CA overturns IPO ruling on burger trademark row

The Court of Appeals (CA) has overturned an earlier ruling of the Intellectual Property Office (IPO) that initially favored the American-owned In-N-Out Burger over Filipino-owned Sehwani Inc., which had registered locally the trademark In-N-Out .

The IPO had cancelled Sehwani’s certificate of registration of the In- N-Out trademark and ordered it to pay In-N-Out Burger P1.2 million in damages.

The CA also dismissed the unfair competition complaint filed by In-N-Out Burger as the court admonished IPO director-general Adrian S. Cristobal Jr. for entertaining In-N-Out Burger’s complaint since it was supposedly outside the IPO’s jurisdiction.

Based on court records, Sehwani had applied for the registration of the In-N-Out trademark for its restaurant business on Nov. 15, 1991.

The Bureau of Patents, Trademarks and Technology Transfer (BPTTT) had issued a certificate of registration in favor of Sehwani on Dec. 17, 1993. The BPTTT was the predecessor of the IPO.

On Aug. 30, 2000, Sehwani entered into a license agreement with Benita’s Frites allowing the latter to use the In N Out trademark for products from its restaurant in Pasig City for five years in exchange for a monthly royalty fee.

On the other hand, In-N-Out Burger filed a trademark and service mark application with the IPO only in June 1997; even though it was not yet engaged in business in the Philippines.

It was only on Dec. 16, 2000 that In-N-Out Burger demanded that Sehwani cease and desist from claiming ownership of the In-N-Out trademark and voluntarily cancel its trademark registration certificate. Sehwani refused but expressed willingness to surrender the trademark for a fair and reasonable consideration.

On June 4, 2001, In-N-Out Burger filed an administrative complaint with the IPO’s Bureau of Legal Affairs (BLA), which denied In-N-Out Burger’s petition for a temporary restraining order but cancelled Sehwani’s certificate of registration. Separate motions for reconsideration were filed by the litigants but were dismissed.

The BLA had ruled that there was no unfair competition and did not award damages.

Unfortunately, the case was elevated to Cristobal’s office which modified the BLA’s decision and ordered Sehwani to pay damages to In-N-Out Burger, thus prompting Sehwani to file an appeal with the CA.