Shangri-La International Hotel v. Court of Appeals

SHANGRI-LA INTERNATIONAL HOTEL MANAGEMENT LTD., et. al. petitioners, vs.
COURT OF APPEALS, et. al., respondents.

June 27, 2006. G.R. No. 158589
FACTS: Petitioners Shangri-La Group filed with the Bureau of Patents, Trademarks and
Technology Transfer (BPTTT) a petition praying for the cancellation of the registration of the
"Shangri-La" mark and "S" device/logo issued to private respondent Developers Group of
Companies, Inc., (DGC) on the ground that the same was illegally and fraudulently obtained and
appropriated for the latter's restaurant business. Likewise, the Shangri-La Group filed with the
BPTTT its own application for registration of the subject mark and logo. The Developers Group
filed an opposition to the application.
Almost three (3) years later, private respondent DGC filed a complaint for infringement
and damages with prayer for injunction against the Shangri-La Group. On January 8, 1992, the
Shangri-La Group moved for the suspension of the proceedings in the infringement case on
account of the pendency of the administrative proceedings before the BPTTT, which was denied.
ARGUMENT OF THE PETITIONERS: Administrative proceedings are still pending before
the BPTTT. Hence, the infringement case filed by private respondent DGC.
ARGUMENTS OF THE PUBLIC RESPONDENT: Both the civil action and the
administrative proceedings may co-exist and the law does not provide for any preference by one
over the other.
ISSUE: Whether, despite the institution of the Inter Partes case for cancellation of a mark with
the BPTTT (now the Bureau of Legal Affairs, Intellectual Property Office) by one party, the
adverse party can file a subsequent action for infringement with the regular courts of justice in
connection with the same registered mark.
RULING: The Court ruled in affirmative.
The law provides that 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. This can be found in Section 151.2 of
Republic Act No. 8293, otherwise known as the Intellectual Property Code and Rule 8, Section
7, of the Regulations on Inter Partes Proceedings.
Hence, as applied in the case at bar, the earlier institution of an Inter Partes case by the
Shangri-La Group for the cancellation of the "Shangri-La" mark and "S" device/logo with the
BPTTT cannot effectively bar the subsequent filing of an infringement case by registrant
Developers Group. The law and the rules are explicit.
The rationale is plain: Certificate of Registration No. 31904, upon which the infringement
case is based, remains valid and subsisting for as long as it has not been cancelled by the Bureau
or by an infringement court. Since the certificate still subsists, Developers Group may thus file a
corresponding infringement suit and recover damages from any person who infringes upon the
former's rights.
Following both law and the jurisprudence enunciated in Conrad and Company, Inc. v.
Court of Appeals, the infringement case can and should proceed independently from the
cancellation case with the Bureau so as to afford the owner of certificates of registration redress
and injunctive writs. In the same light, so must the cancellation case with the BPTTT continue
independently from the infringement case so as to determine whether a registered mark may
ultimately be cancelled.
However, with the decision of the Regional Trial Court upholding the validity of the
registration of the service mark "Shangri-La" and "S" logo in the name of Developers Group, the
cancellation case filed with the Bureau hence becomes moot. To allow the Bureau to proceed
with the cancellation case would lead to a possible result contradictory to that which the
Regional Trial Court has rendered, albeit the same is still on appeal. Such a situation is certainly
not in accord with the orderly administration of justice. In any event, the Court of Appeals has
the competence and jurisdiction to resolve the merits of the said RTC decision.

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SHANGRI-LA INTERNATIONAL HOTEL MANAGEMENT LTD., et. al. petitioners, vs.

COURT OF APPEALS, et. al., respondents.

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