PHILIP MORRIS, INC. VS.
FORTUNE TOBACCO CORPORATION (Equal Standing of  [respondent], without any previous consent from any of the [petitioners],
International Law and Municipal Law)
Penned by: GARCIA, J.:
Petition for review under Rule 45 of the Rules of Court, petitioners Philip Morris, Inc., Benson &
Hedges (Canada) Inc., and Fabriques de Tabac Reunies, S.A. (now Philip Morris Products S.A.) seek
the reversal and setting aside of the following issuances of the Court of Appeals (CA) in CA-G.R.
CV No. 66619: PETITION DENIED
1. Decision dated January 21, 20031 affirming an earlier decision of the Regional Trial Court of
Pasig City, Branch 166, in its Civil Case No. 47374
 Dismissed the complaint for trademark infringement and damages thereat commenced by
the petitioners against respondent Fortune Tobacco Corporation; and
2. Resolution dated May 30, 20032 denying petitioners’ motion for reconsideration.
FACTS OF THE CASE:
 Petitioner Philip Morris, Inc., a corporation (State of Virginia, U.S.A), is the registered
owner of the trademark “MARK VII” for cigarettes. (per Certificate of Registration No.
18723 issued on April 26, 1973 by the Philippine Patents Office (PPO)
 Similarly, petitioner Benson & Hedges (Canada), Inc., a subsidiary of Philip Morris, Inc., is
the registered owner of the trademark “MARK TEN” for cigarettes (PPO Certificate of
Registration No. 11147)
 Fabriques de Tabac Reunies, S.A. (Swiss company), another subsidiary of Philip Morris,
Inc., is the assignee of the trademark “LARK,” (Trademark Certificate of Registration No.
19053) (originally registered in 1964 by Ligget and Myers Tobacco Company)
 Respondent Fortune Tobacco Corporation, a company organized in the Philippines,
manufactures and sells cigarettes using the trademark “MARK.”
 Petitioners, on the claim that an infringement of their respective trademarks had been
committed, filed, on August 18, 1982, a Complaint for Infringement of Trademark and
Damages against respondent Fortune Tobacco Corporation, docketed as Civil Case No. 47374
of the Regional Trial Court of Pasig, Branch 166.
The decision under review summarized what happened next, as follows:
o Prayer for the issuance of a preliminary injunction, [petitioners] alleged that they are foreign
corporations not doing business in the Philippines and are suing on an isolated transaction.
o Countries in which they are domiciled grant to corporate or juristic persons of the
Philippines the privilege to bring action for infringement, without need of a license
to do business in those countries.
o [Petitioners] likewise manifested [being registered owners of the trademark “MARK VII” and
“MARK TEN”
o registered the trademarks in their respective countries of origin
 by virtue of the long and extensive usage of the same, these trademarks
have already gained international fame and acceptance
manufactured and sold cigarettes bearing the identical and/or confusingly
similar trademark “MARK”
 have caused and is likely to cause confusion or mistake, or would deceive
purchasers and the public in general into buying these products under the
impression and mistaken belief that they are buying [petitioners’] products.
o Invoked provisions of the Paris Convention for the Protection of Industrial and
Intellectual Property (Paris Convention)
o Philippines is a signatory, [petitioners] pointed out that upon the request of an
interested party, a country of the Union may prohibit the use of a trademark which
constitutes a reproduction, imitation, or translation of a mark already belonging to a
person entitled to the benefits of the said Convention. In accordance with Section
21-A in relation to Section 23 of Republic Act 166, as amended, they are entitled to
relief in the form of damages [and] the issuance of a writ of preliminary injunction
which should be made permanent.
o [Respondent] filed its Answer denying [petitioners’] material allegations and averred
[among other things] that “MARK” is a common word, which cannot particularly identify
a product to be the product of the [petitioners]
o After the termination of the trial on the merits trial court rendered its Decision dated
November 3, 1999 dismissing the complaint and counterclaim after making a finding that the
[respondent] did not commit trademark infringement against the [petitioners].
o The issue of whether or not there was infringement of the [petitioners’]
trademarks by the [respondent] was likewise answered in the negative. It expounded that
“in order for a name, symbol or device to constitute a trademark, it must, either by itself or by
association, point distinctly to the origin or ownership of the article to which it is applied and
be of such nature as to permit an exclusive appropriation by one person”.
 Maintaining to have the standing to sue in the local forum and that respondent has
committed trademark infringement, petitioners went on appeal to the CA. (Appellate
recourse docket CA-G.R. CV No. 66619)
o CA decision on January 21, 2003 (while ruling for petitioners on the matter of their
legal capacity to sue in this country for trademark infringement) affirmed the trial
court’s decision on the underlying issue of respondent’s liability for
infringement.
 Motion for reconsideration denied by the CA (Resolution of May 30, 2003)
ISSUES
 Petitioners seek petition for review (Court of Appeals):
o (1) whether or not petitioners, as Philippine registrants of trademarks, are
entitled to enforce trademark rights in this country;
o (2) whether or not respondent has committed trademark infringement against
petitioners by its use of the mark “MARK” for its cigarettes, hence liable for
damages.
 Respondent: issue the propriety of the petition as it allegedly raises questions of fact.
  The petition is bereft of merit.
 Petition raises both questions of fact and law
o question of law exists when the doubt or difference arises as to what the law is on a
certain state of facts
o question of fact when the doubt or difference arises as to the truth or falsity of
alleged facts
 Court is not the proper venue to consider factual issues as it is not a trier of
facts
 Unless the factual findings of the appellate court are mistaken, absurd,
speculative, conflicting, tainted with grave abuse of discretion, or contrary
to the findings culled by the court of origin, we will not disturb them
 Petitioners: contentions should be treated as purely legal since they are assailing erroneous
conclusions deduced from a set of undisputed facts
 A “trademark” is any distinctive word, name, symbol, emblem, sign, or device, or any
combination thereof adopted and used by a manufacturer or merchant on his goods to identify
and distinguish them from those manufactured, sold, or dealt in by others.
o A trademark deserves protection.
PETITIONER:
 Petitioners assert that, as corporate nationals of member-countries of the Paris Union,
they can sue before Philippine courts for infringement of trademarks, or for unfair
competition, without need of obtaining registration or a license to do business in the
Philippines, and without necessity of actually doing business in the Philippines.
o Right and mechanism are accorded by
 Section 21-A of Republic Act (R.A.) No. 166 or the Trademark Law, as
amended
 Article 2 of the Paris Convention for the Protection of Industrial
Property, aka Paris Convention.
 Not doing business in the Philippines does not mean that cigarettes bearing their trademarks
are not available and sold locally. Citing Converse Rubber Corporation v. Universal
Rubber Products, Inc., such availability and sale may be effected through the acts of
importers and distributors.
 Entitlement to protection even in the absence of actual use of trademarks in the country
o Philippines’ adherence to the Trade Related Aspects of Intellectual Property
Rights or the TRIPS Agreement
o enactment of R.A. No. 8293, or the Intellectual Property Code (“IP Code”)
o fame of a trademark may be acquired through promotion or advertising with no
explicit requirement of actual use in local trade or commerce
 Before discussing petitioners’ claimed entitlement to enforce trademark rights in the
Philippines, it must be emphasized that their standing to sue in Philippine courts had
been recognized, and rightly so, by the CA
o such right to sue does not necessarily mean protection of their registered marks in
the absence of actual use in the Philippines.
Thus clarified, what petitioners now harp about is their entitlement to protection on the strength of
registration of their trademarks in the Philippines.
HELD/RATIO:
As we ruled in G.R. No. 91332,18 :
1. RECIPROCITY REQUIREMENT
 Registration of a trademark gives the registrant (petitioners) advantages denied non-
registrants or ordinary users (respondent)
o validity of the registration
o ownership and the exclusive right to use the registered marks
 they may not successfully sue on the basis alone of their respective certificates of
registration of trademarks.
o Petitioners: still foreign corporations
o condition to availment of the rights and privileges & their trademarks in this
country:
 On top of Philippine registration, their country grants substantially
similar rights and privileges to Filipino citizens pursuant to Section 21-
A20 of R.A. No. 166.
 In Leviton Industries v. Salvador
o Court: reciprocity requirement is a condition sine qua non to filing a suit by a
foreign corporation
 Unless alleged in the complaint, would justify dismissal
o complainant is a national of a Paris Convention- adhering country, its allegation
that it is suing under said Section 21-A would suffice, because the reciprocal
agreement between the two countries is embodied and supplied by the Paris
Convention
 being considered part of Philippine municipal laws, can be taken
judicial notice of in infringement suits.
2. REGISTRATION VERSUS ACUAL USE!!
 members of the Paris Union does not automatically entitle petitioners to the protection
of their trademarks in this country ABSENT ACTUAL USE OF THE MARKS IN
LOCAL COMMERCE AND TRADE.
 Philippines’ adherence to the Paris Convention effectively obligates the country to honor
and enforce its provisions( as regards the protection of industrial property of foreign
nationals in this country)
o However, any protection accorded has to be made subject to the limitations of
Philippine laws.
o Hence, despite Article 2 of the Paris Convention which substantially provides that:
  (1) nationals of member-countries shall have in this country rights specially
provided by the Convention as are consistent with Philippine laws, and
enjoy the privileges that Philippine laws now grant or may hereafter grant to
its national
 (2) while no domicile requirement in the country where protection is
claimed shall be required of persons entitled to the benefits of the Union for
the enjoyment of any industrial property rights
 foreign nationals must still observe and comply with the conditions
imposed by Philippine law on its nationals.
 R.A. No. 166 (as amended, specifically Sections 228 and 2-A29), mandates actual use of
the marks and/or emblems in local commerce and trade before they may be registered
and ownership thereof acquired
o the petitioners cannot, therefore, dispense with the element of actual use.
o Their being nationals of member-countries of the Paris Union does not alter the legal
situation.
 In Emerald Garment Mfg. Corporation v. Court of Appeals, the Court reiterated its rulings in
Sterling Products International, Inc. v. Farbenfabriken Bayer Aktiengesellschaft, Kabushi
Kaisha Isetan v. Intermediate Appellate Court, and Philip Morris v. Court of Appeals and
Fortune Tobacco Corporation on the importance of ACTUAL COMMERCIAL USE OF A
TRADEMARK in the Philippines notwithstanding the Paris Convention:
o The provisions of the 1965 Paris Convention … relied upon by private respondent
and Sec. 21-A of the Trademark Law were sufficiently expounded upon and
qualified in the recent case of Philip Morris, Inc., et. al. vs. Court of Appeals:
 Following universal acquiescence and comity, our municipal law on
trademarks regarding the requirements of actual use in the Philippines must
subordinate an international agreement inasmuch as the apparent clash is
being decided by a municipal tribunal.
 Withal, the fact that international law has been made part of the law of the
land does NOT by any means imply the primacy of international law
over national law in the municipal sphere.
 Under the DOCTRINE OF INCORPORATION as applied in most
countries, rules of International Law are given a standing EQUAL, not
superior, to national legislative enactments.
 A foreign corporation) may have the capacity to sue for infringement … but
whether they have an exclusive right over their symbol as to justify issuance
of the controversial writ will depend on actual use of their trademarks in
the Philippines in line with Sections 2 and 2-A of the same law.
 It is thus incongruous for petitioners to claim that when a foreign
corporation not licensed to do business in the Philippines files a
complaint for infringement, the entity need not be actually using its
trademark in commerce in the Philippines.
 Such a foreign corporation may have the personality to file a suit for
infringement but it may not necessarily be entitled to protection due to
absence of actual use of the emblem in the local market.
 Registration of trademark cannot be deemed conclusive as to the actual use of such
trademark in local commerce.
o registration does not confer upon the registrant an absolute right to the registered
mark.
o merely constitutes prima facie evidence that the registrant is the owner of the
registered mark.
o Evidence of non-usage of the mark rebuts the presumption of trademark
ownership
 We stress that registration in the Philippines of trademarks does not ipso facto convey an
absolute right or exclusive ownership thereof.
o Shangri-La International Hotel Management, Ltd. v. Development Group of
Companies, Inc.
 Trademark is a creation of use
 Actual use is a pre-requisite to exclusive ownership
 Registration is only an administrative confirmation of the existence of the
right of ownership of the mark
 does not perfect such right; actual use thereof is the perfecting
ingredient.
 Petitioners’ reliance on Converse Rubber Corporation is quite misplaced
o different factual milieu
o foreign owner of a Philippine trademark, albeit not licensed to do, and not so
engaged in, business in the Philippines, may actually earn reputation or goodwill for
its goods in the country.
o But unlike in the instant case, evidence of actual sales of Converse rubber shoes,
such as sales invoices, receipts and the testimony of a legitimate trader, was
presented in Converse.
 This Court also finds the IP Code and the TRIPS Agreement to be inapplicable
o the infringement complaint filed in August 1982 and tried under the aegis of R.A.
No. 166, as amended.
o The IP Code (January 1, 1998) no provision on retroactivity; TRIPS Agreement
(December 16, 1994)
 registration of a trademark unaccompanied by actual use thereof in the country accords
the registrant only the standing to sue for infringement in Philippine courts. Entitlement
to protection of such trademark in the country is entirely a different matter.
ETEPHA, A.G., petitioner, vs. DIRECTOR OF PATENTS and WESTMONT
PHARMACEUTICALS, INC., respondents .
(G.R. No. L-20635, March 31, 1966)
FACTS:
Respondent Westmont Pharmaceuticals, Inc., a New York corporation, sought registration of
trademark "Atussin" placed on its "medicinal preparation of expectorant antihistaminic,
 bronchodilator sedative, ascorbic acid (Vitamin C) used in the treatment of cough". The
trademark is used exclusively in the Philippines since January 21, 1959.
Petitioner, Etepha, A. G., a Liechtenstin (principality) corporation, objected claiming that it
will be damaged because Atussin is so confusedly similar to its Pertussin used on a
preparation for the treatment of coughs, that the buying public will be misled into believing
that Westmont's product is that of petitioner's which allegedly enjoys goodwill.
The Director of Patents ruled that the trademark ATUSSIN may be registered even though
PERTUSSIN had been previously registered from the same office, hence, this appeal.
ISSUE: Whether or not ATUSSIN may be registered?
HELD:
We are to be guided by the rule that the validity of a cause for infringement is predicated upon
colorable imitation. The phrase "colorable imitation" denotes such a "close or ingenious
imitation as to be calculated to deceive ordinary persons, or such a resemblance to the original
as to deceive an ordinary purchaser, giving such attention as a purchaser usually gives, and to
cause him to purchase the one supposing it to be the other.
A practical approach to the problem of similarity or dissimilarity is to go into the whole of the
two trademarks pictured in their manner of display. Inspection should be undertaken from the
viewpoint of a prospective buyer. Confusion is likely between trademarks, however, only if
their over-all presentations in any of the particulars of sound, appearance, or meaning are such
as would lead the purchasing public into believing that the products to which the marks are
applied emanated from the same source.
We concede the possibility that buyers might be able to obtain Pertussin or Attusin without
prescription. When this happens, then the buyer must be one thoroughly familiar with what he
intends to get, else he would not have the temerity to ask for a medicine — specifically
needed to cure a given ailment. In which case, the more improbable it will be to palm off one
for the other. For a person who purchases with open eyes is hardly the man to be deceived.
For the reasons given, the appealed decision of the respondent Director of Patents — giving
due course to the application for the registration of trademark ATTUSIN is hereby affirmed.
Cost against petitioner. So ordered.
Asia Brewery, Inc. v. Court of Appeals, G.R. No. 103543, 5 July
1993
ASIA BREWERY, INC. vs. THE HON. COURT OF APPEALS and SAN MIGUEL
CORPORATION
G.R. 103543 July 5, 1993
Facts:
San Miguel Corporation (SMC) filed a complaint against Asia Brewery Inc. (ABI) for
infringement of trademark and unfair competition on account of the latter's BEER PALE
PILSEN or BEER NA BEER product which has been competing with SMC's SAN MIGUEL
PALE PILSEN for a share of the local beer market.
The trial court dismissed SMC's complaint because ABI "has not committed trademark
infringement or unfair competition against" SMC
On appeal by SMC, the Court of Appeals reversed the decision rendered by the trial court,
finding the defendant Asia Brewery Incorporated GUILTY of infringement of trademark and
unfair competition. ABI then filed a petition for certiorari.
Issue:
Are the words PALE PILSEN as part of ABI’s trademark constitute infringement of SMC’s
trademark?
Ruling:
No. The Supreme Court said it does not constitute an infringement as the words PALE
PILSEN, which are part of ABI’s trademark, are generic words descriptive of the color
(“pale“), of a type of beer (“pilsen”), which is a light bohemian beer with a strong hops flavor
that originated in the City of Pilsen, Czechislovakia and became famous in the Middle Ages.
The Supreme Court further said that the words "pale pilsen" may not be appropriated by SMC
for its exclusive use even if they are part of its registered trademark. No one may appropriate
generic or descriptive words. They belong to the public domain.
Petitioner ABI has neither infringed SMC's trademark nor committed unfair competition with
the latter's SAN MIGUEL PALE PILSEN product.
Societe des produits Nestle, S.A. V Court of Appeals; GR No. 112012; April 4,
2001
In 1984, CFC Corporation filed with the Bureau of Patents, Trademarks, and
Technology Transfers an application for the registration of its trademark
“Flavor Master” – an instant coffee. Nestle opposed the application as it
alleged that “Flavor Master” is confusingly similar to Nestle coffee products
like Master Blend and Master Roast. Nestle alleged that in promoting their
products, the word Master has been used so frequently so much so that when
one hears the word Master it connotes to a Nestle product. They provided as
examples the fact that they’ve been using Robert Jaworski and Ric Puno Jr.
as their commercial advertisers; and that in those commercials Jaworski is a
master of basketball and that Puno is a master of talk shows; that the brand
of coffee equitable or fit to them is Master Blend and Master Roast. CFC
Corporation on the other hand alleged that the word “Master” is a generic and
a descriptive term, hence not subject to trademark. The Director of Patents
ruled in favor of Nestle but the Court of Appeals, using the Holistic Test,
reversed the said decision.
ISSUE: Whether or not the Court of Appeals is correct.
HELD: No. The proper test that should have been used is the Dominancy
Test. The application of the totality or holistic test is improper since the
ordinary purchaser would not be inclined to notice the specific features,
similarities or dissimilarities, considering that the product is an inexpensive
and common household item. The use of the word Master by Nestle in its
products and commercials has made Nestle acquire a connotation that if it’s a
Master product it is a Nestle product. As such, the use by CFC of the term
“MASTER” in the trademark for its coffee product FLAVOR MASTER is likely
to cause confusion or mistake or even to deceive the ordinary purchasers.
In addition, the word “MASTER” is neither a generic nor a descriptive term. As
such, said term can not be invalidated as a trademark and, therefore, may be
legally protected.
Generic terms are those which constitute “the common descriptive name of
an article or substance,” or comprise the “genus of which the particular
product is a species,” or are “commonly used as the name or description of a
kind of goods,” or “imply reference to every member of a genus and the
exclusion of individuating characters,” or “refer to the basic nature of the
wares or services provided rather than to the more idiosyncratic
characteristics of a particular product,” and are not legally protectable.
On the other hand, a term is descriptive and therefore invalid as a trademark
if, as understood in its normal and natural sense, it “forthwith conveys the
characteristics, functions, qualities or ingredients of a product to one who has
never seen it and does not know what it is,” or “if it forthwith conveys an
immediate idea of the ingredients, qualities or characteristics of the goods,” or
if it clearly denotes what goods or services are provided in such a way that
the consumer does not have to exercise powers of perception or imagination.
Rather, the term “MASTER” is a suggestive term brought about by the
advertising scheme of Nestle. Suggestive terms are those which, in the
phraseology of one court, require “imagination, thought and perception to
reach a conclusion as to the nature of the goods.” Such terms, “which subtly
connote something about the product,” are eligible for protection in the
absence of secondary meaning. While suggestive marks are capable of
shedding “some light” upon certain characteristics of the goods or services in
dispute, they nevertheless involve “an element of incongruity,”
“figurativeness,” or ” imaginative effort on the part of the observer.”
McDonald's Corporation v. L.C. Big Mak Burger,
Inc.
MCDONALD'S CORPORATION and MCGEORGE FOOD INDUSTRIES, INC.,
petitioners, vs. L.C. BIG MAK BURGER, INC., FRANCIS B. DY, EDNA A. DY, RENE B.
DY, WILLIAM B. DY, JESUS AYCARDO, ARACELI AYCARDO, and GRACE HUERTO,
respondents.
G.R. No. 143993, August 18, 2004.
CARPIO, J.:
Petitioner McDonald's Corporation ("McDonald's") is a US corporation that operates a
global chain of fast-food restaurants, with Petitioner McGeorge Food Industries
("McGeorge"), as the Philippine franchisee.
McDonald's owns the "Big Mac" mark for its "double-decker hamburger sandwich." with
the US Trademark Registry on 16 October 1979.
Based on this Home Registration, McDonald's applied for the registration of the same
mark in the Principal Register of the then Philippine Bureau of Patents, Trademarks and
Technology ("PBPTT") (now IPO). On 18 July 1985, the PBPTT allowed registration of
the "Big Mac."
Respondent L.C. Big Mak Burger, Inc. is a domestic corporation which operates fast-food
outlets and snack vans in Metro Manila and nearby provinces. Respondent corporation's
menu includes hamburger sandwiches and other food items.
On 21 October 1988, respondent corporation applied with the PBPTT for the registration
of the "Big Mak" mark for its hamburger sandwiches, which was opposed by McDonald's.
McDonald's also informed LC Big Mak chairman of its exclusive right to the "Big Mac"
mark and requested him to desist from using the "Big Mac" mark or any similar mark.
Having received no reply, petitioners sued L.C. Big Mak Burger, Inc. and its directors
before Makati RTC Branch 137 ("RTC"), for trademark infringement and unfair
competition.
RTC rendered a Decision finding respondent corporation liable for trademark
infringement and unfair competition. CA reversed RTC's decision on appeal.
1ST ISSUE:W/N respondent corporation is liable for trademark infringement and unfair
competition.
Ruling: Yes
Section 22 of Republic Act No. 166, as amended, defines trademark infringement as
follows:
Infringement, what constitutes. - Any person who [1] shall use, without the consent of the
registrant, any reproduction, counterfeit, copy or colorable imitation of any registered
mark or trade-name in connection with the sale, offering for sale, or advertising of any
goods, business or services on or in connection with which such use is likely to cause
confusion or mistake or to deceive purchasers or others as to the source or origin of such
goods or services, or identity of such business; or [2] 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, receptacles or
advertisements intended to be used upon or in connection with such goods, business or
services, shall be liable to a civil action by the registrant for any or all of the remedies
herein provided.
To establish trademark infringement, the following elements must be shown: (1) the
validity of plaintiff's mark; (2) the plaintiff's ownership of the mark; and (3) the use of the
mark or its colorable imitation by the alleged infringer results in "likelihood of confusion."
Of these, it is the element of likelihood of confusion that is the gravamen of trademark
infringement.
1st element:
A mark is valid if it is distinctive and not merely generic and descriptive.
The "Big Mac" mark, which should be treated in its entirety and not dissected word for
word, is neither generic nor descriptive. Generic marks are commonly used as the name
or description of a kind of goods, such as "Lite" for beer. Descriptive marks, on the other
hand, convey the characteristics, functions, qualities or ingredients of a product to one
who has never seen it or does not know it exists, such as "Arthriticare" for arthritis
medication. On the contrary, "Big Mac" falls under the class of fanciful or arbitrary marks
as it bears no logical relation to the actual characteristics of the product it represents. As
such, it is highly distinctive and thus valid.
2nd element:
Petitioners have duly established McDonald's exclusive ownership of the "Big Mac"
mark. Prior valid registrants of the said mark had already assigned his rights to
McDonald's.
3rd element:
Section 22 covers two types of confusion arising from the use of similar or colorable
imitation marks, namely, confusion of goods (confusion in which the ordinarily prudent
purchaser would be induced to purchase one product in the belief that he was
purchasing the other) and confusion of business (though the goods of the parties are
different, the defendant's product is such as might reasonably be assumed to originate
with the plaintiff, and the public would then be deceived either into that belief or into the
belief that there is some connection between the plaintiff and defendant which, in fact,
does not exist).
There is confusion of goods in this case since respondents used the "Big Mak" mark on
the same goods, i.e. hamburger sandwiches, that petitioners' "Big Mac" mark is used.
There is also confusion of business due to Respondents' use of the "Big Mak" mark in
the sale of hamburgers, the same business that petitioners are engaged in, also results
in confusion of business. The registered trademark owner may use his mark on the same
or similar products, in different segments of the market, and at different price levels
depending on variations of the products for specific segments of the market. The
registered trademark owner enjoys protection in product and market areas that are the
normal potential expansion of his business.
Furthermore, In determining likelihood of confusion, the SC has relied on the dominancy
test (similarity of the prevalent features of the competing trademarks that might cause
confusion) over the holistic test (consideration of the entirety of the marks as applied to
the products, including the labels and packaging).
Applying the dominancy test, Respondents' use of the "Big Mak" mark results in
likelihood of confusion. Aurally the two marks are the same, with the first word of both
marks phonetically the same, and the second word of both marks also phonetically the
same. Visually, the two marks have both two words and six letters, with the first word of
both marks having the same letters and the second word having the same first two
letters.
Lastly, since Section 22 only requires the less stringent standard of "likelihood of
confusion," Petitioners' failure to present proof of actual confusion does not negate their
claim of trademark infringement.
2ND ISSUE: W/N Respondents committed Unfair Competition
Ruling: Yes.
Section 29 ("Section 29")73 of RA 166 defines unfair competition, thus:
Any person who will employ deception or any other means contrary to good faith by
which he shall pass off the goods manufactured by him or in which he deals, or his
business, or services for those of the one having established such goodwill, or who shall
commit any acts calculated to produce said result, shall be guilty of unfair competition,
and shall be subject to an action therefor.
The essential elements of an action for unfair competition are (1) confusing similarity in
the general appearance of the goods, and (2) intent to deceive the public and defraud a
competitor.
In the case at bar, Respondents have applied on their plastic wrappers and bags almost
the same words that petitioners use on their styrofoam box. Further, Respondents' goods
are hamburgers which are also the goods of petitioners. Moreover, there is actually no
notice to the public that the "Big Mak" hamburgers are products of "L.C. Big Mak Burger,
Inc." This clearly shows respondents' intent to deceive the public.
LYCEUM OF THE PHILIPPINES, INC., petitioner, vs. COURT OF APPEALS, ET. AL., respondents.
FACTS:
Petitioner is an educational institution duly registered with the Securities and Exchange Commission
("SEC"). When it first registered with the SEC on 21 September 1950, it used the corporate name
Lyceum of the Philippines, Inc. and has used that name ever since.
On 24 February 1984, petitioner instituted proceedings before the SEC to compel the private
respondents, which are also educational institutions, to delete the word "Lyceum" from their
corporate names and permanently to enjoin them from using "Lyceum" as part of their respective
names.
Petitioner had sometime before commenced in the SEC a proceeding (SEC-Case No. 1241) against the
Lyceum of Baguio, Inc. to require it to change its corporate name and to adopt another name not
"similar [to] or identical" with that of petitioner. In an Order dated 20 April 1977, Associate
Commissioner Julio Sulit held that the corporate name of petitioner and that of the Lyceum of Baguio,
Inc. were substantially identical because of the presence of a "dominant" word, i.e., "Lyceum," the
name of the geographical location of the campus being the only word which distinguished one from
the other corporate name. The SEC also noted that petitioner had registered as a corporation ahead
of the Lyceum of Baguio, Inc. in point of time, 1 and ordered the latter to change its name to another
name "not similar or identical [with]" the names of previously registered entities.
The Lyceum of Baguio, Inc. assailed the Order of the SEC before the Supreme Court in a case docketed
as G.R. No. L-46595. In a Minute Resolution dated 14 September 1977, the Court denied the Petition
for Review for lack of merit. Entry of judgment in that case was made on 21 October 1977.
With the Resolution of the Court in G.R. No. L-46595, petitioner then wrote all the educational
institutions it could find using the word "Lyceum" as part of their corporate name, and advised them
to discontinue such use of "Lyceum." When, with the passage of time, it became clear that this
recourse had failed, petitioner instituted before the SEC SEC-Case No. 2579 to enforce what petitioner
claims as its proprietary right to the word "Lyceum." The SEC hearing officer rendered a decision
sustaining petitioner's claim to an exclusive right to use the word "Lyceum." The hearing officer relied
upon the SEC ruling in the Lyceum of Baguio, Inc. case (SEC-Case No. 1241) and held that the word
"Lyceum" was capable of appropriation and that petitioner had acquired an enforceable exclusive
right to the use of that word.
On appeal, however, by private respondents to the SEC En Banc, the decision of the hearing officer
was reversed and set aside. The SEC En Banc did not consider the word "Lyceum" to have become so
identified with petitioner as to render use thereof by other institutions as productive of confusion
about the identity of the schools concerned in the mind of the general public. Unlike its hearing
officer, the SEC En Banc held that the attaching of geographical names to the word "Lyceum" served
sufficiently to distinguish the schools from one another, especially in view of the fact that the
campuses of petitioner and those of the private respondents were physically quite remote from each
other.
Petitioner then went on appeal to the Court of Appeals. In its Decision dated 28 June 1991, however,
the Court of Appeals affirmed the questioned Orders of the SEC En Banc. 4 Petitioner filed a motion
for reconsideration.
ISSUE:
1. The Court of Appeals erred in holding that the word Lyceum has not acquired a secondary meaning
in favor of petitioner.
RULING:
"SECTION 18. Corporate name. — No corporate name may be allowed by the Securities and Exchange
Commission if the proposed name is identical or deceptively or confusingly similar to that of any
existing corporation or to any other name already protected by law or is patently deceptive, confusing
or contrary to existing laws. When a change in the corporate name is approved, the Commission shall
issue an amended certificate of incorporation under the amended name." (Emphasis supplied)
The policy underlying the prohibition in Section 18 against the registration of a corporate name which
is "identical or deceptively or confusingly similar" to that of any existing corporation or which is
"patently deceptive" or "patently confusing" or "contrary to existing laws," is the avoidance of fraud
upon the public which would have occasion to deal with the entity concerned, the evasion of legal
obligations and duties, and the reduction of difficulties of administration and supervision over
corporations.
Under the doctrine of secondary meaning, a word or phrase originally incapable of exclusive
appropriation with reference to an article in the market, because geographical or otherwise
descriptive might nevertheless have been used so long and so exclusively by one producer with
reference to this article that, in that trade and to that group of the purchasing public, the word or
phrase has come to mean that the article was his produce (Ana Ang vs. ToribioTeodoro, 74 Phil. 56).
This circumstance has been referred to as the distinctiveness into which the name or phrase has
evolved through the substantial and exclusive use of the same for a considerable period of time.
Consequently, the same doctrine or principle cannot be made to apply where the evidence did not
prove that the business (of the plaintiff) has continued for so long a time that it has become of
consequence and acquired a good will of considerable value such that its articles and produce have
acquired a well-known reputation, and confusion will result by the use of the disputed name (by the
defendant) .
We conclude and so hold that petitioner institution is not entitled to a legally enforceable exclusive
right to use the word "Lyceum" in its corporate name and that other institutions may use "Lyceum" as
part of their corporate names. To determine whether a given corporate name is "identical" or
"confusingly or deceptively similar" with another entity's corporate name, it is not enough to
ascertain the presence of "Lyceum" or "Liceo" in both names. One must evaluate corporate names in
their entirety and when the name of petitioner is juxtaposed with the names of private respondents,
they are not reasonably regarded as "identical" or "confusingly or deceptively similar" with each
other.
The decision of the Court of Appeals is affirmed and the petition for review is DENIED for
lack of merit.
ANG V. TEODORO (G.R. NO. L-48226)
Facts:
Respondent Teodoro has long been using ‘Ang Tibay’ both as trademark and tradename in the
manufacture and sale of its slippers, shoes and indoor baseballs when he formally registered
it. Meanwhile, petitioner Ang registered the same trademark ‘Ang Tibay’ for its products of
pants and shirts. Respondent moved to cancel the registration of petitioner’s mark. The trial
court found for petitioner Ang. CA reversed the judgment. Petitioner argues the validity of
the mark being descriptive; that it had not acquired secondary meaning in favor of respondent;
and that there can be no infringement/unfair competition because the goods are not similar.
Issues:
(1) Whether or not ‘ANG TIBAY’ is a descriptive term not registrable.
(2) Whether or not the trademark ‘ANG TIBAY’ has acquired a secondary meaning.
(3) Whether or not there is trademark infringement and/or unfair competition between
unrelated goods.
Ruling:
(1) NO. The phrase “Ang Tibay” is an exclamation denoting administration of strength or
durability. For instance, one who tries hard but fails to break an object exclaims, “Ang tibay!”
(How strong!”) The phrase “ang tibay” is never used adjectively to define or describe an
object. One does not say, “ang tibay sapatos” or “sapatos ang tibay” is never used adjectively
to define or describe an object. One does not say, “ang tibay sapatos” or “sapatos ang tibay” to
mean “durable shoes,” but “matibay na sapatos” or “sapatos na matibay.” From all of this we
deduce that “Ang Tibay” is not a descriptive term within the meaning of the Trade-Mark Law
but rather a fanciful or coined phrase which may properly and legally be appropriated as a
trademark or tradename. In this connection we do not fail to note that when the petitioner
herself took the trouble and expense of securing the registration of these same words as a
trademark of her products she or her attorney as well as the Director of Commerce was
undoubtedly convinced that said words (Ang Tibay) were not a descriptive term and hence
could be legally used and validly registered as a trademark.
(2) NO. In view of the conclusion we have reached upon the first assignment of error, it is
unnecessary to apply here the doctrine of “secondary meaning” in trade-mark parlance. This
doctrine is to the effect that a word or phrase originally incapable of exclusive appropriation
with reference to an article of the market, because geographically or otherwise descriptive,
might nevertheless have been used so long and so exclusively by one producer with reference
to his article that, in that trade and to that branch of the purchasing public, the word or phrase
has come to mean that the article was his product. We have said that the phrase “Ang Tibay,”
being neither geographic nor descriptive, was originally capable of exclusive appropriation as
a trade-mark. But were it not so, the application of the doctrine of secondary meaning made
by the Court of Appeals could nevertheless be fully sustained because, in any event, by
respondent’s long and exclusive use of said phrase with reference to his products and his
business, it has acquired a proprietary connotation.
(3) YES. In the present state of development of the law on Trade-Marks, Unfair Competition,
and Unfair Trading, the test employed by the courts to determine whether noncompeting
goods are or are not of the same class is confusion as to the origin of the goods of the second
user. Although two noncompeting articles may be classified under two different classes by the
Patent Office because they are deemed not to possess the same descriptive properties, they
would, nevertheless, be held by the courts to belong to the same class if the simultaneous use
on them of identical or closely similar trade-marks would be likely to cause confusion as to
the origin, or personal source, of the second user’s goods. They would be considered as not
falling under the same class only if they are so dissimilar or so foreign to each other as to
make it unlikely that the purchaser would think the first user made the second user’s goods.
The Court of Appeals found in this case that by uninterrupted and exclusive use since 1910 of
respondent’s registered trade-mark on slippers and shoes manufactured by him, it has come to
indicate the origin and ownership of said goods. It is certainly not farfetched to surmise that
the selection by petitioner of the same trade-mark for pants and shirts was motivated by a
desire to get a free ride on the reputation and selling power it has acquired at the hands of the
respondent.
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