BY ATTY. JULIUS GREGORY B. DELGADO
When Trademark Registration Is Not Enough: The Lido Restaurant Ruling
The facts tell a familiar story of a family business gone sour. The Lido Restaurant traces its roots to 1936. In 1997, King Si Biak and Annie Alipio formed Eng Son Co., a partnership, to operate the restaurant under the Lido name. After the partners fell out, Alipio applied in 2008 to register “Panciteria Lido” in her own name, and King Si Biak opposed. On November 19, 2010, the Bureau of Legal Affairs (BLA) of the Intellectual Property Office (IPO) ruled that the right to the mark belonged to Eng Son Co., not to either partner, and that even a dissolved partnership continues to exist until its affairs are wound up. That ruling became final.
King Si Biak died in 2010, leaving his sons, Albert and Arthur King, as his heirs. Alipio then formed a new partnership, Panciteria Lido Chinese Cuisine Co. (PLCCC), which in 2012 applied for and obtained two registrations: No. 4-2012-014828 (“Lido” with “Cocina Tsina”) and No. 4-2012-014829 (the Chinese characters 麗都), covering food products and restaurant services under Classes 29, 30, and 43. The King brothers petitioned the IPO to cancel both registrations.
The Supreme Court reversed the rulings of the IPO Director General and the Court of Appeals, reinstated the BLA rulings, and cancelled both PLCCC registrations.
On the procedural issue, the Court excused the late filing of the petition. The petition had substantive merit, the 15-day delay was explained by annexes that had not yet been issued, and the heirs promptly cured the defects cited by the Court of Appeals.
On the merits, the Court acknowledged that under Section 122 of the Intellectual Property Code, trademark rights are acquired through registration, not prior use. But Section 122 speaks of registration “made validly.” A certificate of registration is only prima facie proof of ownership, and Section 151.1(b) allows the cancellation, at any time, of a registration obtained fraudulently or contrary to the Code. The Court found two independent defects in PLCCC’s registrations.
Bad faith. PLCCC knew, through Alipio, that the mark belonged to Eng Son Co.
Trade name protection. Section 165.2 protects a trade name, whether registered or not, against any subsequent use likely to mislead the public. Eng Son Co. had done business for decades as “Lido,” “Panciteria Lido,” and “Lido Restaurant.” By registering marks dominated by the word “Lido,” PLCCC appropriated that trade name.
The Court further held that a partner’s death dissolves a partnership but does not terminate it until its affairs are wound up. Because Eng Son Co. was never liquidated and the mark was never transferred, the mark remained partnership property that no single partner could claim alone.
Lido builds directly on Zulueta v. Cyma Greek Taverna Co. (G.R. No. 205699, January 23, 2023, 934 Phil. 34), and the parallel is almost exact. In Cyma, Manuel Zulueta and Raoul Goco formed Cyma Greek Taverna Company, registered with the Securities and Exchange Commission in 2006, to run the Cyma restaurants the partnership had operated since 2005. In September 2006, Zulueta filed a trademark application for “CYMA” in his own name. The partnership filed its own application months later but obtained its registration first. Zulueta argued that, as the first to file, he had priority.
The Court disagreed and laid down a two-part test: where (i) an entity has prior use, creation, or registration of a mark, and (ii) the applicant knows of it, the application is tainted by bad faith and must be denied. A bad-faith application is void from the start and earns no priority right under Section 123(d). As a partner, Zulueta plainly knew that the mark had been conceived for, and used only by, the partnership; he had never used it in his own capacity.
The lesson of Lido and Cyma is clear: a certificate of registration is only as strong as the good faith and sound ownership behind it. This matters a great deal in Bohol, where many of our most recognized names, from heritage bakeries and pasalubong makers to Panglao resorts and family-run restaurants, began as partnerships or family enterprises, with little more than a handshake to settle who owns the brand. When relatives or partners part ways, the name on the signboard is often the first thing they fight over, and by then it may already be registered in the wrong hands.
An Intellectual Property Lawyer may be able to help Bohol businesses prevent that fight before it starts: clearing and registering marks in the name of the true owner, putting brand ownership in writing in partnership and shareholder agreements, protecting trade names, product designs, and creative works, monitoring the IPO registry for copycat filings, and, when necessary, opposing or seeking the cancellation of registrations obtained in bad faith. Your business name may well be your most valuable asset. If it is not yet secured, the time to protect it is now, before a dispute arises, not after.