it applied for registration of the subject mark on 16 December 1998; and

10. SANKEI applied for the registration of the subject mark on 18 October 1999, ten (10) months after the Appellants filed their trademark application which shows that SANKEI did not transfer or assign its right over the mark.

The Appellants filed their ANSWER on 20 February 2006 alleging the following:

1. The Appellants were appointed by SANKEI to be the sole importer and distributor in the Philippines of 555 products;

2. The Appellees failed to show proof evidencing their distributorship agreement with SANKEI;

G. R. No. L-28SS4. 28 February 1983.

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i3. An importer may file for the registration of the trademark of the

goods imported provided that the owner thereof has consented to; ;!

J 4. SANKEI consented for the Appellants. as its exclusive distributor in the

Philippines, to file a trademark application;

5. SANKEI's transfer of the mark to the Appellants is manifested in a letter of support and appreciation of the latter's activities to stop the proliferation of counterfeit 555 products in the Philippines; !

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I 6. SANKEI showed active involvement in the campaign of informing the ·1 1 1

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buying public of the safety hazard of purchasing counterfeit spare parts; and

,I 1 7. The instant case should be dismissed on the ground of litis pendentia

as there is a criminal case pending before the Department of Justice ("DOf').

The Appellees submitted the following evidence:

1. Secretary's Certificates.'

2. Joint Special Power of Attorney.'

3. Certificates of trademark registrations:" 4. Status of the trademark application of SANKEJ;S

5. Application for Search Warrant and supporting documents:"

6. Receipts of Property Seized:'

7. Certified True Copy of Very Urgent Motion to Ogash Search Warrants and/or Suppress Evidence Obtained Thereof"

8. Orders dated 27 May 2005 and 07 September 2005;9

9. Complaint-Affidavit. Counter-Affidavit. Reply-Affidavit and Manifestation:"

On the other hand, the Appellants' evidence is as follows:

Exh. "A" and "B".

Exh. "C".

See Exh. "D" and" E".

Exh. "F".

Exh. "G" to "G-3".

Exh. "I" to "1-3".

Exh. "J".

Exh. "K" and "L".

10 Exh. "M" to "Q".

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I j 1. Authentication of Certification of Sole Distributorship:" I

2. Letter dated 9 May 2005 by the Sales Manager of SANKEI to theI Appellants:" and1

I 3. Picture with Article on seized counterfeit 555 parts:':'

I 1 After the appropriate proceedings, the Director ordered the cancellation of Cert. :j of Reg. No. 4-1998-09163. She held that the right to register a mark is based on

ownership and in the instant case, no document of assignment or transfer of the application for registration was executed by SANKEI in favor of the Appellants.

t The Appellants filed a "MOTION FOR RECONSIDERATION" on 08 January! 2007. The Director denied the motion for reconsideration in her Resolution No. 2007­i 1 11 (D), dated 21 May 2007. Hence, this appeal alleging the following! 4:

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"ASSIGNMENT OF ERRORS

I "THE OFFICE OF THE DIRECTOR OF BUREU OF LEGAL AFFAIRS ERRED IN DECLARING THAT THE APPELLANT-RESPONDENT IS ESTOPPED FROM RAISING THE ISSUE OF LACK OF JURISDICTION OF SAID OFFICE TO TAKE COGNIZANCE OF THIS CASE.

J 1 I I "THE OFFICE OF THE DIRECTOR OF BUREAU OF LEGAL AFFAIRS ERRED IN I DECLARING THAT SECTION 151.2 OF RA NO. 8293 DOES NOT APPLY TO THEI DEPARTMENT OF JUSTICE. ~

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"THE OFFICE OF THE DIRECTOR OF BUREAU OF LEGAL AFFAIRS ERRED INj DECLARING THAT LITIS PENDENTIA DOES NOT APPLY TO THE CASE AT BAR.I j

"THE OFFICE OF THE DIRECTOR OF BUREAU OF LEGAL AFFAIRS ERRED IN1 I CANCELLING THE REGISTRATION OF THE SUBJECT MARK ON THE GROUND THAT

IT WAS REGISTERED WITHOUT THE CONSENT OF SANKEI INDUSTRY:

I In their appeal, the Appellants contend that the issue of lack of jurisdiction over , the subject matter may be raised at anytime in the proceedings, and even for the first

time on appeal. They claim that they raised this issue in their position paper asserting that under Sec. 151.2 of Rep. Act No. 8293, also known as the Intellectual Property 1 Code of the Philippines ("IP Code"), the filing of the complaint against the Appellees in the DOJ bars the subsequent filing of the instant petition for cancellation. According to 1 the Appellants, litis pendencia as a ground for dismissal of a case applies as the decision in this cancellation proceedings will affect the case in the DOJ. They also maintain their

1 claim that SANKEI has consented to the registration of the subject mark under the j name of the Appellants. -j I

The Appellees filed their comment to the appeal on 10 July 2007.15 They claim 1 1 '1 II Exh. "1".

1 12 Exh. "2".

13 Exh. "3".~ 1 14 The Appellants filed an "APPEAL MEMORANDUM For Appellant-Respondents" on 04 June 2007.

15 The Appellees field their "COMMENT/OPPOSITION (to the Appeal Memorandum dated 04 June 2007) on 10July 2007. I

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that the Appellants are estopped from raising the issue of jurisdiction and that even if they could, their arguments are without merit. The Appellees assert that the complaint filed in the DOl is not the action or suit contemplated in Sec. 151.2 of the IP Code and I besides, the issue is now moot since the complaint was dismissed. They contend that ,

I litis pendentia is inapplicable because the Appellants' complaint in the DOl was dismissed and was never brought to court. The Appellees also assert that the Appellants are not legally entitled to register the contested mark for failure to comply with the procedural and substantive aspect of assignment or transfer of application andI

~ registration of trademark. 1

I I On 02 August 2007, the Appellants filed an "OMNIBUS MOTION TO ADMITI NEW EVIDENCE FOR THE APPELLANT-RESPONDENT" (Omnibus Motion") attaching a

copy of a document titled "ASSIGNMENT FOR REGISTRATION OF TRADEMARK" ("Assignment of Trademark") executed by and between the Appellants and SANKEI on

l 31 [uly 2007. This Office in an Order, dated 17 August 2007, required the Appellees to I 1 file comment to the motion within five (5) days from receipt thereof They did not file j

their comment but cited in their Memorandum that the document was executed months after the Appellants' motion for reconsideration was denied by the Director and that there is no way that it should be applied retroactively in favor of the Appellants to the prejudice of the Appellees."

The issues to be resolved in this appeal are the following:

1. Whether or not the filing by the Appellants of a complaint in the DOl against the Appellees divested the Bureau of Legal Affairs of jurisdiction over the instant case, and

2. Whether or not Cert. of Reg. No. 4-1998-09163 issued in favor of the Appellants should be cancelled.

Concerning the first issue, Sec. 151.2 of the IP Code provides that:

"151.2. Notwithstanding the foregoing provisions, the court or the administrative agency vested with jurisdiction to hear and adjudicate any action to enforce the rights to a registered mark shall likewise exercise jurisdiction to determine whether the registration of said mark may be cancelled in accordance with this Act. The filing of a suit to enforce the registered mark with the proper court or agency shall exclude any other court or agency from assuming jurisdiction over a subsequently filed petition to cancel the same mark On the other hand, the earlier filing of petition to cancel the mark with the Bureau of Legal Affairs shall not constitute a prejudicial question that must be resolved before an action to enforce the rights to same registered mark may be decided." (Underscoring supplied)

The court or administrative agency contemplated by Sec. 151.2 of the IP Code is one that has jurisdiction not only to hear and adjudicate any action or suit regarding

16 MEMORANDUM [for Appellee-Opposers], filed on 21 Aug. 2007, par. 34.

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Under the IP Code, the courts and the Intellectual Property Office have the authority to cancel a trademark registration. The DOJ does not have that authority. The Director correctly held that the function of the Department of Justice is to determine the existence of probable cause, for possible endorsement to the court of justice."

1i Thus, litis pendentia would not apply to this case. For litis pendentia to be

invoked, the following requisites must concur:

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(a) identity of parties or at least such as representing the same interest in both actions;

(b) identity of rights asserted and reliefs prayed for, the reliefs being founded on the same facts; and

:~ (c) the identity in the two cases should be such that the judgment that 1"'..... may be rendered in one would, regardless of which party is successful.

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amount to res judicata in the other. IS

In this instance, while there are similarity of parties, the rights asserted and relief sought are different. The complaint filed in the DOJ refers to trademark infringement. unfair competition and false designation of origin while the case filed in the Bureau of Legal Affairs is for the cancellation of a registered trademark. Besides, the resolution of the DOJ of a complaint cannot amount to res judicata because, as mentioned above, it is only limited to the determination of probable to warrant the filing of a criminal case in court. A trial on the merits, if appropriate, still has to be taken in the proper court. The Supreme Court has ruled in Tandoc, et al; vs. Resultan. that:

"Preliminary investigation is merely inquisitorial, and it is often the only means of discovering the persons who may be reasonably charged with a crime, to enable the fiscal to prepare his complaint or information. It is not a trial of the case on the merits and has no purpose except that of determining whether a crime has been committed and whether there is probable cause to believe that the accused is guilty thereof, and it does not place the person against whom it is taken in jeopardy."?

Also, res judicata exists only when the following elements are present:

(a) the former judgment must be final;

(b) the court which rendered judgment had jurisdiction over the parties and the subject matter:

(c) it must be a judgment on the merits; and

17 Res. No. 2007-11(0), p, 3.

18 See Proton Pilipinas Corp. v. Rep. of the Phil., G.R. No. 165027, 16 Oct. 2006.

19 G. R. No. 5924'-44,05 July 1989.

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I (d) there must be between the first and, second actions identity of parties. subject matter, and cause of action."

t J Going now to the main issue of whether or not the Appellants are legally

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entitled to register the subject mark. the Appellees' petition for cancellation is anchored on the ground that the Appellants procured Cert. of Reg. No. 4-1998-09163 through fraud. In this regard, the Appellees are correct in submitting that registration alone does

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not confer ownership over the mark. but it is the ownership of the mark that confers the right to register it as a trademark. Accordingly, the registration of a mark by a party who is fully aware that the mark belongs to another who has not given his consent or authorization is tainted with bad faith and is tantamount to fraud.

The question is: Was there fraud on the part of the Appellants?

To determine whether the Appellants were guilty of fraud in procuring the registration of the subject mark. the following must be established: first, that the Appellants are not the owners of the mark as of the time of the filing of their trademark registration on 10 December 1998; second, that they were already aware at that time that the mark belongs to another; and third, that they were not authorized by the real owner of the mark to register it.

In this instance. a certificate of registration was already issued to the Appellants.

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The certificate is prima facie evidence of the validity of the registration. the registrant's t ownership of the mark and exclusive right to use it in connection with the goods or services and those that are related thereto as specified in the certificate." When the Appellants' application was allowed and a certificate of registration was issued. these suggest that all the requirements under the law have been complied with." !

I Thus, Sec. 151 of the IP Code provides: I "151.1. A petition to cancel a registration of a mark under this Act may be filed f with the Bureau of Legal Affairs by any person who believes that he is or will be damaged by the registration of a mark under this Act as follows: x x x (b) At any time, if the registered mark becomes the generic name for the goods or services, or a portion thereof, for which it is registered, or has been abandoned, or Iits registration was obtained fraudulently or contrary to the provisions of this Act. ~

x x x", r

In seeking cancellation of Cert. of Reg. No. 4-1998-09163, the Appellees I assumed the burden of overcoming the legal presumption of its validity. They have the burden of evidence and proof to show that the Appellants were not the owners of the mark and were not authorized. supposedly by the actual owner thereof. at the time they filed their trademark application. The Appellees also have to show that they will be

20 Avisado, et al., vs. Rumbaua, et al., G. R. No. 1373061,12Mar. 2001.

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21 Sec. 138 of the IP Code. ~

22 The file wrapper also shows copies of the required Declaration of Actual Use by the Appellants. , I

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damaged by the registration. This burden becomes "heavier" because the Appellees neither claims ownership of the mark themselves nor represent SMTKEI who they claimed to be the real owner of the subject mark.

In deciding in favor of the Appellees, the Director accepted the allegations of the Appellees that the Appellants are not the owners of the mark. but collectively as mere distributor of the 555 products. According to her, SANKEI could not have consented to the Appellants' filing of a trademark application because it also filed a trademark application and there was no deed of assignment of trademark application or registration that SANKEI executed in favor the Appellants.

Accordingly, this is an instance where the purported real owner of a mark ­SANKEI - is not the one who opposes or seeks the cancellation of the certificate of registration of the mark issued in favor of another. If ever there was a party who would be directly damaged or prejudiced by the registration of the subject mark in favor of another and would have opposed the application or sought the cancellation of such registration, it would have been, supposedly. SANKEI. However, this is not the case. SANKEI's actions on record and non-actions contradict the Appellees' claim that the Appellants procured their registration through fraud.

Records show that the Appellant's application preceded SANKEI's by ten (10) months. In fact, SANKEI's application was rejected on 23 March 2006. Thus, at the time of the filing by the Appellants of their trademark application, there was no prior application filed or existing registration of the mark obtained by anybody, not even by SANKEI. Therefore, the Director's finding that SANKEI could not have consented to the Appellants' filing of a trademark application because it also filed a trademark application and there was no deed of assignment of trademark application or registration that SANKEI executed in favor the Appellants, is flawed. It was impossible for SANKEI to assign a trademark registration or application on or before the Appellants' filing of their trademark application on 16 December 1998 simply because SANKEI did not have any registration nor file a trademark application at that time. Significantly, the ownership of the subject mark at the time the Appellants filed their trademark application was not yet in issue. No party, not even SANKEI, opposed the Appellants' application.

It must be stressed that in an opposition and cancellation proceedings, where the validity of the registration or the registrability of a mark is in question, the entire records pertaining to the trademark application and registration are opened up for review. This Office takes cognizance or judicial notice of the records as these are material and crucial to the resolution of the issues.

Accordingly, this Office examined the file wrapper of the mark THREE FIVE & 555 WITHIN AN OVAL and found out that during the examination of the Appellants' application. they and SANKEI executed on 20 December 2002 a document between them, titled "ASSIGNMENT OF APPLICAnON FOR REGISTRAnON OF TRADEMARK" (Assignment"), to wit: I

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"1. That the ASSIGNOR has goods covered by the mark '555 AUTOMOBILE PARTS "THREE FIVE'" (the 'Mark') for which it has filed an application for registration in the Intellectual Property Office of the Philippines CIPO') on December 16. 1998. which was assigned Application No. 4-1998-09163:

"2. That the ASSIGNEE is desirous of acquiring in and to the said application and in the registration that shall mature thereon;

"3. That for good and valuable consideration. receipt of which is hereby acknowledged. the ASSIGNOR does hereby sell. assign. and transfer unto the said ASSIGNEE all the rights. title and interest in and to the herein subject Mark together with the goodwill of the businesses that has accrued through its use;"

If indeed SANKEI was the owner and did not authorize the Appellants to file the trademark application. why did it enter into such agreement with the Appellants? This document shows that the Appellants as of the time of filing of the application owned the mark or at the least. that SANKEI has previously consented to the Appellants' filing 1 of the application.", While this document was executed and filed after the filing of the trademark application, the application was then still being examined and Cert. of Reg.

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No. 4-1998-09163 has not yet been issued.

Significantly. SANKEI also sent the Appellants a letter dated 09 May 200524 !

I expressing its appreciation to the efforts and cooperation of the Appellants for the improvement of their brand images. This reiterates the recognition by SMrKEI of the rights of the Appellants to the subject trademark. Certainly. it is highly improbable that one who has been defrauded could have been so appreciative of the efforts of the party who allegedly perpetrated the fraud.

i That the Appellants did not procure Cert. of Reg. No. 4-1998-09163 through t fraud is further bolstered by the contents of the "ASSIGNMENT FOR REGISTRAnON

OF TRADEMARK" ("Assignment of Trademark") executed by and between SANKEI and1,~

the Appellents on 31 July 2007, which reads. as follows: I

"WHEREAS. in consideration of the appointment as exclusive distributorship. the ASSIGNOR has assigned the Mark to the ASSIGNEE and is willing to confirm and ratify such assignment of said mark; I

"NOW. THEREFORE. That for good and valuable consideration received. I the ASSIGNOR does hereby RATIFY AND CONFIRM the assignment and transfer If

unto the said ASSIGNEEE of all the rights. title and interest in and to the herein 1 Isubject mark covered by Certificate of Registration No. 4-1998-09163 issued on j 27 November 2003. together with the goodwill of the business that has accrued 1f through its use. Further. the ASSIGNOR further RATIFIES AND CONFIRMS that I I t

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23 That the Cert. of Reg. No. 4-1998-09163 is still in the name of the Appellant BSB Junrose Autoparts Corporation despite the Assignment is because the request for the recorda I of the Assignment is still pending in this Office This Office issued a communication dated 11 November 2005 addressed to the counsel of the Appellants requesting photocopies of the trademark application for the mark THREE FIVE I, & 555 within an oval and the Cert. of Reg. No. 4-1998-09163 issued on 28 April 2003 for this mark to expedite the processing of the recordal of the Assignment. The Appellants requested for extension of time to respond to this communication.

I 24 See Exh. "2". !9 I

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the ASSIGNOR authorized and consented to the filing of the application for registration of the subject mark with the Intellectual Property Office of the Philippines by the ASSIGNEE:'

As mentioned above. this Office gave the Appellees opportunity to rebut this

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"new evidence" being adduced by the Appellants. The Appellees. however, did not object to the admissibility of this document but argued instead on its evidentiary weight. In Andaya v. NLRC et a£25 cited by the Appellants, the Supreme Court held that:

"In the interest of substantial justice. new or additional evidence may be introduced on appeal before the National Labor Relations Commission (NLRC).

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Allowing this move would be proper. provided due process is observed by giving the opposing party sufficient opportunity to meet and rebut the new or additional evidence."

Liberal construction of the rules is the controlling principle to effect substantial justice. Thus. litigations should, as much as possible. be decided on their merits and not ~ j

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on technicalities.

But even if the "Assignment". dated 27 July 2007, is not admitted by this Office, this does not detract from the fact that the Appellees failed to substantiate their claim that SANKEI was defrauded and unjustly stripped of its rights to the subject mark. The records and evidence do not support the Appellees' claim that the Appellants procured Cert. of Reg. No. 4-1998-09163 through fraud. Therefore, the Director should not have cancelled the Appellants' trademark registration.

! Wherefore, premises considered. the appeal is hereby GRANTED. The assailed !

decision of the Director of the Bureau of Trademarks is hereby REVERSED and SET ASIDE. Let a copy of this Decision as well as the records be furnished and returned to the Director of Bureau of Legal Affairs for appropriate action. Further, let also the Director of the Bureau of Trademarks and the library of the Documentation. Information and Technology Transfer Bureau be furnished a copy of this Decision for information, guidance. and records purposes.

SO ORDERED.

SEP 15 2008 , Makati City.

25 G.R. No. 157371, 15July 2005.

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