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Zuneca Pharmaceutical

This case involved a dispute between Zuneca Pharmaceutical, which sells the drug carbamazepine under the brand name "ZYNAPS", and Natrapharm, which sells citicoline under the trademark "ZYNAPSE". Natrapharm filed an infringement case against Zuneca due to the similar marks. The Supreme Court ruled that (1) ownership of a trademark is acquired through registration under Philippine law, so Natrapharm's earlier registration defeated Zuneca's claim as prior user; but (2) Zuneca was not liable for infringement as a prior user in good faith, whose rights are protected under the law allowing co-existence of the similar marks.

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95 views3 pages

Zuneca Pharmaceutical

This case involved a dispute between Zuneca Pharmaceutical, which sells the drug carbamazepine under the brand name "ZYNAPS", and Natrapharm, which sells citicoline under the trademark "ZYNAPSE". Natrapharm filed an infringement case against Zuneca due to the similar marks. The Supreme Court ruled that (1) ownership of a trademark is acquired through registration under Philippine law, so Natrapharm's earlier registration defeated Zuneca's claim as prior user; but (2) Zuneca was not liable for infringement as a prior user in good faith, whose rights are protected under the law allowing co-existence of the similar marks.

Uploaded by

Angeline
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 3

ZUNECA PHARMACEUTICAL, AKRAM ARAIN AND/OR VENUS

ARAIN, M.D., AND STYLE OF ZUNECA PHARMACEUTICAL,


versus NATRAPHARM, INC.,
G.R. No. 211850, September 28, 2020

FACTS:

Petitioner (Zuneca) sells a drug called carbamazepine under the


brand name "ZYNAPS", an anti-convulsant used to control all types of
seizure disorders of varied causes like epilepsy. Respondent (Natrapharm),
on the other hand, manufactures and sells citicoline under the trademark
"ZYNAPSE" which is used for treatment of cerebrovascular disease or
stroke. The trademark ZYNAPSE was registered with the Intellectual
Property Office in 2007 in the name of Respondent. Respondent then filed
a case for Trademark Infringement against the Petitioner due to the
confusing similarity of the latter’s ZYNAPS mark to that of the Respondent.

Petitioner Zuneca claimed that it is a prior user of the mark ZYNAPS


as it has been engaged in the sale of the product carbamazepine under such
mark since 2004, earlier than that of the Respondent. Moreover, it also
averred that it is Respondent that should be held liable for having
registered an identical mark in bad faith.

However, both the RTC and the CA ruled in favor of respondent


Natrapharm and against petitioner Zuneca. In ruling so, they held that the
first filer in good faith defeats a first user in good faith who did
not file any application for registration . Moreover, there was no bad
faith when respondent Natrapharm registered its ZYNAPSE mark as it has
no knowledge of the existence of the prior use of the mark ZYNAPS by the
petitioner.

Therefore, respondent (Natrapharm), as the first registrant in good


faith, had trademark rights over "ZYNAPSE" and it may prevent others,
including petitioner Zuneca, from registering an identical or confusingly
similar mark. Consequently, Petitioner was also held liable for trademark
infringement.

Aggrieved, petitioner Zuneca filed a petition before the Supreme


Court.

ISSUE:

1. Whether or not the CA erred when it affirmed the RTC ruling that the
first to file in good faith defeats the right of the prior user in good
faith; and
2. Whether or not petitioner Zuneca is liable for trademark
infringement

Page 1 of 3
RULING:

As to the first issue: No. Ownership of a trademark is acquired by its


registration.

The Supreme Court held that the language of the Intellectual Property
Code of the Philippines clearly provides that ownership of a mark is
acquired through registration. As expressed in the language of the
provisions of the IP Code, prior use no longer determines the
acquisition of ownership of a mar k in light of the adoption of the rule
that ownership of a mark is acquired through registration made validly in
accordance with the provisions of the IP Code.

Moreover, the Supreme Court stated that the intention of the


lawmakers was to abandon the rule that ownership of a mark is acquired
through prior use, and that the rule on ownership used in Berris. v.
Abyadang and EYIS et al. v. Shen Dar is inconsistent with the IP Code
regime of acquiring ownership through registration.

As to the second issue: No. According to the Supreme Court, the IP


Code likewise protects and respects the rights of prior users in good
faith.

While Section 147.1 of the IP Code provides that the owner of a


registered mark shall have the exclusive right to prevent third parties' use
of identical or similar marks for identical or similar goods where such use
would result in a likelihood of confusion, this provision should be
interpreted in harmony with Section 159.1 of the IP Code
especially the latter's proviso which allows the transfer or assignment of the
mark together with the enterprise or business of the prior user in good
faith or with that part of his enterprise or business in which the mark is
used. The lawmakers intended for the rights of the owner of the registered
mark in Section 147.1 to be subject to the rights of a prior user in good faith
contemplated under Section 159.1.

Section 159.1: Notwithstanding the provisions of Section 155


hereof, a registered mark shall have no effect against any person,
who in good faith, before the filing date or priority date, was using
the mark for the purpose pf his business pr enterprise: Provided,
That his right may only be transferred or assigned together with his
enterprise or business or with that part of his enterprise or business
in which the mark is used.

Essentially, therefore, Section 159.1 is an exception to the rights of the


trademark owner in Section 14 7 .1 of the IP Code.

Page 2 of 3
Furthermore, Section 159.1 of the IP Code clearly contemplates that a
prior user in good faith may continue to use its mark even after
the registration of the mark by the first-to-file registrant in good
faith. In any event, the application of Section 159.1 necessarily results in
the co-existence of at least two entities – the unregistered prior user in
good faith, on one hand; and the first-to-file registrant in good faith on the
other – using identical or confusingly similar marks in the market at the
same point in time, even if there exists the likelihood of confusion.

Thus, petitioner Zuneca was not held liable for trademark


infringement as it was considered as a prior user in good faith. Although
there is confusing similarity between the two marks, the Supreme Court
allowed the co-existence of both believing that the evil of medical switching
will not likely arise considering that the law requires the generic names of
drugs to be written in prescriptions.

Page 3 of 3

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