•        Mere exhibition of a trademark in a website is not sufficient.

•       There must be an actual commercial transaction through the website or at the very least, the website must show that it intends to target local consumers by containing specific details geared towards a commercial activity or interaction. These details may constitute a local contact phone number for local consumers to call for information or other local concerns, a specific local webpage, whether domestic language and currency is used on the website, and/or whether domestic payment methods are accepted.

W LAND HOLDING, INC. (“W Land”) sought to cancel STARWOOD HOTELS AND RESORTS WORLDWIDE, INC.’s (“Starwood”) trademark “W” for non-use of its mark in the Philippines owing to the absence of an actual hotel or establishment in the Philippines providing the class 43 and 44 services covered by its registration. Further, Starwood’s registered trademark “W” barred the registration of its own “W” trademark application which the IPO earlier found to be confusingly similar to Starwood’s registered “W” trademark.

 In its defense, Starwood asserted that the interactive websites for its W Hotels allows Philippine residents to make reservations and bookings, which amount to an actual use of its registered “W” trademark in the Philippines.

 The Bureau of Legal Affairs ruled in favor of W Land since Starwood’s hotel or establishment are located abroad. On appeal, the Director General held that the absence of any hotel or establishment owned by Starwood in the Philippines bearing the “W” mark should not be equated to the absence of its use in the country, opining that Starwood’s pieces of evidence, particularly its interactive website, indicate actual use in the Philippines. The Court of Appeals affirmed this decision pointing out that “the internet has become a powerful tool in allowing businesses to reach out to consumers in a given market without being physically present thereat” and as such, “ Starwood’s interactive websites already indicate its actual use in the Philippines of the “W” mark”.

Aggrieved, the W Land filed a petition before the Supreme Court.

In its 4 December 2017 decision (G.R. No. 222366), the Supreme Court declared:

“It must be emphasized, however, that the mere exhibition of goods or services over the internet, without more, is not enough to constitute actual use. To reiterate, the “use” contemplated by law is genuine use — that is, a bona fide kind of use tending towards a commercial transaction in the ordinary course of trade. Since the internet creates a borderless marketplace, it must be shown that the owner has actually transacted, or at the very least, intentionally targeted customers of a particular jurisdiction in order to be considered as having used the trade mark in the ordinary course of his trade in that country. A showing of an actual commercial link to the country is therefore imperative. Otherwise, an unscrupulous registrant would be    able to maintain his mark by the mere expedient of setting up a website, or by posting his goods or services on another’s site, although no commercial activity is intended to be pursued in the   Philippines. This type of token use renders inutile the commercial purpose of the mark, and hence, negates the reason to keep its registration active.”

“As earlier intimated, mere use of a mark on a website which can be accessed anywhere in the world will not automatically mean that the mark has been used in the ordinary course of trade of a particular country. Thus, the use of mark on the internet must be shown to result into a within-State sale, or at the very least, discernibly intended to target customers that reside in that country. This being so, the use of the mark on an interactive website, for instance, may be said to target local customers when they contain specific details regarding or pertaining to the target State, sufficiently showing an intent towards realizing a within-State commercial activity or interaction. These details may constitute a local contact phone number, specific reference being available to local customers, a specific local webpage, whether domestic language and currency is used on the website, and/or whether domestic payment methods are accepted. xxx”.

Using the above yardstick, the Supreme Court found that Starwood was able to prove its use of the mark in the Philippines, viz:

“In this case, Starwood has proven that it owns Philippine registered domain names, i.e., www.whotels.ph, www.wreservations.ph, www.whotel.ph, www.wreservation.ph, for its website   that showcase its mark. The website is readily accessible to Philippine citizens and residents, where they can avail and book amenities and other services in any of Starwood’s W Hotels worldwide. Its website also readily provides a phone number for Philippine consumers to call for  information or other concerns. The website further uses the English language — considered as   an official language in this country — which the relevant market in the Philippines understands and often uses in the daily conduct of affairs. In addition, the prices for its hotel accommodations and/or services can be converted into the local currency or the Philippine Peso. Amidst all of these features, Starwood’s “W” mark is prominently displayed in the website through which consumers in the Philippines can instantaneously book and pay for their accommodations, with immediate confirmation, in any of its W Hotels. Furthermore, it has presented data showing a considerably growing number of internet users in the Philippines visiting its website since 2003, which is enough to conclude that Starwood has established commercially-motivated relationships with Philippine consumers. Taken together, these facts and circumstances show that Starwood’s use of its “W” mark through its interactive website is intended to produce a discernable  commercial effect or activity within the Philippines, or at the very least, seeks to establish commercial interaction with local consumers. Accordingly, Starwood’s use of the “W” mark in its reservation services through its website constitutes use of the mark sufficient to keep its registration in force.

To be sure, Starwood’s “W” mark is registered for Classes 43, i.e., for hotel, motel, resort and motor inn services, hotel reservation services, restaurant, bar and catering services, food and beverage preparation services, café and cafeteria services, provision of conference, meeting and social function facilities, under the Nice Classification. Under Section 152.3 of the IP Code, “[t]he use of a mark in connection with one or more of the goods or services belonging to the class in respect of which the mark is registered shall prevent its cancellation or removal in respect of all other goods or services of the same class.” Thus, Starwood’s use of the “W” mark for reservation services through its website constitutes use of the mark which is already sufficient to protect its registration under the entire subject classification from non-use cancellation. This, notwithstanding the absence of a Starwood hotel or establishment in the Philippines”.