Emerald Garment Manufacturing Corporation vs. The H.D. Lee Company, Inc.

A final and executory judgment determining the ownership and registrability of a trademark, including findings of prior local use and confusing similarity, operates as res judicata and precludes a subsequent application for registration of a mark that contains the same dominant design element between the same parties. The principle of conclusiveness of judgment applies when there is identity of parties and identity of issues, even if the causes of action are not strictly identical.

The H.D. Lee Company, an American apparel manufacturer, sought to register the composite mark "LEE & OGIVE CURVE DESIGN" for clothing in the Philippines in 2001, asserting first use in 1996. Emerald Garment Manufacturing Corporation, a Philippine entity, had been using and had registered its own back-pocket designs—"DOUBLE REVERSIBLE WAVE LINE" since 1973 and "DOUBLE CURVE LINES" since 1980—both prominently featuring a similar double-curve motif. When H.D. Lee’s application was published, Emerald opposed it, invoking its prior use and registrations. During the opposition proceedings, Emerald’s separate applications to secure its own marks were litigated to finality: the IPO Director General’s decision confirming Emerald’s ownership of "DOUBLE CURVE LINES" became final in 2008, and the Supreme Court in G.R. No. 195415 finally upheld the registration of "DOUBLE REVERSIBLE WAVE LINE" in 2013, explicitly finding that H.D. Lee’s "OGIVE CURVE DEVICE" was not well-known in the Philippines at the material time and that Emerald was the prior local user. Despite these final rulings, the IPO Director General and later the Court of Appeals approved H.D. Lee’s application for "LEE & OGIVE CURVE DESIGN," prompting Emerald’s appeal to the Supreme Court.

• Emerald’s Prior Marks: Emerald adopted and continuously used in Philippine commerce "DOUBLE REVERSIBLE WAVE LINE (Back Pocket Design)" since October 1, 1973, and "DOUBLE CURVE LINES" since January 8, 1980. Both were used on jeans and pants (Class 25). "DOUBLE CURVE LINES" was registered under the Supplemental Register (Reg. No. 5513) on May 5, 1981, and under the Principal Register (Reg. No. 30810) on May 31, 1982. Applications for re-registration and registration of these marks were pending or subsequently finalized in separate proceedings.
• H.D. Lee’s Application: On December 21, 2001, H.D. Lee filed Application No. 4-2001-009602 to register "LEE & OGIVE CURVE DESIGN" for outer clothing in Class 25, claiming first use in the Philippines on October 31, 1996. A Declaration of Actual Use was filed within three years. H.D. Lee claimed earlier use in the United States since February 18, 1946, and US Registration No. 1,273,602 for "OGIVE CURVE DESIGN" issued on April 10, 1984. It also claimed numerous international registrations or pending applications for the ogive curve design in approximately 100 countries.
• BLA Denial (2009): The IPO Bureau of Legal Affairs Director Atty. Estrellita Beltran Abelardo denied H.D. Lee’s application. The BLA found that Emerald had established ownership of "DOUBLE CURVE LINES" and "DOUBLE REVERSIBLE WAVE LINE" through continuous commercial use under Section 2-A of Republic Act No. 166. H.D. Lee failed to present certified or authenticated copies of its foreign registrations, submitted no proof of promotional activities abroad before 2000, and its Philippine use began only in 1996—23 years after Emerald started. The near resemblance between the competing marks for identical goods heightened the likelihood of confusion.
• IPO Director General Reversal (2012): DG Blancaflor reversed the BLA, holding that H.D. Lee had established ownership by substantial evidence of global registrations and advertising. He ruled that Emerald’s earlier Philippine registration merely raised a prima facie presumption rebutted by H.D. Lee’s proofs. The DG further held that H.D. Lee’s mark was well-known internationally and in the Philippines, satisfying criteria such as duration, extent, and geographical area of use, and that Emerald offered no explanation for how it conceived a highly distinctive back-pocket design, giving credence to H.D. Lee’s claim of prior creation.
• CA Affirmance (2013): The Court of Appeals denied Emerald’s petition and affirmed the DG. The CA emphasized that H.D. Lee had substantially complied with procedural requisites; the "OGIVE CURVE DESIGN" was registered or applied for in about 100 countries; the inconsistency between H.D. Lee’s claimed first use dates (1946 vs. 1949) was immaterial because it still antedated Emerald’s use by at least two decades; the Philippine Certificate of Registration in Emerald’s name was only prima facie and rebuttable; and the mark was entitled to protection as a well-known brand under the IPC and international treaties even without local registration. It also took judicial notice that actor James Dean wore Lee jeans with the ogive curve design in the 1950s.
• Final Prior Judgments: While CA-G.R. SP No. 126253 was pending, two related proceedings reached finality:
  • G.R. No. 195415: H.D. Lee had opposed Emerald’s application to register "DOUBLE REVERSIBLE WAVE LINE." The Supreme Court issued Resolutions dated November 28, 2012 and January 28, 2013 (Entry of Judgment on March 20, 2013) that upheld Emerald’s registration. The Court found Emerald’s actual use since October 1973 proven by sales invoices; H.D. Lee’s Philippine sales began only in 1996; and H.D. Lee failed to prove its "OGIVE CURVE DEVICE" was well-known at the time of Emerald’s filing.
  • Inter Partes Case No. 3498: The IPO Director General’s decision upholding Emerald’s "DOUBLE CURVE LINES" became final and executory on October 21, 2008, confirming Emerald’s use since 1980.
  • Emerald’s Motion for Reconsideration before the CA: Emerald argued that the final decisions in G.R. No. 195415 and Inter Partes Case No. 3498 barred H.D. Lee’s application under the principle of conclusiveness of judgment. The CA denied reconsideration, holding that the rule did not apply because the issues were different: G.R. No. 195415 concerned the registrability of Emerald’s mark versus H.D. Lee’s opposition, while the instant case concerned the registrability of H.D. Lee’s distinct composite mark.

• Conclusiveness of Judgment: Petitioner Emerald maintained that the final and executory decisions in G.R. No. 195415 and Inter Partes Case No. 3498 conclusively determined that Emerald was the prior user of the confusingly similar marks in the Philippines, H.D. Lee’s local use commenced only in 1996, and H.D. Lee’s "OGIVE CURVE DEVICE" was not well-known at the relevant time. These identical issues could no longer be relitigated, and H.D. Lee was precluded from registering a mark dominated by the same ogive design.
• Dominant Feature: Petitioner argued that "OGIVE CURVE DESIGN" is the dominant element of "LEE & OGIVE CURVE DESIGN," and its confusing similarity to Emerald’s "DOUBLE CURVE LINES" and "DOUBLE REVERSIBLE WAVE LINE" had already been adjudged with finality. Adding the word "LEE" did not create a distinct mark; H.D. Lee itself had abandoned its earlier separate application for "OGIVE CURVE DESIGN" filed in 1990.
• Violation of Section 123.1(d), IPC: Registration of H.D. Lee’s mark was proscribed because it is confusingly similar to Emerald’s earlier-registered marks for identical goods, giving Emerald a prior filing or priority date.

• Lack of Identity of Issues: Respondent H.D. Lee countered that conclusiveness of judgment did not apply because G.R. No. 195415 involved the registrability of Emerald’s "DOUBLE REVERSIBLE WAVE LINE" against H.D. Lee’s opposition, while the present case concerns the registrability of H.D. Lee’s entirely different composite mark "LEE & OGIVE CURVE DESIGN." The issues and causes of action were not identical.
• Separate and Distinct Mark: Respondent insisted that "LEE & OGIVE CURVE DESIGN" is a composite mark distinct from the stand-alone "OGIVE CURVE DESIGN." A prior ruling on the ogive curve device alone does not bar registration of a mark combining it with the word "LEE."
• No Bar to Variants: Even if there are similarities, prior decisions cannot preclude all future applications for variants or modifications of a mark.
• Well-Known Mark Protection: H.D. Lee argued that it had presented substantial evidence of international registration, advertising, and long-standing global use since 1946, qualifying its mark for protection as a well-known mark under the IPC and the Paris Convention regardless of prior local use by Emerald.

• Res Judicata / Conclusiveness of Judgment: Whether the principle of conclusiveness of judgment precludes H.D. Lee’s application for registration of "LEE & OGIVE CURVE DESIGN" in view of the final Supreme Court Resolutions in G.R. No. 195415 and the final IPO DG decision in Inter Partes Case No. 3498, which determined Emerald’s prior rights over confusingly similar marks.
• Dominant Feature and Distinctiveness: Whether "LEE & OGIVE CURVE DESIGN" is a materially different mark or one whose dominant element is the same ogive curve design already adjudged to be confusingly similar to Emerald’s registered marks, thereby falling within the preclusive effect of prior final rulings.

• Res Judicata / Conclusiveness of Judgment: The principle of conclusiveness of judgment was applied, barring H.D. Lee’s application. The Court found identity of parties (Emerald and H.D. Lee) and identity of issues. Both the prior final proceedings and the present case centered on the registrability of the confusingly similar ogive curve design versus Emerald’s double curve line marks. H.D. Lee’s characterization of its mark as "LEE & OGIVE CURVE DESIGN" rather than merely "OGIVE CURVE DESIGN" was deemed a specious and hair-splitting distinction, as the ogive curve design remained the dominant feature. Because Emerald had already established with finality its rights over its marks as against H.D. Lee’s ogive design, that determination was conclusive and prevented H.D. Lee from obtaining registration of a mark substantially incorporating the same dominant element.
• Dominant Feature and Distinctiveness: The addition of the word "LEE" did not sufficiently differentiate H.D. Lee’s composite mark. The prior final judgments had determined that the ogive curve design was not well-known at the material time and that Emerald was the prior user in the Philippines. Allowing registration of the composite mark would contradict those findings. Consequently, the application for "LEE & OGIVE CURVE DESIGN" was denied. The Court also reminded courts to be vigilant in examining related cases to avoid judicial confusion and conflicting decisions.

• Conclusiveness of Judgment — A species of res judicata under Rule 39, Section 47(b) and (c) of the Rules of Court. It applies when a fact or question has been squarely put in issue, judicially passed upon, and adjudged in a former suit by a court of competent jurisdiction. That adjudication is conclusive between the same parties in all subsequent suits, even if the causes of action are different. The requisites are: identity of parties and identity of issues. In this case, the final determinations in G.R. No. 195415 and Inter Partes Case No. 3498—that Emerald was the prior local user, H.D. Lee’s ogive design was not well-known at the relevant time, and the marks were confusingly similar—were conclusive in the subsequent registration proceeding involving the same dominant design element.
• Immutability of Final Judgments — Once a decision attains finality, it becomes immutable and unalterable, and may no longer be modified in any respect, even if the modification would correct errors of fact or law. Litigation must end, and the prevailing party must not be deprived of the fruits of the verdict. Courts must guard against schemes that prolong controversies. This principle undergirded the Court’s refusal to permit relitigation of the prior use and confusing similarity issues.
• Ownership Through Prior Commercial Use — Under the Philippine trademark regime (Republic Act No. 166 and the IPC), prior and continuous commercial use in the Philippines is the basis of trademark ownership and the right to registration, not merely the act of registration itself. The prior use by Emerald since 1973 and 1980 conferred superior rights over the ogive design as used in the Philippines, as earlier determined with finality.

• "H.D. Lee's claim that the instant petition involves the mark 'LEE & OGIVE CURVE DESIGN' and not 'OGIVE CURVE DESIGN' is specious and a clear attempt to engage into hair-splitting distinctions. A thorough examination of the pleadings submitted by H.D. Lee itself shows that indeed, the focus is the 'OGIVE CURVE DESIGN,' which remains to be the dominant feature of the mark sought to be registered."
• "The Court needs to stress that in G.R. No. 195415 and Inter Partes Case No. 3498 before the IPO, Emerald had already established with finality its rights over the registration of the marks 'DOUBLE CURVE LINES' and 'DOUBLE REVERSIBLE WAVE LINE' as against H.D. Lee's 'OGIVE CURVE DESIGN.'"
• "As a final note, the courts are reminded to be constantly vigilant in extending their judicial gaze to cases related to the matters submitted for their resolution as to ensure against judicial confusion and any seeming conflict in the judiciary's decisions."

• Pryce Corporation v. China Banking Corporation, 727 Phil. 1 (2014) — Cited as controlling authority on the doctrine of res judicata, including its two concepts of bar by prior judgment and conclusiveness of judgment. The Court applied its formulation of the elements for conclusiveness of judgment: identity of parties and identity of issues.
• Siy v. National Labor Relations Commission, 505 Phil. 265 (2005) — Cited to support the principle that final and executory judgments are immutable and unalterable, and that the winning party must not be deprived of the fruits of the verdict.

• Section 123.1(d), Republic Act No. 8293 (Intellectual Property Code) — Prohibits the registration of a mark that is identical to a registered mark owned by another, or one with an earlier filing or priority date, for identical, closely related goods, or that nearly resembles such mark as to deceive or cause confusion. The provision applied because Emerald’s "DOUBLE CURVE LINES" and "DOUBLE REVERSIBLE WAVE LINE" were earlier-registered marks for identical Class 25 goods and were confusingly similar to H.D. Lee’s ogive curve design.
• Section 2-A, Republic Act No. 166 (Old Trademark Law) — Provided that ownership of a trademark is acquired through continuous commercial use. Relied upon by the BLA in finding Emerald’s ownership of its marks through use since 1973 and 1980.
• Rule 39, Section 47(b) and (c), Rules of Court — Prescribes the effect of final judgments, including that a judgment is conclusive between parties and their successors on matters directly adjudged or necessarily included. This was the procedural basis for invoking conclusiveness of judgment.
• Paris Convention for the Protection of Industrial Property — Referenced in the context of H.D. Lee’s claim for protection of a well-known mark, though the Court found that the factual predicate (well-known status at the relevant time) had already been resolved against H.D. Lee in the prior final proceedings.

Associate Justice Presbitero J. Velasco, Jr. (Chairperson), Associate Justice Lucas P. Bersamin, Associate Justice Francis H. Jardeleza, and Associate Justice Noel Gimenez Tijam. Chief Justice Maria Lourdes P.A. Sereno certified the decision.

N/A (The decision was unanimous).