Berris Agricultural Co., Inc. vs. Abyadang

A notarized Declaration of Actual Use (DAU) carries a presumption of regularity and constitutes prima facie evidence of prior use; a trademark application may be refused registration if its dominant feature is confusingly similar to a prior registered mark for identical goods, considering the aural and visual impressions on the ordinary purchaser.

Berris Agricultural Co., Inc., a Laguna-based company, owned the registered trademark “D-10 80 WP” for fungicide with 80% Mancozeb. Norvy Abyadang, proprietor of NS Northern Organic Fertilizer in Baguio City, filed an application to register “NS D-10 PLUS” for an identical fungicide product. Berris opposed, alleging confusing similarity. The Intellectual Property Office (IPO) sustained the opposition, but the Court of Appeals reversed, directing registration of Abyadang’s mark and cancelling Berris’ registration. Berris elevated the matter to the Supreme Court.

• Nature of the Action: The case involved an opposition by Berris Agricultural Co., Inc. to the trademark application of Norvy Abyadang for the mark “NS D-10 PLUS” for fungicide (Class 5), on the ground that it was confusingly similar to Berris’ registered mark “D-10 80 WP,” also for fungicide with 80% Mancozeb.

• Berris’ Evidence of Prior Use: Berris presented its trademark application filed on November 29, 2002; Certificate of Registration No. 4-2002-010272 dated October 25, 2004, with a registration date of July 8, 2004; a notarized Declaration of Actual Use (DAU) dated April 23, 2003, stating that the mark was first used on June 20, 2002, and attaching sales invoices and official receipts; and a photocopy of its packaging. The DAU bore the IPO Bureau of Trademarks’ stamp of April 25, 2003.

• Abyadang’s Evidence: Abyadang submitted a photocopy of his “NS D-10 PLUS” packaging; his own Affidavit explaining that the mark was derived from personal letters and dates, and claiming ignorance of Berris or its product; FPA Certifications stating that “NS D-10 PLUS” had been registered with the Fertilizer and Pesticide Authority since May 26, 2003, and in the market since July 30, 2003; an FPA Certification that it had neither encountered nor received reports about “D-10 80 WP” in Region I and the Cordillera Administrative Region; and receipts showing his product sold as “D-10” and “D-10+.”

• IPO and IPPDG Findings: The IPO Bureau of Legal Affairs (BLA) found confusing similarity and rejected the application. On appeal, the IPPDG affirmed, noting that the “D-10” component of Berris’ mark was a fanciful term and that Berris’ DAU established prior use. The IPO bodies gave weight to Berris’ evidence of first use in 2002.

• Court of Appeals Reversal: The CA reversed, holding that (1) “NS D-10 PLUS” was not confusingly similar to “D-10 80 WP”; (2) Berris failed to establish ownership of its mark; and (3) Berris’ registration could be cancelled to avoid multiplicity of suits.

• Confusing Similarity: Petitioner Berris argued that the CA’s finding of no confusing similarity between “NS D-10 PLUS” and “D-10 80 WP” was based on a misapprehension of facts, surmise, and conjecture, and was contrary to the Intellectual Property Code and applicable Supreme Court decisions.

• Standard of Review: Petitioner contended that the CA erred in reversing the technical findings of the IPO without any finding—or even an allegation—of grave abuse of discretion on the part of the administrative agency.

• Cancellation of Registration: Petitioner maintained that the CA’s order cancelling its duly registered and validly existing trademark was not in accord with the Intellectual Property Code and jurisprudence, as no petition for cancellation had been properly filed before the IPO.

• No Confusing Similarity: Respondent Abyadang maintained that his mark “NS D-10 PLUS” was not confusingly similar to Berris’ “D-10 80 WP,” and that the CA correctly found the marks distinguishable.

• Failure to Prove Ownership: Respondent contended that Berris had failed to establish its ownership of the “D-10 80 WP” mark, particularly because its FPA registration was obtained only in November 2004, casting doubt on the claimed first use in June 2002.

• Propriety of Cancellation: Respondent argued that Berris’ trademark registration could be cancelled in the same proceeding to avoid multiplicity of suits.

• Prior Use and Ownership: Whether Berris established prior use and ownership of the mark “D-10 80 WP” through its notarized Declaration of Actual Use.

• Confusing Similarity: Whether respondent Abyadang’s mark “NS D-10 PLUS” is confusingly similar to petitioner Berris’ registered mark “D-10 80 WP” such that the application should be refused registration under Section 123.1(d) of the Intellectual Property Code.

• Standard of Review: Whether the Court of Appeals erred in reversing the factual findings of the Intellectual Property Office without a finding of grave abuse of discretion.

• Cancellation of Registration: Whether the Court of Appeals properly ordered the cancellation of Berris’ trademark registration in the absence of a separately filed petition for cancellation.

• Prior Use and Ownership: Berris’ notarized Declaration of Actual Use, which stated first use in June 2002 and was received by the IPO in due course, constituted prima facie evidence of the facts stated therein and enjoyed a presumption of regularity. Respondent’s attack based on Berris’ later FPA registration was deemed a separate matter outside the IPO’s jurisdiction and insufficient to overcome the DAU’s probative value. The FPA Certification that it had not encountered Berris’ product in certain regions did not negate actual use, as Berris’ initial trade occurred in Laguna. Consequently, Berris, as prior user and prior registrant, was the rightful owner of “D-10 80 WP.”

• Confusing Similarity: Applying the Dominancy Test, the dominant feature “D-10” appearing in both marks was held to create a likelihood of confusion. The “D-10” component was written in a larger font on Berris’ packaging and placed at the beginning of the mark, making it the most memorable element. Under the Holistic Test, the similarity was reinforced by packaging factors: both products used foil-type material with identical red, green, and white color schemes, and both bore the phrase “BROAD SPECTRUM FUNGICIDE” in predominantly red marks. The goods were identical—fungicide with 80% Mancozeb—targeting the same agricultural consumers. Thus, registration of “NS D-10 PLUS” was properly refused under Section 123.1(d) of R.A. No. 8293.

• Standard of Review: The findings of fact of administrative agencies like the IPO, which possess specialized expertise, are generally accorded great respect and finality when supported by substantial evidence. The CA substituted its own judgment for that of the IPO without any showing of grave abuse of discretion, which was erroneous.

• Cancellation of Registration: In light of the reinstatement of the IPO decisions and the finding that Berris is the rightful owner of the mark, the Court deemed it unnecessary to rule further on the issue of cancellation. The CA’s cancellation order was effectively reversed as part of the overall disposition.

• Presumption of Regularity of Notarized Documents — A notarized document, particularly a Declaration of Actual Use duly received by the IPO, is evidence of the facts stated therein and carries a presumption of regularity entitled to full faith and credit. The burden to overcome it rests on the contesting party, who must present clear, strong, and convincing evidence of falsity. Here, the DAU was not rebutted by mere allegations or by evidence of later FPA registration.

• Ownership by Prior Use — A trademark is a creation of use and belongs to the one who first used it in trade or commerce. Adoption of the mark through advertisements or price lists does not suffice; actual sale of goods bearing the mark to the public is required. Receipts, sales invoices, and testimonies of customers best prove actual use.

• Dominancy Test — In determining confusing similarity, the Dominancy Test focuses on the prevalent or dominant features of the competing marks that produce aural and visual impressions on the buyer. Duplication or imitation is not necessary; what matters is whether the dominant feature is likely to cause confusion, mistake, or deception. Little weight is given to prices, quality, sales outlets, or market segments.

• Holistic (Totality) Test — The Holistic Test considers the entirety of the marks as applied to the products, including labels and packaging. The discerning eye examines not only predominant words but also other features on both labels to determine whether one is confusingly similar to the other.

• Deference to Administrative Expertise — Administrative agencies like the IPO, by reason of their special knowledge and expertise, are in a better position to pass judgment on matters within their jurisdiction. Their factual findings are generally accorded great respect, if not finality, when supported by substantial evidence. An appellate court is not tasked to re-weigh evidence and substitute its judgment.

• “The ownership of a trademark is acquired by its registration and its actual use by the manufacturer or distributor of the goods made available to the purchasing public. … [A] trademark is a creation of use and belongs to one who first used it in trade or commerce.” — This passage articulates the dual basis of trademark ownership and the primacy of actual commercial use.

• “The Dominancy Test focuses on the similarity of the prevalent or dominant features of the competing trademarks that might cause confusion, mistake, and deception in the mind of the purchasing public. … Given more consideration are the aural and visual impressions created by the marks on the buyers of goods, giving little weight to factors like prices, quality, sales outlets, and market segments.” — This defines the Dominancy Test as applied in Philippine trademark law.

• “[A]dministrative agencies, such as the IPO, by reason of their special knowledge and expertise over matters falling under their jurisdiction, are in a better position to pass judgment thereon. Thus, their findings of fact in that regard are generally accorded great respect, if not finality by the courts, as long as they are supported by substantial evidence.” — This restates the principle of judicial deference to specialized administrative bodies.

• Prosource International, Inc. v. Horphag Research Management SA, G.R. No. 180073, November 25, 2009 — Followed as authority for the application of the Dominancy Test in determining confusing similarity between trademarks.

• McDonald’s Corporation v. MacJoy Fastfood Corporation, G.R. No. 166115, February 2, 2007 — Cited for the Dominancy Test and for the policy that trademark protection safeguards both business goodwill and the public against consumer confusion.

• Gutierrez v. Mendoza-Plaza, G.R. No. 185477, December 4, 2009 — Relied upon for the rule that a notarized document carries a presumption of regularity and that the burden of rebutting it requires clear, strong, and convincing evidence.

• Amigo Manufacturing, Inc. v. Cluett Peabody Co., Inc., 406 Phil. 905 (2001) — Cited for the principle that appellate courts should not substitute their judgment for that of an administrative agency in matters of evidentiary sufficiency.

• Section 122, R.A. No. 8293 — Provides that rights in a mark shall be acquired through valid registration with the IPO. Applied to confirm that Berris, as prior registrant, acquired rights over “D-10 80 WP.”

• Section 123.1(d), R.A. No. 8293 — A mark cannot be registered if it is identical with, or nearly resembles, a registered mark belonging to a different proprietor with an earlier filing or priority date, in respect of the same or closely related goods, such that it would likely deceive or cause confusion. The provision was the ground for rejecting Abyadang’s application.

• Section 124.2, R.A. No. 8293 — Requires the applicant or registrant to file a Declaration of Actual Use within three years from filing; failure results in refusal or removal. The provision underscored the importance of the DAU submitted by Berris.

• Section 138, R.A. No. 8293 — A certificate of registration is prima facie evidence of the validity of registration, the registrant’s ownership, and the exclusive right to use the mark. The Court relied on this provision in upholding Berris’ ownership.

• Section 147.1, R.A. No. 8293 — Confers on the owner of a registered mark the exclusive right to prevent third parties from using identical or similar signs for identical or similar goods where such use would result in a likelihood of confusion. The provision supports Berris’ right to oppose Abyadang’s application.

• Section 9, P.D. No. 1144 — Requires registration of pesticides with the FPA before sale. While cited, the Court held that violation of this provision is separate from the issue of trademark ownership and did not defeat the evidence of prior use.

Presbitero J. Velasco, Jr., Teresita J. Leonardo-De Castro, Arturo D. Brion, Jose Catral Mendoza