INTELLECTUAL PROPERTYPHILIPPINES

- versus -

RUBEN L. BANSILRespondent-Applicant.

x- -----------------------x

HEIRS OF THE INTESTATE }ESTATE OF PAULINA LUMANOG }BANSIL, namely, ALEXANDER }LUMANOG BANSIL & L1L1BETH }BANSIL-YAPIT, L1ZA JANE }BANSIL-CALLOS, AZUL BANSIL & }AMABEL BANSIL, as the surviving }children of deceased ALFREDO }LUMANOG BANSIL, and }represented herein by their }mother LILIAN FAUSTO-BANSIL }

Petitioners, }}}}}}}

DECISION

IPC No. 14-2007-00228

Petition for Cancellation of:

Regn. No. 4-2004-000574Issued on: 30 August 2006

TM: "LUMANOG"

Decision No. 2008-SS

This is a verified PETITION for Cancellation filed by the Heirs of theintestate estate of Paulina Lumanog Bansil namely, Alexander Lumanog Bansil ;and Lilibeth Bansil-Yapit, Liza Jane Bansil-Callos, Azul Bansil , and AmabelBansil as the surviving children of the deceased Alfredo Lumanog Bansil andrepresented herein by their mother Lilian Fausto-Bansil to the registration of themark "LUMANOG" for guitars under Class 15 bearing Registration No. 4-2004­00574 issued on August 30, 2006 in the name of respondent-registrant Ruben L.Bansi!.

Petitioner Alexander Lumanog Bansil is of legal age, Filipino , and aresident of 116-C J.P. Rizal St. , Project 4, Quezon City; petitioners LilibethBansil-Yapit, Liza Jane Bansil-Callos, Azul Bansil, and Amabel Bansil who arerepresented by their mother Lilian Fausto-Bansn are the surviving children of thedeceased Alfredo Lumanog Bansil, are all of legal age, all Filipinos, and allresidents of 2975 V.Mapa St. Sta. Mesa, Manila. Respondent-registrant RUbe~L, Bansil is of legal age, Filipino , and a resident of 2975 V. Mapa St., Sta . Mesa ,Manila. ~

Republic of the PhilippinesINTELLECTUAL PROPERTY OFFICE

351 Sen. Gil Puyat Ave., Makati City 1200 Philippines • www.ipophil.gov.phTelephone: +632-7525450 to 65 • Facsimile: +632-8904862 • email: mail@ipophil.gov.ph

Petitioners filed this Verified Petition for Cancellation based on thefollowing grounds :

1. Petitioner Alexande r Lumanog Bansil , respondent RubenLumanog Bansil, and Alfredo Lumanog Bansil are among the eight(8) heirs of the late Paulina Lumanog Bansil whose estate owns"Lumanog Music Store";

2. Respondent-registrant is presently the court-appointedadministrator of the Estate of Paulina Lumanog Bansil;

3. Sometime in the late 1950's, Pauling Lumanog Bansil , ablyassisted by her husband Rufino Bansil, established the businessenterprise known as "Lumanog Music Store" which later became"Lumanog Music Store and Sporting Goods", by opening its firststore in Raon St. (now Gonzalo Puyat St.), Quiapo , Manila , inPaulina Lumanog Bansil's name as evidenced by the followingoriginal certificates of registration of business name of its mainstore as well as its branches, to wit: 1) BOT Certificate ofRegistration dated June 02, 1978 of Branch I located at 4105 R.Magsaysay Blvd., Manila; 2) BOT Certificate of Registration datedJune 18, 1982 of the branch located at 734 G. Puyat St., Manila; 3)BOT Certificate of Registrat ion dated July 26, 1983 of the branchlocated at 2972 V. Mapa St., Sta. Mesa, Manila; 4) BOT Certificateof Registration (renewal) dated February 15, 1984 of Branch IIlocated at 635 Gonzalo Puyat St., Manila; 5) BOT Certificate ofRegistration (renewal) dated February 15, 1984 of the main storelocated at 677 Gonzalo Puyat St., Manila; 6) BOT Certificate ofRegistration (renewal) dated February 15, 1984 of Branch I locatedat 4105 R. Magsaysay Blvd., Manila ; 7) BOT Certificate ofRegistration (renewal) dated October 23, 1984 of Branch II locatedat 635 Gonzalo Puyat St., Manila; and 8) BOT Certificate ofRegistration dated March 17, 1989 of the main store located at 677Gonzalo Puyat St., Manila;

4. For over forty (40) years or more, said "Lumanog MusicStore and Sporting Goods" under the ownership of PaulinaLumanog Bansil and Rufino Bansil produced , manufactured, anddistributed quality musical instruments (e.g., bandurias , octavinas ,lauds, and other randalia instruments) most especially guitars allcarrying the brand name "LUMANOG" such that " LU MANO~~

guitars became a household name in locally manufactured guitars) ftr/

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5. The brand name "LUMANOG" was actually placed in theheadstock portion of the guitar, and was usually in the form ofvamishable white "stickers" that embed therein after application ofvarnish and which eventually tells the public the manufacturer'sname or the origin of the guitar,

6. The lettering style/font, and color of the brand name"LUMANOG" differed from year to year;

7. In 1987 when petitioner Alexander Lumanog Bansilbecame manager of the store, he changed the lettering style/fontof the brand name "LUMANOG" to the Old English font and theword "Original" was placed on top of the name "LUMANOG";

9. Similarly, the office supplies or paraphemalia of the storesuch as letterheads, cash vouchers, and receipts or sales invoiceswere now stylized in the Old English font for purposes ofuniformity and identification;

10. Rufino Bansil and Paulina Lumanog Bansil diedrespectively in February 1980 and January 1991 but theirnumerous stores continue to exist and operate under the samestyle "Lumanog Music Store and Sporting Goods" which use thesame original 'LUMANOG" as the brand name or trademark ofthe guitars;

11. On April 22, 1991, intestate estate proceedings wereinstituted in court entitled, "In the matter of the Intestate Estate ofPaulina L. Bansil" docketed as Sp. Proc. No. Q-91-8559 beforethe Regional Trial Court of Quezon City;

12. In the Petition for letters administration, among theproperties included as part of the Estate of Paulina LumanogBansil are the two (2) stores located at 635 and 677 Raon St.,Manila;

13. The deceased Paulina Lumanog Bansil is theowner/proprietor of the business name "Lumanog Music Store andSporting Goods" and its brand name or guitar trade name"LUMANOG" during her lifetime which have become part of herEstate after her demise in 1991;

14. Thus, Paulina Lumanog Bansil's Estate has the legal rightto use and appropriate the name of Paulina Lumanog Bansi:~whether it be her full name, her surname "LUMANOG", or an~ I~

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other moniker to which she was known in business; and no otherperson or entity may use such name "LUMANOG" either as atrademark or as a trade name without the consent of her Estate orof the heirs of Paulina Lumanog Bansil's Estate;

15. Respondent-registrant knew very well that the trade nameor business name "LUMANOG" belongs to his mother during thelatter's lifetime, and to his mother's Estate after her death asRuben Lumanog Bansil even managed subject stores before andafter the death of his mother;

16. For more than 40 years, prior to the death of PaulinaLumanog Bansil and for more than sixteen (16) years during thependency of the Estate proceedings , Paulina Lumanog Bansil'sEstate had used the trade name "LUMANOG" in all its guitars andno other business entity dared to use said trade name as it hasbecome well-known in the guitar industry that such trade namebelonged to Paulina Lumanog Bansil and later to her Estate;

17. When intestate estate proceedings were instituted in court,respondent actively participated and vigorously fought for the rightof the Estate over certain properties, more particularly, the two (2)stores located at 635 and 677 Raon St., Quiapo, Manila whereguitars of the Estate bearing the "LUMANOG" trademark werefervently sold, either wholesale or retail;

18. Thus, when respondent-registrant filed an application forthe registration of the trademark "LUMANOG" in stylized form- OldEnglish font- and was eventually successful in appropriating forhimself such trademark with the issuance of a Certificate ofRegistration on August 30,2006 in his name, he was utterly guiltyin bad faith of falsification and misrepresentation as he knew verywell that the name "LUMANOG" was owned by the Estate of hismother Paulina Lumanog Bansil, contrary to his statement in theapplication;

19. Worse, prior to the issuance of the Certificate OfRegistration, respondent-registrant had already filed two (2)motions in court, namely: 1) Motion for Approval of Sale andMotion to Appoint Heir Ruben L. Bansil as Administrator; and 2)Motion for Appointment of Administrator, for his appointment asadministrator of Paulina Lumanog Bansil's Estate which wouldlegally disqualify him from acquiring, directly or indirectly, an~asset of the Estate; I I~

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20. Respondent-registrant is not the owner of the trademark"LUMANOG" and has no moral and legal right to register thesame: The right to register a trademark is based on ownership orstated otherwise , only the owner of the trademark used todistinguish his goods is entitled to register the same;

21 . Documentary evidence from the then Bureau of DomesticTrade (now the Department of Trade and Industry) clearly showsthat the business name "Lumanog Music Store and SportingGoods" which exclusively sells guitars bearing the mark'LUMANOG" is owned and registered in the name of PaulinaLumanog Bansil and actually pertains to her maiden name"Lumanog';

22 . Other documentary evidence such as "LUMANOG"letterheads, cash vouchers , and receipts or sales invoices bearthe "LUMANOG" trade name of trademark in Old English fontwhich is exactly the same trade name or trademark respondent­registrant fraudulently misrepresented as being his when in fact heknew very well that it is being used and belongs to the Estate ofhis deceased mother Paulina Lumanog Bansil ;

23. The documentary evidence dates back to 1978 up to 1995when the Estate was already using the Old English font for themark "LUMANOG" and such evidence are substantial enough toprove that respondent-registrant is not the prior user or the firstone to adopt the trademark 'LUMANOG" on guitars;

24. Respondent-registrant admits that he is not the first user orthe first person to adopt the trademark "LUMANOG": After hisCertificate of Registration was issued, respondent-registrant lostno time in applying for search warrants against those using thetrademark "LUMANOG", and respondent-registrant categoricallystated in his letter to the NBI Director that the "LUMANOG"trademark was made famous by his grandmother;

25. When respondent-registrant sought the registration of thetrademark 'LUMANOG" in Old English font, he virtually copied themark being used and owned by Paulina Lumanog Bansil's Estate;

26. As the court-appointed administrator of Paulina LumanogBansil's Estate, respondent-registrant may not validly acquireproperties under his administration as the same is a breach of th7£1r.,trust reposed on him; / .~~

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27. As heirs of Paulina Lumanog Bansil , petitioners have thelegal right to file this PETITION against respondent-registrant bothin his personal capacity and in his capacity as Administrator of theEstate as said heirs are not only prejudiced by the illegalappropriation and conversion of what legally belongs to the Estateof which they are co-owners by operation of law, but may also bedamaged, including its goodwill , by the confusion of guitars beingsold by respondent-registrant in his music store as possibly beingpassed off as being guitars of the Estate's music store.

Petitioners essentially pray, thus, that the PETITION be granted and thatCertificate of Registration No. 42004007574 issued on August 30,2004 issued torespondent-registrant be cancelled.

On September 10, 2007 , respondent-registrant filed a VERIFIEDANSWER admitting the allegations in Paragraphs 1-6 and 9-11 of the verifiedPETITION; specifically denying the allegations in Paragraphs 7-8 and 12-25; andalleging the following special and affirmative defenses:

1. By petitioners ' own quasi-judicial admission throughParagraphs 10 and 11 of its PETITION which states:

"10. In (sic) April 22, 1991, intestate estate proceedingswere instituted in Court entitled "In the matter of theIntestate Estate of Paulina L. Bansil" docketed as Sp. Proc.Q-91-8559 before the Regional Trial Court of Quezon .

11. In the Petition for letters administration , among theproperties included as forming part of the Estate of PaulinaLumanog Bansil are the two (2) stores of the Estatelocated at #635 and #577 Raon St., Manila . . . "

among the properties included as forming part of the Estate ofPaulina Lumanog Bansil are the two (2) stores located at RaonStreet , Manila, and no mark- "LUMANOG"- was mentioned asproperty that was settled as part of the estate;

2. That no such property was settled in said Estateproceeding is within the knowledge of petitioner AlexanderLumanog Bansil when he signed the compromise agreement infinally settling said estate resulting to the rendition of a DEC'SIONBASED ON COMPROMISE AGREEMENT dated June 21,2007by the Regional Trial Court of Quezon City , Branch 221 docketed~as Sp. Proc. Case No. Q-91-8559 ; / f~

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3. In short, petitioner cannot file. C) petition claiming the mark"LUMANOG" because the effect of the DECISION BASED ONCOMPROMISE AGREEMENT is conclusive upon petitioner Atty.Alexander Lumanog Bansii;

4. Under Article 1816 (sic) (Please refer to Article 2037) ofthe Civil Code, a compromise shall have, with respect to theparties, the same authority as res judicata but only a compromisemade in court may be enforced by execution;

5. The law provides, moreover that a compromise cannot beannulled unless it is vitiated by error, deceit, violence, or forgery ofdocuments which circumstances were not alleged in thePETITION;

6. Jurisprudence provides that refusal to consent to thestipulation is no ground for the annulment of the compromise andthe only action open to appellant is to demand the enforcementthereof;

7. Jurisprudence further provides that a compromise upon itsperfection becomes binding upon the parties, and has the effectand authority of res judicata even if not judicially approved;

8. Petitioner Alexander Lumanog Bansil has no legal capacityto sue as he is not a party-in-interest to this case: Said petitionerhas no proprietary rights to protect, much less such right uponwhich infringement can happen as he is not engaged in buying orselling guitars or musical instruments;

9. The allegation in the PETITION that respondent-registrantacted in bad faith in having the mark "LUMANOG" registered in hisname is highly uncalled for: As Paulina Lumanog Bansil's son,respondent-registrant is entitled to do business and register in hisname the mark 'LUMANOG" which none of his brothers andsisters claimed to register as theirs after the death of their mother,and not even their mother had the willingness to register the markwith the intellectual property office but had it registered only in1978 with the then Bureau of Domestic Trade as a businessname;

10. Petitioners are estopped from claiming the subject mark i~

view of the passage of time and of the DECISION BASED ONCOMPROMISE AGREEMENT; ~

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11. Except for petitioner Alexander Lumanog Bansil, allpetitioners are claiming rights and doing business under the nameof SJ Music Store, the proprietor of which is Samuel V. Callos whois husband to petitioner Uza Jane Bansii-Cauos;

12. The SJ Music Store was the subject of a search warrant(Search Warrant No. A07-11690) issued by the Regional TrialCourt of Manila, Branch 33 for trademark infringement;

13. The filing of the instant PETITION is to thwart the wheelsof criminal justice for which reason petitioners, except forpetitioner Alexander Lumanog Bansil, stand indicted in court; and

14. As counterclaim, respondent-registrant repleads theforegoing allegations and was constrained to pay legal services inthe amount of Forty Five Thousand Pesos (P45,000 .00) to protecthis interest.

Preliminary conference was set on November 16, 2008 which partook thenature of a clarificatory hearing. What transpired during this preliminaryconference is best summarized in Order No. 2007-2151 which narrates , thus:

"At the hearing for preliminary conference on November16, 2007, respondent through counsel manifested that before theRegional Trial Court of Quezon City, Branch 221 (RTC QC,Branch 221) is a case for the settlement of the estate of PaulinaLumanog Bansil wherein said court issued a Decision dated June21, 2007 based on a compromise agreement among the heirs ofsaid Paulina Lumanog Bansil, identifying all the properties of saiddecedent's estate but which does not include the intellectualproperty/mark "LUMANOG". Respondent's counsel manifestedthat the Decision is conclusive as to all the parties referredthereto; and as to all properties including the mark "LUMANOG",and all matters and issues that could have been included in saidDecision such that all these can never be raised in any civil,criminal case, or administrative case. Respondent prayed, thus,for a dismissal of the instant Petition and for an oral ruling but wasgiven a period of ten (10) days from date to file a written motion.Meanwhile, petitioners through counsel manifested that they shallnot file a comment to respondent's motion, and that they aresubmitting the incident for resolution upon the filing ofrespondent's motion."

On November 26, 2007, respondent-registrant filed a MOTION T~O

DISMISS/POSITION PAPER which was denied per Order No. 2152.

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Preliminary conference was set again on December 06, 2007 wherein issueswere respectively raised by petitioners and respondent-registrant.

Issues of Petitioner:

1) Whether or not the trademark Lumanog is owned by the Estate ofPaulina L. Bansil.

2) Whether or not Ruben Basil (respondent) copied the TrademarkLumanog

3) Whether or not Ruben Bansil is a Registrant in bad faith of theTrademark Lumanog.

4) Whether or not Respondent Ruben Bansil as the Administrator inthe Estate of Paulina Bansil may validly register and appropriatefor himself the trademark Lumanog owned by the Estate ofPaulina Bansil.

5) Whether or not registration of Ruben Bansil of the trademarkLumanog should be cancelled by this Honorable Office .

Issues of Respondent-Applicant:

1) Whether the Honorable Office can rule on whether this tradenameis part and parcel of the Estate of Paulina Bansil which theRespondent contends beyond the jurisdiction of this office.

2) Whether or not Paulina Bansil had registered a trademark ortradename during her lifetime before her death in 1991.

3) Whether or not the Petitioner Alexander Bansil has a cause ofaction or a real party in interest since he is not engaged in anysale , manufacture on the business of guitars.

4) Whether or not this Liza Jane Bansil-Callos whose husbandSamuel Callos has a pending Intellectual Property Violationsbefore the Department of Justice and Regional Trial Court.

5) Whether or not Liza Jane Bansil-Callos or Samuel Callos who isdoing business in selling guitars and manufacturing guitars a~entitled to Lumanog trademark. , / rAJ,V---

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6) Whether or not the Respondent herein is really in good faith inregistering this trademark Lumanog.

Thereafter, said preliminary conference was terminated .

On December 07, 2007, Order No. 2007-2182 was issued wherein theparties were directed to file within a non-extendible period of ten (10) days fromreceipt of their respective copies of said Order their respective position papersand, if desired, draft decisions. Petitioners and respondent-registrant filed theirrespective position papers on January 02, 2008.

A careful perusal of the respective allegations by the parties in theirpleadings as well as in their manifestations in open court during the clarificatoryhearing on November 18, 2007, and during the preliminary conference onDecember 06, 2007 pares down the issue to the following: Who is the owner ofthe mark "LUMANOG"? After a determination of this issue, a corollary issuearises: Should the PETITION for cancellation be given due course?

It is pertinent to discuss at this point about ownership and whatconstitutes ownership over a trademark or a tradename.

Before the effectivity on January 01, 1998 of R.A. No. 8293 which is thecurrent Intellectual Property (IP) Code, the Jaw that governed trademark andtrade name rights was R.A. No. 166, the former Trademarks Law. The distinctionis crucial since Petitioners allege ownership over the subject mark by theirmother, Paulina Lumanog Bansil, was as early as the 1950's which was duringthe effectivity of the former Trademarks Law(R. A. 166) until she died in 1991,and thereafter by her Estate which was still during the effectivity of the oldTrademarks Law though by January 01, 1998, the IP Code became effective .Meanwhile, respondent-registrant was issued a certificate of registration for thesubject mark during the effectivity of the IP Code.

It is important to note at this point that Sec. 239.1 of R. A. 8293 onlyrepealed the parts of the former Trademark Law (R.A.. 16q) insofar as they areinconsistent with R. A. 8293.

It is likewise equally important to state that Sec. 236 of the new law,Intellectual Property Code (R. A. 8293) provides that-

"SEC. 236. Preservation of Existing Rights. - Nothingherein shall adversely affect the rights on the enforcement ofrights in patents, utility models, industrial designs, marks and~

works acquired in good faith prior to the effective date of r~ ,0 /'

this Act." (Undescoring supplied) ~

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Considering that the mark (trademarkltradename) 'LUMANOG"subject matter of this Petition for Cancellation was alleged to have been usedduring the late 1950's, we shall use the applicable law, R. A. 166, the formertrademark Law in the determination of ownership of the mark LUMANOG

Sec . 2-A of R. A. 166 as amended,specifically provides how ownership ofa trademark is acquired. It states , to wit:

Sec . 2-A. Ownership of trademarks, tradenames andservice marks, how acquired. - Anyone who lawfullyproduces or deals in merchandise of any kind or whoengages in any lawful business, or who renders any lawfulservice in commerce , by actual use thereof in manufacture ortrade, in business, and in the service rendered, may appropriate tohis exclusive use a trademark, a tradename, or a service mark notso appropriated by another, to distinguish his merchandise,business or service from the merchandise, business, or service ofothers. The ownership or possession of a trademark,tradename, service mark, heretofore or hereafterappropriated, as in this section provided, shall be recognizedand protected in the same manner and to the same extent asare other property rights known to the laws. (As amended byR.A. No. 638.)

Under the Trademark, Law then existing, which is the applicable law atthe time the trademarkjtradename LUMANOG was first adopted and use,trademark is a creation of use. Adoption alone is not sufficient to acquireownership thereof or to give exclusive right thereto. The right grows out of itsactual use in business or commerce. Adoption is not use: One may makeadvertisements, issue circulars, give out price lists on goods but these alonewould not give exclusive right to use unless the goods on which the mark is usedare sold in the market. The rationale for this is that buyers have come tounderstand the mark as indicating the origin of the wares . Flowing from thisprinciple is the trader's right to protection of the mark built up and the goodwill hehas accumulated from the use of the mark. Actual use in commerce orbusiness is a prerequisite to the acquisition of the right of ownership underthe previous Trademarks Law (Underscoring supplied.) (Emerald GarmentManufacturing Corporation v. Hon. Court of Appeals, Bureau of Patents,Trademarks and Technology Transfer and H.D. Lee Company, Inc., G. R. No.100098, December 29, 1995;Sterling Products International, Incorporated v.Farbenfabriken Bayer Aktiengeselschaft and Allied Manufacturing and TradingCo., Inc., G. R. L-19906, April 30, 1969). Moreover, the adoption and use of amark must be in the Philippines and not abroad because foreign usecreates no trademark right in the country following the nationality principleupon which Philippine trademark law rests (Bala Induslries, Ltd. v. The~

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Honorable Court of Appeals; Tiburcio S. Evalie, Director of Patents, NewOlympian Rubber Products Co., lnc., G. R. L-53672, May 31, 1982).

Petitioners presented in evidence certificates of registration issued by thethen Bureau of Domestic Trade, which is now the Department of Trade andIndustry (DTI), of the name "Lumanog Music Store and Sporting Goods" as usedin the branches where the stores are located to prove ownership and registrationby their mother Paulina Lumanog Bansil and, later, by their mother's Estate of thebusiness name "Lumanog Music Store and Sporting Goods"; of the businessitself of selling musical instruments under such business name; and of the brandname or trade name "LUMANOG" (Exhibits "N to "W of PETITION).

Section 1 of Act No. 3883, as amended , also known as the BusinessName Law, provides that it shall be unlawful for any person to: 1.) (use)or (sign [on any .. . printed receipt] or [on any . . . printed evidence) of any ...business transactions any name used in connection with his business other thanhis true name; or 2.) or keep conspicuously exhibited in plain view [in] or [at theplace] where his business is concluded , if he is engaged in a business , any signannouncing a . .. business name or style, without first registering such othername , or such firm name , or business name, or style , in the Bureau ofCommerce (now Department of Trade and Industry) together with his true name.The purpose of registration of a business name with the DTI, thus , is to regulatethe use of a business name especially one other than the true name of theperson who owns the business.

It appears, then , that the mere fact of registration with the DTI of abusiness name does not ipso facto confer upon the registrant ownership thereto,or to the dominant word therein , in terms of ownership in the context ofintellectual property law. In other words , such registration neither confer norconfirm ownership as a trademark of the word/s and/or mark/s which constitutes,or is found in the business name. A person may establish a business and give ita name which the Business Name Law regulates but this does not give himintellectual property ownership over the wordfs andfor mark used in the businessname. Ownership over a mark, as earlier discussed, is gauged by actualuse in commerce of such mark in the Philippines. This means that thegoods with which the mark is used are sold or carried on in trade in thecountry; or are imported into, and thereafter sold in the Philippines.Adoption alone of a mark is not sufficient either to acquire ownership thereof or togive exclusive right thereto as adoption is not equivalent to use (Bata Industries,Ltd. v. Court of Appeals, et al., supra; Sterling Products International, Inc. v.Farbenfabriken Bayer Aktiengesselschaft, supra.).

There is no question that Paulina Lumanog Bansil, mother of petitionersand respondent-applicant, owned and operated the business and the store~~r /under the business name "Lumanog Music Store and Sporting Goods" during he;V

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lifetime. Aside from the DTI certificates of registration, the DECISION BASEDON COMPROMISE AGREEMENT point to this: Said decision shows that partof Paulina Lumanog Bansil's Estate consists of lease rights on property locatedat 677 Gonzalo Puyat St., Quiapo Manila, as well as of real estate located at2975 V. Mapa St. Sta. Mesa. Manila (Annex "1" of VERIFIED ANSWER). It canbe gathered that from these establishments were sold musicalmerchandise: Receipts issued by the "Lumanog Music Store and SportingGoods" on March 21 and 27, 1995, and April 05, 1995 from the brancheslocated at 635 and 677 Gonzalo Puyat St., Quiapo, Manila and at 2975 V.Mapa St. Sta. Mesa, Manila printed with the name of Paulina LumanogBansil as proprietor show that musical items from said stores were sold toone Ate Lilian. It is to be noted, too, that respondent-registrant admitted inhis VERIFIED ANSWER petitioners' allegation that for over 40 years ormore, the "Lumanog Music Store and Sporting Goods" produced,manufactured and distributed quality musical instruments especiallyguitars, all carrying the brand name "LUMANOG"."

The question now arises: Was the mark "LUMANOG" actually used incommerce in the Philippines through the sale of guitars andlor other musicalinstruments by Paulina Lumanog Bansil during the effectivity of the oldTrademarks Law as petitioners allege?

The answer is in the affirmative.

Part of petitioners' evidence consists of an original receipt issued by the"Lumanog Music Store and Sporting Goods" showing the sale of folk guitars andother musical instruments such as bongos to one Ate Lilian on March 21, 1995(Exhibit "L" of PET'T'ON). This receipt bears the "Lumanog Music Store andSporting Goods" name and the printed name of Paulina Lumanog Bansildesignated as proprietor. The "LUMANOG" insignia in Old English font isindicated on the receipt which corresponds to the "LUMANOG" stickersthat petitioners alleged was placed at the headstock portion of the guitars.The genuineness and due execution of this receipt have not been put inissue.

Actual use is shown by the sale to the public of goods bearing said mark(Kabushiki Kaisha Isetan v. Intermediate Appellate Court, et al. G. R. No.75420, November 15, 1991, citing The Parties Convention Commentary on theParis Convention. Arlicle by Dr. Bogach, Director General of the WorldIntellectual Property Organization, Geneva, Switzerland, 1985). Sales invoicesandlor official receipts are the best proof that there are actual sales to thepublic of a trader's products (Converse Rubber Corporation v. UniversalRubber Products, et al., GR. No. L-27906, January 8, 1987). Any sale made bya legitimate trader from his store is a commercial act establishingtrademark rights since such sale is made in due course to the gene~

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public (Converse Rubber Corporation v. Universal Rubber Products, et al.,supra.) .

As shown by the evidence and as clearly provided under the law andjurisprudence, since it was Paulina Lumanog Bansil who had exclusivelyappropriated and used the mark "LUMANOG", since the 1950's, she acquiredownership over the mark "LUMANOG" and it became her property.

Accordingly, since Paulina Lumanog Bansil has exclusivelyappropriated and used the mark "LUMANOG" through stickers varnishedon the guitars and other musical instruments and sold by herestablishment "Lumanog Music Store and Sporting Goods" of which sheis the proprietor, the mark "LUMANOG" was owned by her during herlifetime and when she died, by her Estate.

What is the significance, then, of a certificate of registration of a mark?

A certificate of registration is prima facie evidence of ownership over atrademark. This is explicitly provided for under Section 138 of the IP Code. Saidprovision of law provides, moreover, that the registration is valid and that theregistrant has the right to use the trademark to the exclusion of others inconnection with the goods specified in the certificate as well as with the goodsrelated thereto . Section 138 of the IP Code is quoted hereunder.

"A certificate of registration of a mark shall be prima facieevidence of the validity of the registration , the registrant'sownership over the mark, and of the registrant's exclusive right touse the same in connection with the goods ... and those that arerelated thereto specified in the certificate."

There is a presumption , thus , in favor of the registrant that he is theowner of the mark, having the right to use such mark to the exclusion of others inrelation to the goods specified in the certificate as well as to the goods relatedthereto . But considering that a certificate of registration is only a primafacie evidence, this presumption may be overturned by evidence to thecontrary.

In the instant case, the evidence presented clearly show that the mark"LUMANOG" was owned by Paulina Lumanog Bansil during her lifetime and,thereafter, by her Estate while it is still being settled as earlier discussed, andNOT Respondent-Registrant Ruben Lumanog Bansil, the presumption ofownership in his favor has been overturned .

There is, thus , no merit in respondent-registrant's averment in his speci~~and affirmative defenses that "as Paulina Lurnanog Bansil's son, responden~IV

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registrant is entitled to do business and register in his name the mark'LUMANOG' which none of his brothers and sisters claimed to register as theirsafter the death of their mother and not even their mother has the willingness toregister with the intellectual property office but had it registered only in 1978 withthe then Bureau of Domestic Trade as a business name.

Moreover, Section 4 (d) of R.A. 166 provides that:

Sec. 4. Registration of trade-marks, trade-names andservice-marks on the principal register. - There is herebyestablished a register of trade-marks, trade-names and service­marks which shall be shown as the principal register. The ownerof a trade-mark, trade-name, or service-mark used todistinguish his goods, business or services from the goods,business, or services of others shall have the right to registerthe same on the principal register, unless it:

xxx

(d). Consist or comprises a mark or trade-name whichso resembles a mark of trade-name registered in the Philippinesor a mark or trade-name previously used in the Philippines byanother and not abandoned, as to be likely, when applied toor used in connection with the good, business or services ofthe applicant, to cause confusion or mistakes or to deceivepurchasers; (Underscoring supplied)

As it was Respondent-Registrant's mother, Paulina Lumanog Bansil whopreviously used the mark LUMANOG in the Philippines and the same has notbeen abandoned, Respondent-Registrant cannot register the same mark in hisfavor.

Respondent-registrant also argues that petitioners are estopped fromclaiming rights to the subject mark by the passage of time and by the DECISIONBASED ON COMPROMISE AGREEMENT, or that said decision is conclusiveand has the effect of res judicata on the parties thereto.

This Bureau echoes its ruling in Order No. 2007-2152, to wit:

"Notwithstanding, thus, the RTC QC, Branch 221 Decision basedon the compromise agreement, the BLA has jurisdiction to, andmay take cognizance of the instant Petition. Stated otherwise ,the existence of the estate proceedings before the regular courtand the issuance of a Decision as to the specific apPOrlionment1~

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the corresponding heirs of the properties stated therein areindependent of the proceedings before the BLA and does notaffect the jurisdiction of the BLA: What is at issue before the BLAis the ownership of the mark "LUMANOG" while at issue beforethe estate proceedings is the apportionment among the heirs ofspecific tangible properties that are unquestionably part of theestate of Paulina Lumanog Bansi\. Precisely , the intangibleintellectual property which is the trademark "LUMANOG"- propertythat is distinct and separate from any of the properties consideredin the estate proceedings- was not included in the estateproceedings, and any pronouncement in such proceedings cannotprejudice that which is not included therein . Section 47 (a) of theRules on Civil Procedure which provides:

'In case of a judgment . .. against a specific thing,or in respect to . .. the administration of the estateof a deceased person . .. the judgment . . . isconclusive upon the title to the thing .. .'

thus, does not apply to the instant case as it refers to a judgmentagainst a specific thing being conclusive upon the title to suchthing. Again, to repeat, no judgment against the intellectualproperty/mark "LUMANOG" was made and could have been madein the estate proceedings because it was not included therein.There is no conclusiveness to speak of, thus, upon the title to thisproperty. Also, Section 47 (b) of the same Rules which provides:

'In other cases .. . the judgment ... is,with respect to the matter directly adjudged or as toany other matter that could have been raised inrelation thereto, conclusive between the parties andtheir successors in interest by title subsequent tothe commencement of the action or specialproceeding . . .'

does not apply to the instant case. Taken in its proper context,the phrase "as to any matter that could have been raised inrelation thereto" refers to a matter related to another matterdirectly adjudged. In other words, this presupposes that there isan explicit judgment as to a specific matter brought before thecourt and there is a matter related thereto that could have beenraised but was not in fact raised. In this instance, then, ther~

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judgment is conclusive between the parties. But then, again, thenature of the intangible , intellectual property/mark "LUMANOG" isdifferent, separate , and distinct from the real properties, includingthe two Raon stores, adjudged in the RTC QC, Branch 221

Decision based on compromise agreement such that issues as toits ownership could not be included within the scope of theaforesaid phrase.

Article 2037 of the Civil Code which provides:

'A compromise has upon the parties the effect andauthority or res judicata; but there shall be noexecution except in compliance with a judicialcompromise.'

cannot apply to the instant case: As earlier discussed, the issueof ownership over the intellectual property/mark "LUMANOG"cannot be considered as covered by the compromise agreementas it was not included for consideration in the estate proceedings."

Moreover, this Bureau disagrees with the allegation of respondent­registrant that petitioner Alexander Lumanog Bansil has no legal capacity to sue:As an heir of Paulina Lumanog Bansil, petitioner Alexander Lumanog Bansilstands to be benefited or injured by any judgment herein. He is a real party ininterest. (Section 2, Rule 3 of The Rules OF Court)

Considering, then, that the prima facie presumption of ownership to themark "LUMANOG' granted to respondent-registrant under Section 138 of theIntellectual Property Code has been overtumed by substantial evidence which isdefined as that amount of relevant evidence which a reasonable mind mightaccept as adequate to justify a conclusion, the cancellation of the subjectregistration is in order (Section 5, Rule 133 of The Rules Of Court).

As to respondent-registrant's counterclaim for legal services in theamount of Forty Five Thousand Pesos (P45,OOO .00), this Bureau finds no merittherein.

WHEREFORE, the verified PETITION is hereby GRANTED.Accordingly, Certificate of Registration No. 4200400574 issued on August 30,2006 in the name of Ruben Lumanog Bansil is hereby ordered CANCELLED. assubject mark "LUMANOG" is declared as owned by Paulina Lumanog Bansilduring her lifetime and after she died, by her Estate. Let the disposition of themark LUMANOG proceed according to the rules on intestate successio~

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Consequently, Respondent-registrant Ruben Lumanog Bansil's counterclaim ishereby DISMISSED.

Let the filewrapper of the mark LUMANOG subject matter of this case beforwarded to the Bureau of Trademarks (BOT) for appropriate action inaccordance with this Decision.

SO ORDERED.

Makati City , March 31,2008.

LUTA BELTRAN-ABELARDODirector, Bureau of Legal Affairs

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