Inexcusable Neglect: What You Don’t Know Can Hurt You

November 9, 2015

Parties to a case, whether or not represented by counsel, must be proactive in monitoring what is going on at every stage of litigation.  One must not simply wait for his lawyer to advise him of the status of his case.  The party himself must be diligent in knowing how his case is shaping up at all times while a case is pending.  This was the lesson taught in a recent case, which was brought to the Court of Appeals.  (See Albert Tan vs. Intellectual Property Office, Office of the Director General and Coby Electronics Corporation, CA-G.R. Sp. No. 127039).

In this case, Albert Tan (“Petitioner”) applied for registration of the trademark “COBY” for use on goods under Class 9.  Coby Electronics, Inc. opposed alleging, among others, that it is the prior user and owner of the “COBY” trademark in the Philippines.  The Bureau of Legal Affairs denied the opposition after concluding that Coby Electronics failed to prove that “COBY” is a well-known trademark in the Philippines. The Bureau further held that Petitioner has a better right to “COBY” because his trademark application was filed earlier and hence deserves priority and protection.

Coby Electronics filed an appeal to the Director General who reversed the Bureau’s decision and rejected Petitioner’s trademark application. Petitioner did not file an appeal claiming that he did not receive a copy of the Director’s decision.  Petitioner also claimed that upon subsequent investigation, he learned that a copy of the Director General’s decision was furnished to his counsel but his counsel failed to notify him about the Director General’s adverse decision.  Aggrieved, Petitioner, through a new counsel, filed a Petition for Relief from Judgment before the Director General of the IPO.

In the Petition, it was alleged that at the time that the case was pending before the IPO, it was extremely difficult for Petitioner to follow-up on the status of the case with his former counsel.  He eventually found out that his former counsel was stricken with a serious health problem, which prevented him from performing his regular duties to Petitioner.

Petitioner also claimed that his own family was experiencing hard times, as his own wife also had a serious health problem that needed his primary attention.  It was during this time that Petitioner and his former counsel failed to communicate with each other regarding the status of his case.  Despite Petitioner’s arguments, the Director General dismissed the Petition for Relief from Judgment.  Hence, the Petitioner filed the present Petition for Certiorari before the Court of Appeals ascribing grave abuse of discretion on the part of the Director General.

In deciding the Petition, the Court limited its analysis to the following two issues:  (1) whether the Petition should be dismissed outright for lack of proper verification; and (2) whether the Director General abused his discretion in failing to give due course to the Petition for Relief from Judgment.

With respect to the first issue, Coby Electronics argued that the present Petition should be dismissed because the verification page was signed by Petitioner on October 19, 2012, while the actual Petition was dated October 22, 2012.  The Court, however, decided that such procedural lapse does not invalidate the Petition.  In fact, the Court stated that a verification is “merely a formal and not a jurisdictional requisite which does not affect the validity or efficacy of the pleading or the jurisdiction of the court.”  In other words, a defective verification does not render the Petition invalid.

As to the second issue, the Court cited Rule 38, Section 2 of the Revised Rules of Court, which states that a final and executory judgment or order may be set aside on the ground of fraud, accident, mistake or excusable neglect.  In addition, a petitioner must assert facts showing that he has a good, substantial and meritorious defense or cause of action.  In this case, the Court found that Petitioner’s erroneous belief or opinion that no decision has been issued by the Director General is not the type of mistake for which a Petition for Relief is available.  This is so because Petitioner was never prevented from interposing his appeal.  In fact, he was not prevented from inquiring whether a decision has been rendered by the Director General.

The Court emphasized that the negligence of counsel is binding on the client, unless it is proven that the negligence was so gross “that ordinary diligence and prudence could not have guarded against.”  Here, Petitioner failed to show that his counsel’s negligence was so gross and palpable as to call for the exercise of the Court’s equity jurisdiction.  Petitioner could have simply inquired with the Office of the Director General as to the status of his own case, but failed to do so.

Also, Section 9 of the Uniform Rules of the IPO provides that a decision or order of the Director General is final and executory fifteen (15) days from receipt of a copy thereof unless appealed to the Court of Appeals or the Secretary of the Department of Trade and Industry.  In this case, the Director General’s decision became final for failure to file an appeal and the finality of the decision effectively barred Petitioner from seeking relief from judgment.

The takeaway is that litigants must be vigilant in monitoring their own cases.  In fact, it is advisable that litigants docket their own cases for follow-up and not rely solely on counsel’s reminders or calendaring system.  This case also serves as a cautionary tale and reminder that the negligence of counsel can be binding on the client, unless it is proven that (1) there was a reckless or gross negligence, which deprives the client of due process, (2) the application of the rule will result in outright deprivation of the client’s liberty or property; or (3) where the interest of justice so require.  Here, Petitioner was unable to prove reckless or gross negligence because he had the opportunity to exercise his own due diligence to determine the status of his case, but failed to take such step to his detriment.

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