3/4/2017 G.R.No.

L78325

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RepublicofthePhilippines
SUPREMECOURT
Manila

FIRSTDIVISION

G.R.No.L78325January25,1990

DELMONTECORPORATIONandPHILIPPINEPACKINGCORPORATION,petitioners,
vs.
COURTOFAPPEALSandSUNSHINESAUCEMANUFACTURINGINDUSTRIES,respondents.

Bito,Misa&Lozadaforpetitioners.

ReynaldoF.Singsonforprivaterespondent.

CRUZ,J.:

Thepetitionersarequestioningthedecisionoftherespondentcourtupholdingthedismissalbythetrialcourtof
theircomplaintagainsttheprivaterespondentforinfringementoftrademarkandunfaircompetition.

Petitioner Del Monte Corporation is a foreign company organized under the laws of the United States and not
engaged in business in the Philippines. Both the Philippines and the United States are signatories to the
Convention of Paris of September 27, 1965, which grants to the nationals of the parties rights and advantages
whichtheirownnationalsenjoyfortherepressionofactsofinfringementandunfaircompetition.

Petitioner Philippine Packing Corporation (Philpack) is a domestic corporation duly organized under the laws of
thePhilippines.OnApril11,1969,DelMontegrantedPhilpacktherighttomanufacture,distributeandsellinthe
Philippinesvariousagriculturalproducts,includingcatsup,undertheDelMontetrademarkandlogo.

On October 27,1965, Del Monte authorized Philpack to register with the Philippine Patent Office the Del Monte
catsup bottle configuration, for which it was granted Certificate of Trademark Registration No. SR913 by the
Philippine Patent Office under the Supplemental Register. 1 On November 20, 1972, Del Monte also obtained two
registrationcertificatesforitstrademark"DELMONTE"anditslogo.2

RespondentSunshineSauceManufacturingIndustrieswasissuedaCertificateofRegistrationbytheBureauof
DomesticTradeonApril17,1980,toengageinthemanufacture,packing,distributionandsaleofvariouskindsof
sauce, identified by the logo Sunshine Fruit Catsup. 3 This logo was registered in the Supplemental Register on
September20,1983.4Theproductitselfwascontainedinvariouskindsofbottles,includingtheDelMontebottle,whichthe
privaterespondentboughtfromthejunkshopsforrecycling.

Having received reports that the private respondent was using its exclusively designed bottles and a logo
confusinglysimilartoDelMonte's,Philpackwarnedittodesistfromdoingsoonpainoflegalaction.Thereafter,
claiming that the demand had been ignored, Philpack and Del Monte filed a complaint against the private
respondentforinfringementoftrademarkandunfaircompetition,withaprayerfordamagesandtheissuanceofa
writofpreliminaryinjunction.5

In its answer, Sunshine alleged that it had long ceased to use the Del Monte bottle and that its logo was
substantially different from the Del Monte logo and would not confuse the buying public to the detriment of the
petitioners.6

After trial, the Regional Trial Court of Makati dismissed the complaint. It held that there were substantial
differencesbetweenthelogosortrademarksofthepartiesthatthedefendanthadceasedusingthepetitioners'
bottlesandthatinanycasethedefendantbecametheownerofthesaidbottlesuponitspurchasethereoffrom
thejunkyards.Furthermore,thecomplainantshadfailedtoestablishthedefendant'smaliceorbadfaith,which
wasanessentialelementofinfringementoftrademarkorunfaircompetition.7

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Thisdecisionwasaffirmedintotobytherespondentcourt,whichisnowfaultedinthispetitionforcertiorariunder
Rule45oftheRulesofCourt.

Section22ofR.A.No.166,otherwiseknownastheTrademarkLaw,providesinpartasfollows:

Sec. 22. Infringement, what constitutes. Any person who shall use, without the consent of the
registrant,anyreproduction,counterfeit,copyorcolorableimitationofanyregisteredmarkortrade
nameinconnectionwiththesale,offeringforsale,oradvertisingofanygoods,businessorservices
on or in connection with which such use is likely to cause confusion or mistake or to deceive
purchasersorothersastothesourceororiginofsuchgoodsorservicesoridentityofsuchbusiness
or reproduce, counterfeit copy or colorably imitate any such mark or trade name and apply such
reproduction, counterfeit copy or colorable imitation to labels, signs, prints, packages, wrappers,
receptaclesoradvertisementsintendedtobeuseduponorinconnectionwithsuchgoods,business
or services, shall be liable to a civil action by the registrant for any or all of the remedies herein
provided.

Sec.29ofthesamelawstatesasfollows:

Sec.29.Unfaircompetition,rightsandremedies.Apersonwhohasidentifiedinthemindofthe
publicthegoodshemanufacturesordealsin,hisbusinessorservicesfromthoseofothers,whether
or not a mark or tradename is employed, has a property right in the goodwill of the said goods,
business or services so identified, which will be protected in the same manner as other property
rights.Suchapersonshallhavetheremediesprovidedinsectiontwentythree,ChapterVhereof.

Anypersonwhoshallemploydeceptionoranyothermeanscontrarytogoodfaithbywhichheshall
passoffthegoodsmanufacturedbyhimorinwhichhedeals,orhisbusiness,orservicesforthose
oftheonehavingestablishedsuchgoodwill,orwhoshallcommitanyactscalculatedtoproducesaid
result,shallbeguiltyofunfaircompetition,andshallbesubjecttoanactiontherefor.

In particular, and without in any way limiting the scope of unfair competition, the following shall be
deemedguiltyofunfaircompetition:

(a) Any person, who in selling his goods shall give them the general appearance of
goods of another manufacturer or dealer, either as to the goods themselves or in the
wrappingofthepackagesinwhichtheyarecontained,orthedevicesorwordsthereon,
or in any other feature of their appearance, which would likely influence purchasers to
believe that the goods offered are those of a manufacturer or dealer other than the
actual manufacturer or dealer, or who otherwise clothes the goods with such
appearance as shall deceive the public and defraud another of his legitimate trade, or
any subsequent vendor of such goods or any agent of any vendor engaged in selling
suchgoodswithalikepurpose

(b) Any person who by any artifice, or device, or who employs ally other means
calculatedtoinducethefalsebeliefthatsuchpersonisofferingtheservicesofanother
whohasidentifiedsuchservicesinthemindofthepublicor

(c)Anypersonwhoshallmakeanyfalsestatementinthecourseoftradeorwhoshall
commitanyotheractcontrarytogoodfaithofanaturecalculatedtodiscreditthegoods,
businessorservicesofanother.

To arrive at a proper resolution of this case, it is important to bear in mind the following distinctions between
infringementoftrademarkandunfaircompetition.

(1) Infringement of trademark is the unauthorized use of a trademark, whereas unfair

competitionisthepassingoffofone'sgoodsasthoseofanother.

(2) In infringement of trademark fraudulent intent is unnecessary whereas in unfair

competitionfraudulentintentisessential.

(3)Ininfringementoftrademarkthepriorregistrationofthetrademarkisaprerequisite
totheaction,whereasinunfaircompetitionregistrationisnotnecessary.8

In the challenged decision, the respondent court cited the following test laid down by this Court in a number of
cases:

Indeterminingwhethertwotrademarksareconfusinglysimilar,thetwomarksintheirentiretyasthey
appear in the respective labels must be considered in relation to the goods to which they are

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attachedthediscerningeyeoftheobservermustfocusnotonlyonthepredorninantwordsbutalso
ontheotherfeaturesappearingonbothlabels.9

and applying the same, held that there was no colorable imitation of the petitioners' trademark and logo by the
privaterespondent.Therespondentcourtagreedwiththefindingsofthetrialcourtthat:

Inordertoresolvethesaidissue,theCourtnowattemptstomakeacomparisonofthe
twoproducts,towit:

1.Astotheshapeoflabelormake:

Del Monte: Semirectangular with a crown or tomato shape design on top of the
rectangle.

Sunshine:Regularrectangle.

2.Astobrandprintedonlabel:

DelMonte:Tomatocatsupmark.

Sunshine:Fruitcatsup.

3.Astothewordsorletteringonlabelormark:

DelMonte:ClearlyindicatedwordspackedbySysuInternational,Inc.,Q.C.,Philippines.

Sunshine:Sunshinefruitcatsupisclearlyindicated"madeinthePhilippinesbySunshine
SauceManufacturingIndustries"No.1DelMonteAvenue,Malabon,MetroManila.

4.Astocoloroflogo:

DelMonte:Combinationofyellowanddarkred,withwords"DelMonteQuality"inwhite.

Sunshine:White,lightgreenandlightred,withwords"SunshineBrand"inyellow.

5.Astoshapeoflogo:

DelMonte:Intheshapeofatomato.

Sunshine:Entirelydifferentinshape.

6.Astolabelbelowthecap:

DelMonte:Sealcoveringthecapdowntotheneckofthebottle,withpictureoftomatoes
withwords"madefromrealtomatoes."

Sunshine:Thereisalabelbelowthecapwhichsays"SunshineBrand."

7.Astothecoloroftheproducts:

DelMonte:Darkerred.

Sunshine:LighterthanDelMonte.

While the Court does recognize these distinctions, it does not agree with the conclusion that there was no
infringementorunfaircompetition.Itseemstousthatthelowercourtshavebeensopreoccupiedwiththedetails
thattheyhavenotseenthetotalpicture.

Ithasbeencorrectlyheldthatsidebysidecomparisonisnotthefinaltestofsimilarity.10Suchcomparisonrequires
acarefulscrutinytodetermineinwhatpointsthelabelsoftheproductsdiffer,aswasdonebythetrialjudge.Theordinary
buyerdoesnotusuallymakesuchscrutinynordoesheusuallyhavethetimetodoso.Theaverageshopperisusuallyina
hurryanddoesnotinspecteveryproductontheshelfasifhewerebrowsinginalibrary.Wherethehousewifehastoreturn
homeassoonaspossibletoherbabyortheworkingwomanhastomakequickpurchasesduringheroffhours,sheisapt
tobeconfusedbysimilarlabelseveniftheydohaveminutedifferences.Themaleshopperisworseasheusuallydoesnot
botheraboutsuchdistinctions.

Thequestionisnotwhetherthetwoarticlesaredistinguishablebytheirlabelwhensetsidebysidebutwhether
thegeneralconfusionmadebythearticleupontheeyeofthecasualpurchaserwhoisunsuspiciousandoffhis
guard,issuchastolikelyresultinhisconfoundingitwiththeoriginal. 11Asobservedinseveralcases,thegeneral
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impressionoftheordinarypurchaser,buyingunderthenormallyprevalentconditionsintradeandgivingtheattentionsuch
purchasersusuallygiveinbuyingthatclassofgoodsisthetouchstone.12

Ithasbeenheldthatinmakingpurchases,theconsumermustdependuponhisrecollectionoftheappearanceof
theproductwhichheintendstopurchase.13Thebuyerhavinginmindthemark/labeloftherespondentmustrelyupon
hismemoryofthepetitioner'smark. 14Unlikethejudgewhohasampletimetominutelyexaminethelabelsinquestionin
thecomfortofhissala,theordinaryshopperdoesnotenjoythesameopportunity.

Anumberofcourtshaveheldthattodeterminewhetheratrademarkhasbeeninfringed,wemustconsiderthe
mark as a whole and not as dissected. If the buyer is deceived, it is attributable to the marks as a totality, not
usuallytoanypartofit. 15Thecourtthereforeshouldbeguidedbyitsfirstimpression, 16forabuyeractsquicklyandis
governedbyacasualglance,thevalueofwhichmaybedissipatedassoonasthecourtassumestoanalyzecarefullythe
respectivefeaturesofthemark.17

It has also been held that it is not the function of the court in cases of infringement and unfair competition to
educate purchasers but rather to take their carelessness for granted, and to be ever conscious of the fact that
marksneednotbeidentical.Aconfusingsimilaritywilljustifytheinterventionofequity. 18 The judge must also be
aware of the fact that usually a defendant in cases of infringement does not normally copy but makes only colorable
changes. 19 Well has it been said that the most successful form of copying is to employ enough points of similarity to
confusethepublicwithenoughpointsofdifferencetoconfusethecourts.20

We also note that the respondent court failed to take into consideration several factors which should have
affected its conclusion, to wit: age, training and education of the usual purchaser, the nature and cost of the
article,whetherthearticleisboughtforimmediateconsumptionandalsotheconditionsunderwhichitisusually
purchased. 21 Among these, what essentially determines the attitude of the purchaser, specifically his inclination to be
cautious,isthecostofthegoods.Tobesure,apersonwhobuysaboxofcandieswillnotexerciseasmuchcareasone
whobuysanexpensivewatch.Asageneralrule,anordinarybuyerdoesnotexerciseasmuchprudenceinbuyinganarticle
for which he pays a few centavos as he does in purchasing a more valuable thing. 22 Expensive and valuable items are
normally bought only after deliberate, comparative and analytical investigation. But mass products, low priced articles in
wide use, and matters of everyday purchase requiring frequent replacement are bought by the casual consumer without
greatcare.23Inthislattercategoryiscatsup.

At that, even if the labels were analyzed together it is not difficult to see that the Sunshine label is a colorable
imitation of the Del Monte trademark. The predominant colors used in the Del Monte label are green and red
orange, the same with Sunshine. The word "catsup" in both bottles is printed in white and the style of the
print/letteristhesame.AlthoughthelogoofSunshineisnotatomato,thefigureneverthelessapproximatesthat
ofatomato.

Aspreviouslystated,thepersonwhoinfringesatrademarkdoesnotnormallycopyoutbutonlymakescolorable
changes,employingenoughpointsofsimilaritytoconfusethepublicwithenoughpointsofdifferencestoconfuse
the courts. What is undeniable is the fact that when a manufacturer prepares to package his product, he has
beforehimaboundlesschoiceofwords,phrases,colorsandsymbolssufficienttodistinguishhisproductfromthe
others. When as in this case, Sunshine chose, without a reasonable explanation, to use the same colors and
lettersasthoseusedbyDelMontethoughthefieldofitsselectionwassobroad,theinevitableconclusionisthat
itwasdonedeliberatelytodeceive.24

Ithasbeenaptlyobservedthattheultimateratioincasesofgravedoubtistherulethatasbetweenanewcomer
who by the confusion has nothing to lose and everything to gain and one who by honest dealing has already
achieved favor with the public, any doubt should be resolved against the newcomer inasmuch as the field from
whichhecanselectadesirabletrademarktoindicatetheoriginofhisproductisobviouslyalargeone.25

Comingnowtothesecondissue,wefindthattheprivaterespondentisnotguiltyofinfringementforhavingused
the Del Monte bottle. The reason is that the configuration of the said bottle was merely registered in the
SupplementalRegister.InthecaseofLorenzanav.Macagba,26wedeclaredthat:

(1)RegistrationinthePrincipalRegistergivesrisetoapresumptionofthevalidityofthe
registration, the registrant's ownership of the mark and his right to the exclusive use
thereof.ThereisnosuchpresumptionintheregistrationintheSupplementalRegister.

(2)RegistrationinthePrincipalRegisterislimitedtotheactualownerofthetrademark
and proceedings therein on the issue of ownership which may be contested through
oppositionorinterferenceproceedingsor,afterregistration,inapetitionforcancellation.

Registration in the Principal Register is constructive notice of the registrant's claim of

ownership,whileregistrationintheSupplementalRegisterismerelyproofofactualuse
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of the trademark and notice that the registrant has used or appropriated it. It is not
subject to opposition although it may be cancelled after the issuance. Corollarily,
registration in the Principal Register is a basis for an action for infringement while
registrationintheSupplementalRegisterisnot.

(3)InapplicationsforregistrationinthePrincipalRegister,publicationoftheapplication
isnecessary.ThisisnotsoinapplicationsforregistrationsintheSupplementalRegister.

It can be inferred from the foregoing that although Del Monte has actual use of the bottle's configuration, the
petitioners cannot claim exclusive use thereof because it has not been registered in the Principal Register.
However,wefindthatSunshine,despitethemanychoicesavailabletoitandnotwithstandingthatthecaution"Del
Monte Corporation, Not to be Refilled" was embossed on the bottle, still opted to use the petitioners' bottle to
market a product which Philpack also produces. This clearly shows the private respondent's bad faith and its
intentiontocapitalizeonthelatter'sreputationandgoodwillandpassoffitsownproductasthatofDelMonte.

TheCourtobservesthatthereasonsgivenbytherespondentcourtinresolvingthecaseinfavorofSunshineare
untenable. First, it declared that the registration of the Sunshine label belied the company's malicious intent to
imitate petitioner's product. Second, it held that the Sunshine label was not improper because the Bureau of
Patentpresumablyconsideredothertrademarksbeforeapprovingit.Third,itcitedthecaseofShellCo.v.Insular
Petroleum, 27 where this Court declared that selling oil in containers of another with markings erased, without intent to
deceive,wasnotunfaircompetition.

Regarding the fact of registration, it is to be noted that the Sunshine label was registered not in the Principal
Register but only in the Supplemental Register where the presumption of the validity of the trademark, the
registrant'sownershipofthemarkandhisrighttoitsexclusiveuseareallabsent.

AnenttheassumptionthattheBureauofPatenthadconsideredotherexistingpatents,itisreiteratedthatsince
registrationwasonlyintheSupplementalRegister,thisdidnotvesttheregistrantwiththeexclusiverighttouse
thelabelnordiditgiverisetothepresumptionofthevalidityoftheregistration.

Ontheargumentthatnounfaircompetitionwascommitted,theShellCaseisnotonallfourswiththecaseatbar
because:

(1)InShell,theabsenceofintenttodeceivewassupportedbythefactthattherespondenttherein,
before marketing its product, totally obliterated and erased the brands/mark of the different
companies stenciled on the containers thereof, except for a single isolated transaction. The
respondentinthepresentcasemadenosimilareffort.

(2)InShell,whatwasinvolvedwasasingleisolatedtransaction.Ofthemanydrumsused,therewas
onlyonecontainerwheretheShelllabelwasnoterased,whileinthecaseathand,therespondent
admitted that it made use of several Del Monte bottles and without obliterating the embossed
warning.

(3)InShell,theproductofrespondentwassoldtodealers,nottoultimateconsumers.Asageneral
rule,dealersarewellacquaintedwiththemanufacturerfromwhomtheymaketheirpurchasesand
since they are more experienced, they cannot be so easily deceived like the inexperienced public.
There may well be similarities and imitations which deceive all, but generally the interests of the
dealersarenotregardedwiththesamesolicitudeasaretheinterestsoftheordinaryconsumer.For
itistheforminwhichthewarescometothefinalbuyerthatisofsignificance.28

AsSunshine'slabelisaninfringementoftheDelMonte'strademark,lawandequitycallforthecancellationofthe
privaterespondent'sregistrationandwithdrawalofallitsproductsbearingthequestionedlabelfromthemarket.
With regard to the use of Del Monte's bottle, the same constitutes unfair competition hence, the respondent
shouldbepermanentlyenjoinedfromtheuseofsuchbottles.

The court must rule, however, that the damage prayed for cannot be granted because the petitioner has not
presentedevidencetoprovetheamountthereof.Section23ofR.A.No.166provides:

Sec.23.Actionsanddamagesandinjunctionforinfringement.Anypersonentitledtotheexclusive
useofaregisteredmarkortradenamemayrecoverdamagesinacivilactionfromanypersonwho
infringes his rights, and the measure of the damages suffered shall be either the reasonable profit
whichthecomplainingpartywouldhavemade,hadthedefendantnotinfringedhissaidrightsorthe
profit which the defendant actually made out of the infringement, or in the event such measure of
damagescannotbereadilyascertainedwithreasonablecertaintythecourtmayawardasdamages
reasonablepercentagebasedupontheamountofgrosssalesofthedefendantorthevalueofthe
servicesinconnectionwithwhichthemarkortradenamewasusedintheinfringementoftherights

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of the complaining party. In cases where actual intent to mislead the public or to defraud the
complainingpartyshallbeshown,inthediscretionofthecourt,thedamagesmaybedoubled.

Thecomplainingparty,uponpropershowingmayalsobegrantedinjunction.

Fortunately for the petitioners, they may still find some small comfort in Art. 2222 of the Civil Code, which
provides:

Art. 2222. The court may award nominal damages in every obligation arising from any source
enumeratedinArt.1157,orineverycasewhereanypropertyrighthasbeeninvaded.

Accordingly, the Court can only award to the petitioners, as it hereby does award, nominal damages in the
amountofPl,000.00.

WHEREFORE,thepetitionisGRANTED.ThedecisionoftheCourtofAppealsdatedDecember24,1986andthe
ResolutiondatedApril27,1987,areREVERSEDandSETASIDEandanewjudgmentisherebyrendered:

(1) Canceling the private respondent's Certificate of Register No. SR6310 and permanently
enjoiningtheprivaterespondentfromusingalabelsimilartothatofthepetitioners.

(2)Prohibitingtheprivaterespondentfromusingtheemptybottlesofthepetitionersascontainersfor
itsownproducts.

(3) Ordering the private respondent to pay the petitioners nominal damages in the amount of
Pl,000.00,andthecostsofthesuit.

SOORDERED.

NarvasaGancayco,GrioAquinoandMedialdea,JJ.,concur.

Footnotes

1OriginalRecords,pp.2930.

2Ibid.,Annex2pp.89Annex3,pp.1617.

3Id.,AnnexA.p.41.

4Id.,AnnexB,pp.4243.

5Id.,pp.16.

6Id.,pp.3840.

7Id.,pp.166168.DecisionpennedbyJudgeRoqueA.Tamayo,affirmedintheCourtofAppealsby
Coquia,J.,ponente,withLucianoandCui,JJ.,concurring.

8JoseC.Vitug,PandectofCommercialLaw&Jurisprudence,lsted.,p.291citingCompania
GeneraldeTabacosv.deAljambraCigarandCigaretteManufacturingCo.,33Phil485Ogurav.
Chua,59Phil.471:ParkeDavies&Co.v.KiuFoo&Co.,60Phil.928.

9MeadJohnsonCo.v.N.V.J.VonDorp.Ltd.,7SCRA768BristolMyersCo.v.DirectorofPatents,
17SCRA128.

10Stuartv.F.G.StewartCo.,91F243.

11NotasemeHosieryv.Strauss201F99.

12McLeanv.Fleming96US245Fischerv.Blank,138N.Y.244TillmanBendelv.California
PackingCorporation,63F2d498.

13Martini&Rossiv.Consumer'sPeople'sProducts,57F2d599.

14Stuartv.F.G.StewartCo.,91F243.

15HelmetCo.v.WmWrigleyJr.Co.,245F842PennzoilCo.v.PennsylvaniaPetroleumCo.,159
M.D.187,

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16WilliamWaltke&Co.v.GeoH.Schafer,49App.D.C.294WardBakingCo.v.PotterWrintington,
298F398.

17VortexMfg.Co.v.PlyRiteContractingCo.,33F2d302.

18Hiltonv.Hilton,90N.J.Eq564.

19BickmoreGallCureCo.v.Karns,134F8331J.C.PennyCo.v.H.D.LeeMerchantileCo.,120F
2d949.

20BakerandMasterPrintersUnionofNewJersey,34F.Supp.808.

2111H.D.Nims,TheLawofUnfairCompetitionandTrademark,1947,p.1027.

22Ibid.,p.1030.

2311RudolfCallman,TheLawofUnfairCompetitionandTrademark,1945,pp.1137,1136.

24Ibid.,Vol.111,2nded.pp.15271528citedinConverseRubberCorporationv.UniversalRubber
ProductInc.,147SCRA155.

25WilliamWaltke&Co.v.GeoH.Schafer&Co.,49App.D.C.294StandardOilv.Michie34F2d
802.

26154SCRA723.

2711SCRA436.

26Supra.,p.1141.

TheLawphilProjectArellanoLawFoundation

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