Rolex clocks up win despite non-competing business use

In Montres Rolex SA v Rolex Plastic Manufacturing Corporation (Case Q-01-15285, December 8 2004), Branch 90 of the Regional Trial Court of Quezon City has ordered a local company to drop the internationally well-known trademark and trade name ROLEX from its corporate name.

Montres Rolex SA, the famous manufacturer of timepieces, filed a complaint against Rolex Plastic Manufacturing Corporation (Plastic), arguing that it had appropriated the ROLEX mark as part of its corporate name in an attempt to ride on the mark's international renown. Rolex proved the international renown of its trademark through:

• registration certificates in a large number of countries worldwide;
  
  
• advertising materials in various forms of mass media; and
  
  
• evidence of worldwide use of its trademark.

It also cited a decision in which the Bureau of Patents and Trademarks upheld Rolex's opposition to Plastic's application for the registration of ROLEX as a trademark for plastic bags that it was manufacturing and selling in the Philippines.

Plastic argued that (i) it was not using the name Rolex as a trademark but only as part of its corporate name, and (ii) its use of the name Rolex for a non-competing business meant that consumers would not confuse its products with those of Rolex. In particular, it noted that its products do not carry the ROLEX trademark.

The Regional Trial Court of Quezon City upheld Rolex's complaint.

It accepted Rolex's evidence of the international renown of its ROLEX mark and declared that the mark could not be appropriated by Plastic without Rolex's consent. The court stated that although Plastic was using ROLEX for a non-competing business, consumers were likely to associate it with Rolex.

In addition to cancelling Plastic's corporate name, the court ordered it to pay Rolex Ps150,000 in attorney's fees and costs.

The decision followed the guidelines of the Supreme Court in its decision in 246 Corporation v Daway (Case GR 157216, November 20 2003), which involved a trademark infringement complaint filed by Rolex in response to the unauthorized use of its trademark in the business name Rolex Music Lounge. In that case, 246 Corporation, trading as Rolex Music Lounge, argued that its use of the name Rolex was non-infringing and unlikely to cause consumer confusion since its entertainment business was totally unrelated to Rolex's business.

Relying on the provision of the Philippines Intellectual Property Code on the protection of internationally well-known marks, the Supreme Court held for the first time that such marks may not be appropriated even for a non-competing business where this prejudices the owner. The court reasoned that such unauthorized use would prevent the trademark owner from expanding its business to unrelated goods or services. The goodwill and reputation of the mark would also suffer as a result of the likely inferior quality of the goods or services offered by the unauthorized user.

Vicente B Amador, SyCip Salazar Hernandez & Gatmaitan, Manila