TRADEMARKS
La Chemise Lacoste vs. Fernandez, GR No. L-63796, 2 May 1984 ........... 41
Table of Contents
What are Trademarks? (Sec 121, IPC)................................................................... 2
How are Trademarks being distinguished from Tradenames/Business names,
and Collective marks? (Sec. 121.1, 121.2, 121.3, 165, and 167, IPC) ............... 2
Canon Kabushiki Kaisha vs. CA, GR No. 120900, July 20, 2000 .................. 2
What are the purposes of Trademarks? ................................................................. 4
Etepha vs. Director of Patents, GR. No L-20635 March 31, 1966 ................. 4
Mirpuri vs. CA GR No 114508 Nov. 19, 1999 ................................................... 5
Acquisition of Ownership of Marks (Sec. 122, IPC); ........................................... 11
Cluster 1 .................................................................................................................... 12
Generic - Sec. 123.1 (h) IPC .................................................................................. 12
Descriptive - Sec. 123.1 (j) IPC.............................................................................. 12
Fanciful or Suggestive – others Suggestive ......................................................... 12
Asia Brewery, Inc. vs. CA GR No. 103543, 5 July 1993 ............................... 12
Societe Des Produits Nestle S.A vs. CA GR No. 112012, 4 April 2001 ...... 16
Mc Donald’s Corporation vs. LC Big Mak Burger Inc. GR No. 143997, 18
August 2004 ........................................................................................................ 19
Lyceum of the Philippines Inc vs. CA, GR No. 101897, 5 March 1993 ....... 26
Etpha vs. Director of Patents (supra) ............................................................... 29
Ang vs. Teodoro GR No. L-48226, 14 Dec. 1942 .......................................... 29
Cluster 2 .................................................................................................................... 31
Immoral Matters, Sec. 123.1 (a); Contrary to Public Order and Morality, Sec
123. 1 (m).................................................................................................................. 31
Flags, Sec. 123.1 (b); See also Sec. 4 Act No. 2928, RA No. 226; Portraits,
Sec. 123.1 (c) ........................................................................................................... 31
Shapes, Colors Sec 123.1 (k) and (l) .................................................................... 31
Cluster 3 .................................................................................................................... 31
Confusingly Similar with registered marks, Sec 123 (d); Sec 147,1 ................. 31
Deceptive, Sec. 123.1 (g) ....................................................................................... 32
What are the tests developed to determine if colorable imitation / confusing
similarity exists? ....................................................................................................... 32
Dominancy test ........................................................................................................ 32
Holistic test ............................................................................................................... 32
Mc Donald’s Corp vs. LC Big Mac (Supra) ................................................ 32
Asia Brewery Inc. vs. CA (Supra) .................................................................... 32
Del Monte Corp vs. CA GR No. L-78325, 25 January 1990 ......................... 32
American Wire and Cable Company vs. Dir. of Patents GR No. L-26557, 18
Feb. 1990 ............................................................................................................ 35
Converse Rubber Corp vs Universal Rubber Products, Inc. GR No. L-
27906, 8 Jan. 1987 ............................................................................................ 36
Cluster 4 .................................................................................................................... 38
Confusingly Similar with Well-known Marks, Sec. 123.1 (e, f), Article 6bis,
Paris Convention for the Protection of Intellectual Property Rights, Art 16(2-3)
Agreement on Trade Related Aspects of Intellectual Property Rights.............. 38
Mirpuri vs. CA (Supra) ....................................................................................... 39
246 Corporation vs. Daway, GR. No. 114508, 19 Nov. 1999 ....................... 39
INTELLECTUAL PROPERTY LAWS – AMES 2014
CONTRA: Philip Morris, Inc. vs. CA GR No. 91332, 16 July 1993 .............. 47
Cluster 5.................................................................................................................... 52
Customary / Usual signs, Sec 123.1 (i) ................................................................ 52
Marks that acquired Secondary Meanings, Sec. 123.2 in relation to Sec. 123.1
(j-l).............................................................................................................................. 52
Ang vs. Teodoro GR No. L-48226, 14 December 1942 (SUPRA).............. 52
Ong Ai Gui vs. Director of Patent, GR No. L-6235, 28 March 1995 ............ 52
Lyceum of the Phil vs. CA (SUPRA) ................................................................ 54
Arce Sons and Co. vs. Selecta Biscuits GR No. L-14761, 28 Jan. 1961.... 54
What are the rights conferred by registration? ..................................................... 57
Exclusive use, Sec. 147.......................................................................................... 57
Importation of Drugs and Medicines, Sec. 72.1 ................................................... 57
Are there any exceptions to the conferred rights? Sec 148 ............................... 57
May an application or registration be transferred or assigned? Sec 149 ......... 58
What about licensing? Sec. 150 ............................................................................ 58
What are the grounds to cancel registration? Secs. 151 and 154 .................... 58
What is Trademark Infringement? Secs. 155-156 ............................................... 58
Can damages be recovered? Secs. 156-158 ...................................................... 58
What is Unfair Competition? Sec. 168 .................................................................. 59
How is trademark infringement similar / dissimilar to unfair competition? To
False Designation of Origin and False Description or Representation? Sec.
169 ............................................................................................................................. 59
Ang vs. Teodoro (SUPRA) ................................................................................ 60
Ang Si Heng vs. Wellington Department Store Inc. GR No. L-4531, 10 Jan.
1953 ..................................................................................................................... 60
Mc Donald’s Corp vs. LC Big Make Burger (SUPRA) ................................... 61
Can a Foreign Corporation not engaged in business in the Philippines bring an
action for trademark infringement before Philippine courts? Sec 160 IPC and
Rule 3 AM No. 10-3-10-SC .................................................................................... 61
What are the defenses against Infringement? ..................................................... 61
Bona Fide Prior User, Sec. 159..1, Sec. 1 Rule 16 AM No. 10-3-10 SC ......... 61
Innocent Infringer, Sec. 159.2 ................................................................................ 61
Against Publishers or Distributors, Sec. 159.3 .................................................... 61
Imported Drugs and Medicines, Sec. 159.4 ......................................................... 61
What are the penalties that could be imposed? Civil, Administrative, Criminal –
Sec 170, Damages – Sec 156 and 158, Injunctive Relief – Sec. 156 .............. 61
Philip Morris et. Al vs. CA (SUPRA) ................................................................ 62
Developers Group of Companies, Inc. vs. CA GR No. 104583 8 March
1993 ..................................................................................................................... 62
Conrad and Company vs. CA, Filtrite and Victoria Biscuits GR No. 115115,
18 July 1995........................................................................................................ 63
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TRADEMARKS
What are Trademarks? (Sec 121, IPC)
Section 121. Definitions. - As used in Part III, the following terms have the
following meanings:
121.1. "Mark" means any visible sign capable of distinguishing the goods
(trademark) or services (service mark) of an enterprise and shall include a
stamped or marked container of goods; (Sec. 38, R.A. No. 166a)
121.2. "Collective mark" means any visible sign designated as such in the
application for registration and capable of distinguishing the origin or any other
common characteristic, including the quality of goods or services of different
enterprises which use the sign under the control of the registered owner of the
collective mark; (Sec. 40, R.A. No. 166a)
121.3. "Trade name" means the name or designation identifying or
distinguishing an enterprise; (Sec. 38, R.A. No. 166a)
121.4. "Bureau" means the Bureau of Trademarks;
121.5. "Director" means the Director of Trademarks;
121.6. "Regulations" means the Rules of Practice in Trademarks and Service
Marks formulated by the Director of Trademarks and approved by the Director
General; and
121.7. "Examiner" means the trademark examiner. (Sec. 38, R.A. No. 166a)
How are Trademarks being distinguished from Tradenames/Business
names, and Collective marks? (Sec. 121.1, 121.2, 121.3, 165, and 167,
IPC)
121.1. "Mark" means any visible sign capable of distinguishing the goods
(trademark) or services (service mark) of an enterprise and shall include a
stamped or marked container of goods; (Sec. 38, R.A. No. 166a)
121.2. "Collective mark" means any visible sign designated as such in the
application for registration and capable of distinguishing the origin or any other
common characteristic, including the quality of goods or services of different
enterprises which use the sign under the control of the registered owner of the
collective mark; (Sec. 40, R.A. No. 166a)
121.3. "Trade name" means the name or designation identifying or
distinguishing an enterprise; (Sec. 38, R.A. No. 166a)
Section 165. Trade Names or Business Names. - 165.1. A name or
designation may not be used as a trade name if by its nature or the use to
which such name or designation may be put, it is contrary to public order or
morals and if, in particular, it is liable to deceive trade circles or the public as to
the nature of the enterprise identified by that name.
165.2.(a) Notwithstanding any laws or regulations providing for any obligation
to register trade names, such names shall be protected, even prior to or
without registration, against any unlawful act committed by third parties.
(b) In particular, any subsequent use of the trade name by a third party,
whether as a trade name or a mark or collective mark, or any such use of a
similar trade name or mark, likely to mislead the public, shall be deemed
unlawful.
165.3. The remedies provided for in Sections 153 to 156 and Sections 166 and
167 shall apply mutatis mutandis.
165.4. Any change in the ownership of a trade name shall be made with the
transfer of the enterprise or part thereof identified by that name. The provisions
of Subsections 149.2 to 149.4 shall apply mutatis mutandis.
Section 167. Collective Marks. - 167.1. Subject to Subsections 167.2 and
167.3, Sections 122 to 164 and 166 shall apply to collective marks, except that
references therein to "mark" shall be read as "collective mark".
167.2.(a) An application for registration of a collective mark shall designate the
mark as a collective mark and shall be accompanied by a copy of the
agreement, if any, governing the use of the collective mark.
(b) The registered owner of a collective mark shall notify the Director of any
changes made in respect of the agreement referred to in paragraph (a).
167.3. In addition to the grounds provided in Section 149, the Court shall
cancel the registration of a collective mark if the person requesting the
cancellation proves that only the registered owner uses the mark, or that he
uses or permits its use in contravention of the agreements referred to in
Subsection 166.2 or that he uses or permits its use in a manner liable to
deceive trade circles or the public as to the origin or any other common
characteristics of the goods or services concerned.
167.4. The registration of a collective mark, or an application therefor shall not
be the subject of a license contract. (Sec. 40, R.A. No. 166a)
Canon Kabushiki Kaisha vs. CA, GR No. 120900, July 20, 2000
INTELLECTUAL PROPERTY LAWS – AMES 2014
Before us is a petition for review that seeks to set aside the
Decision1 dated February 21, 1995 of the Court of Appeals in CA-GR SP
No. 30203, entitled "Canon Kabushiki Kaisha vs. NSR Rubber
Corporation" and its Resolution dated June 27, 1995 denying the motion
for reconsideration of herein petitioner Canon Kabushiki Kaisha
(petitioner).
On January 15, 1985, private respondent NSR Rubber Corporation
(private respondent) filed an application for registration of the mark
CANON for sandals in the Bureau of Patents, Trademarks, and
Technology Transfer (BPTTT). A Verified Notice of Opposition was filed by
petitioner, a foreign corporation duly organized and existing under the
laws of Japan, alleging that it will be damaged by the registration of the
trademark CANON in the name of private respondent. The case was
docketed as Inter Partes Case No. 3043.
Petitioner moved to declare private respondent in default for its failure to
file its answer within the prescribed period. The BPTTT then declared
private respondent in default and allowed petitioner to present its
evidence ex-parte.
Based on the records, the evidence presented by petitioner consisted of
its certificates of registration for the mark CANON in various countries
covering goods belonging to class 2 (paints, chemical products, toner, and
dye stuff). Petitioner also submitted in evidence its Philippine Trademark
Registration No. 39398, showing its ownership over the trademark
CANON also under class 2.
On November 10, 1992, the BPTTT issued its decision dismissing the
opposition of petitioner and giving due course to private respondent's
application for the registration of the trademark CANON. On February 16,
1993, petitioner appealed the decision of the BPTTT with public
respondent Court of Appeals that eventually affirmed the decision of
BPTTT. Hence, this petition for review.
Petitioner anchors this instant petition on these grounds:
A) PETITIONER IS ENTITLED TO EXCLUSIVE USE OF THE MARK
CANON BECAUSE IT IS ITS TRADEMARK AND IS USED ALSO FOR
FOOTWEAR.
B) TO ALLOW PRIVATE RESPONDENT TO REGISTER CANON FOR
FOOTWEAR IS TO PREVENT PETITIONER FROM USING CANON FOR
VARIOUS KINDS OF FOOTWEAR, WHEN IN FACT, PETITIONER HAS
EARLIER USED SAID MARK FOR SAID GOODS.
C) PETITIONER IS ALSO ENTITLED TO THE RIGHT TO EXCLUSIVELY
USE CANON TO PREVENT CONFUSION OF BUSINESS.
D) PETITIONER IS ALSO ENTITLED TO THE EXCLUSIVE USE OF
CANON BECAUSE IT FORMS PART OF ITS CORPORATE NAME,
PROTECTED BY THE PARIS CONVENTION.2
The BPTTT and the Court of Appeals share the opinion that the trademark
"CANON" as used by petitioner for its paints, chemical products, toner,
and dyestuff, can be used by private respondent for its sandals because
the products of these two parties are dissimilar. Petitioner protests the
appropriation of the mark CANON by private respondent on the ground
that petitioner has used and continues to use the trademark CANON on its
wide range of goods worldwide. Allegedly, the corporate name or
tradename of petitioner is also used as its trademark on diverse goods
including footwear and other related products like shoe polisher and
polishing agents. To lend credence to its claim, petitioner points out that it
has branched out in its business based on the various goods carrying its
trademark CANON3, including footwear which petitioner contends covers
sandals, the goods for which private respondent sought to register the
mark CANON. For petitioner, the fact alone that its trademark CANON is
carried by its other products like footwear, shoe polisher and polishing
agents should have precluded the BPTTT from giving due course to the
application of private respondent.
We find the arguments of petitioner to be unmeritorious. Ordinarily, the
ownership of a trademark or tradename is a property right that the owner
is entitled to protect4 as mandated by the Trademark Law.5 However,
when a trademark is used by a party for a product in which the other party
does not deal, the use of the same trademark on the latter's product
cannot be validly objected to.6
A review of the records shows that with the order of the BPTTT declaring
private respondent in default for failure to file its answer, petitioner had
every opportunity to present ex-parte all of its evidence to prove that its
certificates of registration for the trademark CANON cover footwear. The
certificates of registration for the trademark CANON in other countries and
in the Philippines as presented by petitioner, clearly showed that said
certificates of registration cover goods belonging to class 2 (paints,
chemical products, toner, dyestuff). On this basis, the BPTTT correctly
ruled that since the certificate of registration of petitioner for the trademark
CANON covers class 2 (paints, chemical products, toner, dyestuff), private
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respondent can use the trademark CANON for its goods classified as
class 25 (sandals). Clearly, there is a world of difference between the
paints, chemical products, toner, and dyestuff of petitioner and the
sandals of private respondent.
Petitioner counters that notwithstanding the dissimilarity of the products of
the parties, the trademark owner is entitled to protection when the use of
by the junior user "forestalls the normal expansion of his
business".7Petitioner's opposition to the registration of its trademark
CANON by private respondent rests upon petitioner's insistence that it
would be precluded from using the mark CANON for various kinds of
footwear, when in fact it has earlier used said mark for said goods.
Stretching this argument, petitioner claims that it is possible that the public
could presume that petitioner would also produce a wide variety of
footwear considering the diversity of its products marketed worldwide.
We do not agree. Even in this instant petition, except for its bare
assertions, petitioner failed to attach evidence that would convince this
Court that petitioner has also embarked in the production of footwear
products. We quote with approval the observation of the Court of Appeals
that:
"The herein petitioner has not made known that it intends to venture into
the business of producing sandals. This is clearly shown in its Trademark
Principal Register (Exhibit "U") where the products of the said petitioner
had been clearly and specifically described as "Chemical products,
dyestuffs, pigments, toner developing preparation, shoe polisher, polishing
agent". It would be taxing one's credibility to aver at this point that the
production of sandals could be considered as a possible "natural or
normal expansion" of its business operation".8
In Faberge, Incorporated vs. Intermediate Appellate Court,9 the Director of
patents allowed the junior user to use the trademark of the senior user on
the ground that the briefs manufactured by the junior user, the product for
which the trademark BRUTE was sought to be registered, was unrelated
and non-competing with the products of the senior user consisting of after
shave lotion, shaving cream, deodorant, talcum powder, and toilet soap.
The senior user vehemently objected and claimed that it was expanding
its trademark to briefs and argued that permitting the junior user to register
the same trademark would allow the latter to invade the senior user's
exclusive domain. In sustaining the Director of Patents, this Court said that
since "(the senior user) has not ventured in the production of briefs, an
item which is not listed in its certificate of registration, (the senior user),
cannot and should not be allowed to feign that (the junior user) had
invaded (the senior user's) exclusive domain."10 We reiterated the
principle that the certificate of registration confers upon the trademark
owner the exclusive right to use its own symbol only to those goods
specified in the certificate, subject to the conditions and limitations stated
therein.11 Thus, the exclusive right of petitioner in this case to use the
trademark CANON is limited to the products covered by its certificate of
registration.
Petitioner further argues that the alleged diversity of its products all over
the world makes it plausible that the public might be misled into thinking
that there is some supposed connection between private respondent's
goods and petitioner. Petitioner is apprehensive that there could be
confusion as to the origin of the goods, as well as confusion of business, if
private respondent is allowed to register the mark CANON. In such a
case, petitioner would allegedly be immensely prejudiced if private
respondent would be permitted to take "a free ride on, and reap the
advantages of, the goodwill and reputation of petitioner Canon".12 In
support of the foregoing arguments, petitioner invokes the rulings in Sta.
Ana vs. Maliwat13 , Ang vs. Teodoro14 and Converse Rubber Corporation
vs. Universal Rubber Products, Inc.15.
The likelihood of confusion of goods or business is a relative concept, to
be determined only according to the particular, and sometimes peculiar,
circumstances of each case.16 Indeed, in trademark law cases, even more
than in other litigation, precedent must be studied in the light of the facts
of the particular case.17 Contrary to petitioner's supposition, the facts of
this case will show that the cases of Sta. Ana vs. Maliwat,, Ang vs.
Teodoro and Converse Rubber Corporation vs. Universal Rubber
Products, Inc. are hardly in point. The just cited cases involved goods that
were confusingly similar, if not identical, as in the case of Converse
Rubber Corporation vs. Universal Rubber Products, Inc. Here, the
products involved are so unrelated that the public will not be misled that
there is the slightest nexus between petitioner and the goods of private
respondent.
In cases of confusion of business or origin, the question that usually arises
is whether the respective goods or services of the senior user and the
junior user are so related as to likely cause confusion of business or
origin, and thereby render the trademark or tradenames confusingly
similar.18 Goods are related when they belong to the same class or have
INTELLECTUAL PROPERTY LAWS – AMES 2014
the same descriptive properties; when they possess the same physical
attributes or essential characteristics with reference to their form,
composition, texture or quality.19 They may also be related because they
serve the same purpose or are sold in grocery stores. 20
Thus, in Esso Standard Eastern, Inc. vs. Court of Appeals, this Court ruled
that the petroleum products on which the petitioner therein used the
trademark ESSO, and the product of respondent, cigarettes are "so
foreign to each other as to make it unlikely that purchasers would think
that petitioner is the manufacturer of respondent's goods" 21. Moreover, the
fact that the goods involved therein flow through different channels of
trade highlighted their dissimilarity, a factor explained in this wise:
"The products of each party move along and are disposed through
different channels of distribution. The (petitioner's) products are distributed
principally through gasoline service and lubrication stations, automotive
shops and hardware stores. On the other hand, the (respondent's)
cigarettes are sold in sari-sari stores, grocery store, and other small
distributor outlets. (Respondnet's) cigarettes are even peddled in the
streets while (petitioner's) 'gasul' burners are not. Finally, there is a
marked distinction between oil and tobacco, as well as between petroleum
and cigarettes. Evidently, in kind and nature the products of (respondent)
and of (petitioner) are poles apart."22
Undoubtedly, the paints, chemical products, toner and dyestuff of
petitioner that carry the trademark CANON are unrelated to sandals, the
product of private respondent. We agree with the BPTTT, following the
Esso doctrine, when it noted that the two classes of products in this case
flow through different trade channels. The products of petitioner are sold
through special chemical stores or distributors while the products of
private respondent are sold in grocery stores, sari-sari stores and
department stores.23 Thus, the evident disparity of the products of the
parties in the case at bar renders unfounded the apprehension of
petitioner that confusion of business or origin might occur if private
respondent is allowed to use the mark CANON.
In its bid to bar the registration of private respondent of the mark CANON,
petitioner invokes the protective mantle of the Paris Convention. Petitioner
asserts that it has the exclusive right to the mark CANON because it forms
part of its corporate name or tradename, protected by Article 8 of the Paris
Convention, to wit:
"A tradename shall be protected in all the countries of the Union without
the obligation of filing or registration, whether or not it forms part of a
trademark."
Public respondents BPTTT and the Court of Appeals allegedly committed
an oversight when they required petitioner to prove that its mark is a well-
known mark at the time the application of private respondent was filed.
Petitioner questions the applicability of the guidelines embodied in the
Memorandum of then Minister of Trade and Industry Roberto Ongpin
(Ongpin) dated October 25, 1983 which according to petitioner
implements Article 6bis of the Paris Convention, the provision referring to
the protection of trademarks. The memorandum reads:
"a) the mark must be internationally known;
b) the subject of the right must be a trademark, not a patent or copyright or
anything else;
c) the mark must be for use in the same or similar class of goods;
d) the person claiming must be the owner of the mark."
According to petitioner, it should not be required to prove that its
trademark is well-known and that the products are not similar as required
by the quoted memorandum. Petitioner emphasizes that the guidelines in
the memorandum of Ongpin implement Article 6bis of the Paris
Convention, the provision for the protection of trademarks, not
tradenames. Article 6bis of the Paris Convention states:
(1) The countries of the Union undertake, either administratively if their
legislation so permits, or at the request of an interested party, to refuse or
to cancel the registration and to prohibit the use of a trademark which
constitutes a reproduction, imitation or translation, liable to create
confusion, of a mark considered by the competent authority of the country
of registration or use to be well-known in that country as being already the
mark of a person entitled to the benefits of the present Convention and
used for identical or similar goods. These provisions shall also apply when
the essential part of the mark constitutes a reproduction of any such well-
known mark or an imitation liable to create confusion therewith.
(2) A period of at least five years from the date of registration shall be
allowed for seeking the cancellation of such a mark. The countries of the
Union may provide for a period within which the prohibition of use must be
sought.
(3) No time limit shall be fixed for seeking the cancellation or the
prohibition of the use of marks or used in bad faith."
Petitioner insists that what it seeks is the protection of Article 8 of the Paris
Convention, the provision that pertains to the protection of tradenames.
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TRADEMARKS
Petitioner believes that the appropriate memorandum to consider is that
issued by the then Minister of Trade and Industry, Luis Villafuerte,
directing the Director of patents to:
"reject all pending applications for Philippine registration of signature and
other world famous trademarks by applicants other than the original
owners or users."
As far as petitioner is concerned, the fact that its tradename is at risk
would call for the protection granted by Article 8 of the Paris Convention.
Petitioner calls attention to the fact that Article 8, even as embodied in par.
6, sec. 37 of RA 166, mentions no requirement of similarity of goods.
Petitioner claims that the reason there is no mention of such a
requirement, is "because there is a difference between the referent of the
name and that of the mark"24 and that "since Art. 8 protects the tradename
in the countries of the Union, such as Japan and the Philippines,
Petitioner's tradename should be protected here."25
We cannot uphold petitioner's position.
The term "trademark" is defined by RA 166, the Trademark Law, as
including "any word, name, symbol, emblem, sign or device or any
combination thereof adopted and used by a manufacturer or merchant to
identify his goods and distinguish them for those manufactured, sold or
dealt in by others."26 Tradename is defined by the same law as including
"individual names and surnames, firm names, tradenames, devices or
words used by manufacturers, industrialists, merchants, agriculturists, and
others to identify their business, vocations, or occupations; the names or
titles lawfully adopted and used by natural or juridical persons, unions,
and any manufacturing, industrial, commercial, agricultural or other
organizations engaged in trade or commerce."27 Simply put, a trade name
refers to the business and its goodwill; a trademark refers to the goods.28
The Convention of Paris for the Protection of Industrial Property, otherwise
known as the Paris Convention, of which both the Philippines and Japan,
the country of petitioner, are signatories29, is a multilateral treaty that
seeks to protect industrial property consisting of patents, utility models,
industrial designs, trademarks, service marks, trade names and
indications of source or appellations of origin, and at the same time aims
to repress unfair competition.30 We agree with public respondents that the
controlling doctrine with respect to the applicability of Article 8 of the Paris
Convention is that established in Kabushi Kaisha Isetan vs. Intermediate
Appellate Court.31 As pointed out by the BPTTT:
"Regarding the applicability of Article 8 of the Paris Convention, this Office
believes that there is no automatic protection afforded an entity whose
tradename is alleged to have been infringed through the use of that
name as a trademark by a local entity.
In Kabushiki Kaisha Isetan vs. The Intermediate Appellate Court, et. al.,
G.R. No. 75420, 15 November 1991, the Honorable Supreme Court held
that:
'The Paris Convention for the Protection of Industrial Property does not
automatically exclude all countries of the world which have signed it from
using a tradename which happens to be used in one country. To illustrate
– if a taxicab or bus company in a town in the United Kingdom or India
happens to use the tradename "Rapid Transportation", it does not
necessarily follow that "Rapid" can no longer be registered in Uganda, Fiji,
or the Philippines.
This office is not unmindful that in the Treaty of Paris for the Protection of
Intellectual Property regarding well-known marks and possible application
thereof in this case. Petitioner, as this office sees it, is trying to seek
refuge under its protective mantle, claiming that the subject mark is well
known in this country at the time the then application of NSR Rubber was
filed.
However, the then Minister of Trade and Industry, the Hon. Roberto V.
Ongpin, issued a memorandum dated 25 October 1983 to the Director of
Patents, a set of guidelines in the implementation of Article 6bis (sic) of
the Treaty of Paris. These conditions are:
a) the mark must be internationally known;
b) the subject of the right must be a trademark, not a patent or copyright or
anything else;
c) the mark must be for use in the same or similar kinds of goods; and
d) the person claiming must be the owner of the mark (The Parties
Convention Commentary on the Paris Convention. Article by Dr. Bogsch,
Director General of the World Intellectual Property Organization, Geneva,
Switzerland, 1985)'
From the set of facts found in the records, it is ruled that the Petitioner
failed to comply with the third requirement of the said memorandum that is
the mark must be for use in the same or similar kinds of goods. The
Petitioner is using the mark "CANON" for products belonging to class 2
(paints, chemical products) while the Respondent is using the same mark
for sandals (class 25). Hence, Petitioner's contention that its mark is well-
known at the time the Respondent filed its application for the same mark
INTELLECTUAL PROPERTY LAWS – AMES 2014
should fail. "32
Petitioner assails the application of the case of Kabushi Kaisha Isetan vs.
Intermediate Appellate Court to this case. Petitioner points out that in the
case of Kabushi Kaisha Isetan vs. Intermediate Appellate Court, petitioner
therein was found to have never at all conducted its business in the
Philippines unlike herein petitioner who has extensively conducted its
business here and also had its trademark registered in this country.
Hence, petitioner submits that this factual difference renders inapplicable
our ruling in the case of Kabushi Kaisha Isetan vs. Intermediate Appellate
Court that Article 8 of the Paris Convention does not automatically extend
protection to a tradename that is in danger of being infringed in a country
that is also a signatory to said treaty. This contention deserves scant
consideration. Suffice it to say that the just quoted pronouncement in the
case of Kabushi Kaisha Isetan vs. Intermediate Appellate Court, was
made independent of the factual finding that petitioner in said case had
not conducted its business in this country.
WHEREFORE, in view of the foregoing, the instant petition for review on
certiorari is DENIED for lack of merit.
SO ORDERED.
What are the purposes of Trademarks?
Do the marks distinguish the products from one manufacturer from
that of another?
Do the marks guarantee the quality of service provided by a
manufacturer?
Do the marks advertise the product itself?
Functions:
a. To indicate the origin of the goods to which they are attached;
b. To guarantee the standard of quality of the goods; and
c. To advertise the goods (Mirpuri vs. CA) – Reviewer on Commercial Law,
Sundiang and Aquino
Etepha vs. Director of Patents, GR. No L-20635 March 31, 1966
To the question: May trademark ATUSSIN be registered, given the fact
that PERTUSSIN, another trademark, had been previously registered in
the Patent Office? — the Director of Patents answered affirmatively.
Hence this appeal.
On April 23, 1959, 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. 1
Petitioner, Etepha, A. G., a Liechtenstin (principality) corporation,
objected. Petitioner claims that it will be damaged because Atussin is so
confusedly similar to its Pertussin (Registration No. 6089, issued on
September 25, 1957) 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.
1. The objects of a trademark are "to point out distinctly the
origin or ownership of the articles to which it is affixed, to secure
to him who has been instrumental in bringing into market a
superior article or merchandise the fruit of his industry and skill,
and to prevent fraud and imposition."2 Our over-all task then is
to ascertain whether or not Atussin so resembles Pertussin "as
to be likely, when applied to or used in connection with the
goods ... of the applicant, to cause confusion or mistake or to
deceive purchasers".3And, 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."4
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TRADEMARKS
2. That the word "tussin" figures as a component of both
trademarks is nothing to wonder at. The Director of Patents
aptly observes that it is "the common practice in the drug and
pharmaceutical industries to 'fabricate' marks by using syllables
or words suggestive of the ailments for which they are intended
and adding thereto distinctive prefixes or suffixes".5 And
appropriately to be considered now is the fact that, concededly,
the "tussin" (in Pertussin and Atussin) was derived from the
Latin root-word "tussis" meaning cough.6
"Tussin" is merely descriptive; it is generic; it furnishes to the
buyer no indication of the origin of the goods; it is open for
appropriation by anyone. It is accordingly barred from
registration as trademark. With jurisprudence holding the line,
we feel safe in making the statement that any other conclusion
would result in "appellant having practically a monopoly"7 of the
word "tussin" in a trademark.8
While "tussin" by itself cannot thus be used exclusively to
identify one's goods, it may properly become the subject of a
trademark "by combination with another word or phrase". 9 And
this union of words is reflected in petitioner's Pertussin and
respondent's Atussin, the first with prefix "Per" and the second
with Prefix "A".1äwphï1.ñët
3. 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. The
trademark complained of should be compared and contrasted
with the purchaser's memory (not in juxtaposition) of the
trademark said to be infringed. 10 Some such factors as "sound;
appearance; form, style, shape, size or format; color; ideas
connoted by marks; the meaning, spelling, and pronunciation, of
words used; and the setting in which the words appear" may be
considered. 11 For, indeed, trademark infringement is a form of
unfair competition. 12
We take a casual look at the two labels — without spelling out
the details — bearing in mind the easy-to-remember earmarks
thereof. Respondent's label underscores the trademark Atussin
in bold, block letters horizontally written. In petitioner's, on the
other hand, Pertussin is printed diagonally upwards and across
in semiscript style with flourishes and with only the first letter "P"
capitalized. Each label plainly shows the source of the medicine:
petitioner's at the foot bears "Etepha Ltd. Schaan Fl", and on
top, "Apothecary E. Taeschner's"; respondent's projects
"Westmont Pharmaceuticals, Inc. New York, USA" at the
bottoms, and on the lower left side the word "Westmont" upon a
white diamond shaped enclosure and in red ink — a color
different from that of the words above and below it. Printed
prominently along the left, bottom and right edges of petitioner's
label are indications of the use: "for bronchial catarrh —
whopping-cough — coughs and asthma". Respondent's for its
part briefly represents what its produce actually is - a "cough
syrup". The two labels are entirely different in colors, contents,
arrangement of words thereon, sizes, shapes and general
appearance. The contrasts in pictorial effects and appeals to the
eye is so pronounced that the label of one cannot be mistaken
for that of the other, not even by persons unfamiliar with the two
trademarks. 13
On this point the following culled from a recent decision of the
United States Court of Customs and Patent Appeals (June 15,
1956) is persuasive: 14
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. In testing
this issue, fixed legal rules exist — if not in harmony,
certainly in abundance — but, in the final analysis, the
INTELLECTUAL PROPERTY LAWS – AMES 2014
application of these rules in any given situation
necessarily reflects a matter of individual judgment
largely predicated on opinion. There is, however, and
can be no disagreement with the rule that the
purchaser is confused, if at all, by the marks as a
whole.
4. We now consider exclusively the two words — Pertussin and
Atussin — as they appear on the respective labels. As
previously adverted to, these words are presented to the public
in different styles of writing and methods of design. The
horizontal plain, block letters of Atussin and the diagonally and
artistically upward writing of Pertussin leave distinct visual
impressions. One look is enough to denude the mind of that
illuminating similarity so essential for a trademark infringement
case to prosper.
5. As we take up Pertussin and Atussin once again, we cannot
escape notice of the fact that the two words do not sound alike
— when pronounced. There is not much phonetic similarity
between the two. The Solicitor General well-observed that in
Pertussin the pronunciation of the prefix "Per", whether correct
or incorrect, includes a combination of three letters P, e and r;
whereas, in Atussin the whole starts with the single letter A
added to suffix "tussin". Appeals to the ear are disimilar. And
this, because in a word combination, the part that comes first is
the most pronounced. An expositor of the applicable rule here is
the decision in the Syrocol-Cheracol controversy. 15 There, the
ruling is that trademark Syrocol (a cough medicine preparation)
is not confusedly similar to trademark Cheracol (also a cough
medicine preparation). Reason: the two words "do not look or
sound enough alike to justify a holding of trademark
infringement", and the "only similarity is in the last syllable, and
that is not uncommon in names given drug compounds".
6. In the solution of a trademark infringement problem, regard
too should be given to the class of persons who buy the
particular product and the circumstances ordinarily attendant to
its acquisition. 16 The medicinal preparation clothed with the
trademarks in question, are unlike articles of everyday use such
as candies, ice cream, milk, soft drinks and the like which may
be freely obtained by anyone, anytime, anywhere. Petitioner's
and respondent's products are to be dispensed upon medical
prescription. The respective labels say so. An intending buyer
must have to go first to a licensed doctor of medicine; he
receives instructions as to what to purchase; he reads the
doctor's prescription; he knows what he is to buy. He is not of
the incautious, unwary, unobservant or unsuspecting type; he
examines the product sold to him; he checks to find out whether
it conforms to the medical prescription. The common trade
channel is the pharmacy or the drugstore. Similarly, the
pharmacist or druggist verifies the medicine sold. The margin of
error in the acquisition of one for the other is quite remote.
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 throughly 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. Costa against petitioner. So
ordered.
Mirpuri vs. CA GR No 114508 Nov. 19, 1999
The Convention of Paris for the Protection of Industrial Property is a multi-
lateral treaty which the Philippines bound itself to honor and enforce in this
country. As to whether or not the treaty affords protection to a foreign
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TRADEMARKS
corporation against a Philippine applicant for the registration of a similar
trademark is the principal issue in this case.
On June 15, 1970, one Lolita Escobar, the predecessor-in-interest of
petitioner Pribhdas J. Mirpuri, filed an application with the Bureau of
Patents for the registration of the trademark "Barbizon" for use in
brassieres and ladies undergarments. Escobar alleged that she had been
manufacturing and selling these products under the firm name "L & BM
Commercial" since March 3, 1970.
Private respondent Barbizon Corporation, a corporation organized and
doing business under the laws of New York, U.S.A., opposed the
application. It claimed that:
The mark BARBIZON of respondent-applicant is confusingly similar to the
trademark BARBIZON which opposer owns and has not abandoned.
That opposer will be damaged by the registration of the mark BARBIZON
and its business reputation and goodwill will suffer great and irreparable
injury.
That the respondent-applicant's use of the said mark BARBIZON which
resembles the trademark used and owned by opposer, constitutes an
unlawful appropriation of a mark previously used in the Philippines and not
abandoned and therefore a statutory violation of Section 4 (d) of Republic
Act No. 166, as amended. 1
This was docketed as Inter Partes Case No. 686 (IPC No. 686). After filing
of the pleadings, the parties submitted the case for decision.
On June 18, 1974, the Director of Patents rendered judgment dismissing
the opposition and giving due course to Escobar's application, thus:
WHEREFORE, the opposition should be, as it is
hereby, DISMISSED. Accordingly, Application Serial
No. 19010 for the registration of the trademark
BARBIZON, of respondent Lolita R. Escobar, is given
due course.
IT IS SO ORDERED. 2
This decision became final and on September 11, 1974, Lolita
Escobar was issued a certificate of registration for the
trademark "Barbizon." The trademark was "for use in
"brassieres and lady's underwear garments like panties." 3
Escobar later assigned all her rights and interest over the trademark to
petitioner Pribhdas J. Mirpuri who, under his firm name then, the "Bonito
Enterprises," was the sole and exclusive distributor of Escobar's
"Barbizon" products.
In 1979, however, Escobar failed to file with the Bureau of Patents the
Affidavit of Use of the trademark required under Section 12 of Republic
Act (R.A.) No. 166, the Philippine Trademark Law. Due to this failure, the
Bureau of Patents cancelled Escobar's certificate of registration.
On May 27, 1981, Escobar reapplied for registration of the cancelled
trademark. Mirpuri filed his own application for registration of Escobar's
trademark. Escobar later assigned her application to herein petitioner and
this application was opposed by private respondent. The case was
docketed as Inter Partes Case No. 2049 (IPC No. 2049).
In its opposition, private respondent alleged that:
(a) The Opposer has adopted the trademark BARBIZON (word), sometime
in June 1933 and has then used it on various kinds of wearing apparel. On
August 14, 1934, Opposer obtained from the United States Patent Office a
more recent registration of the said mark under Certificate of Registration
No. 316,161. On March 1, 1949, Opposer obtained from the United States
Patent Office a more recent registration for the said trademark under
Certificate of Registration No. 507,214, a copy of which is herewith
attached as Annex "A." Said Certificate of Registration covers the
following goods — wearing apparel: robes, pajamas, lingerie, nightgowns
INTELLECTUAL PROPERTY LAWS – AMES 2014
and slips;
(b) Sometime in March 1976, Opposer further adopted the trademark
BARBIZON and Bee design and used the said mark in various kinds of
wearing apparel. On March 15, 1977, Opposer secured from the United
States Patent Office a registration of the said mark under Certificate of
Registration No. 1,061,277, a copy of which is herein enclosed as Annex
"B." The said Certificate of Registration covers the following goods: robes,
pajamas, lingerie, nightgowns and slips;
(c) Still further, sometime in 1961, Opposer adopted the trademark
BARBIZON and a Representation of a Woman and thereafter used the
said trademark on various kinds of wearing apparel. Opposer obtained
from the United States Patent Office registration of the said mark on April
5, 1983 under Certificate of Registration No. 1,233,666 for the following
goods: wearing apparel: robes, pajamas, nightgowns and lingerie. A copy
of the said certificate of registration is herewith enclosed as Annex "C."
(d) All the above registrations are subsisting and in force and Opposer has
not abandoned the use of the said trademarks. In fact, Opposer, through a
wholly-owned Philippine subsidiary, the Philippine Lingerie Corporation,
has been manufacturing the goods covered by said registrations and
selling them to various countries, thereby earning valuable foreign
exchange for the country. As a result of respondent-applicant's
misappropriation of Opposer's BARBIZON trademark, Philippine Lingerie
Corporation is prevented from selling its goods in the local market, to the
damage and prejudice of Opposer and its wholly-owned subsidiary.
(e) The Opposer's goods bearing the trademark BARBIZON have been
used in many countries, including the Philippines, for at least 40 years and
has enjoyed international reputation and good will for their quality. To
protect its registrations in countries where the goods covered by the
registrations are being sold, Opposer has procured the registration of the
trademark BARBIZON in the following countries: Australia, Austria, Abu
Dhabi, Argentina, Belgium, Bolivia, Bahrain, Canada, Chile, Colombia,
Denmark, Ecuador, France, West Germany, Greece, Guatemala,
Hongkong, Honduras, Italy, Japan, Jordan, Lebanon, Mexico, Morocco,
Panama, New Zealand, Norway, Sweden, Switzerland, Syria, El Salvador,
South Africa, Zambia, Egypt, and Iran, among others;
(f) To enhance its international reputation for quality goods and to further
promote goodwill over its name, marks and products, Opposer has
extensively advertised its products, trademarks and name in various
publications which are circulated in the United States and many countries
around the world, including the Philippines;
(g) The trademark BARBIZON was fraudulently registered in the
Philippines by one Lolita R. Escobar under Registration No. 21920, issued
on September 11, 1974, in violation of Article 189 (3) of the Revised Penal
Code and Section 4 (d) of the Trademark Law. Herein respondent
applicant acquired by assignment the "rights" to the said mark previously
registered by Lolita Escobar, hence respondent-applicant's title is vitiated
by the same fraud and criminal act. Besides, Certificate of Registration
No. 21920 has been cancelled for failure of either Lolita Escobar or herein
respondent-applicant, to seasonably file the statutory affidavit of use. By
applying for a re-registration of the mark BARBIZON subject of this
opposition, respondent-applicant seeks to perpetuate the fraud and
criminal act committed by Lolita Escobar.
(h) Opposer's BARBIZON as well as its BARBIZON and Bee Design and
BARBIZON and Representation of a Woman trademarks qualify as well-
known trademarks entitled to protection under Article 6bis of the
Convention of Paris for the Protection of Industrial Property and further
amplified by the Memorandum of the Minister of Trade to the Honorable
Director of Patents dated October 25, 1983 [sic], 4 Executive Order No.
913 dated October 7, 1963 and the Memorandum of the Minister of Trade
and Industry to the Honorable Director of Patents dated October 25, 1983.
(i) The trademark applied for by respondent applicant is identical to
Opposer's BARBIZON trademark and constitutes the dominant part of
Opposer's two other marks namely, BARBIZON and Bee design and
BARBIZON and a Representation of a Woman. The continued use by
respondent-applicant of Opposer's trademark BARBIZON on goods
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TRADEMARKS
belonging to Class 25 constitutes a clear case of commercial and criminal
piracy and if allowed registration will violate not only the Trademark Law
but also Article 189 of the Revised Penal Code and the commitment of the
Philippines to an international treaty. 5
Replying to private respondent's opposition, petitioner raised the
defense of res judicata.
On March 2, 1982, Escobar assigned to petitioner the use of the business
name "Barbizon International." Petitioner registered the name with the
Department of Trade and Industry (DTI) for which a certificate of
registration was issued in 1987.
Forthwith, private respondent filed before the Office of Legal Affairs of the
DTI a petition for cancellation of petitioner's business name.
On November 26, 1991, the DTI, Office of Legal Affairs, cancelled
petitioner's certificate of registration, and declared private respondent the
owner and prior user of the business name "Barbizon International." Thus:
WHEREFORE, the petition is hereby GRANTED and petitioner is declared
the owner and prior user of the business name "BARBIZON
INTERNATIONAL" under Certificate of Registration No. 87-09000 dated
March 10, 1987 and issued in the name of respondent, is [sic] hereby
ordered revoked and cancelled. . . . . 6
Meanwhile, in IPC No. 2049, the evidence of both parties were received
by the Director of Patents. On June 18, 1992, the Director rendered a
decision declaring private respondent's opposition barred by res
judicata and giving due course to petitioner's application for registration, to
wit:
WHEREFORE, the present Opposition in Inter Partes Case No. 2049 is
hereby DECLARED BARRED by res judicata and is hereby DISMISSED.
Accordingly, Application Serial No. 45011 for trademark BARBIZON filed
by Pribhdas J. Mirpuri is GIVEN DUE COURSE.
SO ORDERED. 7
Private respondent questioned this decision before the Court of Appeals in
CA-G.R. SP No. 28415. On April 30, 1993, the Court of Appeals reversed
the Director of Patents finding that IPC No. 686 was not barred by
judgment in IPC No. 2049 and ordered that the case be remanded to the
Bureau of Patents for further proceedings, viz:
WHEREFORE, the appealed Decision No. 92-13 dated June 18, 1992 of
the Director of Patents in Inter Partes Case No. 2049 is hereby SET
ASIDE; and the case is hereby remanded to the Bureau of Patents for
further proceedings, in accordance with this pronouncement. No costs. 8
In a Resolution dated March 16, 1994, the Court of Appeals
denied reconsideration of its decision. 9 Hence, this recourse.
Before us, petitioner raises the following issues:
1. WHETHER OR NOT THE DECISION OF THE DIRECTOR OF
PATENTS IN INTER PARTES CASE NO. 686 RENDERED ON JUNE 18,
1974, ANNEX C HEREOF, CONSTITUTED RES JUDICATA IN SO FAR
AS THE CASE BEFORE THE DIRECTOR OF PATENTS IS
CONCERNED;
2. WHETHER OR NOT THE DIRECTOR OF PATENTS CORRECTLY
APPLIED THE PRINCIPLE OFRES JUDICATA IN DISMISSING PRIVATE
RESPONDENT BARBIZON'S OPPOSITION TO PETITIONER'S
APPLICATION FOR REGISTRATION FOR THE TRADEMARK
BARBIZON, WHICH HAS SINCE RIPENED TO CERTIFICATE OF
REGISTRATION NO. 53920 ON NOVEMBER 16, 1992;
3. WHETHER OR NOT THE REQUISITE THAT A "JUDGMENT ON THE
MERITS" REQUIRED A "HEARING WHERE BOTH PARTIES ARE
SUPPOSED TO ADDUCE EVIDENCE" AND WHETHER THE JOINT
INTELLECTUAL PROPERTY LAWS – AMES 2014
SUBMISSION OF THE PARTIES TO A CASE ON THE BASIS OF THEIR
RESPECTIVE PLEADINGS WITHOUT PRESENTING TESTIMONIAL OR
DOCUMENTARY EVIDENCE FALLS WITHIN THE MEANING OF
"JUDGMENT ON THE MERITS" AS ONE OF THE REQUISITES TO
CONSTITUTE RES JUDICATA;
4. WHETHER A DECISION OF THE DEPARTMENT OF TRADE AND
INDUSTRY CANCELLING PETITIONER'S FIRM NAME "BARBIZON
INTERNATIONAL" AND WHICH DECISION IS STILL PENDING
RECONSIDERATION NEVER OFFERED IN EVIDENCE BEFORE THE
DIRECTOR OF PATENTS IN INTER PARTES CASE NO. 2049 HAS THE
RIGHT TO DECIDE SUCH CANCELLATION NOT ON THE BASIS OF
THE BUSINESS NAME LAW (AS IMPLEMENTED BY THE BUREAU OF
DOMESTIC TRADE) BUT ON THE BASIS OF THE PARIS
CONVENTION AND THE TRADEMARK LAW (R.A. 166) WHICH IS
WITHIN THE ORIGINAL AND EXCLUSIVE JURISDICTION OF THE
DIRECTOR OF PATENTS. 10
Before ruling on the issues of the case, there is need for a brief
background on the function and historical development of trademarks and
trademark law.
A "trademark" is defined under R.A. 166, the Trademark Law, as including
"any word, name, symbol, emblem, sign or device or any combination
thereof adopted and used by a manufacturer or merchant to identify his
goods and distinguish them from those manufactured, sold or dealt in by
others. 11 This definition has been simplified in R.A. No. 8293, the
Intellectual Property Code of the Philippines, which defines a "trademark"
as "any visible sign capable of distinguishing goods." 12 In Philippine
jurisprudence, the function of a trademark is to point out distinctly the
origin or ownership of the goods to which it is affixed; to secure to him,
who has been instrumental in bringing into the market a superior article of
merchandise, the fruit of his industry and skill; to assure the public that
they are procuring the genuine article; to prevent fraud and imposition;
and to protect the manufacturer against substitution and sale of an inferior
and different article as his product. 13
Modern authorities on trademark law view trademarks as performing three
distinct functions: (1) they indicate origin or ownership of the articles to
which they are attached; (2) they guarantee that those articles come up to
a certain standard of quality; and (3) they advertise the articles they
symbolize. 14
Symbols have been used to identify the ownership or origin of articles for
several centuries. 15 As early as 5,000 B.C., markings on pottery have
been found by archaeologists. Cave drawings in southwestern Europe
show bison with symbols on their flanks. 16 Archaeological discoveries of
ancient Greek and Roman inscriptions on sculptural works, paintings,
vases, precious stones, glassworks, bricks, etc. reveal some features
which are thought to be marks or symbols. These marks were affixed by
the creator or maker of the article, or by public authorities as indicators for
the payment of tax, for disclosing state monopoly, or devices for the
settlement of accounts between an entrepreneur and his workmen. 17
In the Middle Ages, the use of many kinds of marks on a variety of goods
was commonplace. Fifteenth century England saw the compulsory use of
identifying marks in certain trades. There were the baker's mark on bread,
bottlemaker's marks, smith's marks, tanner's marks, watermarks on paper,
etc. 18 Every guild had its own mark and every master belonging to it had a
special mark of his own. The marks were not trademarks but police marks
compulsorily imposed by the sovereign to let the public know that the
goods were not "foreign" goods smuggled into an area where the guild
had a monopoly, as well as to aid in tracing defective work or poor
craftsmanship to the artisan. 19 For a similar reason, merchants also used
merchants' marks. Merchants dealt in goods acquired from many sources
and the marks enabled them to identify and reclaim their goods upon
recovery after shipwreck or piracy. 20
With constant use, the mark acquired popularity and became voluntarily
adopted. It was not intended to create or continue monopoly but to give
the customer an index or guarantee of quality. 21 It was in the late 18th
century when the industrial revolution gave rise to mass production and
distribution of consumer goods that the mark became an important
instrumentality of trade and commerce. 22 By this time, trademarks did not
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TRADEMARKS
merely identify the goods; they also indicated the goods to be of
satisfactory quality, and thereby stimulated further purchases by the
consuming public. 23 Eventually, they came to symbolize the goodwill and
business reputation of the owner of the product and became a property
right protected by law. 24 The common law developed the doctrine of
trademarks and tradenames "to prevent a person from palming off his
goods as another's, from getting another's business or injuring his
reputation by unfair means, and, from defrauding the
public." 25 Subsequently, England and the United States enacted national
legislation on trademarks as part of the law regulating unfair trade. 26 It
became the right of the trademark owner to exclude others from the use of
his mark, or of a confusingly similar mark where confusion resulted in
diversion of trade or financial injury. At the same time, the trademark
served as a warning against the imitation or faking of products to prevent
the imposition of fraud upon the public.27
Today, the trademark is not merely a symbol of origin and goodwill; it is
often the most effective agent for the actual creation and protection of
goodwill. It imprints upon the public mind an anonymous and impersonal
guaranty of satisfaction, creating a desire for further satisfaction. In other
words, the mark actually sells the goods. 28 The mark has become the
"silent salesman," the conduit through which direct contact between the
trademark owner and the consumer is assured. It has invaded popular
culture in ways never anticipated that it has become a more convincing
selling point than even the quality of the article to which it refers. 29 In the
last half century, the unparalleled growth of industry and the rapid
development of communications technology have enabled trademarks,
tradenames and other distinctive signs of a product to penetrate regions
where the owner does not actually manufacture or sell the product itself.
Goodwill is no longer confined to the territory of actual market penetration;
it extends to zones where the marked article has been fixed in the public
mind through advertising. 30 Whether in the print, broadcast or electronic
communications medium, particularly on the Internet, 31 advertising has
paved the way for growth and expansion of the product by creating and
earning a reputation that crosses over borders, virtually turning the whole
world into one vast marketplace.
This is the mise-en-scene of the present controversy. Petitioner brings this
action claiming that "Barbizon" products have been sold in the Philippines
since 1970. Petitioner developed this market by working long hours and
spending considerable sums of money on advertisements and promotion
of the trademark and its products. Now, almost thirty years later, private
respondent, a foreign corporation, "swaggers into the country like a
conquering hero," usurps the trademark and invades petitioner's
market. 32 Justice and fairness dictate that private respondent be
prevented from appropriating what is not its own. Legally, at the same
time, private respondent is barred from questioning petitioner's ownership
of the trademark because of res judicata. 33
Literally, res judicata means a matter adjudged, a thing judicially acted
upon or decided; a thing or matter settled by judgment. 34 In res judicata,
the judgment in the first action is considered conclusive as to every matter
offered and received therein, as to any other admissible matter which
might have been offered for that purpose, and all other matters that could
have been adjudged therein. 35 Res judicata is an absolute bar to a
subsequent action for the same cause; and its requisites are: (a) the
former judgment or order must be final; (b) the judgment or order must be
one on the merits; (c) it must have been rendered by a court having
jurisdiction over the subject matter and parties; (d) there must be between
the first and second actions, identity of parties, of subject matter and of
causes of action. 36
The Solicitor General, on behalf of respondent Director of Patents, has
joined cause with petitioner. Both claim that all the four elements of res
judicata have been complied with: that the judgment in IPC No. 686 was
final and was rendered by the Director of Patents who had jurisdiction over
the subject matter and parties; that the judgment in IPC No. 686 was on
the merits; and that the lack of a hearing was immaterial because
substantial issues were raised by the parties and passed upon by the
Director of Patents. 37
The decision in IPC No. 686 reads as follows:
xxx xxx xxx.
INTELLECTUAL PROPERTY LAWS – AMES 2014
Neither party took testimony nor adduced documentary evidence. They
submitted the case for decision based on the pleadings which, together
with the pertinent records, have all been carefully considered.
Accordingly, the only issue for my disposition is whether or not the herein
opposer would probably be damaged by the registration of the trademark
BARBIZON sought by the respondent-applicant on the ground that it so
resembles the trademark BARBIZON allegedly used and owned by the
former to be "likely to cause confusion, mistake or to deceive purchasers."
On record, there can be no doubt that respondent-applicant's sought-to-
be-registered trademark BARBIZON is similar, in fact obviously identical,
to opposer's alleged trademark BARBIZON, in spelling and pronunciation.
The only appreciable but very negligible difference lies in their respective
appearances or manner of presentation. Respondent-applicant's
trademark is in bold letters (set against a black background), while that of
the opposer is offered in stylish script letters.
It is opposer's assertion that its trademark BARBIZON has been used in
trade or commerce in the Philippines prior to the date of application for the
registration of the identical mark BARBIZON by the respondent-applicant.
However, the allegation of facts in opposer's verified notice of opposition
is devoid of such material information. In fact, a reading of the text of said
verified opposition reveals an apparent, if not deliberate, omission of the
date (or year) when opposer's alleged trademark BARBIZON was first
used in trade in the Philippines (see par. No. 1, p. 2, Verified Notice of
Opposition, Rec.). Thus, it cannot here and now be ascertained whether
opposer's alleged use of the trademark BARBIZON could be prior to the
use of the identical mark by the herein respondent-applicant, since the
opposer attempted neither to substantiate its claim of use in local
commerce with any proof or evidence. Instead, the opposer submitted the
case for decision based merely on the pleadings.
On the other hand, respondent-applicant asserted in her amended
application for registration that she first used the trademark BARBIZON for
brassiere (or "brasseire") and ladies underwear garments and panties as
early as March 3, 1970. Be that as it may, there being no testimony taken
as to said date of first use, respondent-applicant will be limited to the filing
date, June 15, 1970, of her application as the date of first use (Rule 173,
Rules of Practice in Trademark Cases).
From the foregoing, I conclude that the opposer has not made out a case
of probable damage by the registration of the respondent-applicant's mark
BARBIZON.
WHEREFORE, the opposition should be, as it is hereby, DISMISSED.
Accordingly, Application Serial No. 19010, for the registration of the
trademark BARBIZON of respondent Lolita R. Escobar, is given due
course. 38
The decision in IPC No. 686 was a judgment on the merits and it was error
for the Court of Appeals to rule that it was not. A judgment is on the merits
when it determines the rights and liabilities of the parties based on the
disclosed facts, irrespective of formal, technical or dilatory objections. 39 It
is not necessary that a trial should have been conducted. If the court's
judgment is general, and not based on any technical defect or objection,
and the parties had a full legal opportunity to be heard on their respective
claims and contentions, it is on the merits although there was no actual
hearing or arguments on the facts of the case. 40 In the case at bar, the
Director of Patents did not dismiss private respondent's opposition on a
sheer technicality. Although no hearing was conducted, both parties filed
their respective pleadings and were given opportunity to present evidence.
They, however, waived their right to do so and submitted the case for
decision based on their pleadings. The lack of evidence did not deter the
Director of Patents from ruling on the case, particularly on the issue of
prior use, which goes into the very substance of the relief sought by the
parties. Since private respondent failed to prove prior use of its trademark,
Escobar's claim of first use was upheld.
The judgment in IPC No. 686 being on the merits, petitioner and the
Solicitor General allege that IPC No. 686 and IPC No. 2049 also comply
with the fourth requisite of res judicata, i.e., they involve the same parties
and the same subject matter, and have identical causes of action.
Undisputedly, IPC No. 686 and IPC No. 2049 involve the same parties
and the same subject matter. Petitioner herein is the assignee of Escobar
while private respondent is the same American corporation in the first
case. The subject matter of both cases is the trademark "Barbizon."
Private respondent counter-argues, however, that the two cases do not
have identical causes of action. New causes of action were allegedly
introduced in IPC No. 2049, such as the prior use and registration of the
trademark in the United States and other countries worldwide, prior use in
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the Philippines, and the fraudulent registration of the mark in violation of
Article 189 of the Revised Penal Code. Private respondent also cited
protection of the trademark under the Convention of Paris for the
Protection of Industrial Property, specifically Article 6bis thereof, and the
implementation of Article 6bis by two Memoranda dated November 20,
1980 and October 25, 1983 of the Minister of Trade and Industry to the
Director of Patents, as well as Executive Order (E.O.) No. 913.
The Convention of Paris for the Protection of Industrial Property, otherwise
known as the Paris Convention, is a multilateral treaty that seeks to
protect industrial property consisting of patents, utility models, industrial
designs, trademarks, service marks, trade names and indications of
source or appellations of origin, and at the same time aims to repress
unfair competition. 41 The Convention is essentially a compact among
various countries which, as members of the Union, have pledged to
accord to citizens of the other member countries trademark and other
rights comparable to those accorded their own citizens by their domestic
laws for an effective protection against unfair competition. 42 In short,
foreign nationals are to be given the same treatment in each of the
member countries as that country makes available to its own
citizens. 43 Nationals of the various member nations are thus assured of a
certain minimum of international protection of their industrial property. 44
The Convention was first signed by eleven countries in Paris on March 20,
1883. 45 It underwent several revisions — at Brussels in 1900, at
Washington in 1911, at The Hague in 1925, at London in 1934, at Lisbon
in 1958, 46 and at Stockholm in 1967. Both the Philippines and the United
States of America, herein private respondent's country, are signatories to
the Convention. The United States acceded on May 30, 1887 while the
Philippines, through its Senate, concurred on May 10, 1965. 47 The
Philippines' adhesion became effective on September 27, 1965, 48 and
from this date, the country obligated itself to honor and enforce the
provisions of the Convention. 49
In the case at bar, private respondent anchors its cause of action on the
first paragraph of Article 6bis of the Paris Convention which reads as
follows:
Article 6bis
(1) The countries of the Union undertake, either administratively if their
legislation so permits, or at the request of an interested party, to refuse or
to cancel the registration and to prohibit the use, of a trademark which
constitutes a reproduction, an imitation, or a translation, liable to create
confusion, of a mark considered by the competent authority of the country
of registration or use to be well-known in that country as being already the
mark of a person entitled to the benefits of this Convention and used for
identical or similar goods. These provisions shall also apply when the
essential part of the mark constitutes a reproduction of any such well-
known mark or an imitation liable to create confusion therewith.
(2) A period of at least five years from the date of registration shall be
allowed for seeking the cancellation of such a mark. The countries of the
Union may provide for a period within which the prohibition of use must be
sought.
(3) No time limit shall be fixed for seeking the cancellation or the
prohibition of the use of marks registered or used in bad faith. 50
This Article governs protection of well-known trademarks. Under the first
paragraph, each country of the Union bound itself to undertake to refuse
or cancel the registration, and prohibit the use of a trademark which is a
reproduction, imitation or translation, or any essential part of which
trademark constitutes a reproduction, liable to create confusion, of a mark
considered by the competent authority of the country where protection is
sought, to be well-known in the country as being already the mark of a
person entitled to the benefits of the Convention, and used for identical or
similar goods.
Art. 6bis was first introduced at The Hague in 1925 and amended in
Lisbon in 1952. 51 It is a self-executing provision and does not require
legislative enactment to give it effect in the member country. 52 It may be
INTELLECTUAL PROPERTY LAWS – AMES 2014
applied directly by the tribunals and officials of each member country by
the mere publication or proclamation of the Convention, after its ratification
according to the public law of each state and the order for its execution. 53
The essential requirement under Article 6bis is that the trademark to be
protected must be "well-known" in the country where protection is sought.
The power to determine whether a trademark is well-known lies in the
"competent authority of the country of registration or use." This competent
authority would be either the registering authority if it has the power to
decide this, or the courts of the country in question if the issue comes
before a court. 54
Pursuant to Article 6bis, on November 20, 1980, then Minister Luis
Villafuerte of the Ministry of Trade issued a Memorandum to the Director
of Patents. The Minister ordered the Director that:
Pursuant to the Paris Convention for the Protection of Industrial Property
to which the Philippines is a signatory, you are hereby directed to reject all
pending applications for Philippine registration of signature and other
world-famous trademarks by applicants other than its original owners or
users.
The conflicting claims over internationally known trademarks involve such
name brands as Lacoste, Jordache, Vanderbilt, Sasson, Fila, Pierre
Cardin, Gucci, Christian Dior, Oscar de la Renta, Calvin Klein, Givenchy,
Ralph Lauren, Geoffrey Beene, Lanvin and Ted Lapidus.
It is further directed that, in cases where warranted, Philippine registrants
of such trademarks should be asked to surrender their certificates of
registration, if any, to avoid suits for damages and other legal action by
the trademarks' foreign or local owners or original users.
You are also required to submit to the undersigned a progress report on
the matter.
For immediate compliance. 55
Three years later, on October 25, 1983, then Minister Roberto Ongpin
issued another Memorandum to the Director of Patents, viz:
Pursuant to Executive Order No. 913 dated 7 October 1983 which
strengthens the rule-making and adjudicatory powers of the Minister of
Trade and Industry and provides inter alia, that "such rule-making and
adjudicatory powers should be revitalized in order that the Minister of
Trade and Industry can . . . apply more swift and effective solutions and
remedies to old and new problems . . . such as infringement of
internationally-known tradenames and trademarks . . ." and in view of the
decision of the Intermediate Appellate Court in the case of LA CHEMISE
LACOSTE, S.A., versus RAM SADWHANI [AC-G.R. SP NO. 13359 (17)
June 1983] 56 which affirms the validity of the MEMORANDUM of then
Minister Luis R. Villafuerte dated 20 November 1980 confirming our
obligations under the PARIS CONVENTION FOR THE PROTECTION OF
INDUSTRIAL PROPERTY to which the Republic of the Philippines is a
signatory, you are hereby directed to implement measures necessary to
effect compliance with our obligations under said Convention in general,
and, more specifically, to honor our commitment under
Section 6bis 57 thereof, as follows:
1. Whether the trademark under consideration is well-known in the
Philippines or is a mark already belonging to a person entitled to the
benefits of the CONVENTION, this should be established, pursuant to
Philippine Patent Office procedures in inter partesand ex parte cases,
according to any of the following criteria or any combination thereof:
(a) a declaration by the Minister of Trade and Industry that the trademark
being considered is already well-known in the Philippines such that
permission for its use by other than its original owner will constitute a
reproduction, imitation, translation or other infringement;
(b) that the trademark is used in commerce internationally, supported by
proof that goods bearing the trademark are sold on an international scale,
advertisements, the establishment of factories, sales offices,
distributorships, and the like, in different countries, including volume or
other measure of international trade and commerce;
(c) that the trademark is duly registered in the industrial property office(s)
of another country or countries, taking into consideration the date of such
registration;
(d) that the trademark has long been established and obtained goodwill
and international consumer recognition as belonging to one owner or
source;
(e) that the trademark actually belongs to a party claiming ownership and
has the right to registration under the provisions of the aforestated PARIS
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TRADEMARKS
CONVENTION.
2. The word trademark, as used in this MEMORANDUM, shall include
tradenames, service marks, logos, signs, emblems, insignia or other
similar devices used for identification and recognition by consumers.
3. The Philippine Patent Office shall refuse all applications for, or cancel
the registration of, trademarks which constitute a reproduction, translation
or imitation of a trademark owned by a person, natural or corporate, who
is a citizen of a country signatory to the PARIS CONVENTION FOR THE
PROTECTION OF INDUSTRIAL PROPERTY.
4. The Philippine Patent Office shall give due course to the Opposition in
cases already or hereafter filed against the registration of trademarks
entitled to protection of Section 6bis of said PARIS CONVENTION as
outlined above, by remanding applications filed by one not entitled to such
protection for final disallowance by the Examination Division.
5. All pending applications for Philippine registration of signature and other
world-famous trademarks filed by applicants other than their original
owners or users shall be rejected forthwith. Where such applicants have
already obtained registration contrary to the abovementioned PARIS
CONVENTION and/or Philippine Law, they shall be directed to surrender
their Certificates of Registration to the Philippine Patent Office for
immediate cancellation proceedings.
xxx xxx xxx. 58
In the Villafuerte Memorandum, the Minister of Trade instructed the
Director of Patents to reject all pending applications for Philippine
registration of signature and other world-famous trademarks by applicants
other than their original owners or users. The Minister enumerated several
internationally-known trademarks and ordered the Director of Patents to
require Philippine registrants of such marks to surrender their certificates
of registration.
In the Ongpin Memorandum, the Minister of Trade and Industry did not
enumerate well-known trademarks but laid down guidelines for the
Director of Patents to observe in determining whether a trademark is
entitled to protection as a well-known mark in the Philippines under Article
6bis of the Paris Convention. This was to be established through
Philippine Patent Office procedures in inter partes and ex parte cases
pursuant to the criteria enumerated therein. The Philippine Patent Office
was ordered to refuse applications for, or cancel the registration of,
trademarks which constitute a reproduction, translation or imitation of a
trademark owned by a person who is a citizen of a member of the Union.
All pending applications for registration of world-famous trademarks by
persons other than their original owners were to be rejected forthwith. The
Ongpin Memorandum was issued pursuant to Executive Order No. 913
dated October 7, 1983 of then President Marcos which strengthened the
rule-making and adjudicatory powers of the Minister of Trade and Industry
for the effective protection of consumers and the application of swift
solutions to problems in trade and industry. 59
Both the Villafuerte and Ongpin Memoranda were sustained by the
Supreme Court in the 1984 landmark case ofLa Chemise Lacoste, S.A. v.
Fernandez. 60 This court ruled therein that under the provisions of Article
6bis of the Paris Convention, the Minister of Trade and Industry was the
"competent authority" to determine whether a trademark is well-known in
this country. 61
The Villafuerte Memorandum was issued in 1980, i.e., fifteen (15) years
after the adoption of the Paris Convention in 1965. In the case at bar, the
first inter partes case, IPC No. 686, was filed in 1970, before the
Villafuerte Memorandum but five (5) years after the effectivity of the Paris
Convention. Article 6bis was already in effect five years before the first
case was instituted. Private respondent, however, did not cite the
protection of Article 6bis, neither did it mention the Paris Convention at all.
It was only in 1981 when IPC No. 2049 was instituted that the Paris
Convention and the Villafuerte Memorandum, and, during the pendency of
the case, the 1983 Ongpin Memorandum were invoked by private
respondent.
The Solicitor General argues that the issue of whether the protection of
Article 6bis of the Convention and the two Memoranda is barred by res
judicata has already been answered in Wolverine Worldwide, Inc. v. Court
of
Appeals. 62 In this case, petitioner Wolverine, a foreign corporation, filed
with the Philippine Patent Office a petition for cancellation of the
registration certificate of private respondent, a Filipino citizen, for the
INTELLECTUAL PROPERTY LAWS – AMES 2014
trademark "Hush Puppies" and "Dog Device." Petitioner alleged that it was
the registrant of the internationally-known trademark in the United States
and other countries, and cited protection under the Paris Convention and
the Ongpin Memorandum. The petition was dismissed by the Patent Office
on the ground of res judicata. It was found that in 1973 petitioner's
predecessor-in-interest filed two petitions for cancellation of the same
trademark against respondent's predecessor-in-interest. The Patent Office
dismissed the petitions, ordered the cancellation of registration of
petitioner's trademark, and gave due course to respondent's application
for registration. This decision was sustained by the Court of Appeals,
which decision was not elevated to us and became final and
executory. 63
Wolverine claimed that while its previous petitions were filed under R.A.
No. 166, the Trademark Law, its subsequent petition was based on a new
cause of action, i.e., the Ongpin Memorandum and E.O. No. 913 issued in
1983, after finality of the previous decision. We held that the said
Memorandum and E.O. did not grant a new cause of action because it did
"not amend the Trademark Law," . . . "nor did it indicate a new policy with
respect to the registration in the Philippines of world-famous
trademarks." 64 This conclusion was based on the finding that Wolverine's
two previous petitions and subsequent petition dealt with the same issue
of ownership of the trademark. 65 In other words, since the first and
second cases involved the same issue of ownership, then the first case
was a bar to the second case.
In the instant case, the issue of ownership of the trademark "Barbizon"
was not raised in IPC No. 686. Private respondent's opposition therein
was merely anchored on:
(a) "confusing similarity" of its trademark with that of Escobar's;
(b) that the registration of Escobar's similar trademark will cause damage
to private respondent's business reputation and goodwill; and
(c) that Escobar's use of the trademark amounts to an unlawful
appropriation of a mark previously used in the Philippines which act is
penalized under Section 4 (d) of the Trademark Law.
In IPC No. 2049, private respondent's opposition set forth
several issues summarized as follows:
(a) as early as 1933, it adopted the word "BARBIZON" as trademark on its
products such as robes, pajamas, lingerie, nightgowns and slips;
(b) that the trademark "BARBIZON" was registered with the United States
Patent Office in 1934 and 1949; and that variations of the same
trademark, i.e., "BARBIZON" with Bee design and "BARBIZON" with the
representation of a woman were also registered with the U.S. Patent
Office in 1961 and 1976;
(c) that these marks have been in use in the Philippines and in many
countries all over the world for over forty years. "Barbizon" products have
been advertised in international publications and the marks registered in
36 countries worldwide;
(d) Escobar's registration of the similar trademark "BARBIZON" in 1974
was based on fraud; and this fraudulent registration was cancelled in
1979, stripping Escobar of whatsoever right she had to the said mark;
(e) Private respondent's trademark is entitled to protection as a well-
known mark under Article 6bis of the Paris Convention, Executive Order
No. 913, and the two Memoranda dated November 20, 1980 and October
25, 1983 of the Minister of Trade and Industry to the Director of Patents;
(f) Escobar's trademark is identical to private respondent's and its use on
the same class of goods as the latter's amounts to a violation of the
Trademark Law and Article 189 of the Revised Penal Code.
IPC No. 2049 raised the issue of ownership of the trademark,
the first registration and use of the trademark in the United
States and other countries, and the international recognition and
reputation of the trademark established by extensive use and
advertisement of private respondent's products for over forty
years here and abroad. These are different from the issues of
confusing similarity and damage in IPC No. 686. The issue of
prior use may have been raised in IPC No. 686 but this claim
was limited to prior use in the Philippines only. Prior use in IPC
No. 2049 stems from private respondent's claim as originator of
the word and symbol "Barbizon," 66 as the first and registered
user of the mark attached to its products which have been sold
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TRADEMARKS
and advertised worldwide for a considerable number of years
prior to petitioner's first application for registration of her
trademark in the Philippines. Indeed, these are substantial
allegations that raised new issues and necessarily gave private
respondent a new cause of action. Res judicata does not apply
to rights, claims or demands, although growing out of the same
subject matter, which constitute separate or distinct causes of
action and were not put in issue in the former action. 67
Respondent corporation also introduced in the second case a fact that did
not exist at the time the first case was filed and terminated. The
cancellation of petitioner's certificate of registration for failure to file the
affidavit of use arose only after IPC No. 686. It did not and could not have
occurred in the first case, and this gave respondent another cause to
oppose the second application. Res judicata extends only to facts and
conditions as they existed at the time judgment was rendered and to the
legal rights and relations of the parties fixed by the facts so
determined. 68 When new facts or conditions intervene before the second
suit, furnishing a new basis for the claims and defenses of the parties, the
issues are no longer the same, and the former judgment cannot be
pleaded as a bar to the subsequent action. 69
It is also noted that the oppositions in the first and second cases are
based on different laws. The opposition in IPC No. 686 was based on
specific provisions of the Trademark Law, i.e., Section 4 (d) 70 on
confusing similarity of trademarks and Section 8 71 on the requisite
damage to file an opposition to a petition for registration. The opposition in
IPC No. 2049 invoked the Paris Convention, particularly Article
6bis thereof, E.O. No. 913 and the two Memoranda of the Minister of
Trade and Industry. This opposition also invoked Article 189 of the
Revised Penal Code which is a statute totally different from the Trademark
Law. 72 Causes of action which are distinct and independent from each
other, although arising out of the same contract, transaction, or state of
facts, may be sued on separately, recovery on one being no bar to
subsequent actions on others. 73 The mere fact that the same relief is
sought in the subsequent action will not render the judgment in the prior
action operative as res judicata, such as where the two actions are based
on different statutes. 74 Res judicata therefore does not apply to the instant
case and respondent Court of Appeals did not err in so ruling.
Intellectual and industrial property rights cases are not simple property
cases. Trademarks deal with the psychological function of symbols and
the effect of these symbols on the public at large. 75 Trademarks play a
significant role in communication, commerce and trade, and serve
valuable and interrelated business functions, both nationally and
internationally. For this reason, all agreements concerning industrial
property, like those on trademarks and tradenames, are intimately
connected with economic development. 76 Industrial property encourages
investments in new ideas and inventions and stimulates creative efforts for
the satisfaction of human needs. They speed up transfer of technology
and industrialization, and thereby bring about social and economic
progress. 77 These advantages have been acknowledged by the Philippine
government itself. The Intellectual Property Code of the Philippines
declares that "an effective intellectual and industrial property system is
vital to the development of domestic and creative activity, facilitates
transfer of technology, it attracts foreign investments, and ensures market
access for our products." 78 The Intellectual Property Code took effect on
January 1, 1998 and by its express provision, 79 repealed the Trademark
Law, 80 the Patent Law, 81 Articles 188 and 189 of the Revised Penal
Code, the Decree on Intellectual Property, 82 and the Decree on
Compulsory Reprinting of Foreign Textbooks. 83 The Code was enacted to
strengthen the intellectual and industrial property system in the Philippines
as mandated by the country's accession to the Agreement Establishing
the World Trade Organization (WTO). 84
The WTO is a common institutional framework for the conduct of trade
relations among its members in matters related to the multilateral and
plurilateral trade agreements annexed to the WTO Agreement. 85 The
WTO framework ensures a "single undertaking approach" to the
administration and operation of all agreements and arrangements
attached to the WTO Agreement. Among those annexed is the Agreement
on Trade-Related Aspects of Intellectual Property Rights or
TRIPs. 86 Members to this Agreement "desire to reduce distortions and
impediments to international trade, taking into account the need to
promote effective and adequate protection of intellectual property rights,
INTELLECTUAL PROPERTY LAWS – AMES 2014
and to ensure that measures and procedures to enforce intellectual
property rights do not themselves become barriers to legitimate trade." To
fulfill these objectives, the members have agreed to adhere to minimum
standards of protection set by several Conventions.87 These Conventions
are: the Berne Convention for the Protection of Literary and Artistic Works
(1971), the Rome Convention or the International Convention for the
Protection of Performers, Producers of Phonograms and Broadcasting
Organisations, the Treaty on Intellectual Property in Respect of Integrated
Circuits, and the Paris Convention (1967), as revised in Stockholm on July
14, 1967. 88
A major proportion of international trade depends on the protection of
intellectual property rights. 89 Since the late 1970's, the unauthorized
counterfeiting of industrial property and trademarked products has had a
considerable adverse impact on domestic and international trade
revenues. 90 The TRIPs Agreement seeks to grant adequate protection of
intellectual property rights by creating a favorable economic environment
to encourage the inflow of foreign investments, and strengthening the
multi-lateral trading system to bring about economic, cultural and
technological independence. 91
The Philippines and the United States of America have acceded to the
WTO Agreement. This Agreement has revolutionized international
business and economic relations among states, and has propelled the
world towards trade liberalization and economic
globalization. 92 Protectionism and isolationism belong to the past. Trade
is no longer confined to a bilateral system. There is now "a new era of
global economic cooperation, reflecting the widespread desire to operate
in a fairer and more open multilateral trading system." 93 Conformably, the
State must reaffirm its commitment to the global community and take part
in evolving a new international economic order at the dawn of the new
millenium.
IN VIEW WHEREOF, the petition is denied and the Decision and
Resolution of the Court of Appeals in CA-G.R. SP No. 28415 are affirmed.
SO ORDERED.
Acquisition of Ownership of Marks (Sec. 122, IPC);
What marks are registrable/non-registrable?
Section 122. How Marks are Acquired. - The rights in a mark shall be
acquired through registration made validly in accordance wih the provisions of
this law. (Sec. 2-A, R A. No. 166a)
1. Registration is necessary before one can file an action for infringement
2. Actual Use
i. Prior use in the Philippines is not required before registration.
ii. However, there must be actual use after registration.
Declaration to use within 3 years upon application
Declaration of actual use and evidence to that effect or should show valid
reasons for non-use within 1 year from fifth anniversary date of registration
iii. Certificate of Registration of the mark – prima facie evidence of the
validity of registration
iv. registration is not important to protect the goodwill of his goods or
services
v. Registration of the mark is not necessary for purposes of filing cases for
unfair competition or false designation of origin
“The rights in a mark shall be acquired through registration made validly in
accordance with the provisions of this law.”
- Right is acquired from time of registration is actually the filing
date of application
- Filing date of application – the date of which the IPO receives the
following indications and elements: (a) express or implication that
the registration of the mark is sought (b) identity of the applicant
(c) indications sufficient to contact the application or his
representative (d) reproduction of the mark (e) list of goods or
services for which registration is sought
The right may also be protected from priority date. Take note of reciprocity
rule where the application is filed in the Philippines and the same applicant
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TRADEMARKS
previously filed an application in the countries covered by the reciprocity
rule, the application is deemed filed as of the day the application was first
filed in the foreign country. However there will be no registration in the
Philippines until registered in such foreign country
– RCL, Sundiang and Aquino
Cluster 1
Generic - Sec. 123.1 (h) IPC
(h) Consists exclusively of signs that are generic for the goods or services that
they seek to identify;
Descriptive - Sec. 123.1 (j) IPC
(j) Consists exclusively of signs or of indications that may serve in trade to
designate the kind, quality, quantity, intended purpose, value, geographical
origin, time or production of the goods or rendering of the services, or other
characteristics of the goods or services;
Fanciful or Suggestive – others Suggestive
Asia Brewery, Inc. vs. CA GR No. 103543, 5 July 1993
On September 15, 1988, 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. (San Miguel Corporation vs.
Asia Brewery Inc., Civ. Case. No. 56390, RTC Branch 166, Pasig, Metro
Manila.).
On August 27, 1990, a decision was rendered by the trial Court, presided
over by Judge Jesus O. Bersamira, dismissing SMC's complaint because
ABI "has not committed trademark infringement or unfair competition
against" SMC (p. 189, Rollo).
SMC appealed to the Court of Appeals (C.A.-G.R. CV No. 28104). On
September 30, 1991, the Court of Appeals (Sixth Division composed of
Justice Jose C. Campos, Jr., chairman and ponente, and Justices Venancio
D. Aldecoa Jr. and Filemon H. Mendoza, as members) reversed the trial
court. The dispositive part of the decision reads as follows:
In the light of the foregoing analysis and under the plain language of the
applicable rule and principle on the matter, We find the defendant Asia
Brewery Incorporated GUILTY of infringement of trademark and unfair
competition. The decision of the trial court is hereby REVERSED, and a new
judgment entered in favor of the plaintiff and against the defendant as
follows:
(1) The defendant Asia Brewery Inc. its officers, agents, servants and
employees are hereby permanently enjoined and restrained from
manufacturing, putting up, selling, advertising, offering or announcing for
sale, or supplying Beer Pale Pilsen, or any similar preparation, manufacture
or beer in bottles and under labels substantially identical with or like the said
bottles and labels of plaintiff San Miguel Corporation employed for that
purpose, or substantially identical with or like the bottles and labels now
employed by the defendant for that purpose, or in bottles or under labels
which are calculated to deceive purchasers and consumers into the belief
that the beer is the product of the plaintiff or which will enable others to
substitute, sell or palm off the said beer of the defendant as and for the beer
of the plaintiff-complainant.
(2) The defendant Asia Brewery Inc. is hereby ordered to render an
accounting and pay the San Miguel Corporation double any and all the
payments derived by defendant from operations of its business and the sale
of goods bearing the mark "Beer Pale Pilsen" estimated at approximately
Five Million Pesos (P5,000,000.00); to recall all its products bearing the mark
"Beer Pale Pilsen" from its retailers and deliver these as well as all labels,
INTELLECTUAL PROPERTY LAWS – AMES 2014
signs, prints, packages, wrappers, receptacles and advertisements bearing
the infringing mark and all plates, molds, materials and other means of
making the same to the Court authorized to execute this judgment for
destruction.
(3) The defendant is hereby ordered to pay plaintiff the sum of Two Million
Pesos (P2,000,000.00) as moral damages and Half a Million Pesos
(P5,000,000.00) by way of exemplary damages.
(4) The defendant is further ordered to pay the plaintiff attorney's fees in the
amount of P250,000.00 plus costs to this suit. (p. 90, Rollo.)
Upon a motion for reconsideration filed by ABI, the above dispositive part of
the decision, was modified by the separate opinions of the Special Sixth
Division 1 so that it should read thus:
In the light of the foregoing analysis and under the plain language of the
applicable rule and principle on the matter, We find the defendant Asia
Brewery Incorporated GUILTY of infringement of trademark and unfair
competition. The decision of the trial court is hereby REVERSED, and a new
judgment entered in favor of the plaintiff and against the defendant as
follows:
(1) The defendant Asia Brewery Inc., its officers, agents, servants and
employees are hereby permanently enjoined and restrained from
manufacturing, putting up, selling, advertising, offering or announcing for
sale, or supplying Beer Pale Pilsen, or any similar preparation, manufacture
or beer in bottles and under labels substantially identical with or like the said
bottles and labels of plaintiff San Miguel Corporation employed for that
purpose, or substantially identical with or like the bottles and labels now
employed by the defendant for that purpose, or in bottles or under labels
which are calculated to deceive purchasers and consumers into the belief
that the beer if the product of the plaintiff or which will enable others to
substitute, sell or palm off the said beer of the defendant as and for the beer
of the plaintiff-complainant.
(2) The defendant Asia Brewery Inc. is hereby ordered 2 to recall all its
products bearing the mark Beer Pale Pilsen from its retailers and deliver
these as well as all labels, signs, prints, packages, wrappers, receptacles
and advertisements bearing the infringing mark and all plates, molds,
materials and other means of making the same to the Court authorized to
execute this judgment for destruction.
(3) The defendant is hereby ordered to pay plaintiff the sum of Two Million
Pesos (P2,000,000.00) as moral damages and Half a Million Pesos
(P500,000.00) by way of exemplary damages.
(4) The defendant is further ordered to pay the plaintiff attorney's fees in the
amount of P250,000.00 plus costs of this suit.
In due time, ABI appealed to this Court by a petition for certiorari under Rule
45 of the Rules of Court. The lone issue in this appeal is whether ABI
infringes SMC's trademark: San Miguel Pale Pilsen with Rectangular Hops
and Malt Design, and thereby commits unfair competition against the latter. It
is a factual issue (Phil. Nut Industry Inc. v. Standard Brands Inc., 65 SCRA
575) and as a general rule, the findings of the Court of Appeals upon factual
questions are conclusive and ought not to be disturbed by us. However,
there are exceptions to this general rule, and they are:
(1) When the conclusion is grounded entirely on speculation, surmises and
conjectures;
(2) When the inference of the Court of Appeals from its findings of fact is
manifestly mistaken, absurd and impossible;
(3) Where there is grave abuse of discretion;
(4) When the judgment is based on a misapprehension of facts;
(5) When the appellate court, in making its findings, went beyond the issues
of the case, and the same are contrary to the admissions of both the
appellant and the appellee;
(6) When the findings of said court are contrary to those of the trial court;
(7) When the findings are without citation of specific evidence on which they
are based;
(8) When the facts set forth in the petition as well as in the petitioner's main
and reply briefs are not disputed by the respondents; and
(9) When the findings of facts of the Court of Appeals are premised on the
absence of evidence and are contradicted on record. (Reynolds Philippine
Corporation vs. Court of Appeals, 169 SCRA 220, 223 citing, Mendoza vs.
Court of Appeals, 156 SCRA 597; Manlapaz vs. Court of Appeals, 147
SCRA 238; Sacay vs. Sandiganbayan, 142 SCRA 593, 609; Guita vs. CA,
139 SCRA 576; Casanayan vs. Court of Appeals, 198 SCRA 333, 336; also
Apex Investment and Financing Corp. vs. IAC, 166 SCRA 458 [citing
Tolentino vs. De Jesus, 56 SCRA 167; Carolina Industries, Inc. vs. CMS
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Stock Brokerage, Inc., 97 SCRA 734; Manero vs. CA, 102 SCRA 817; and
Moran, Jr. vs. CA, 133 SCRA 88].)
Under any of these exceptions, the Court has to review the evidence in order
to arrive at the correct findings based on the record (Roman Catholic Bishop
of Malolos, Inc. vs. IAC, 191 SCRA 411, 420.) Where findings of the Court of
Appeals and trial court are contrary to each other, the Supreme Court may
scrutinize the evidence on record. (Cruz vs. CA, 129 SCRA 222, 227.)
The present case is one of the exceptions because there is no concurrence
between the trial court and the Court of Appeals on the lone factual issue of
whether ABI, by manufacturing and selling its BEER PALE PILSEN in amber
colored steinie bottles of 320 ml. capacity with a white painted rectangular
label has committed trademark infringement and unfair competition against
SMC.
Infringement of trademark is a form of unfair competition (Clarke vs. Manila
Candy Co., 36 Phil. 100, 106). Sec. 22 of Republic Act No. 166, otherwise
known as the Trademark Law, defines what constitutes infringement:
Sec. 22. Infringement, what constitutes. — Any person who 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 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. (Emphasis supplied.)
This definition implies that only registered trade marks, trade names and
service marks are protected against infringement or unauthorized use by
another or others. The use of someone else's registered trademark, trade
name or service mark is unauthorized, hence, actionable, if it is done
"without the consent of the registrant." (Ibid.)
The registered trademark of SMC for its pale pilsen beer is:
San Miguel Pale Pilsen With Rectangular Hops and Malt Design. (Philippine
Bureau of Patents, Trademarks and Technology Transfer Trademark
Certificate of Registration No. 36103, dated 23 Oct. 1986,
(p. 174, Rollo.)
As described by the trial court in its decision (Page 177, Rollo):
. . . . a rectangular design [is] bordered by what appears to be minute grains
arranged in rows of three in which there appear in each corner hop designs.
At the top is a phrase written in small print "Reg. Phil. Pat. Off." and at the
bottom "Net Contents: 320 Ml." The dominant feature is the phrase "San
Miguel" written horizontally at the upper portion. Below are the words "Pale
Pilsen" written diagonally across the middle of the rectangular design. In
between is a coat of arms and the phrase "Expertly Brewed." The "S" in
"San" and the "M" of "Miguel," "P" of "Pale" and "Pilsen" are written in Gothic
letters with fine strokes of serifs, the kind that first appeared in the 1780s in
England and used for printing German as distinguished from Roman and
Italic. Below "Pale Pilsen" is the statement "And Bottled by" (first line, "San
Miguel Brewery" (second line), and "Philippines" (third line). (p. 177,Rollo;
Emphasis supplied.)
On the other hand, ABI's trademark, as described by the trial court, consists
of:
. . . a rectangular design bordered by what appear to be buds of flowers with
leaves. The dominant feature is "Beer" written across the upper portion of
the rectangular design. The phrase "Pale Pilsen" appears immediately below
in smaller block letters. To the left is a hop design and to the right, written in
small prints, is the phrase "Net Contents 320 ml." Immediately below "Pale
INTELLECTUAL PROPERTY LAWS – AMES 2014
Pilsen" is the statement written in three lines "Especially brewed and bottled
by" (first line), "Asia Brewery Incorporated" (second line), and "Philippines"
(third line), (p. 177, Rollo; Emphasis supplied.)
Does ABI's BEER PALE PILSEN label or "design" infringe upon SMC's SAN
MIGUEL PALE PILSEN WITH RECTANGULAR MALT AND HOPS
DESIGN? The answer is "No."
Infringement is determined by the "test of dominancy" rather than by
differences or variations in the details of one trademark and of another. The
rule was formulated in Co Tiong Sa vs. Director of Patents, 95 Phil. 1, 4
(1954); reiterated in Lim Hoa vs. Director of Patents, 100 Phil. 214, 216-217
(1956), thus:
It has been consistently held that the question of infringement of a trademark
is to be determined by the test of dominancy. Similarity in size, form and
color, while relevant, is not conclusive. If the competing trademark contains
the main or essential or dominant features of another, and confusion and
deception is likely to result, infringement takes place. Duplication or imitation
is not necessary; nor it is necessary that the infringing label should suggest
an effort to imitate. [C. Neilman Brewing Co. vs. Independent Brewing Co.,
191 F., 489, 495, citing Eagle White Lead Co., vs. Pflugh (CC) 180 Fed.
579]. The question at issue in cases of infringement of trademarks is whether
the use of the marks involved would be likely to cause confusion or mistakes
in the mind of the public or deceive purchasers. (Auburn Rubber Corporation
vs. Honover Rubber Co., 107 F. 2d 588; . . . .) (Emphasis supplied.)
In Forbes, Munn & Co. (Ltd.) vs. Ang San To, 40 Phil. 272, 275, the test was
similarity or "resemblance between the two (trademarks) such as would be
likely to cause the one mark to be mistaken for the other. . . . [But] this is not
such similitude as amounts to identity."
In Phil. Nut Industry Inc. vs. Standard Brands Inc., 65 SCRA 575, the court
was more specific: the test is "similarity in the dominant features of the
trademarks."
What are the dominant features of the competing trademarks before us?
There is hardly any dispute that the dominant feature of SMC's trademark is
the name of the product: SAN MIGUEL PALE PILSEN, written in white
Gothic letters with elaborate serifs at the beginning and end of the letters "S"
and "M" on an amber background across the upper portion of the rectangular
design.
On the other hand, the dominant feature of ABI's trademark is the name:
BEER PALE PILSEN, with the word "Beer" written in large amber letters,
larger than any of the letters found in the SMC label.
The trial court perceptively observed that the word "BEER" does not appear
in SMC's trademark, just as the words "SAN MIGUEL" do not appear in ABI's
trademark. Hence, there is absolutely no similarity in the dominant features
of both trademarks.
Neither in sound, spelling or appearance can BEER PALE PILSEN be said
to be confusingly similar to SAN MIGUEL PALE PILSEN. No one who
purchases BEER PALE PILSEN can possibly be deceived that it is SAN
MIGUEL PALE PILSEN. No evidence whatsoever was presented by SMC
proving otherwise.
Besides the dissimilarity in their names, the following other dissimilarities in
the trade dress or appearance of the competing products abound:
(1) The SAN MIGUEL PALE PILSEN bottle has a slender tapered neck.
The BEER PALE PILSEN bottle has a fat, bulging neck.
(2) The words "pale pilsen" on SMC's label are printed in bold and laced
letters along a diagonal band, whereas the words "pale pilsen" on ABI's
bottle are half the size and printed in slender block letters on a
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TRADEMARKS
straight horizontalband. (See Exhibit "8-a".).
(3) The names of the manufacturers are prominently printed on their
respective bottles.
SAN MIGUEL PALE PILSEN is "Bottled by the San Miguel Brewery,
Philippines," whereas BEER PALE PILSEN is "Especially brewed and
bottled by Asia Brewery Incorporated, Philippines."
(4) On the back of ABI's bottle is printed in big, bold letters, under a row of
flower buds and leaves, its copyrighted slogan:
"BEER NA BEER!"
Whereas SMC's bottle carries no slogan.
(5) The back of the SAN MIGUEL PALE PILSEN bottle carries the SMC
logo, whereas the BEER PALE PILSEN bottle has no logo.
(6) The SAN MIGUEL PALE PILSEN bottle cap is stamped with a coat of
arms and the words "San Miguel Brewery Philippines" encircling the same.
The BEER PALE PILSEN bottle cap is stamped with the name "BEER" in the
center, surrounded by the words "Asia Brewery Incorporated Philippines."
(7) Finally, there is a substantial price difference between BEER PALE
PILSEN (currently at P4.25 per bottle) and SAN MIGUEL PALE PILSEN
(currently at P7.00 per bottle). One who pays only P4.25 for a bottle of beer
cannot expect to receive San Miguel Pale Pilsen from the storekeeper or
bartender.
The fact that the words pale pilsen are part of ABI's trademark does not
constitute an infringement of SMC's trademark: SAN MIGUEL PALE
PILSEN, for "pale pilsen" 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 in Czechoslovakia and became
famous in the Middle Ages. (Webster's Third New International Dictionary of
the English Language, Unabridged. Edited by Philip Babcock Gove.
Springfield, Mass.: G & C Merriam Co., [c] 1976, page 1716.) "Pilsen" is a
"primarily geographically descriptive word," (Sec. 4, subpar. [e] Republic Act
No. 166, as inserted by Sec. 2 of R.A. No. 638) hence, non-registerable and
not appropriable by any beer manufacturer. The Trademark Law provides:
Sec. 4. . . .. The owner of trade-mark, trade-name or service-mark used to
distinguish his goods, business or services from the goods, business or
services of others shall have the right to register the same [on the principal
register], unless it:
xxx xxx xxx
(e) Consists of a mark or trade-name which, when applied to or used in
connection with the goods, business or services of the applicant is merely
descriptive or deceptively misdescriptive of them, or when applied to or used
in connection with the goods, business or services of the applicant isprimarily
geographically descriptive or deceptively misdescriptive of them, or is
primarily merely a surname." (Emphasis supplied.)
The words "pale pilsen" may not be appropriated by SMC for its exclusive
use even if they are part of its registered trademark: SAN MIGUEL PALE
PILSEN, any more than such descriptive words as "evaporated milk,"
"tomato ketchup," "cheddar cheese," "corn flakes" and "cooking oil" may be
appropriated by any single manufacturer of these food products, for no other
reason than that he was the first to use them in his registered trademark.
In Masso Hermanos, S.A. vs. Director of Patents, 94 Phil. 136, 139 (1953), it
was held that a dealer in shoes cannot register "Leather Shoes" as his
trademark because that would be merely descriptive and it would be unjust
to deprive other dealers in leather shoes of the right to use the same words
with reference to their merchandise. No one may appropriate generic or
descriptive words. They belong to the public domain (Ong Ai Gui vs. Director
of Patents, 96 Phil. 673, 676 [1955]):
A word or a combination of words which is merely descriptive of an article of
INTELLECTUAL PROPERTY LAWS – AMES 2014
trade, or of its composition, characteristics, or qualities, cannot be
appropriated and protected as a trademark to the exclusion of its use by
others. . . . inasmuch as all persons have an equal right to produce and vend
similar articles, they also have the right to describe them properly and to use
any appropriate language or words for that purpose, and no person can
appropriate to himself exclusively any word or expression, properly
descriptive of the article, its qualities, ingredients or characteristics, and thus
limit other persons in the use of language appropriate to the description of
their manufactures, the right to the use of such language being common to
all. This rule excluding descriptive terms has also been held to apply to
trade-names. As to whether words employed fall within this prohibition, it is
said that the true test is not whether they are exhaustively descriptive of the
article designated, but whether in themselves, and as they are commonly
used by those who understand their meaning, they are reasonably indicative
and descriptive of the thing intended. If they are thus descriptive, and not
arbitrary, they cannot be appropriated from general use and become the
exclusive property of anyone. (52 Am. Jur. 542-543.)
. . . . Others may use the same or similar descriptive word in connection with
their own wares, provided they take proper steps to prevent the public being
deceived. (Richmond Remedies Co. vs. Dr. Miles Medical Co., 16 E. [2d]
598.)
. . . . A descriptive word may be admittedly distinctive, especially if the user is
the first creator of the article. It will, however, be denied protection, not
because it lacks distinctiveness, but rather because others are equally
entitled to its use. (2 Callman. Unfair Competition and Trademarks, pp. 869-
870.)" (Emphasis supplied.)
The circumstance that the manufacturer of BEER PALE PILSEN, Asia
Brewery Incorporated, has printed its name all over the bottle of its beer
product: on the label, on the back of the bottle, as well as on the bottle cap,
disproves SMC's charge that ABI dishonestly and fraudulently intends to
palm off its BEER PALE PILSEN as SMC's product. In view of the visible
differences between the two products, the Court believes it is quite unlikely
that a customer of average intelligence would mistake a bottle of BEER
PALE PILSEN for SAN MIGUEL PALE PILSEN.
The fact that BEER PALE PILSEN like SAN MIGUEL PALE PILSEN is
bottled in amber-colored steinie bottles of 320 ml. capacity and is also
advertised in print, broadcast, and television media, does not necessarily
constitute unfair competition.
Unfair competition is the employment of deception or any other means
contrary to good faith by which a person shall pass off the goods
manufactured by him or in which he deals, or his business, or services, for
those of another who has already established goodwill for his similar goods,
business or services, or any acts calculated to produce the same result.
(Sec. 29, Republic Act No. 166, as amended.) The law further enumerates
the more common ways of committing unfair competition, thus:
Sec. 29. . . .
In particular, and without in any way limiting the scope of unfair competition,
the following shall be deemed guilty of unfair competition:
(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 wrapping of the packages in which they are
contained, or the devices or words thereon, or in any other feature of their
appearance, which would be likely to 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 such goods with a like purpose.
(b) Any person who by any artifice, or device, or who employs any other
means calculated to induce the false belief that such person is offering the
services of another who has identified such services in the mind of the
public; or
(c) Any person who shall make any false statement in the course of trade or
who shall commit any other act contrary to good faith of a nature calculated
to discredit the goods, business or services of another.
In this case, the question to be determined is whether ABI is using a name or
mark for its beer that has previously come to designate SMC's beer, or
whether ABI is passing off its BEER PALE PILSEN as SMC's SAN MIGUEL
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TRADEMARKS
PALE PILSEN.
. . ..The universal test question is whether the public is likely to be deceived.
Nothing less than conduct tending to pass off one man's goods or business
as that of another will constitute unfair competition. Actual or probable
deception and confusion on the part of the customers by reason of
defendant's practices must always appear. (Shell Co., of the Philippines, Ltd.
vs. Insular Petroleum Refining Co. Ltd. et al., 120 Phil. 434, 439.)
The use of ABI of the steinie bottle, similar but not identical to the SAN
MIGUEL PALE PILSEN bottle, is not unlawful. As pointed out by ABI's
counsel, SMC did not invent but merely borrowed the steinie bottle from
abroad and it claims neither patent nor trademark protection for that bottle
shape and design. (See rollo, page 55.) The Cerveza Especial and the Efes
Pale Pilsen use the "steinie" bottle. (See Exhibits 57-D, 57-E.) The trial court
found no infringement of SMC's bottle —
The court agrees with defendant that there is no infringement of plaintiff's
bottle, firstly, because according to plaintiff's witness Deogracias Villadolid, it
is a standard type of bottle called steinie, and to witness Jose Antonio
Garcia, it is not a San Miguel Corporation design but a design originally
developed in the United States by the Glass Container Manufacturer's
Institute and therefore lacks exclusivity. Secondly, the shape was never
registered as a trademark. Exhibit "C" is not a registration of a beer bottle
design required under Rep. Act 165 but the registration of the name and
other marks of ownership stamped on containers as required by Rep. Act
623. Thirdly, the neck of defendant's bottle is much larger and has a distinct
bulge in its uppermost part. (p. 186, Rollo.)
The petitioner's contention that bottle size, shape and color may not be the
exclusive property of any one beer manufacturer is well taken. SMC's being
the first to use the steinie bottle does not give SMC a vested right to use it to
the exclusion of everyone else. Being of functional or common use, and not
the exclusive invention of any one, it is available to all who might need to use
it within the industry. Nobody can acquire any exclusive right to market
articles supplying simple human needs in containers or wrappers of the
general form, size and character commonly and immediately used in
marketing such articles (Dy Buncio vs. Tan Tiao Bok, 42 Phil. 190, 194-195.)
. . . protection against imitation should be properly confined to nonfunctional
features. Even if purely functional elements are slavishly copied, the
resemblance will not support an action for unfair competition, and the first
user cannot claim secondary meaning protection. Nor can the first user
predicate his claim to protection on the argument that his business was
established in reliance on any such unpatented nonfunctional feature, even
"at large expenditure of money." (Callman Unfair Competition, Trademarks
and Monopolies, Sec. 19.33 [4th Ed.].) (Petition for Review, p. 28.)
ABI does not use SMC's steinie bottle. Neither did ABI copy it. ABI makes its
own steinie bottle which has a fat bulging neck to differentiate it from SMC's
bottle. The amber color is a functional feature of the beer bottle. As pointed
out by ABI, all bottled beer produced in the Philippines is contained and sold
in amber-colored bottles because amber is the most effective color in
preventing transmission of light and provides the maximum protection to
beer. As was ruled in California Crushed Fruit Corporation vs. Taylor B. and
Candy Co., 38 F2d 885, a merchant cannot be enjoined from using a type or
color of bottle where the same has the useful purpose of protecting the
contents from the deleterious effects of light rays. Moreover, no one may
have a monopoly of any color. Not only beer, but most medicines, whether in
liquid or tablet form, are sold in amber-colored bottles.
That the ABI bottle has a 320 ml. capacity is not due to a desire to imitate
SMC's bottle because that bottle capacity is the standard prescribed under
Metrication Circular No. 778, dated 4 December 1979, of the Department of
Trade, Metric System Board.
With regard to the white label of both beer bottles, ABI explained that it used
the color white for its label because white presents the strongest contrast to
the amber color of ABI's bottle; it is also the most economical to use on
labels, and the easiest to "bake" in the furnace (p. 16, TSN of September 20,
1988). No one can have a monopoly of the color amber for bottles, nor of
white for labels, nor of the rectangular shape which is the usual configuration
of labels. Needless to say, the shape of the bottle and of the label is
INTELLECTUAL PROPERTY LAWS – AMES 2014
unimportant. What is all important is the name of the product written on the
label of the bottle for that is how one beer may be distinguished form the
others.
In Dy Buncio v. Tan Tiao Bok, 42 Phil. 190, 196-197, where two competing
tea products were both labelled as Formosan tea, both sold in 5-ounce
packages made of ordinary wrapping paper of conventional color, both with
labels containing designs drawn in green ink and Chinese characters written
in red ink, one label showing a double-decked jar in the center, the other, a
flower pot, this court found that the resemblances between the designs were
not sufficient to mislead the ordinary intelligent buyer, hence, there was no
unfair competition. The Court held:
. . . . In order that there may be deception of the buying public in the sense
necessary to constitute unfair competition, it is necessary to suppose a
public accustomed to buy, and therefore to some extent familiar with, the
goods in question. The test of fraudulent simulation is to be found in the
likelihood of the deception of persons in some measure acquainted with an
established design and desirous of purchasing the commodity with which
that design has been associated. The test is not found in the deception, or
possibility of the deception, of the person who knows nothing about the
design which has been counterfeited, and who must be indifferent as
between that and the other. The simulation, in order to be objectionable,
must be such as appears likely to mislead the ordinarily intelligent buyer who
has a need to supply and is familiar with the article that he seeks to
purchase.
The main thrust of SMC's complaint if not infringement of its trademark, but
unfair competition arising form the allegedly "confusing similarity" in the
general appearance or trade dress of ABI's BEER PALE PILSEN beside
SMC's SAN MIGUEL PALE PILSEN (p. 209, Rollo)
SMC claims that the "trade dress" of BEER PALE PILSEN is "confusingly
similar" to its SAN MIGUEL PALE PILSEN because both are bottled in 320
ml. steinie type, amber-colored bottles with white rectangular labels.
However, when as in this case, the names of the competing products are
clearly different and their respective sources are prominently printed on the
label and on other parts of the bottle, mere similarity in the shape and size of
the container and label, does not constitute unfair competition. The steinie
bottle is a standard bottle for beer and is universally used. SMC did not
invent it nor patent it. The fact that SMC's bottle is registered under R.A. No.
623 (as amended by RA 5700, An Act to Regulate the Use of Duly Stamped
or Marked Bottles, Boxes, Casks, Kegs, Barrels and Other Similar
Containers) simply prohibits manufacturers of other foodstuffs from the
unauthorized use of SMC's bottles by refilling these with their products. It
was not uncommon then for products such as patis (fish sauce)
and toyo (soy sauce) to be sold in recycled SAN MIGUEL PALE PILSEN
bottles. Registration of SMC's beer bottles did not give SMC a patent on the
steinie or on bottles of similar size, shape or color.
Most containers are standardized because they are usually made by the
same manufacturer. Milk, whether in powdered or liquid form, is sold in
uniform tin cans. The same can be said of the standard ketchup or vinegar
bottle with its familiar elongated neck. Many other grocery items such as
coffee, mayonnaise, pickles and peanut butter are sold in standard glass
jars. The manufacturers of these foodstuffs have equal right to use these
standards tins, bottles and jars for their products. Only their respective labels
distinguish them from each other. Just as no milk producer may sue the
others for unfair competition because they sell their milk in the same size
and shape of milk can which he uses, neither may SMC claim unfair
competition arising from the fact that ABI's BEER PALE PILSEN is sold, like
SMC's SAN MIGUEL PALE PILSEN in amber steinie bottles.
The record does not bear out SMC's apprehension that BEER PALE PILSEN
is being passed off as SAN MIGUEL PALE PILSEN. This is unlikely to
happen for consumers or buyers of beer generally order their beer by brand.
As pointed out by ABI's counsel, in supermarkets and tiendas, beer is
ordered by brand, and the customer surrenders his empty replacement
bottles or pays a deposit to guarantee the return of the empties. If his
empties are SAN MIGUEL PALE PILSEN, he will get SAN MIGUEL PALE
PILSEN as replacement. In sari-sari stores, beer is also ordered from
the tindera by brand. The same is true in restaurants, pubs and beer gardens
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— beer is ordered from the waiters by brand. (Op. cit. page 50.)
Considering further that SAN MIGUEL PALE PILSEN has virtually
monopolized the domestic beer market for the past hundred years, those
who have been drinking no other beer but SAN MIGUEL PALE PILSEN
these many years certainly know their beer too well to be deceived by a
newcomer in the market. If they gravitate to ABI's cheaper beer, it will not be
because they are confused or deceived, but because they find the competing
product to their taste.
Our decision in this case will not diminish our ruling in "Del Monte
Corporation vs. Court of Appeals and Sunshine Sauce Manufacturing
Industries," 181 SCRA 410, 419, 3 that:
. . . to determine whether a trademark has been
infringed, we must consider the mark as a whole and not
as dissected. If the buyer is deceived, it is attributable to
the marks as a totality, not usually to any part of it.
That ruling may not apply to all kinds of products. The Court itself cautioned
that in resolving cases of infringement and unfair competition, the courts
should "take into consideration several factors which would affect its
conclusion, to wit: the age, training and education of the usual purchaser, the
nature and cost of the article, whether the article is bought for immediate
consumption and also the conditions under which it is usually purchased"
(181 SCRA 410, 418-419).
The Del Monte case involved catsup, a common household item which is
bought off the store shelves by housewives and house help who, if they are
illiterate and cannot identify the product by name or brand, would very likely
identify it by mere recollection of its appearance. Since the competitor,
Sunshine Sauce Mfg. Industries, not only used recycled Del Monte bottles
for its catsup (despite the warning embossed on the bottles: "Del Monte
Corporation. Not to be refilled.") but also used labels which were "a colorable
imitation" of Del Monte's label, we held that there was infringement of Del
Monte's trademark and unfair competition by Sunshine.
Our ruling in Del Monte would not apply to beer which is not usually picked
from a store shelf but ordered by brand by the beer drinker himself from the
storekeeper or waiter in a pub or restaurant.
Moreover, SMC's brand or trademark: "SAN MIGUEL PALE PILSEN" is not
infringed by ABI's mark: "BEER NA BEER" or "BEER PALE PILSEN." ABI
makes its own bottle with a bulging neck to differentiate it from SMC's bottle,
and prints ABI's name in three (3) places on said bottle (front, back and
bottle cap) to prove that it has no intention to pass of its "BEER" as "SAN
MIGUEL."
There is no confusing similarity between the competing beers for the name
of one is "SAN MIGUEL" while the competitor is plain "BEER" and the points
of dissimilarity between the two outnumber their points of similarity.
Petitioner ABI has neither infringed SMC's trademark nor committed unfair
competition with the latter's SAN MIGUEL PALE PILSEN product. While its
BEER PALE PILSEN admittedly competes with the latter in the open market,
that competition is neither unfair nor fraudulent. Hence, we must deny SMC's
prayer to suppress it.
WHEREFORE, finding the petition for review meritorious, the same is hereby
granted. The decision and resolution of the Court of Appeals in CA-G.R. CV
No. 28104 are hereby set aside and that of the trial court is REINSTATED
and AFFIRMED. Costs against the private respondent.
SO ORDERED.
Societe Des Produits Nestle S.A vs. CA GR No. 112012, 4 April 2001
This is a petition for review assailing the Decision of the Court of Appeals in
CA-G.R. SP No. 24101,1 reversing and setting aside the decision of the
Bureau of Patents, Trademarks and Technology Transfer (BPTTT),2 which
INTELLECTUAL PROPERTY LAWS – AMES 2014
denied private respondent’s application for registration of the trade-mark,
FLAVOR MASTER.
On January 18, 1984, private respondent CFC Corporation filed with the
BPTTT an application for the registration of the trademark "FLAVOR
MASTER" for instant coffee, under Serial No. 52994. The application, as a
matter of due course, was published in the July 18, 1988 issue of the
BPTTT’s Official Gazette.
Petitioner Societe Des Produits Nestle, S.A., a Swiss company registered
under Swiss laws and domiciled in Switzerland, filed an unverified Notice of
Opposition,3 claiming that the trademark of private respondent’s product is
"confusingly similar to its trademarks for coffee and coffee extracts, to wit:
MASTER ROAST and MASTER BLEND."
Likewise, a verified Notice of Opposition was filed by Nestle Philippines, Inc.,
a Philippine corporation and a licensee of Societe Des Produits Nestle S.A.,
against CFC’s application for registration of the trademark FLAVOR
MASTER.4 Nestle claimed that the use, if any, by CFC of the trademark
FLAVOR MASTER and its registration would likely cause confusion in the
trade; or deceive purchasers and would falsely suggest to the purchasing
public a connection in the business of Nestle, as the dominant word present
in the three (3) trademarks is "MASTER"; or that the goods of CFC might be
mistaken as having originated from the latter.
In answer to the two oppositions, CFC argued that its trademark, FLAVOR
MASTER, is not confusingly similar with the former’s trademarks, MASTER
ROAST and MASTER BLEND, alleging that, "except for the word MASTER
(which cannot be exclusively appropriated by any person for being a
descriptive or generic name), the other words that are used respectively with
said word in the three trademarks are very different from each other – in
meaning, spelling, pronunciation, and sound". CFC further argued that its
trademark, FLAVOR MASTER, "is clearly very different from any of Nestle’s
alleged trademarks MASTER ROAST and MASTER BLEND, especially
when the marks are viewed in their entirety, by considering their pictorial
representations, color schemes and the letters of their respective labels."
In its Decision No. 90-47 dated December 27, 1990, the BPTTT denied
CFC’s application for registration.5 CFC elevated the matter to the Court of
Appeals, where it was docketed as CA-G.R. SP No. 24101.
The Court of Appeals defined the issue thus: "Does appellant CFC’s trade
dress bear a striking resemblance with appellee’s trademarks as to create in
the purchasing public’s mind the mistaken impression that both coffee
products come from one and the same source?"
As stated above, the Court of Appeals, in the assailed decision dated
September 23, 1993, reversed Decision No. 90-47 of the BPTTT and
ordered the Director of Patents to approve CFC’s application. The Court of
Appeals ruled:
Were We to take even a lackadaisical glance at the overall
appearance of the contending marks, the physical discrepancies
between appellant CFC’s and appellee’s respective logos are so
ostensible that the casual purchaser cannot likely mistake one for
the other. Appellant CFC’s label (Exhibit "4") is predominantly a
blend of dark and lighter shade of orange where the words
"FLAVOR MASTER", "FLAVOR" appearing on top of "MASTER",
shaded in mocha with thin white inner and outer sidings per letter
and identically lettered except for the slightly protruding bottom
curve of the letter "S" adjoining the bottom tip of the letter "A" in
the word "MASTER", are printed across the top of a simmering red
coffee cup. Underneath "FLAVOR MASTER" appears "Premium
Instant Coffee" printed in white, slim and slanted letters. Appellees’
"MASTER ROAST" label (Exhibit "7"), however, is almost double
the width of appellant CFC’s. At the top is printed in brown color
the word "NESCAFE" against a white backdrop. Occupying the
center is a square-shaped configuration shaded with dark brown
and picturing a heap of coffee beans, where the word "MASTER"
is inscribed in the middle. "MASTER" in appellees’ label is printed
in taller capital letters, with the letter "M" further capitalized. The
letters are shaded with red and bounded with thin gold-colored
inner and outer sidings. Just above the word "MASTER" is a red
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window like portrait of what appears to be a coffee shrub clad in
gold. Below the "MASTER" appears the word "ROAST" impressed
in smaller, white print. And further below are the inscriptions in
white: "A selection of prime Arabica and Robusta coffee." With
regard to appellees’ "MASTER BLEND" label (Exhibit "6") of which
only a xeroxed copy is submitted, the letters are bolder and taller
as compared to appellant CFC’s and the word "MASTER" appears
on top of the word "BLEND" and below it are the words "100%
pure instant coffee" printed in small letters.
From the foregoing description, while the contending marks depict
the same product, the glaring dissimilarities in their presentation
far outweigh and dispel any aspect of similitude. To borrow the
words of the Supreme Court in American Cyanamid Co. v. Director
of Patents (76 SCRA 568), appellant CFC’s and appellees’ labels
are entirely different in size, background, colors, contents and
pictorial arrangement; in short, the general appearances of the
labels bearing the respective trademarks are so distinct from each
other that appellees cannot assert that the dominant features, if
any, of its trademarks were used or appropriated in appellant
CFC’s own. The distinctions are so well-defined so as to foreclose
any probability or likelihood of confusion or deception on the part
of the normally intelligent buyer when he or she encounters both
coffee products at the grocery shelf. The answer therefore to the
query is a clear-cut NO.6
Petitioners are now before this Court on the following assignment of errors:
1. RESPONDENT COURT GRAVELY ERRED IN REVERSING
AND SETTING ASIDE THE DECISION (NO. 90-47) OF THE
DIRECTOR OF THE BUREAU OF PATENTS, TRADEMARKS
AND TECHNOLOGY TRANSFER (BPTTT) DATED DECEMBER
27, 1990.
2. RESPONDENT COURT ERRED IN FINDING THAT
APPELLANT CFC’S TRADE DRESS IS BEYOND THE SCOPE
OF THE PROSCRIPTION LAID DOWN BY JURISPRUDENCE
AND THE TRADEMARK LAW.
3. RESPONDENT COURT ERRED IN HOLDING THAT THE
TOTALITY RULE, RATHER THAN THE TEST OF DOMINANCY,
APPLIES TO THE CASE.
4. RESPONDENT COURT ERRED IN INVOKING THE TOTALITY
RULE APPLIED IN THE CASES OF BRISTOL MYERS V.
DIRECTOR OF PATENTS, ET AL. (17 SCRA 128), MEAD
JOHNSON & CO. V. NVJ VAN DORF LTD., (7 SCRA 768) AND
AMERICAN CYANAMID CO. V. DIRECTOR OF PATENTS (76
SCRA 568).
The petition is impressed with merit.
A trademark has been generally defined as "any word, name, symbol or
device adopted and used by a manufacturer or merchant to identify his
goods and distinguish them from those manufactured and sold by others." 7
A manufacturer’s trademark is entitled to protection. As Mr. Justice
Frankfurter observed in the case ofMishawaka Mfg. Co. v. Kresge Co.:8
The protection of trade-marks is the law’s recognition of the
psychological function of symbols. If it is true that we live by
symbols, it is no less true that we purchase goods by them. A
trade-mark is a merchandising short-cut which induces a
purchaser to select what he wants, or what he has been led to
believe he wants. The owner of a mark exploits this human
propensity by making every effort to impregnate the atmosphere of
the market with the drawing power of a congenial symbol.
Whatever the means employed, the aim is the same --- to convey
through the mark, in the minds of potential customers, the
desirability of the commodity upon which it appears. Once this is
attained, the trade-mark owner has something of value. If another
poaches upon the commercial magnetism of the symbol he has
INTELLECTUAL PROPERTY LAWS – AMES 2014
created, the owner can obtain legal redress.
Section 4 (d) of Republic Act No. 166 or the Trademark Law, as amended,
which was in force at the time, provides thus:
Registration of trade-marks, trade-names and service-marks on
the principal register. - There is hereby established a register of
trade-marks, trade-names and service marks which shall be
known as the principal register. The owner of a trade-mark, trade-
name or service-mark used to distinguish his goods, business or
services from the goods, business or services of others shall have
the right to register the same on the principal register, unless it:
xxx xxx xxx
(d) Consists of or comprises a mark or trade-name which so
resembles a mark or trade-name registered in the Philippines or a
mark or trade-name previously used in the Philippines by another
and not abandoned,as to be likely, when applied to or used in
connection with the goods, business or services of the applicant,to
cause confusion or mistake or to deceive purchasers;
xxx xxx xxx
(Emphasis supplied)
The law prescribes a more stringent standard in that there should not only be
confusing similarity but that it should not likely cause confusion or mistake or
deceive purchasers.
Hence, the question in this case is whether there is a likelihood that the
trademark FLAVOR MASTER may cause confusion or mistake or may
deceive purchasers that said product is the same or is manufactured by the
same company. In other words, the issue is whether the trademark FLAVOR
MASTER is a colorable imitation of the trademarks MASTER ROAST and
MASTER BLEND.
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, as to cause him to purchase the one supposing it to be the
other.9 In determining if colorable imitation exists, jurisprudence has
developed two kinds of tests - the Dominancy Test and the Holistic
Test.10 The test of dominancy focuses on the similarity of the prevalent
features of the competing trademarks which might cause confusion or
deception and thus constitute infringement. On the other side of the
spectrum, the holistic test mandates that the entirety of the marks in question
must be considered in determining confusing similarity.11
In the case at bar, the Court of Appeals held that:
The determination of whether two trademarks are indeed confusingly similar
must be taken from the viewpoint of the ordinary purchasers who are, in
general, undiscerningly rash in buying the more common and less expensive
household products like coffee, and are therefore less inclined to closely
examine specific details of similarities and dissimilarities between competing
products. The Supreme Court in Del Monte Corporation v. CA, 181 SCRA
410, held that:
"The question is not whether the two articles are distinguishable by their
labels when set side by side but whether the general confusion made by the
article upon the eye of the casual purchaser who is unsuspicious and off his
guard, is such as to likely result in his confounding it with the original. As
observed in several cases, the general impression of the ordinary purchaser,
buying under the normally prevalent conditions in trade and giving the
attention such purchasers usually give in buying that class of goods, is the
touchstone."
From this perspective, the test of similarity is to consider the two marks in
their entirety, as they appear in the respective labels, in relation to the goods
to which they are attached (Bristol Myers Company v. Director of Patents, et
al., 17 SCRA 128, citing Mead Johnson & Co. v. NVJ Van Dorp, Ltd., et al., 7
SCRA 768). The mark must be considered as a whole and not as dissected.
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TRADEMARKS
If the buyer is deceived, it is attributable to the marks as a totality, not usually
to any part of it (Del Monte Corp. v. CA, supra), as what appellees would
want it to be when they essentially argue that much of the confusion springs
from appellant CFC’s use of the word "MASTER" which appellees claim to
be the dominant feature of their own trademarks that captivates the
prospective consumers. Be it further emphasized that the discerning eye of
the observer must focus not only on the predominant words but also on the
other features appearing in both labels in order that he may draw his
conclusion whether one is confusingly similar to the other (Mead Johnson &
Co. v. NVJ Van Dorp, Ltd., supra).12
The Court of Appeals applied some judicial precedents which are not on all
fours with this case. It must be emphasized that in infringement or trademark
cases in the Philippines, particularly in ascertaining whether one trademark
is confusingly similar to or is a colorable imitation of another, no set rules can
be deduced. Each case must be decided on its own merits.13 In Esso
Standard, Inc. v. Court of Appeals,14 we ruled that the likelihood of confusion
is a relative concept; to be determined only according to the particular, and
sometimes peculiar, circumstances of each case. In trademark cases, even
more than in any other litigation, precedent must be studied in light of the
facts of the particular case. The wisdom of the likelihood of confusion test
lies in its recognition that each trademark infringement case presents its own
unique set of facts. Indeed, the complexities attendant to an accurate
assessment of likelihood of confusion require that the entire panoply of
elements constituting the relevant factual landscape be comprehensively
examined.15
The Court of Appeals’ application of the case of Del Monte Corporation v.
Court of Appeals16 is, therefore, misplaced. In Del Monte, the issue was
about the alleged similarity of Del Monte’s logo with that of Sunshine Sauce
Manufacturing Industries. Both corporations market the catsup product which
is an inexpensive and common household item.
Since Del Monte alleged that Sunshine’s logo was confusingly similar to or
was a colorable imitation of the former’s logo, there was a need to go into the
details of the two logos as well as the shapes of the labels or marks, the
brands printed on the labels, the words or lettering on the labels or marks
and the shapes and colors of the labels or marks. The same criteria,
however, cannot be applied in the instant petition as the facts and
circumstances herein are peculiarly different from those in the Del
Monte case.
In the same manner, the Court of Appeals erred in applying the totality rule
as defined in the cases of Bristol Myers v. Director of Patents;17 Mead
Johnson & Co. v. NVJ Van Dorf Ltd.;18 and American Cyanamid Co. v.
Director of Patents.19 The totality rule states that "the test is not simply to
take their words and compare the spelling and pronunciation of said words.
In determining whether two trademarks are confusingly similar, the two
marks in their entirety as they appear in the respective labels must be
considered in relation to the goods to which they are attached; the discerning
eye of the observer must focus not only on the predominant words but also
on the other features appearing on both labels."20
As this Court has often declared, each case must be studied according to the
peculiar circumstances of each case. That is the reason why in trademark
cases, jurisprudential precedents should be applied only to a case if they are
specifically in point.
In the above cases cited by the Court of Appeals to justify the application of
the totality or holistic test to this instant case, the factual circumstances are
substantially different. In the Bristol Myers case, this Court held that although
both BIOFERIN and BUFFERIN are primarily used for the relief of pains
such as headaches and colds, and their names are practically the same in
spelling and pronunciation, both labels have strikingly different backgrounds
and surroundings. In addition, one is dispensable only upon doctor’s
prescription, while the other may be purchased over-the-counter.
In the Mead Johnson case, the differences between ALACTA and ALASKA
are glaring and striking to the eye. Also, ALACTA refers to "Pharmaceutical
Preparations which Supply Nutritional Needs," falling under Class 6 of the
official classification of Medicines and Pharmaceutical Preparations to be
used as prescribed by physicians. On the other hand, ALASKA refers to
"Foods and Ingredients of Foods" falling under Class 47, and does not
INTELLECTUAL PROPERTY LAWS – AMES 2014
require medical prescription.
In the American Cyanamid case, the word SULMET is distinguishable from
the word SULMETINE, as the former is derived from a combination of the
syllables "SUL" which is derived from sulfa and "MET" from methyl, both of
which are chemical compounds present in the article manufactured by the
contending parties. This Court held that the addition of the syllable "INE" in
respondent’s label is sufficient to distinguish respondent’s product or
trademark from that of petitioner. Also, both products are for medicinal
veterinary use and the buyer will be more wary of the nature of the product
he is buying. In any case, both products are not identical as SULMET’s label
indicates that it is used in a drinking water solution while that of SULMETINE
indicates that they are tablets.
It cannot also be said that the products in the above cases can be bought off
the shelf except, perhaps, for ALASKA. The said products are not the usual
"common and inexpensive" household items which an "undiscerningly rash"
buyer would unthinkingly buy.In the case at bar, other than the fact that both
Nestle’s and CFC’s products are inexpensive and common household items,
the similarity ends there. What is being questioned here is the use by CFC of
the trademark MASTER. In view of the difficulty of applying jurisprudential
precedents to trademark cases due to the peculiarity of each case, judicial
fora should not readily apply a certain test or standard just because of
seeming similarities. As this Court has pointed above, there could be more
telling differences than similarities as to make a jurisprudential precedent
inapplicable.
Nestle points out that the dominancy test should have been applied to
determine whether there is a confusing similarity between CFC’s FLAVOR
MASTER and Nestle’s MASTER ROAST and MASTER BLEND.
We agree.
As the Court of Appeals itself has stated, "[t]he determination of whether two
trademarks are indeed confusingly similar must be taken from the viewpoint
of the ordinary purchasers who are, in general, undiscerningly rash in buying
the more common and less expensive household products like coffee, and
are therefore less inclined to closely examine specific details of similarities
and dissimilarities between competing products."21
The basis for the Court of Appeals’ application of the totality or holistic test is
the "ordinary purchaser" buying the product under "normally prevalent
conditions in trade" and the attention such products normally elicit from said
ordinary purchaser. An ordinary purchaser or buyer does not usually make
such scrutiny nor does he usually have the time to do so. The average
shopper is usually in a hurry and does not inspect every product on the shelf
as if he were browsing in a library.22
The Court of Appeals held that the test to be applied should be the totality or
holistic test reasoning, since what is of paramount consideration is the
ordinary purchaser who is, in general, undiscerningly rash in buying the more
common and less expensive household products like coffee, and is therefore
less inclined to closely examine specific details of similarities and
dissimilarities between competing products.
This Court cannot agree with the above reasoning. If the ordinary purchaser
is "undiscerningly rash" in buying such common and inexpensive household
products as instant coffee, and would therefore be "less inclined to closely
examine specific details of similarities and dissimilarities" between the two
competing products, then it would be less likely for the ordinary purchaser to
notice that CFC’s trademark FLAVOR MASTER carries the colors orange
and mocha while that of Nestle’s uses red and brown. 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.
It must be emphasized that the products bearing the trademarks in question
are "inexpensive and common" household items bought off the shelf by
"undiscerningly rash" purchasers. As such, if the ordinary purchaser is
"undiscerningly rash", then he would not have the time nor the inclination to
make a keen and perceptive examination of the physical discrepancies in the
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TRADEMARKS
trademarks of the products in order to exercise his choice.
While this Court agrees with the Court of Appeals’ detailed enumeration of
differences between the respective trademarks of the two coffee products,
this Court cannot agree that totality test is the one applicable in this case.
Rather, this Court believes that the dominancy test is more suitable to this
case in light of its peculiar factual milieu.
Moreover, the totality or holistic test is contrary to the elementary postulate of
the law on trademarks and unfair competition that confusing similarity is to
be determined on the basis of visual, aural, connotative comparisons and
overall impressions engendered by the marks in controversy as they are
encountered in the realities of the marketplace.23 The totality or holistic test
only relies on visual comparison between two trademarks whereas the
dominancy test relies not only on the visual but also on the aural and
connotative comparisons and overall impressions between the two
trademarks.
For this reason, this Court agrees with the BPTTT when it applied the test of
dominancy and held that:
From the evidence at hand, it is sufficiently established that the
word MASTER is the dominant feature of opposer’s mark. The
word MASTER is printed across the middle portion of the label in
bold letters almost twice the size of the printed word ROAST.
Further, the word MASTER has always been given emphasis in
the TV and radio commercials and other advertisements made in
promoting the product. This can be gleaned from the fact that
Robert Jaworski and Atty. Ric Puno Jr.., the personalities engaged
to promote the product, are given the titles Master of the Game
and Master of the Talk Show, respectively. In due time, because of
these advertising schemes the mind of the buying public had come
to learn to associate the word MASTER with the opposer’s goods.
x x x. It is the observation of this Office that much of the
dominance which the word MASTER has acquired through
Opposer’s advertising schemes is carried over when the same is
incorporated into respondent-applicant’s trademark FLAVOR
MASTER. Thus, when one looks at the label bearing the
trademark FLAVOR MASTER (Exh. 4) one’s attention is easily
attracted to the word MASTER, rather than to the dissimilarities
that exist. Therefore, the possibility of confusion as to the goods
which bear the competing marks or as to the origins thereof is not
farfetched. x x x.24
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 terms25 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 descriptive26 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 terms27 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."
INTELLECTUAL PROPERTY LAWS – AMES 2014
This is evident from the advertising scheme adopted by Nestle in promoting
its coffee products. In this case, Nestle has, over time, promoted its products
as "coffee perfection worthy of masters like Robert Jaworski and Ric Puno
Jr."
In associating its coffee products with the term "MASTER" and thereby
impressing them with the attributes of said term, Nestle advertised its
products thus:
Robert Jaworski. Living Legend. A true hard court hero. Fast on
his feet. Sure in every shot he makes. A master strategist. In one
word, unmatched.
MASTER ROAST. Equally unmatched. Rich and deeply satisfying.
Made from a unique combination of the best coffee beans -
Arabica for superior taste and aroma, Robusta for strength and
body. A masterpiece only NESCAFE, the world’s coffee masters,
can create.
MASTER ROAST. Coffee perfection worthy of masters like Robert
Jaworski.28
In the art of conversation, Ric Puno Jr. is master. Witty. Well-
informed. Confident.
In the art of coffee-making, nothing equals Master Roast, the
coffee masterpiece from Nescafe, the world’s coffee masters. A
unique combination of the best coffee beans - Arabica for superior
taste and aroma, Robusta for strength and body. Truly distinctive
and rich in flavor.
Master Roast. Coffee perfection worthy of masters like Ric Puno Jr. 29
The term "MASTER", therefore, has acquired a certain connotation to mean
the coffee products MASTER ROAST and MASTER BLEND produced by
Nestle. 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 closing, it may not be amiss to quote the case of American Chicle Co. v.
Topps Chewing Gum, Inc.,30 to wit:
Why it should have chosen a mark that had long been employed
by [plaintiff] and had become known to the trade instead of
adopting some other means of identifying its goods is hard to see
unless there was a deliberate purpose to obtain some advantage
from the trade that [plaintiff] had built up. Indeed, it is generally
true that, as soon as we see that a second comer in a market has,
for no reason that he can assign, plagiarized the "make-up" of an
earlier comer, we need no more; . . . [W]e feel bound to compel
him to exercise his ingenuity in quarters further afield.
WHEREFORE, in view of the foregoing, the decision of the Court of Appeals
in CA-G.R. SP No. 24101 is REVERSED and SET ASIDE and the decision
of the Bureau of Patents, Trademarks and Technology Transfer in Inter
Partes Cases Nos. 3200 and 3202 is REINSTATED.
SO ORDERED.
Mc Donald’s Corporation vs. LC Big Mak Burger Inc. GR No. 143997, 18
August 2004
The Case
This is a petition for review1 of the Decision dated 26 November 1999 of the
Court of Appeals2 finding respondent L.C. Big Mak Burger, Inc. not liable for
trademark infringement and unfair competition and ordering petitioners to
pay respondents P1,900,000 in damages, and of its Resolution dated 11 July
2000 denying reconsideration. The Court of Appeals' Decision reversed the
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TRADEMARKS
5 September 1994 Decision3 of the Regional Trial Court of Makati, Branch
137, finding respondent L.C. Big Mak Burger, Inc. liable for trademark
infringement and unfair competition.
The Facts
Petitioner McDonald's Corporation ("McDonald's") is a corporation organized
under the laws of Delaware, United States. McDonald's operates, by itself or
through its franchisees, a global chain of fast-food restaurants.
McDonald's4 owns a family of marks5 including the "Big Mac" mark for its
"double-decker hamburger sandwich."6McDonald's registered this trademark
with the United States Trademark Registry on 16 October 1979. 7 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 the Intellectual Property Office
("IPO"). Pending approval of its application, McDonald's introduced its "Big
Mac" hamburger sandwiches in the Philippine market in September 1981.
On 18 July 1985, the PBPTT allowed registration of the "Big Mac" mark in
the Principal Register based on its Home Registration in the United States.
Like its other marks, McDonald's displays the "Big Mac" mark in items8 and
paraphernalia9 in its restaurants, and in its outdoor and indoor signages.
From 1982 to 1990, McDonald's spent P10.5 million in advertisement for "Big
Mac" hamburger sandwiches alone.10
Petitioner McGeorge Food Industries ("petitioner McGeorge"), a domestic
corporation, is McDonald's Philippine franchisee.11
Respondent L.C. Big Mak Burger, Inc. ("respondent corporation") is a
domestic corporation which operates fast-food outlets and snack vans in
Metro Manila and nearby provinces.12 Respondent corporation's menu
includes hamburger sandwiches and other food items.13 Respondents
Francis B. Dy, Edna A. Dy, Rene B. Dy, William B. Dy, Jesus Aycardo,
Araceli Aycardo, and Grace Huerto ("private respondents") are the
incorporators, stockholders and directors of respondent corporation. 14
On 21 October 1988, respondent corporation applied with the PBPTT
for the registration of the "Big Mak" mark for its hamburger sandwiches.
McDonald's opposed respondent corporation's application on the ground that
"Big Mak" was a colorable imitation of its registered "Big Mac" mark for the
same food products. McDonald's also informed respondent Francis Dy
("respondent Dy"), the chairman of the Board of Directors of respondent
corporation, 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 from respondent Dy, petitioners on 6 June 1990
sued respondents in the Regional Trial Court of Makati, Branch 137 ("RTC"),
for trademark infringement and unfair competition. In its Order of 11 July
1990, the RTC issued a temporary restraining order ("TRO") against
respondents enjoining them from using the "Big Mak" mark in the operation
of their business in the National Capital Region.15 On 16 August 1990, the
RTC issued a writ of preliminary injunction replacing the TRO.16
In their Answer, respondents admitted that they have been using the name
"Big Mak Burger" for their fast-food business. Respondents claimed,
however, that McDonald's does not have an exclusive right to the "Big Mac"
mark or to any other similar mark. Respondents point out that the Isaiyas
Group of Corporations ("Isaiyas Group") registered the same mark for
hamburger sandwiches with the PBPTT on 31 March 1979. One Rodolfo
Topacio ("Topacio") similarly registered the same mark on 24 June
1983, prior to McDonald's registration on 18 July 1985.Alternatively,
respondents claimed that they are not liable for trademark infringement or for
unfair competition, as the "Big Mak" mark they sought to register does not
constitute a colorable imitation of the "Big Mac" mark. Respondents asserted
that they did not fraudulently pass off their hamburger sandwiches as those
of petitioners' Big Mac hamburgers.17 Respondents sought damages in their
counterclaim.
In their Reply, petitioners denied respondents' claim that McDonald's is not
the exclusive owner of the "Big Mac" mark. Petitioners asserted that while
the Isaiyas Group and Topacio did register the "Big Mac" mark ahead of
McDonald's, the Isaiyas Group did so only in the Supplemental Register of
INTELLECTUAL PROPERTY LAWS – AMES 2014
the PBPTT and such registration does not provide any protection.
McDonald's disclosed that it had acquired Topacio's rights to his registration
in a Deed of Assignment dated 18 May 1981.18
The Trial Court's Ruling
On 5 September 1994, the RTC rendered judgment ("RTC Decision") finding
respondent corporation liable for trademark infringement and unfair
competition. However, the RTC dismissed the complaint against private
respondents and the counterclaim against petitioners for lack of merit and
insufficiency of evidence. The RTC held:
Undeniably, the mark "B[ig] M[ac]" is a registered trademark for plaintiff
McDonald's, and as such, it is entitled [to] protection against infringement.
xxxx
There exist some distinctions between the names "B[ig] M[ac]" and "B[ig] M[ak]" as
appearing in the respective signages, wrappers and containers of the food products
of the parties. But infringement goes beyond the physical features of the
questioned name and the original name. There are still other factors to be
considered.
xxxx
Significantly, the contending parties are both in the business of fast-food chains and
restaurants. An average person who is hungry and wants to eat a hamburger
sandwich may not be discriminating enough to look for a McDonald's restaurant
and buy a "B[ig] M[ac]" hamburger. Once he sees a stall selling hamburger
sandwich, in all likelihood, he will dip into his pocket and order a "B[ig] M[ak]"
hamburger sandwich. Plaintiff McDonald's fast-food chain has attained wide
popularity and acceptance by the consuming public so much so that its air-
conditioned food outlets and restaurants will perhaps not be mistaken by many to
be the same as defendant corporation's mobile snack vans located along busy
streets or highways. But the thing is that what is being sold by both contending
parties is a food item – a hamburger sandwich which is for immediate
consumption, so that a buyer may easily be confused or deceived into thinking that
the "B[ig] M[ak]" hamburger sandwich he bought is a food-product of plaintiff
McDonald's, or a subsidiary or allied outlet thereof. Surely, defendant corporation
has its own secret ingredients to make its hamburger sandwiches as palatable and
as tasty as the other brands in the market, considering the keen competition
among mushrooming hamburger stands and multinational fast-food chains and
restaurants. Hence, the trademark "B[ig] M[ac]" has been infringed by defendant
corporation when it used the name "B[ig] M[ak]" in its signages, wrappers, and
containers in connection with its food business. xxxx
Did the same acts of defendants in using the name "B[ig] M[ak]" as a trademark or
tradename in their signages, or in causing the name "B[ig] M[ak]" to be printed on
the wrappers and containers of their food products also constitute an act of unfair
competition under Section 29 of the Trademark Law?
The answer is in the affirmative. xxxx
The xxx provision of the law concerning unfair competition is broader and more
inclusive than the lawconcerning the infringement of trademark, which is of more
limited range, but within its narrower range recognizes a more exclusive right
derived by the adoption and registration of the trademark by the person whose
goods or services are first associated therewith. xxx Notwithstanding the distinction
between an action for trademark infringement and an action for unfair
competition, however, the law extends substantially the same relief to the injured
party for both cases. (See Sections 23 and 29 of Republic Act No. 166)
Any conduct may be said to constitute unfair competition if the effect is to pass off
on the public the goods of one man as the goods of another. The choice of "B[ig]
M[ak]" as tradename by defendant corporation is not merely for sentimental
reasons but was clearly made to take advantage of the reputation, popularity and
the established goodwill of plaintiff McDonald's. For, as stated in Section 29, a
person is guilty of unfair competition 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 wrapping of the packages in which they are contained,
or the devices or words thereon, 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. Thus,
plaintiffs have established their valid cause of action against the defendants for
trademark infringement and unfair competition and for damages.19
The dispositive portion of the RTC Decision provides:
WHEREFORE, judgment is rendered in favor of plaintiffs McDonald's Corporation
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TRADEMARKS
and McGeorge Food Industries, Inc. and against defendant L.C. Big Mak Burger,
Inc., as follows:
1. The writ of preliminary injunction issued in this case on [16 August 1990] is made
permanent;
2. Defendant L.C. Big Mak Burger, Inc. is ordered to pay plaintiffs actual damages in
the amount ofP400,000.00, exemplary damages in the amount of P100,000.00, and
attorney's fees and expenses of litigation in the amount of P100,000.00;
3. The complaint against defendants Francis B. Dy, Edna A. Dy, Rene B. Dy, Wiliam
B. Dy, Jesus Aycardo, Araceli Aycardo and Grace Huerto, as well as all counter-
claims, are dismissed for lack of merit as well asfor insufficiency of evidence.20
Respondents appealed to the Court of Appeals.
The Ruling of the Court of Appeals
On 26 November 1999, the Court of Appeals rendered judgment ("Court of
Appeals' Decision") reversing the RTC Decision and ordering McDonald's to
pay respondents P1,600,000 as actual and compensatory damages and
P300,000 as moral damages. The Court of Appeals held:
Plaintiffs-appellees in the instant case would like to impress on this
Court that the use of defendants-appellants of its corporate name
– the whole "L.C. B[ig] M[ak] B[urger], I[nc]." which appears on
their food packages, signages and advertisements is an
infringement of their trademark "B[ig] M[ac]" which they use to
identify [their] double decker sandwich, sold in a Styrofoam box
packaging material with the McDonald's logo of umbrella "M"
stamped thereon, together with the printed mark in red bl[o]ck
capital letters, the words being separated by a single space.
Specifically, plaintiffs-appellees argue that defendants-appellants'
use of their corporate name is a colorable imitation of their
trademark "Big Mac".
xxxx
To Our mind, however, this Court is fully convinced that no
colorable imitation exists. As the definition dictates, it is
not sufficient that a similarity exists in both names, but that more
importantly, the over-all presentation, or in their essential,
substantive and distinctive parts is such as would likely MISLEAD
or CONFUSE persons in the ordinary course of purchasing the
genuine article. A careful comparison of the way the trademark
"B[ig] M[ac]" is being used by plaintiffs-appellees and corporate
name L.C. Big Mak Burger, Inc. by defendants-appellants, would
readily reveal that no confusion could take place, or that the
ordinary purchasers would be misled by it. As pointed out by
defendants-appellants, the plaintiffs-appellees' trademark is used
to designate only one product, a double decker sandwich sold in a
Styrofoam box with the "McDonalds" logo. On the other
hand, what the defendants-appellants corporation is using is not a
trademark for its food product but a business or corporate name.
They use the business name "L.C. Big Mak Burger, Inc." in their
restaurant business which serves diversified food items such as
siopao, noodles, pizza, and sandwiches such as hotdog, ham, fish
burger and hamburger. Secondly, defendants-appellants'
corporate or business name appearing in the food packages and
signages are written in silhouette red-orange letters with the "b"
and "m" in upper case letters. Above the words "Big Mak" are the
upper case letter "L.C.". Below the words "Big Mak" are the words
"Burger, Inc." spelled out in upper case letters.Furthermore, said
corporate or business name appearing in such food packages and
signages is always accompanied by the company mascot, a young
chubby boy named Maky who wears a red T-shirt with the upper
case "m" appearing therein and a blue lower garment. Finally, the
defendants-appellants' food packages are made of plastic
material.
xxxx
xxx [I]t is readily apparent to the naked eye that there appears a
vast difference in the appearance of the product and
the manner that the tradename "Big Mak" is being used and
INTELLECTUAL PROPERTY LAWS – AMES 2014
presented to the public. As earlier noted, there are glaring
dissimilarities between plaintiffs-appellees' trademark and
defendants-appellants' corporate name. Plaintiffs-appellees'
product carrying the trademark "B[ig] M[ac]" is a double decker
sandwich (depicted in the tray mat containing photographs of the
various food products xxx sold in a Styrofoam box with the
"McDonald's" logo and trademark in red, bl[o]ck capital letters
printed thereon xxx at a price which is more expensive than the
defendants-appellants' comparable food products. In order to buy
a "Big Mac", a customer needs to visit an air-conditioned
"McDonald's" restaurant usually located in a nearby commercial
center, advertised and identified by its logo - the umbrella "M", and
its mascot – "Ronald McDonald". A typical McDonald's restaurant
boasts of a playground for kids, a second floor to
accommodate additional customers, a drive-thru to allow
customers with cars to make orders without alighting from their
vehicles, the interiors of the building are well-lighted, distinctly
decorated and painted with pastel colors xxx. In buying a "B[ig]
M[ac]", it is necessary to specify it by its trademark. Thus, a
customer needs to look for a "McDonald's" and enter it first before
he can find a hamburger sandwich which carry the mark "Big
Mac". On the other hand, defendants-appellants sell their goods
through snack vans xxxx
Anent the allegation that defendants-appellants are guilty of unfair
competition, We likewise find the same untenable.
Unfair competition is defined as "the employment of deception
or any other means contrary to good faith by which a
person shall pass off the goods manufactured by him or in which
he deals, or his business, or service, for those of another who has
already established good will for his similar good, business or
services, or any acts calculated to produce the same result" (Sec.
29, Rep. Act No. 166, as amended).
To constitute unfair competition therefore it must necessarily follow
that there was malice and that the entity concerned was in bad
faith.
In the case at bar, We find no sufficient evidence adduced by
plaintiffs-appellees that defendants-appellants deliberately tried to
pass off the goods manufactured by them for those of plaintiffs-
appellees. The mere suspected similarity in the sound of the
defendants-appellants' corporate name with the plaintiffs-
appellees' trademark is not sufficient evidence to conclude unfair
competition. Defendants-appellants explained that the name
"M[ak]" in their corporate name was derived from both the first
names of the mother and father of defendant Francis Dy, whose
names are Maxima and Kimsoy. With this explanation, it is up to
the plaintiffs-appellees to prove bad faith on the part
of defendants-appellants. It is a settled rule that the law always
presumes good faith such that any person who seeks to be
awarded damages due toacts of another has the burden of proving
that the latter acted in bad faith or with ill motive. 21
Petitioners sought reconsideration of the Court of Appeals' Decision but the
appellate court denied their motion in its Resolution of 11 July 2000.
Hence, this petition for review.
Petitioners raise the following grounds for their petition:
I. THE COURT OF APPEALS ERRED IN FINDING THAT
RESPONDENTS' CORPORATE NAME "L.C. BIG MAK BURGER,
INC." IS NOT A COLORABLE IMITATION OF THE MCDONALD'S
TRADEMARK "BIG MAC", SUCH COLORABLE IMITATION
BEING AN ELEMENT OF TRADEMARK INFRINGEMENT.
A. Respondents use the words "Big Mak" as trademark
for their products and not merely as their business or
corporate name.
Page 21
TRADEMARKS
B. As a trademark, respondents' "Big Mak" is undeniably
and unquestionably similar to petitioners' "Big Mac"
trademark based on the dominancy test and the idem
sonans test resulting inexorably in confusion on the part
of the consuming public.
II. THE COURT OF APPEALS ERRED IN REFUSING TO
CONSIDER THE INHERENT SIMILARITY BETWEEN THE MARK
"BIG MAK" AND THE WORD MARK "BIG MAC" AS
AN INDICATION OF RESPONDENTS' INTENT TO DECEIVE OR
DEFRAUD FOR PURPOSES OF ESTABLISHING UNFAIR
COMPETITION.22
Petitioners pray that we set aside the Court of Appeals' Decision and
reinstate the RTC Decision.
In their Comment to the petition, respondents question the propriety of this
petition as it allegedly raises only questions of fact. On the merits,
respondents contend that the Court of Appeals committed no reversible error
in finding them not liable for trademark infringement and unfair competition
and in ordering petitioners to pay damages.
The Issues
The issues are:
1. Procedurally, whether the questions raised in this petition are proper for a
petition for review under Rule 45.
2. On the merits, (a) whether respondents used the words "Big Mak" not only
as part of the corporate name "L.C. Big Mak Burger, Inc." but also as a
trademark for their hamburger products, and (b) whether respondent
corporation is liable for trademark infringement and unfair competition.23
The Court's Ruling
The petition has merit.
On Whether the Questions Raised in the Petition are Proper for a
Petition for Review
A party intending to appeal from a judgment of the Court of Appeals may file
with this Court a petition for review under Section 1 of Rule 45 ("Section
1")24 raising only questions of law. A question of law exists when the doubt or
difference arises on what the law is on a certain state of facts. There is a
question of fact when the doubt or difference arises on the truth or falsity of
the alleged facts. 25
Here, petitioners raise questions of fact and law in assailing the Court of
Appeals' findings on respondent corporation's non-liability for trademark
infringement and unfair competition. Ordinarily, the Court can deny due
course to such a petition. In view, however, of the contradictory findings of
fact of the RTC and Court of Appeals, the Court opts to accept the petition,
this being one of the recognized exceptions to Section 1. 26 We took a similar
course of action in Asia Brewery, Inc. v. Court of Appeals27 which also
involved a suit for trademark infringement and unfair competition in which the
trial court and the Court of Appeals arrived at conflicting findings.
On the Manner Respondents Used
"Big Mak" in their Business
Petitioners contend that the Court of Appeals erred in ruling that the
corporate name "L.C. Big Mak Burger, Inc." appears in the packaging for
respondents' hamburger products and not the words "Big Mak" only.
The contention has merit.
The evidence presented during the hearings on petitioners' motion for the
issuance of a writ of preliminary injunction shows that the plastic wrappings
INTELLECTUAL PROPERTY LAWS – AMES 2014
and plastic bags used by respondents for their hamburger sandwiches bore
the words "Big Mak." The other descriptive words "burger" and "100% pure
beef" were set in smaller type, along with the locations of
branches.28 Respondents' cash invoices simply refer to their hamburger
sandwiches as "Big Mak."29 It is respondents' snack vans that carry the
words "L.C. Big Mak Burger, Inc."30
It was only during the trial that respondents presented in evidence the plastic
wrappers and bags for their hamburger sandwiches relied on by the Court of
Appeals.31 Respondents' plastic wrappers and bags were identical with those
petitioners presented during the hearings for the injunctive writ except that
the letters "L.C." and the words "Burger, Inc." in respondents' evidence were
added above and below the words "Big Mak,"respectively. Since petitioners'
complaint was based on facts existing before and during the hearings on the
injunctive writ, the facts established during those hearings are the proper
factual bases for the disposition of the issues raised in this petition.
On the Issue of Trademark Infringement
Section 22 ("Section 22) of Republic Act No. 166, as amended ("RA 166"),
the law applicable to this case,32defines trademark infringement as follows:
Infringement, what constitutes. — Any person who [1] shall use,
without the consent of the registrant, anyreproduction, 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 withwhich
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 usedupon 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.33
Petitioners base their cause of action under the first part of Section
22, i.e. respondents allegedly used, without petitioners' consent, a colorable
imitation of the "Big Mac" mark in advertising and selling respondents'
hamburger sandwiches. This likely caused confusion in the mind of the
purchasing public on the source of the hamburgers or the identity of the
business.
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."34 Of these, it is the element of likelihood
of confusion that is the gravamen of trademark infringement. 35
On the Validity of the "Big Mac"Mark
and McDonald's Ownership of such Mark
A mark is valid if it is "distinctive" and thus not barred from registration under
Section 436 of RA 166 ("Section 4").However, once registered, not only the
mark's validity but also the registrant's ownership of the mark is prima facie
presumed.37
Respondents contend that of the two words in the "Big Mac" mark, it is only
the word "Mac" that is valid because the word "Big" is generic and
descriptive (proscribed under Section 4[e]), and thus "incapable of exclusive
appropriation."38
The contention has no merit. The "Big Mac" mark, which should be treated in
its entirety and not dissected word for word,39 is neither generic nor
descriptive. Generic marks are commonly used as the name or description of
akind of goods,40 such as "Lite" for beer41 or "Chocolate Fudge" for
chocolate soda drink.42 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,43 such as "Arthriticare" for
arthritis medication.44 On the contrary, "Big Mac" falls
Page 22
TRADEMARKS
under the class of fanciful or arbitrary marks as it bears no logical relation to
the actual characteristics of the product it represents.45 As such, it is highly
distinctive and thus valid. Significantly, the trademark "Little Debbie" for
snack cakes was found arbitrary or fanciful.46
The Court also finds that petitioners have duly established McDonald's
exclusive ownership of the "Big Mac" mark. Although Topacio and the
Isaiyas Group registered the "Big Mac" mark ahead of McDonald's, Topacio,
as petitioners disclosed, had already assigned his rights to McDonald's. The
Isaiyas Group, on the other hand, registered its trademark only in the
Supplemental Register. A mark which is not registered in
the PrincipalRegister, and thus not distinctive, has no real
protection.47 Indeed, we have held that registration in the Supplemental
Register is not even a prima facie evidence of the validity of the registrant's
exclusive right to use the mark on the goods specified in the certificate. 48
On Types of Confusion
Section 22 covers two types of confusion arising from the use of similar or
colorable imitation marks, namely, confusion of goods (product confusion)
and confusion of business (source or origin confusion). In Sterling Products
International, Incorporated v. Farbenfabriken Bayer Aktiengesellschaft, et
al.,49 the Court distinguished these two types of confusion, thus:
[Rudolf] Callman notes two types of confusion. The first is the
confusion of goods "in which event the ordinarily prudent
purchaser would be induced to purchase one product in the belief
that he was purchasing the other." xxx The other is the confusion
of business: "Here 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."
Under Act No. 666,50 the first trademark law, infringement was limited to
confusion of goods only, when the infringing mark is used on "goods of a
similar kind."51 Thus, no relief was afforded to the party whose registered
mark or its colorable imitation is used on different although related goods. To
remedy this situation, Congress enacted RA 166 on 20 June 1947. In
defining trademark infringement, Section 22 of RA 166 deleted the
requirement in question and expanded its scope to include such use of the
mark or its colorable imitation that is likely to result in confusion on "the
source or origin of such goods or services, or identity of such
business."52Thus, while there is confusion of goods when the products are
competing, confusion of business exists when the products are non-
competing but related enough to produce confusion of affiliation. 53
On Whether Confusion of Goods and
Confusion of Business are Applicable
Petitioners claim that respondents' use of the "Big Mak" mark on
respondents' hamburgers results in confusion of goods, particularly with
respect to petitioners' hamburgers labeled "Big Mac." Thus,
petitioners alleged in their complaint:
1.15. Defendants have unduly prejudiced and clearly
infringed upon the property rights of plaintiffs in the McDonald's
Marks, particularly the mark "B[ig] M[ac]". Defendants'
unauthorized acts are likely, and calculated, to confuse, mislead or
deceive the public into believing that the products and services
offered by defendant Big Mak Burger, and the business it is
engaged in, are approved and sponsored by, or affiliated with,
plaintiffs.54 (Emphasis supplied)
Since respondents used the "Big Mak" mark on the same
goods, i.e. hamburger sandwiches, that petitioners' "Big Mac" mark is used,
trademark infringement through confusion of goods is a proper issue in this
case.
Petitioners also claim that respondents' use of the "Big Mak" mark in the sale
of hamburgers, the same business that petitioners are engaged in, results in
INTELLECTUAL PROPERTY LAWS – AMES 2014
confusion of business. Petitioners alleged in their complaint:
1.10. For some period of time, and without the consent of plaintiff
McDonald's nor its licensee/franchisee, plaintiff McGeorge, and in
clear violation of plaintiffs' exclusive right to use and/or
appropriate the McDonald's marks, defendant Big Mak Burger
acting through individual defendants, has been operating "Big Mak
Burger", a fast food restaurant business dealing in the sale of
hamburger and cheeseburger sandwiches, french fries and other
food products, and has caused to be printed on the wrapper of
defendant's food products and incorporated in its signages the
name "Big Mak Burger", which is confusingly similar to and/or is a
colorable imitation of the plaintiff McDonald's mark "B[ig] M[ac]",
xxx. Defendant Big Mak Burger has thus unjustly created the
impression that its business is approved and sponsored by,
or affiliated with, plaintiffs. xxxx
2.2 As a consequence of the acts committed by defendants, which
unduly prejudice and infringe upon the property rights of plaintiffs
McDonald's and McGeorge as the real owner and rightful
proprietor, and the licensee/franchisee, respectively, of the
McDonald's marks, and which are likely to have caused
confusion or deceived the public as to the true source,
sponsorship or affiliation of defendants' food products and
restaurant business, plaintiffs have suffered and continue to
suffer actual damagesin the form of injury to their business
reputation and goodwill, and of the dilution of the distinctive quality
of the McDonald's marks, in particular, the mark "B[ig]
M[ac]".55 (Emphasis supplied)
Respondents admit that their business includes selling hamburger
sandwiches, the same food product that petitioners sell using the "Big Mac"
mark. Thus, trademark infringement through confusion of business is also a
proper issue in this case.
Respondents assert that their "Big Mak" hamburgers cater mainly to the low-
income group while petitioners' "Big Mac" hamburgers cater to the middle
and upper income groups. Even if this is true, the likelihood of confusion of
business remains, since the low-income group might be led to believe that
the "Big Mak" hamburgers are the low-end hamburgers marketed by
petitioners. After all, petitioners have the exclusive right to use the "Big Mac"
mark.On the other hand, respondents would benefit by associating their low-
end hamburgers, through the use of the "Big Mak" mark, with petitioners'
high-end "Big Mac" hamburgers, leading to likelihood of confusion in the
identity of business.
Respondents further claim that petitioners use the "Big Mac" mark only on
petitioners' double-decker hamburgers, while respondents use the "Big Mak"
mark on hamburgers and other products like siopao, noodles and pizza.
Respondents also point out that petitioners sell their Big Mac double-deckers
in a styrofoam box with the "McDonald's" logo and trademark in red, block
letters at a price more expensive than the hamburgers of respondents. In
contrast, respondents sell their Big Mak hamburgers in plastic wrappers and
plastic bags. Respondents further point out that petitioners' restaurants are
air-conditioned buildings with drive-thru service, compared to respondents'
mobile vans.
These and other factors respondents cite cannot negate the undisputed fact
that respondents use their "Big Mak" mark on hamburgers, the same food
product that petitioners' sell with the use of their registered mark "Big Mac."
Whether a hamburger is single, double or triple-decker, and whether
wrapped in plastic or styrofoam, it remains the same hamburger food
product. Even respondents' use of the "Big Mak" mark on non-hamburger
food products cannot excuse their infringement of petitioners' registered
mark, otherwise registered marks will lose their protection under the law.
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 Court has recognized that the registered trademark owner enjoys
protection in product and market areas that are the normal potential
expansion of his business. Thus, the Court has declared:
Page 23
TRADEMARKS
Modern law recognizes that the protection to which the owner of a the holistic test in this wise:
trademark is entitled is not limited to guarding his goods or
business from actual market competition with identical or similar
[T]he totality or holistic test is contrary to the elementary
products of the parties, but extends to all cases in which the use
postulate of the law on trademarks and unfair competition that
by a junior appropriator of a trade-mark or trade-name is likely to
confusing similarity is to be determined on the basis of visual,
lead to a confusion of source, as where prospective purchasers
aural, connotative comparisons
would be misled into thinking that the complaining party has
and overall impressions engendered by the marks in
extended his business into the field (see 148 ALR 56 et seq; 53
controversy as they are encounteredin the realities of the
Am Jur. 576) or is in any way connected with the activities of the
marketplace. (Emphasis supplied)
infringer; or when it forestalls the normal potential expansion of his
business (v. 148 ALR, 77, 84; 52 Am. Jur. 576, 577).56 (Emphasis
supplied) The test of dominancy is now explicitly incorporated into law in Section 155.1
of the Intellectual Property Code which defines infringement
as the "colorable imitation of a registered mark xxx or a dominant
On Whether Respondents' Use of the "Big Mak"
feature thereof."
Mark Results in Likelihood of Confusion

In determining likelihood of confusion, jurisprudence has developed two
tests, the dominancy test and the holistic test.57 The dominancy test focuses
on the similarity of the prevalent features of the competing trademarks that
might cause confusion. In contrast, the holistic test requires the court to
consider the entirety of the marks as applied to the products, including the
labels and packaging, in determining confusing similarity.
The Court of Appeals, in finding that there is no likelihood of confusion that
could arise in the use of respondents' "Big Mak" mark on hamburgers, relied
on the holistic test. Thus, the Court of Appeals ruled that "it is
not sufficientthat a similarity exists in both name(s), but that more
importantly, the overall presentation, or in their essential, substantive and
distinctive parts is such as would likely MISLEAD or CONFUSE persons in
the ordinary course of purchasing the genuine article." The holistic test
considers the two marks in their entirety, as they appear on the goods with
their labels and packaging. It is not enough to consider their words and
compare the spelling and pronunciation of the words.58
Respondents now vigorously argue that the Court of Appeals' application of
the holistic test to this case is correct and in accord with prevailing
jurisprudence.
This Court, however, has relied on the dominancy test rather than the holistic
test. The dominancy test considers the dominant features in the competing
marks in determining whether they are confusingly similar. Under the
dominancy test, courts give greater weight to the similarity of the appearance
of the product arising from theadoption of the dominant features of the
registered mark, disregarding minor differences.59 Courts will consider more
the aural and visual impressions created by the marks in the public mind,
giving little weight to factors like prices, quality, sales outlets and market
segments.
Thus, in the 1954 case of Co Tiong Sa v. Director of Patents,60 the Court
ruled:
xxx It has been consistently held that the question of infringement
of a trademark is to be determined by the test of dominancy.
Similarity in size, form and color, while relevant, is not
conclusive. If the competing trademark contains the main or
essential or dominant features of another, and confusion and
deception is likely to result, infringement takes place.
Duplication or imitation is not necessary; nor is itnecessary that the
infringing label should suggest an effort to imitate. (G. Heilman
Brewing Co. vs. Independent Brewing Co., 191 F., 489, 495, citing
Eagle White Lead Co. vs. Pflugh (CC) 180 Fed. 579). The
question at issue in cases of infringement of trademarks is
whether the use of the marks involved would be likely to cause
confusion or mistakes in the mind of the public or deceive
purchasers. (Auburn Rubber Corporation vs. Honover Rubber Co.,
107 F. 2d 588; xxx) (Emphasis supplied.)
The Court reiterated the dominancy test in Lim Hoa v. Director of
Patents,61 Phil. Nut Industry, Inc. v. Standard Brands Inc.,62 Converse
Rubber Corporation v. Universal Rubber Products, Inc.,63 and Asia
Brewery, Inc. v. Court of Appeals.64 In the 2001 case of Societe Des
Produits Nestlé, S.A. v. Court of Appeals,65 the Court explicitly rejected
Applying the dominancy test, the Court finds that respondents' use of the
"Big Mak" mark results in likelihood of confusion. First, "Big Mak"
sounds exactly the same as "Big Mac." Second, the first word in "Big Mak"
is exactlythe same as the first word in "Big Mac." Third, the first two letters in
"Mak" are the same as the first two letters in "Mac." Fourth, the last letter in
"Mak" while a "k" sounds the same as "c" when the word "Mak" is
pronounced. Fifth, in Filipino, the letter "k" replaces "c" in spelling, thus
"Caloocan" is spelled "Kalookan."
In short, 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. In spelling, considering the
Filipino language, even the last letters of both marks are the same.
Clearly, respondents have adopted in "Big Mak" not only the dominant
but also almost all the features of "Big Mac." Applied to the same food
product of hamburgers, the two marks will likely result in confusion in the
public mind.
The Court has taken into account the aural effects of the words and
letters contained in the marks in determining the issue of confusing
similarity. Thus, in Marvex Commercial Co., Inc. v. Petra Hawpia & Co., et
al.,66 the Court held:
The following random list of confusingly similar sounds in the
matter of trademarks, culled from Nims, Unfair Competition and
Trade Marks, 1947, Vol. 1, will reinforce our view that
"SALONPAS" and "LIONPAS" are confusingly similar in sound:
"Gold Dust" and "Gold Drop"; "Jantzen" and "Jass-Sea"; "Silver
Flash" and "Supper Flash"; "Cascarete" and "Celborite"; "Celluloid"
and "Cellonite"; "Chartreuse" and "Charseurs"; "Cutex" and
"Cuticlean"; "Hebe" and "Meje"; "Kotex" and "Femetex"; "Zuso"
and "Hoo Hoo". Leon Amdur, in his book "Trade-Mark Law and
Practice", pp. 419-421, cities, as coming within the purview of
the idem sonans rule, "Yusea" and "U-C-A", "Steinway Pianos"
and "Steinberg Pianos", and "Seven-Up" and "Lemon-Up". In Co
Tiong vs. Director of Patents, this Court unequivocally said that
"Celdura" and "Cordura" are confusingly similar in sound; this
Court held in Sapolin Co. vs. Balmaceda, 67 Phil. 795 that the
name "Lusolin" is an infringement of the trademark "Sapolin", as
the sound of the two names is almost the same. (Emphasis
supplied)
Certainly, "Big Mac" and "Big Mak" for hamburgers create even greater
confusion, not only aurally but also visually.
Indeed, a person cannot distinguish "Big Mac" from "Big Mak" by their
sound. When one hears a "Big Mac" or "Big Mak" hamburger advertisement
over the radio, one would not know whether the "Mac" or "Mak" ends with a
"c" or a "k."
Petitioners' aggressive promotion of the "Big Mac" mark, as borne by their
advertisement expenses, has built goodwill and reputation for such mark
making it one of the easily recognizable marks in the market today.
Thisincreases the likelihood that consumers will mistakenly associate

INTELLECTUAL PROPERTY LAWS – AMES 2014 Page 24

TRADEMARKS
petitioners' hamburgers and business with those of respondents'.
Respondents' inability to explain sufficiently how and why they came to
choose "Big Mak" for their hamburger sandwiches indicates their intent to
imitate petitioners' "Big Mac" mark. Contrary to the Court of Appeals' finding,
respondents' claim that their "Big Mak" mark was inspired by the first names
of respondent Dy's mother (Maxima) and father (Kimsoy) is not credible. As
petitioners well noted:
[R]espondents, particularly Respondent Mr. Francis Dy, could
have arrived at a more creative choice for a corporate name by
using the names of his parents, especially since he was allegedly
driven by sentimental reasons. For one, he could have put his
father's name ahead of his mother's, as is usually done in this
patriarchal society, and derived letters from said names in that
order. Or, he could have taken an equalnumber of letters (i.e., two)
from each name, as is the more usual thing done. Surely, the more
plausible reason behind Respondents' choice of the word "M[ak]",
especially when taken in conjunction with the word "B[ig]", was
their intent to take advantage of Petitioners' xxx "B[ig] M[ac]"
trademark, with their allegedsentiment-focused "explanation"
merely thought of as a convenient, albeit unavailing, excuse or
defense for such an unfair choice of name.67
Absent proof that respondents' adoption of the "Big Mak" mark was due
to honest mistake or was fortuitous,68 the inescapable conclusion is that
respondents adopted the "Big Mak" mark to "ride on the coattails" of the
more established "Big Mac" mark.69 This saves respondents much of the
expense in advertising to create market recognition of their mark and
hamburgers.70
Thus, we hold that confusion is likely to result in the public mind. We sustain
petitioners' claim of trademark infringement.
On the Lack of Proof of
Actual Confusion
Petitioners' failure to present proof of actual confusion does not negate their
claim of trademark infringement. As noted in American Wire & Cable Co. v.
Director of Patents,71 Section 22 requires the less stringent standard of
"likelihood of confusion" only. While proof of actual confusion is the best
evidence of infringement, its absence is inconsequential.72
On the Issue of Unfair Competition
Section 29 ("Section 29")73 of RA 166 defines unfair competition, thus:
xxxx
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.
In particular, and without in any way limiting the scope of unfair
competition, the following shall be deemed guilty of unfair
competition:
(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 wrapping of
the packages in which they are contained, or the devices or
words thereon, or in any feature of their appearance, which would
be likely to 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
INTELLECTUAL PROPERTY LAWS – AMES 2014
of such goods or any agent of any vendor engaged in selling such
goods with a like purpose;
(b) Any person who by any artifice, or device, or who employs
any other means calculated to induce the false belief that such
person is offering the services of another who has identified such
services in the mind of the public; or
(c) Any person who shall make any false statement in the course
of trade or who shall commit any other act contrary to good faith of
a nature calculated to discredit the goods, business or services of
another. (Emphasis supplied)
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.74 The confusing similarity may or may
not result from similarity in the marks, but may result from other external
factors in the packaging or presentation of the goods. The intent to deceive
and defraud may be inferred from the similarity of the appearance of the
goods as offered for sale to the public.75 Actual fraudulent intent need not be
shown.76
Unfair competition is broader than trademark infringement and includes
passing off goods with or without trademark infringement. Trademark
infringement is a form of unfair competition.77 Trademark infringement
constitutes unfair competition when there is not merely likelihood of
confusion, but also actual or probable deception on the public because of the
general appearance of the goods. There can be trademark infringement
without unfair competition as when the infringer discloses on the labels
containing the mark that he manufactures the goods, thus preventing the
public from being deceived that the goods originate from the trademark
owner.78
To support their claim of unfair competition, petitioners allege that
respondents fraudulently passed off their hamburgers as "Big Mac"
hamburgers. Petitioners add that respondents' fraudulent intent can be
inferred from the similarity of the marks in question.79
Passing off (or palming off) takes place where the defendant, by imitative
devices on the general appearance of the goods, misleads prospective
purchasers into buying his merchandise under the impression that they are
buying that of his competitors.80 Thus, the defendant gives his goods the
general appearance of the goods of his competitor with the intention of
deceiving the public that the goods are those of his competitor.
The RTC described the respective marks and the goods of petitioners and
respondents in this wise:
The mark "B[ig] M[ac]" is used by plaintiff McDonald's to identify its
double decker hamburger sandwich. The packaging material is
a styrofoam box with the McDonald's logo and trademark in red
with block capital letters printed on it. All letters of the "B[ig] M[ac]"
mark are also in red and block capital letters. On the other
hand, defendants' "B[ig] M[ak]" script print is in orange with only
the letter "B" and "M" being capitalized and the packaging material
is plastic wrapper. xxxx Further, plaintiffs' logo and mascot are the
umbrella "M" and "Ronald McDonald's", respectively, compared to
the mascot of defendant Corporation which is a chubby boy called
"Macky" displayed or printed between the words "Big" and
"Mak."81 (Emphasis supplied)
Respondents point to these dissimilarities as proof that they did not give their
hamburgers the general appearance of petitioners' "Big Mac" hamburgers.
The dissimilarities in the packaging are minor compared to the stark
similarities in the words that give respondents' "Big Mak" hamburgers the
general appearance of petitioners' "Big Mac" hamburgers. Section 29(a)
expressly provides that the similarity in the general appearance of the goods
may be in the "devices or words" used on the wrappings. Respondents have
applied on their plastic wrappers and bags almost the same wordsthat
petitioners use on their styrofoam box. What attracts the attention of the
buying public are the words "Big Mak" which are almost the same, aurally
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TRADEMARKS
and visually, as the words "Big Mac." The dissimilarities in the material and
other devices are insignificant compared to the glaring similarity in the words
used in the wrappings.
Section 29(a) also provides that the defendant gives "his goods the general
appearance of goods of another manufacturer." Respondents' goods are
hamburgers which are also the goods of petitioners. If respondents sold egg
sandwiches only instead of hamburger sandwiches, their use of the "Big
Mak" mark would not give their goods the general appearance of petitioners'
"Big Mac" hamburgers. In such case, there is only trademark infringement
but no unfair competition. However, since respondents chose to apply the
"Big Mak" mark on hamburgers, just like petitioner's use of the "Big Mac"
mark on hamburgers, respondents have obviously clothed their goods with
the general appearance of petitioners' goods.
Moreover, there is no notice to the public that the "Big Mak" hamburgers are
products of "L.C. Big Mak Burger, Inc." Respondents introduced during the
trial plastic wrappers and bags with the words "L.C. Big Mak Burger, Inc." to
inform the public of the name of the seller of the hamburgers. However,
petitioners introduced during the injunctive hearings plastic wrappers and
bags with the "Big Mak" mark without the name "L.C. Big Mak Burger, Inc."
Respondents' belated presentation of plastic wrappers and bags bearing the
name of "L.C. Big Mak Burger, Inc." as the seller of the hamburgers is an
after-thought designed to exculpate them from their unfair business conduct.
As earlier stated, we cannot consider respondents' evidence since
petitioners' complaint was based on facts existing before and during the
injunctive hearings.
Thus, there is actually no notice to the public that the "Big Mak" hamburgers
are products of "L.C. Big Mak Burger, Inc." and not those of petitioners who
have the exclusive right to the "Big Mac" mark. This clearly shows
respondents' intent to deceive the public. Had respondents' placed a notice
on their plastic wrappers and bags that the hamburgers are sold by "L.C. Big
Mak Burger, Inc.", then they could validly claim that they did not intend to
deceive the public. In such case, there is only trademark infringement but no
unfair competition.82Respondents, however, did not give such notice. We
hold that as found by the RTC, respondent corporation is liable for unfair
competition.
The Remedies Available to Petitioners
Under Section 2383 ("Section 23") in relation to Section 29 of RA 166, a
plaintiff who successfully maintains trademark infringement and unfair
competition claims is entitled to injunctive and monetary reliefs. Here, the
RTC did not err in issuing the injunctive writ of 16 August 1990 (made
permanent in its Decision of 5 September 1994) and in ordering the payment
of P400,000 actual damages in favor of petitioners. The injunctive writ is
indispensable to prevent further acts of infringement by respondent
corporation. Also, the amount of actual damages is a reasonable percentage
(11.9%) of respondent corporation's gross sales for three (1988-1989 and
1991) of the six years (1984-1990) respondents have used the "Big Mak"
mark.84
The RTC also did not err in awarding exemplary damages by way of
correction for the public good85 in view ofthe finding of unfair competition
where intent to deceive the public is essential. The award of attorney's fees
and expenses of litigation is also in order.86
WHEREFORE, we GRANT the instant petition. We SET ASIDE the Decision
dated 26 November 1999 of the Court of Appeals and its Resolution dated
11 July 2000 and REINSTATE the Decision dated 5 September 1994 of the
Regional Trial Court of Makati, Branch 137, finding respondent L.C. Big Mak
Burger, Inc. liable for trademark infringement and unfair competition.
SO ORDERED.
Lyceum of the Philippines Inc vs. CA, GR No. 101897, 5 March 1993
SYLLABUS
1. CORPORATION LAW; CORPORATE NAMES; REGISTRATION OF
INTELLECTUAL PROPERTY LAWS – AMES 2014
PROPOSED NAME WHICH IS IDENTICAL OR CONFUSINGLY SIMILAR
TO THAT OF ANY EXISTING CORPORATION, PROHIBITED;
CONFUSION AND DECEPTION EFFECTIVELY PRECLUDED BY THE
APPENDING OF GEOGRAPHIC NAMES TO THE WORD "LYCEUM". —
The Articles of Incorporation of a corporation must, among other things, set
out the name of the corporation. Section 18 of the Corporation Code
establishes a restrictive rule insofar as corporate names are concerned:
"Section 18. Corporate name. — No corporate name may be allowed by the
Securities an 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." 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.
We do not consider that the corporate names of private respondent
institutions are "identical with, or deceptively or confusingly similar" to that of
the petitioner institution. True enough, the corporate names of private
respondent entities all carry the word "Lyceum" but confusion and deception
are effectively precluded by the appending of geographic names to the word
"Lyceum." Thus, we do not believe that the "Lyceum of Aparri" can be
mistaken by the general public for the Lyceum of the Philippines, or that the
"Lyceum of Camalaniugan" would be confused with the Lyceum of the
Philippines.
2. ID.; ID.; DOCTRINE OF SECONDARY MEANING; USE OF WORD
"LYCEUM," NOT ATTENDED WITH EXCLUSIVITY. — It is claimed,
however, by petitioner that the word "Lyceum" has acquired a secondary
meaning in relation to petitioner with the result that word, although originally
a generic, has become appropriable by petitioner to the exclusion of other
institutions like private respondents herein. The doctrine of secondary
meaning originated in the field of trademark law. Its application has,
however, been extended to corporate names sine the right to use a
corporate name to the exclusion of others is based upon the same principle
which underlies the right to use a particular trademark or tradename. In
Philippine Nut Industry, Inc. v. Standard Brands, Inc., the doctrine of
secondary meaning was elaborated in the following terms: " . . . a word or
phrase originally incapable of exclusive appropriation with reference to an
article on 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." The question which arises, therefore, is whether or not the use
by petitioner of "Lyceum" in its corporate name has been for such length of
time and with such exclusivity as to have become associated or identified
with the petitioner institution in the mind of the general public (or at least that
portion of the general public which has to do with schools). The Court of
Appeals recognized this issue and answered it in the negative: "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. Toribio Teodoro,
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. . . . No evidence
was ever presented in the hearing before the Commission which sufficiently
proved that the word 'Lyceum' has indeed acquired secondary meaning in
favor of the appellant. If there was any of this kind, the same tend to prove
only that the appellant had been using the disputed word for a long period of
time. . . . In other words, while the appellant may have proved that it had
been using the word 'Lyceum' for a long period of time, this fact alone did not
amount to mean that the said word had acquired secondary meaning in its
favor because the appellant failed to prove that it had been using the same
word all by itself to the exclusion of others. More so, there was no evidence
presented to prove that confusion will surely arise if the same word were to
be used by other educational institutions. Consequently, the allegations of
the appellant in its first two assigned errors must necessarily fail." We agree
with the Court of Appeals. The number alone of the private respondents in
the case at bar suggests strongly that petitioner's use of the word "Lyceum"
has not been attended with the exclusivity essential for applicability of the
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TRADEMARKS
doctrine of secondary meaning. Petitioner's use of the word "Lyceum" was
not exclusive but was in truth shared with the Western Pangasinan Lyceum
and a little later with other private respondent institutions which registered
with the SEC using "Lyceum" as part of their corporation names. There may
well be other schools using Lyceum or Liceo in their names, but not
registered with the SEC because they have not adopted the corporate form
of organization.
3. ID.; ID.; MUST BE EVALUATED IN THEIR ENTIRETY TO DETERMINE
WHETHER THEY ARE CONFUSINGLY OR DECEPTIVELY SIMILAR TO
ANOTHER CORPORATE ENTITY'S NAME. — 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.
DECISION
FELICIANO, J p:
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.
Some of the private respondents actively participated in the proceedings
before the SEC. These are the following, the dates of their original SEC
registration being set out below opposite their respective names:
Western Pangasinan Lyceum — 27 October 1950
Lyceum of Cabagan — 31 October 1962
Lyceum of Lallo, Inc. — 26 March 1972
Lyceum of Aparri — 28 March 1972
Lyceum of Tuao, Inc. — 28 March 1972
Lyceum of Camalaniugan — 28 March 1972
The following private respondents were declared in default for failure to file
an answer despite service of summons:
Buhi Lyceum;
Central Lyceum of Catanduanes;
Lyceum of Eastern Mindanao, Inc.; and
Lyceum of Southern Philippines
Petitioner's original complaint before the SEC had included three (3) other
entities:
1. The Lyceum of Malacanay;
2. The Lyceum of Marbel; and
3. The Lyceum of Araullo
The complaint was later withdrawn insofar as concerned the Lyceum of
Malacanay and the Lyceum of Marbel, for failure to serve summons upon
these two (2) entities. The case against the Liceum of Araullo was dismissed
when that school motu proprio change its corporate name to "Pamantasan
ng Araullo."
The background of the case at bar needs some recounting. 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
INTELLECTUAL PROPERTY LAWS – AMES 2014
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. 2
Armed with the Resolution of this 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. 3
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,
without success.
Before this Court, petitioner asserts that the Court of Appeals committed the
following errors:
1. The Court of Appeals erred in holding that the Resolution of the Supreme
Court in G.R. No. L-46595 did not constitute stare decisis as to apply to this
case and in not holding that said Resolution bound subsequent
determinations on the right to exclusive use of the word Lyceum.
2. The Court of Appeals erred in holding that respondent Western
Pangasinan Lyceum, Inc. was incorporated earlier than petitioner.
3. The Court of Appeals erred in holding that the word Lyceum has not
acquired a secondary meaning in favor of petitioner.
4. The Court of Appeals erred in holding that Lyceum as a generic word
cannot be appropriated by the petitioner to the exclusion of others. 5
We will consider all the foregoing ascribed errors, though not necessarily
seriatim. We begin by noting that the Resolution of the Court in G.R. No. L-
46595 does not, of course, constitute res adjudicata in respect of the case at
bar, since there is no identity of parties. Neither is stare decisis pertinent, if
only because the SEC En Banc itself has re-examined Associate
Commissioner Sulit's ruling in the Lyceum of Baguio case. The Minute
Resolution of the Court in G.R. No. L-46595 was not a reasoned adoption of
the Sulit ruling.
The Articles of Incorporation of a corporation must, among other things, set
out the name of the corporation. 6 Section 18 of the Corporation Code
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TRADEMARKS
establishes a restrictive rule insofar as corporate names are concerned:
"SECTION 18. Corporate name. — No corporate name may be allowed by
the Securities an 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. 7
We do not consider that the corporate names of private respondent
institutions are "identical with, or deceptively or confusingly similar" to that of
the petitioner institution. True enough, the corporate names of private
respondent entities all carry the word "Lyceum" but confusion and deception
are effectively precluded by the appending of geographic names to the word
"Lyceum." Thus, we do not believe that the "Lyceum of Aparri" can be
mistaken by the general public for the Lyceum of the Philippines, or that the
"Lyceum of Camalaniugan" would be confused with the Lyceum of the
Philippines.
Etymologically, the word "Lyceum" is the Latin word for the Greek lykeion
which in turn referred to a locality on the river Ilissius in ancient Athens
"comprising an enclosure dedicated to Apollo and adorned with fountains
and buildings erected by Pisistratus, Pericles and Lycurgus frequented by
the youth for exercise and by the philosopher Aristotle and his followers for
teaching." 8 In time, the word "Lyceum" became associated with schools and
other institutions providing public lectures and concerts and public
discussions. Thus today, the word "Lyceum" generally refers to a school or
an institution of learning. While the Latin word "lyceum" has been
incorporated into the English language, the word is also found in Spanish
(liceo) and in French (lycee). As the Court of Appeals noted in its Decision,
Roman Catholic schools frequently use the term; e.g., "Liceo de Manila,"
"Liceo de Baleno" (in Baleno, Masbate), "Liceo de Masbate," "Liceo de
Albay." 9 "Lyceum" is in fact as generic in character as the word "university."
In the name of the petitioner, "Lyceum" appears to be a substitute for
"university;" in other places, however, "Lyceum," or "Liceo" or "Lycee"
frequently denotes a secondary school or a college. It may be (though this is
a question of fact which we need not resolve) that the use of the word
"Lyceum" may not yet be as widespread as the use of "university," but it is
clear that a not inconsiderable number of educational institutions have
adopted "Lyceum" or "Liceo" as part of their corporate names. Since
"Lyceum" or "Liceo" denotes a school or institution of learning, it is not
unnatural to use this word to designate an entity which is organized and
operating as an educational institution.
It is claimed, however, by petitioner that the word "Lyceum" has acquired a
secondary meaning in relation to petitioner with the result that that word,
although originally a generic, has become appropriable by petitioner to the
exclusion of other institutions like private respondents herein.
The doctrine of secondary meaning originated in the field of trademark law.
Its application has, however, been extended to corporate names sine the
right to use a corporate name to the exclusion of others is based upon the
same principle which underlies the right to use a particular trademark or
tradename. 10 In Philippine Nut Industry, Inc. v. Standard Brands, Inc., 11
the doctrine of secondary meaning was elaborated in the following terms:
" . . . a word or phrase originally incapable of exclusive appropriation with
reference to an article on 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." 12
The question which arises, therefore, is whether or not the use by petitioner
INTELLECTUAL PROPERTY LAWS – AMES 2014
of "Lyceum" in its corporate name has been for such length of time and with
such exclusivity as to have become associated or identified with the
petitioner institution in the mind of the general public (or at least that portion
of the general public which has to do with schools). The Court of Appeals
recognized this issue and answered it in the negative:
"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. Toribio Teodoro, 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) (Ang Si Heng vs. Wellington Department Store,
Inc., 92 Phil. 448).
With the foregoing as a yardstick, [we] believe the appellant failed to satisfy
the aforementioned requisites. No evidence was ever presented in the
hearing before the Commission which sufficiently proved that the word
'Lyceum' has indeed acquired secondary meaning in favor of the appellant. If
there was any of this kind, the same tend to prove only that the appellant had
been using the disputed word for a long period of time. Nevertheless, its
(appellant) exclusive use of the word (Lyceum) was never established or
proven as in fact the evidence tend to convey that the cross-claimant was
already using the word 'Lyceum' seventeen (17) years prior to the date the
appellant started using the same word in its corporate name. Furthermore,
educational institutions of the Roman Catholic Church had been using the
same or similar word like 'Liceo de Manila,' 'Liceo de Baleno' (in Baleno,
Masbate), 'Liceo de Masbate,' 'Liceo de Albay' long before appellant started
using the word 'Lyceum'. The appellant also failed to prove that the word
'Lyceum' has become so identified with its educational institution that
confusion will surely arise in the minds of the public if the same word were to
be used by other educational institutions.
In other words, while the appellant may have proved that it had been using
the word 'Lyceum' for a long period of time, this fact alone did not amount to
mean that the said word had acquired secondary meaning in its favor
because the appellant failed to prove that it had been using the same word
all by itself to the exclusion of others. More so, there was no evidence
presented to prove that confusion will surely arise if the same word were to
be used by other educational institutions. Consequently, the allegations of
the appellant in its first two assigned errors must necessarily fail." 13
(Underscoring partly in the original and partly supplied)
We agree with the Court of Appeals. The number alone of the private
respondents in the case at bar suggests strongly that petitioner's use of the
word "Lyceum" has not been attended with the exclusivity essential for
applicability of the doctrine of secondary meaning. It may be noted also that
at least one of the private respondents, i.e., the Western Pangasinan
Lyceum, Inc., used the term "Lyceum" seventeen (17) years before the
petitioner registered its own corporate name with the SEC and began using
the word "Lyceum." It follows that if any institution had acquired an exclusive
right to the word "Lyceum," that institution would have been the Western
Pangasinan Lyceum, Inc. rather than the petitioner institution.
In this connection, petitioner argues that because the Western Pangasinan
Lyceum, Inc. failed to reconstruct its records before the SEC in accordance
with the provisions of R.A. No. 62, which records had been destroyed during
World War II, Western Pangasinan Lyceum should be deemed to have lost
all rights it may have acquired by virtue of its past registration. It might be
noted that the Western Pangasinan Lyceum, Inc. registered with the SEC
soon after petitioner had filed its own registration on 21 September 1950.
Whether or not Western Pangasinan Lyceum, Inc. must be deemed to have
lost its rights under its original 1933 registration, appears to us to be quite
secondary in importance; we refer to this earlier registration simply to
underscore the fact that petitioner's use of the word "Lyceum" was neither
the first use of that term in the Philippines nor an exclusive use thereof.
Petitioner's use of the word "Lyceum" was not exclusive but was in truth
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shared with the Western Pangasinan Lyceum and a little later with other
private respondent institutions which registered with the SEC using "Lyceum"
as part of their corporation names. There may well be other schools using
Lyceum or Liceo in their names, but not registered with the SEC because
they have not adopted the corporate form of organization.
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.
WHEREFORE, the petitioner having failed to show any reversible error on
the part of the public respondent Court of Appeals, the Petition for Review is
DENIED for lack of merit, and the Decision of the Court of Appeals dated 28
June 1991 is hereby AFFIRMED. No pronouncement as to costs.
SO ORDERED.
Etpha vs. Director of Patents (supra)
Ang vs. Teodoro GR No. L-48226, 14 Dec. 1942
Petitioner has appealed to this Court by certiorari to reverse the judgment of
the Court of Appeals reversing that of the Court of First Instance of Manila
and directing the Director of Commerce to cancel the registration of the
trade-mark "Ang Tibay" in favor of said petitioner, and perpetually enjoining
the latter from using said trade-mark on goods manufactured and sold by
her.
Respondent Toribio Teodoro, at first in partnership with Juan Katindig and
later as sole proprietor, has continuously used "Ang Tibay," both as a trade-
mark and as a trade-name, in the manufacture and sale of slippers, shoes,
and indoor baseballs since 1910. He formally registered it as trade-mark on
September 29, 1915, and as trade-name on January 3, 1933. The growth of
his business is a thrilling epic of Filipino industry and business capacity.
Starting in an obscure shop in 1910 with a modest capital of P210 but with
tireless industry and unlimited perseverance, Toribio Teodoro, then an
unknown young man making slippers with his own hands but now a
prominent business magnate and manufacturer with a large factory operated
with modern machinery by a great number of employees, has steadily grown
with his business to which he has dedicated the best years of his life and
which he has expanded to such proportions that his gross sales from 1918 to
1938 aggregated P8,787,025.65. His sales in 1937 amounted to
P1,299,343.10 and in 1938, P1,133,165.77. His expenses for advertisement
from 1919 to 1938 aggregated P210,641.56.
Petitioner (defendant below) registered the same trade-mark "Ang Tibay" for
pants and shirts on April 11, 1932, and established a factory for the
manufacture of said articles in the year 1937. In the following year (1938) her
gross sales amounted to P422,682.09. Neither the decision of the trial court
nor that of the Court of Appeals shows how much petitioner has spent or
advertisement. But respondent in his brief says that petitioner "was unable to
prove that she had spent a single centavo advertising "Ang Tibay" shirts and
pants prior to 1938. In that year she advertised the factory which she had
just built and it was when this was brought to the attention of the appellee
that he consulted his attorneys and eventually brought the present suit."
The trial court (Judge Quirico Abeto) presiding absolved the defendant from
the complaint, with costs against the plaintiff, on the grounds that the two
trademarks are dissimilar and are used on different and non-competing
goods; that there had been no exclusive use of the trade-mark by the
INTELLECTUAL PROPERTY LAWS – AMES 2014
plaintiff; and that there had been no fraud in the use of the said trade-mark
by the defendant because the goods on which it is used are essentially
different from those of the plaintiff. The second division of the Court of
Appeals, composed of Justices Bengson, Padilla, Lopez Vito, Tuason, and
Alex Reyes, with Justice Padilla as ponente, reversed that judgment, holding
that by uninterrupted an exclusive use since 191 in the manufacture of
slippers and shoes, respondent's trade-mark has acquired a secondary
meaning; that the goods or articles on which the two trade-marks are used
are similar or belong to the same class; and that the use by petitioner of said
trade-mark constitutes a violation of sections 3 and 7 of Act No. 666. The
defendant Director of Commerce did not appeal from the decision of the
Court of Appeals.
First. Counsel for the petitioner, in a well-written brief, makes a frontal
sledge-hammer attack on the validity of respondent's trade-mark "Ang
Tibay." He contends that the phrase "Ang Tibay" as employed by the
respondent on the articles manufactured by him is a descriptive term
because, "freely translate in English," it means "strong, durable, lasting." He
invokes section 2 of Act No. 666, which provides that words or devices which
related only to the name, quality, or description of the merchandise cannot
be the subject of a trade-mark. He cites among others the case of Baxter vs.
Zuazua (5 Phil., 16), which involved the trade-mark "Agua de Kananga" used
on toilet water, and in which this Court held that the word "Kananga," which
is the name of a well-known Philippine tree or its flower, could not be
appropriated as a trade-mark any more than could the words "sugar,"
"tobacco," or "coffee." On the other hand, counsel for the respondent, in an
equally well-prepared and exhaustive brief, contend that the words "Ang
Tibay" are not descriptive but merely suggestive and may properly be
regarded as fanciful or arbitrary in the legal sense. The cite several cases in
which similar words have been sustained as valid trade-marks, such as
"Holeproof" for hosiery, 1 "ideal for tooth brushes, 2 and "Fashionknit" for
neckties and sweaters. 3
We find it necessary to go into the etymology and meaning of the Tagalog
words "Ang Tibay" to determine whether they are a descriptive term, i.e.,
whether they relate to the quality or description of the merchandise to which
respondent has applied them as a trade-mark. The word "ang" is a definite
article meaning "the" in English. It is also used as an adverb, a contraction of
the word "anong" (what or how). For instance, instead of saying, "Anong
ganda!" ("How beautiful!"), we ordinarily say, "Ang ganda!" Tibay is a root
word from which are derived the verb magpatibay (to strenghten; the
nouns pagkamatibay (strength, durability), katibayan (proof, support,
strength), katibay-tibayan (superior strength); and the adjectives matibay
(strong, durable, lasting), napakatibay(very strong), kasintibay or
magkasintibay (as strong as, or of equal strength). 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!") It may also be used in a sentence thus, "Ang tibay ng
sapatos mo!" (How durable your shoes are!") 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 trade-mark or trade-
name. 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 trade-mark. It seems stultifying and puerile for her now
to contend otherwise, suggestive of the story of sour grapes. Counsel for the
petitioner says that the function of a trade-mark is to point distinctively, either
by its own meaning or by association, to the origin or ownership of the wares
to which it is applied. That is correct, and we find that "Ang Tibay," as used
by the respondent to designate his wares, had exactly performed that
function for twenty-two years before the petitioner adopted it as a trade-mark
in her own business. Ang Tibay shoes and slippers are, by association,
known throughout the Philippines as products of the Ang Tibay factory
owned and operated by the respondent Toribio Teodoro.
Second. In her second assignment of error petitioner contends that the Court
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of Appeals erred in holding that the words "Ang Tibay" had acquired a
secondary meaning. 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. (G. & C. Merriam Co. vs. Salfield, 198 F., 369,
373.) 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. (Landers, Frary, and Clark vs. Universal Cooler
Corporation, 85 F. [2d], 46.)
Third. Petitioner's third assignment of error is, that the Court of Appeals
erred in holding that pants and shirts are goods similar to shoes and slippers
within the meaning of sections 3 and 7 of Act No. 666. She also contends
under her fourth assignment of error (which we deem convenient to pass
upon together with the third) that there can neither be infringement of trade-
mark under section 3 nor unfair competition under section 7 through her use
of the words "Ang Tibay" in connection with pants and shirts, because those
articles do not belong to the same class of merchandise as shoes and
slippers.
The question raised by petitioner involve the scope and application of
sections 3,7, 11, 13, and 20 of the Trade-Mark Law (Act No. 666.) Section 3
provides that "any person entitled to the exclusive use of a trade-mark to
designate the origin or ownership of goods he has made or deals in, may
recover damages in a civil actions from any person who has sold goods of a
similar kind, bearing such trade-mark . . . The complaining party . . . may
have a preliminary injunction, . . . and such injunction upon final hearing, if
the complainant's property in the trade-mark and the defendant's violation
thereof shall be fully established, shall be made perpetual, and this injunction
shall be part of the judgment for damages to be rendered in the same
cause." Section 7 provides that any person who, in selling his goods, shall
give them the general appearance of the goods of another either in the
wrapping of the packages, or in the devices or words thereon, or in any other
feature of their appearance, which would be likely to influence purchasers to
believe that the goods offered are those of the complainant, shall be guilty of
unfair competition, and shall be liable to an action for damages and to an
injunction, as in the cases of trade-mark infringement under section 3.
Section 11 requires the applicant for registration of a trade-mark to state,
among others, "the general class of merchandise to which the trade-mark
claimed has been appropriated." Section 13 provides that no alleged trade-
mark or trade name shall be registered which is identical with a registered or
known trade-mark owned by another and appropriate to the same class of
merchandise, or which to nearly resembles another person's lawful trade-
mark or trade-name as to be likely to cause confusion or mistake in the mind
of the public, or to deceive purchasers. And section 2 authorizes the Director
of Commerce to establish classes of merchandise for the purpose of the
registration of trade-marks and to determine the particular description of
articles included in each class; it also provides that "an application for
registration of a trade-mark shall be registered only for one class of
articles and only for the particular description of articles mentioned in said
application."
We have underlined the key words used in the statute: "goods of a similar
kin," "general class of merchandise," "same class of merchandise," "classes
of merchandise," and "class of articles," because it is upon their implications
that the result of the case hinges. These phrases, which refer to the same
thing, have the same meaning as the phrase "merchandise of the same
descriptive properties" used in the statutes and jurisprudence of other
jurisdictions.
The burden of petitioner's argument is that under sections 11 and 20 the
registration by respondent of the trade-mark "Ang Tibay" for shoes and
slippers is no safe-guard against its being used by petitioner for pants and
shirts because the latter do not belong to the same class of merchandise or
articles as the former; that she cannot be held guilty of infringement of trade-
mark under section 3 because respondent's mark is not a valid trade-mark,
INTELLECTUAL PROPERTY LAWS – AMES 2014
nor has it acquired a secondary meaning; that pants and shirts do not
possess the same descriptive properties as shoes and slippers; that neither
can she be held guilty of unfair competition under section 7 because the use
by her of the trade-mark "Ang Tibay" upon pants and shirts is not likely to
mislead the general public as to their origin or ownership; and that there is
now showing that she in unfairly or fraudulently using that mark "Ang Tibay"
against the respondent. If we were interpreting the statute for the first time
and in the first decade of the twentieth century, when it was enacted, and
were to construe it strictly and literally, we might uphold petitioner's
contentions. But law and jurisprudence must keep abreast with the progress
of mankind, and the courts must breathe life into the statutes if they are to
serve their purpose. Our Trade-mark Law, enacted nearly forty years ago,
has grown in its implications and practical application, like a constitution, in
virtue of the life continually breathed into it. It is not of merely local
application; it has its counterpart in other jurisdictions of the civilized world
from whose jurisprudence it has also received vitalizing nourishment. We
have to apply this law as it has grown and not as it was born. Its growth or
development abreast with that of sister statutes and jurisprudence in other
jurisdictions is reflected in the following observation of a well-known author:
This fundamental change in attitude first manifested itself in the
year 1915-1917. Until about then, the courts had proceeded on the
theory that the same trade-mark, used on un-like goods, could not
cause confusion in trade and that, therefore, there could be no
objection to the use and registration of a well-known mark by a
third party for a different class of goods. Since 1916 however, a
growing sentiment began to arise that in the selection of a famous
mark by a third party, there was generally the hidden intention to
"have a free ride" on the trade-mark owner's reputation and good
will. (Derenberg, Trade-Mark Protection & Unfair Trading, 1936
edition, p. 409.)
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.
Such construction of the law is induced by cogent reasons of equity and fair
dealing. The courts have come to realize that there can be unfair competition
or unfair trading even if the goods are non-competing, and that such unfair
trading can cause injury or damage to the first user of a given trade-mark,
first, by prevention of the natural expansion of his business and, second, by
having his business reputation confused with and put at the mercy of the
second user. Then noncompetitive products are sold under the same mark,
the gradual whittling away or dispersion of the identity and hold upon the
public mind of the mark created by its first user, inevitably results. The
original owner is entitled to the preservation of the valuable link between him
and the public that has been created by his ingenuity and the merit of his
wares or services. Experience has demonstrated that when a well-known
trade-mark is adopted by another even for a totally different class of goods, it
is done to get the benefit of the reputation and advertisements of the
originator of said mark, to convey to the public a false impression of some
supposed connection between the manufacturer of the article sold under the
original mark and the new articles being tendered to the public under the
same or similar mark. As trade has developed and commercial changes
have come about, the law of unfair competition has expanded to keep pace
with the times and the element of strict competition in itself has ceased to be
the determining factor. The owner of a trade-mark or trade-name has a
property right in which he is entitled to protection, since there is damage to
him from confusion of reputation or goodwill in the mind of the public as well
as from confusion of goods. The modern trend is to give emphasis to the
unfairness of the acts and to classify and treat the issue as a fraud.
A few of the numerous cases in which the foregoing doctrines have been laid
down in one form or another will now be cited: (1) In Teodoro Kalaw Ng Khe
vs. Level Brothers Company (G.R. No. 46817), decided by this Court on April
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18, 1941, the respondent company (plaintiff below) was granted injunctive
relief against the use by the petitioner of the trade-mark "Lux" and "Lifebuoy"
for hair pomade, they having been originally used by the respondent for
soap; The Court held in effect that although said articles are noncompetitive,
they are similar or belong to the same class. (2) In Lincoln Motor Co. vs.
Lincoln Automobile Co. (44 F. [2d], 812), the manufacturer of the well-known
Lincoln automobile was granted injunctive relief against the use of the word
"Lincoln" by another company as part of its firm name. (3) The case of Aunt
Jemima Mills Co. vs. Rigney & Co. (247 F., 407), involved the trade-mark
"Aunt Jemima," originally used on flour, which the defendant attempted to
use on syrup, and there the court held that the goods, though different, are
so related as to fall within the mischief which equity should prevent. (4)
In Tiffany & Co., vs. Tiffany Productions, Inc. (264 N.Y.S., 459; 23 Trade-
mark Reporter, 183), the plaintiff, a jewelry concern, was granted injunctive
relief against the defendant, a manufacturer of motion pictures, from using
the name "Tiffany." Other famous cases cited on the margin, wherein the
courts granted injunctive relief, involved the following trade-marks or trade-
names: "Kodak," for cameras and photographic supplies, against its use for
bicycles. 4 "Penslar," for medicines and toilet articles, against its use for
cigars; 5 "Rolls-Royce," for automobiles. against its use for radio
tubes; 6 "Vogue," as the name of a magazine, against its use for
hats; 7"Kotex," for sanitary napkins, against the use of "Rotex" for vaginal
syringes; 8 "Sun-Maid," for raisins, against its use for flour; 9 "Yale," for locks
and keys, against its use for electric flashlights; 10 and "Waterman," for
fountain pens, against its use for razor blades. 11lawphil.net
Against this array of famous cases, the industry of counsel for the petitioner
has enabled him to cite on this point only the following cases: (1) Mohawk
Milk Products vs. General Distilleries Corporation (95 F. [2d], 334), wherein
the court held that gin and canned milk and cream do not belong to the same
class; (2) Fawcett Publications, Inc. vs. Popular Mechanics Co. (80 F. [2d],
194), wherein the court held that the words "Popular Mechanics" used as the
title of a magazine and duly registered as a trade-mark were not infringed by
defendant's use of the words "Modern Mechanics and Inventions" on a
competitive magazine, because the word "mechanics" is merely a descriptive
name; and (3) Oxford Book Co. vs. College Entrance Book Co. (98 F. [2d],
688), wherein the plaintiff unsuccessfully attempted to enjoin the defendant
from using the word "Visualized" in connection with history books, the court
holding that said word is merely descriptive. These cases cites and relied
upon by petitioner are obviously of no decisive application to the case at bar.
We think reasonable men may not disagree that shoes and shirts are not as
unrelated as fountain pens and razor blades, for instance. The mere relation
or association of the articles is not controlling. As may readily be noted from
what we have heretofore said, the proprietary connotation that a trade-mark
or trade-name has acquired is of more paramount consideration. 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. As observed in another case, 12 the field from
which a person may select a trade-mark is practically unlimited, and hence
there is no excuse for impinging upon or even closely approaching the mark
of a business rival. In the unlimited field of choice, what could have been
petitioner's purpose in selecting "Ang Tibay" if not for its fame?
Lastly, in her fifth assignment of error petitioner seems to make a frantic
effort to retain the use of the mark "Ang Tibay." Her counsel suggests that
instead of enjoining her from using it, she may be required to state in her
labels affixed to her products the inscription: "Not manufactured by Toribio
Teodoro." We think such practice would be unethical and unworthy of a
reputable businessman. To the suggestion of petitioner, respondent may
say, not without justice though with a tinge of bitterness: "Why offer a
perpetual apology or explanation as to the origin of your products in order to
use my trade-mark instead of creating one of your own?" On our part may
we add, without meaning to be harsh, that a self-respecting person does not
remain in the shelter of another but builds one of his own.
The judgment of the Court of Appeals is affirmed, with costs against the
petitioner in the three instances. So ordered.
INTELLECTUAL PROPERTY LAWS – AMES 2014
Cluster 2
Immoral Matters, Sec. 123.1 (a); Contrary to Public Order and Morality,
Sec 123. 1 (m)
(a) Consists of immoral, deceptive or scandalous matter, or matter which may
disparage or falsely suggest a connection with persons, living or dead,
institutions, beliefs, or national symbols, or bring them into contempt or
disrepute;
(m) Is contrary to public order or morality.
Flags, Sec. 123.1 (b); See also Sec. 4 Act No. 2928, RA No. 226; Portraits,
Sec. 123.1 (c)
(b) Consists of the flag or coat of arms or other insignia of the Philippines or
any of its political subdivisions, or of any foreign nation, or any simulation
thereof;
No. 2928.—An Act to adopt an official flag for the Government of the Philippine
Islands, prescribe rules for its use, and provide penalties for the violation of
said rules.
SEC. 4. Any utterance in speech, writing or drawing, and any act or omission
casting dishonor, ridicule, or contempt upon the Philippine flag, as well as its
use in places of ill-repute or for purposes involving disrespect, including use as
trade-marks and for industrial, commercial or agricultural labels or designs,
and any drawings or inscriptions upon the Philippine flag are hereby prohibited
and their execution shall constitute an offence; and any person who, either
himself or through another, violates any of the provisions of this Act and
particularly those contained in this section, shall, upon conviction, be punished
by a fine of not less than twenty-five nor more than one thousand pesos, or by
imprisonment for not more than one year, or both such fine and imprisonment,
in the discretion of the court: Provided, That in case of non-payment of the fine
or any part thereof, the offender shall serve one day of subsidiary
imprisonment for each peso of the fine unpaid:And, provided
REPUBLIC ACT NO. 226
REPUBLIC ACT NO. 226 - AN ACT PROHIBITING THE USE OF THE
EMBLEM, OFFICIAL SEAL, AND NAME OF THE UNITED NATIONS FOR
COMMERCIAL PURPOSES
Section 1. It shall be unlawful for any person, association or corporation to
use, directly or indirectly, the emblem, official seal and name of the United
Nations, both in its full and in its abbreviated form, for commercial or business
purposes.
Sec. 2. Any person, association or corporation violating the provisions of this
Act shall upon conviction be liable to a fine of not more than one thousand
pesos or imprisonment for a term not exceeding one year, or both, at the
discretion of the Court. In case the violation is committed by a corporation or
association, the penalty shall be imposed upon the president, director, or any
other officer thereof responsible for such violation. The goods and articles
upon which the emblem, seal or name of the United Nations have been used
shall be confiscated in favor of the Government.cralaw
Shapes, Colors Sec 123.1 (k) and (l)
(k) Consists of shapes that may be necessitated by technical factors or by the
nature of the goods themselves or factors that affect their intrinsic value;
(l) Consists of color alone, unless defined by a given form; or
Cluster 3
Confusingly Similar with registered marks, Sec 123 (d); Sec 147,1
(d) Is identical with a registered mark belonging to a different proprietor or a
mark with an earlier filing or priority date, in respect of:
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TRADEMARKS
(i) The same goods or services, or
(ii) Closely related goods or services, or
(iii) If it nearly resembles such a mark as to be likely to deceive or
cause confusion;
Section 147. Rights Conferred. - 147.1. The owner of a registered mark shall
have the exclusive right to prevent all third parties not having the owner's
consent from using in the course of trade identical or similar signs or
containers for goods or services which are identical or similar to those in
respect of which the trademark is registered where such use would result in a
likelihood of confusion. In case of the use of an identical sign for identical
goods or services, a likelihood of confusion shall be presumed.
Deceptive, Sec. 123.1 (g)
(g) Is likely to mislead the public, particularly as to the nature, quality,
characteristics or geographical origin of the goods or services;
What are the tests developed to determine if colorable imitation /
confusing similarity exists?
Dominancy test
Holistic test
Dominancy Test – focuses on the similarity of the prevalent features of the
competing trademarks which might cause confusion of deception, and thus
infringement. If the competing trademark contains the main, essential or
dominant features of another, and the confusion or deception is likely to result,
infringement takes place. Duplication or imitation is not necessary; nor is it
necessary that the infringing label should suggest an effort to imitate. The
question is whether the use of the mark involved is likely to cause confusion or
mistake in the mind of the public or deceive purchasers. The Dominancy test is
no embodied in Section 155 of the IPL and is therefore the controlling test.
Holistic Test – requires that the entirety of the mark in question be considered
in resolving confusing similarity. Comparison of words is not the only
determining factor. The trademark in their entirety as they appear in their
respective labels or hand tags must also be considered in relation to the goods
to which they are attached. The discerning eye of the observer must focus not
only on the predominant words but also on the other features appearing in
both labels in order that he may draw his conclusion whether one is
confusingly similar to the other.
- CLR, Sundiang and Aquino
Mc Donald’s Corp vs. LC Big Mac (Supra)
Asia Brewery Inc. vs. CA (Supra)
Del Monte Corp vs. CA GR No. L-78325, 25 January 1990
The petitioners are questioning the decision of the respondent court
upholding the dismissal by the trial court of their complaint against the
private respondent for infringement of trademark and unfair competition.
INTELLECTUAL PROPERTY LAWS – AMES 2014
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 which their own nationals enjoy for the repression of
acts of infringement and unfair competition.
Petitioner Philippine Packing Corporation (Philpack) is a domestic
corporation duly organized under the laws of the Philippines. On April 11,
1969, Del Monte granted Philpack the right to manufacture, distribute and
sell in the Philippines various agricultural products, including catsup, under
the Del Monte trademark and logo.
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. SR-913 by the
Philippine Patent Office under the Supplemental Register. 1 On November
20, 1972, Del Monte also obtained two registration certificates for its
trademark "DEL MONTE" and its logo. 2
Respondent Sunshine Sauce Manufacturing Industries was issued a
Certificate of Registration by the Bureau of Domestic Trade on April 17,1980,
to engage in the manufacture, packing, distribution and sale of various kinds
of sauce, identified by the logo Sunshine Fruit Catsup. 3 This logo was
registered in the Supplemental Register on September 20, 1983. 4 The
product itself was contained in various kinds of bottles, including the Del
Monte bottle, which the private respondent bought from the junk shops for
recycling.
Having received reports that the private respondent was using its exclusively
designed bottles and a logo confusingly similar to Del Monte's, Philpack
warned it to desist from doing so on pain of legal action. Thereafter, claiming
that the demand had been ignored, Philpack and Del Monte filed a complaint
against the private respondent for infringement of trademark and unfair
competition, with a prayer for damages and the issuance of a writ of
preliminary injunction. 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 differences between the logos or trademarks of
the parties; that the defendant had ceased using the petitioners' bottles; and
that in any case the defendant became the owner of the said bottles upon its
purchase thereof from the junk yards. Furthermore, the complainants had
failed to establish the defendant's malice or bad faith, which was an essential
element of infringement of trademark or unfair competition. 7
This decision was affirmed in toto by the respondent court, which is now
faulted in this petition for certiorari under Rule 45 of the Rules of Court.
Section 22 of R.A. No. 166, otherwise known as the Trademark Law,
provides in part as follows:
Sec. 22. Infringement, what constitutes. — Any person who 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 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.
Sec. 29 of the same law states as follows:
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TRADEMARKS
Sec. 29. Unfair competition, rights and remedies. — A person who has
identified in the mind of the public the goods he manufactures or deals in, his
business or services from those of others, 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. Such a person shall have the remedies
provided in section twenty- three, Chapter V hereof.
Any person who shall 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.
In particular, and without in any way limiting the scope of unfair competition,
the following shall be deemed guilty of unfair competition:
(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 wrapping of the packages in which they are
contained, or the devices or words thereon, 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 such goods with a like purpose;
(b) Any person who by any artifice, or device, or who employs ally other
means calculated to induce the false belief that such person is offering the
services of another who has identified such services in the mind of the
public; or
(c) Any person who shall make any false statement in the course of trade or
who shall commit any other act contrary to good faith of a nature calculated
to discredit the goods, business or services of another.
To arrive at a proper resolution of this case, it is important to bear in mind the
following distinctions between infringement of trademark and unfair
competition.
(1) Infringement of trademark is the unauthorized use of a trademark,
whereas unfair competition is the passing off of one's goods as those of
another.
(2) In infringement of trademark fraudulent intent is unnecessary whereas in
unfair competition fraudulent intent is essential.
(3) In infringement of trademark the prior registration of the trademark is a
prerequisite to the action, whereas in unfair competition registration is not
necessary. 8
In the challenged decision, the respondent court cited the following test laid
down by this Court in a number of cases:
In determining whether two trademarks are confusingly similar, the two
marks in their entirety as they appear in the respective labels must be
considered in relation to the goods to which they are attached; the discerning
eye of the observer must focus not only on the predorninant words but also
on the other features appearing on both labels. 9
and applying the same, held that there was no colorable imitation of the
petitioners' trademark and logo by the private respondent. The respondent
court agreed with the findings of the trial court that:
In order to resolve the said issue, the Court now attempts to make a
comparison of the two products, to wit:
1. As to the shape of label or make:
Del Monte: Semi-rectangular with a crown or tomato shape design on top of
the rectangle.
Sunshine: Regular rectangle.
2. As to brand printed on label:
Del Monte: Tomato catsup mark.
Sunshine: Fruit catsup.
3. As to the words or lettering on label or mark:
Del Monte: Clearly indicated words packed by Sysu International, Inc., Q.C.,
Philippines.
Sunshine: Sunshine fruit catsup is clearly indicated "made in the Philippines
by Sunshine Sauce Manufacturing Industries" No. 1 Del Monte Avenue,
Malabon, Metro Manila.
4. As to color of logo:
Del Monte: Combination of yellow and dark red, with words "Del Monte
Quality" in white.
INTELLECTUAL PROPERTY LAWS – AMES 2014
Sunshine: White, light green and light red, with words "Sunshine Brand" in
yellow.
5. As to shape of logo:
Del Monte: In the shape of a tomato.
Sunshine: Entirely different in shape.
6. As to label below the cap:
Del Monte: Seal covering the cap down to the neck of the bottle, with picture
of tomatoes with words "made from real tomatoes."
Sunshine: There is a label below the cap which says "Sunshine Brand."
7. As to the color of the products:
Del Monte: Darker red.
Sunshine: Lighter than Del Monte.
While the Court does recognize these distinctions, it does not agree with the
conclusion that there was no infringement or unfair competition. It seems to
us that the lower courts have been so pre-occupied with the details that they
have not seen the total picture.
It has been correctly held that side-by-side comparison is not the final test of
similarity. 10 Such comparison requires a careful scrutiny to determine in
what points the labels of the products differ, as was done by the trial judge.
The ordinary buyer does not usually make such scrutiny nor does he usually
have the time to do so. The average shopper is usually in a hurry and does
not inspect every product on the shelf as if he were browsing in a library.
Where the housewife has to return home as soon as possible to her baby or
the working woman has to make quick purchases during her off hours, she is
apt to be confused by similar labels even if they do have minute differences.
The male shopper is worse as he usually does not bother about such
distinctions.
The question is not whether the two articles are distinguishable by their label
when set side by side but whether the general confusion made by the article
upon the eye of the casual purchaser who is unsuspicious and off his guard,
is such as to likely result in his confounding it with the original. 11 As
observed in several cases, the general impression of the ordinary purchaser,
buying under the normally prevalent conditions in trade and giving the
attention such purchasers usually give in buying that class of goods is the
touchstone. 12
It has been held that in making purchases, the consumer must depend upon
his recollection of the appearance of the product which he intends to
purchase. 13 The buyer having in mind the mark/label of the respondent must
rely upon his memory of the petitioner's mark. 14 Unlike the judge who has
ample time to minutely examine the labels in question in the comfort of his
sala, the ordinary shopper does not enjoy the same opportunity.
A number of courts have held that to determine whether a trademark has
been infringed, we must consider the mark as a whole and not as dissected.
If the buyer is deceived, it is attributable to the marks as a totality, not usually
to any part of it. 15 The court therefore should be guided by its first
impression, 16 for a buyer acts quickly and is governed by a casual glance,
the value of which may be dissipated as soon as the court assumes to
analyze carefully the respective features of the mark. 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
marks need not be identical. A confusing similarity will justify the intervention
of equity. 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 confuse the public with
enough points of difference to confuse the courts. 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,
whether the article is bought for immediate consumption and also the
conditions under which it is usually purchased . 21 Among these, what
essentially determines the attitude of the purchaser, specifically his
inclination to be cautious, is the cost of the goods. To be sure, a person who
buys a box of candies will not exercise as much care as one who buys an
expensive watch. As a general rule, an ordinary buyer does not exercise as
much prudence in buying an article for which he pays a few centavos as he
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TRADEMARKS
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 great care. 23 In this latter category is catsup.
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/letter is the same. Although the logo of Sunshine is
not a tomato, the figure nevertheless approximates that of a tomato.
As previously stated, the person who infringes a trade mark does not
normally copy out but only makes colorable changes, employing enough
points of similarity to confuse the public with enough points of differences to
confuse the courts. What is undeniable is the fact that when a manufacturer
prepares to package his product, he has before him a boundless choice of
words, phrases, colors and symbols sufficient to distinguish his product from
the others. When as in this case, Sunshine chose, without a reasonable
explanation, to use the same colors and letters as those used by Del Monte
though the field of its selection was so broad, the inevitable conclusion is that
it was done deliberately to deceive . 24
It has been aptly observed that the ultimate ratio in cases of grave doubt is
the rule that as between a newcomer 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 which he can select a desirable
trademark to indicate the origin of his product is obviously a large one. 25
Coming now to the second issue, we find that the private respondent is not
guilty of infringement for having used the Del Monte bottle. The reason is
that the configuration of the said bottle was merely registered in the
Supplemental Register. In the case of Lorenzana v. Macagba, 26 we declared
that:
(1) Registration in the Principal Register gives rise to a presumption of the
validity of the registration, the registrant's ownership of the mark and his right
to the exclusive use thereof. There is no such presumption in the registration
in the Supplemental Register.
(2) Registration in the Principal Register is limited to the actual owner of the
trademark and proceedings therein on the issue of ownership which may be
contested through opposition or interference proceedings or, after
registration, in a petition for cancellation.
Registration in the Principal Register is constructive notice of the registrant's
claim of ownership, while registration in the Supplemental Register is merely
proof of actual use 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 registration in the Supplemental Register
is not.
(3) In applications for registration in the Principal Register, publication of the
application is necessary. This is not so in applications for registrations in the
Supplemental Register.
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, we find that Sunshine, despite the many choices available to it and
notwithstanding that the caution "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 intention to capitalize on the latter's
reputation and goodwill and pass off its own product as that of Del Monte.
The Court observes that the reasons given by the respondent court in
resolving the case in favor of Sunshine are 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 Patent presumably considered other
trademarks before approving it. Third, it cited the case of Shell Co. v. Insular
Petroleum, 27 where this Court declared that selling oil in containers of
another with markings erased, without intent to deceive, was not unfair
INTELLECTUAL PROPERTY LAWS – AMES 2014
competition.
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's ownership of the mark and his right to its exclusive use are all
absent.
Anent the assumption that the Bureau of Patent had considered other
existing patents, it is reiterated that since registration was only in the
Supplemental Register, this did not vest the registrant with the exclusive right
to use the label nor did it give rise to the presumption of the validity of the
registration.
On the argument that no unfair competition was committed, the Shell Case is
not on all fours with the case at bar because:
(1) In Shell, the absence of intent to deceive was supported by the fact that
the respondent therein, 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 respondent
in the present case made no similar effort.
(2) In Shell, what was involved was a single isolated transaction. Of the
many drums used, there was only one container where the Shell label was
not erased, while in the case at hand, the respondent admitted that it made
use of several Del Monte bottles and without obliterating the embossed
warning.
(3) In Shell, the product of respondent was sold to dealers, not to ultimate
consumers. As a general rule, dealers are well acquainted with the
manufacturer from whom they make their purchases and 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 dealers are not regarded with the same
solicitude as are the interests of the ordinary consumer. For it is the form in
which the wares come to the final buyer that is of significance. 28
As Sunshine's label is an infringement of the Del Monte's trademark, law and
equity call for the cancellation of the private respondent's registration and
withdrawal of all its products bearing the questioned label from the market.
With regard to the use of Del Monte's bottle, the same constitutes unfair
competition; hence, the respondent should be permanently enjoined from the
use of such bottles.
The court must rule, however, that the damage prayed for cannot be granted
because the petitioner has not presented evidence to prove the amount
thereof. Section 23 of R.A. No. 166 provides:
Sec. 23. Actions and damages and injunction for infringement. — Any
person entitled to the exclusive use of a registered mark or trade name may
recover damages in a civil action from any person who infringes his rights,
and the measure of the damages suffered shall be either the reasonable
profit which the complaining party would have made, had the defendant not
infringed his said rights or the profit which the defendant actually made out of
the infringement, or in the event such measure of damages cannot be readily
ascertained with reasonable certainty the court may award as damages
reasonable percentage based upon the amount of gross sales of the
defendant or the value of the services in connection with which the mark or
trade name was used in the infringement of the rights of the complaining
party. In cases where actual intent to mislead the public or to defraud the
complaining party shall be shown, in the discretion of the court, the damages
may be doubled.
The complaining party, upon proper showing may also be granted injunction.
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 enumerated in Art. 1157, or in every case where any
property right has been invaded.
Accordingly, the Court can only award to the petitioners, as it hereby does
Page 34
TRADEMARKS
award, nominal damages in the amount of Pl,000.00.
WHEREFORE, the petition is GRANTED. The decision of the Court of
Appeals dated December 24, 1986 and the Resolution dated April 27,1987,
are REVERSED and SET ASIDE and a new judgment is hereby rendered:
(1) Canceling the private respondent's Certificate of Register No. SR-6310
and permanently enjoining the private respondent from using a label similar
to that of the petitioners.
(2) Prohibiting the private respondent from using the empty bottles of the
petitioners as containers for its own products.
(3) Ordering the private respondent to pay the petitioners nominal damages
in the amount of Pl,000.00, and the costs of the suit.
SO ORDERED.
American Wire and Cable Company vs. Dir. of Patents GR No. L-26557,
18 Feb. 1990
Appeal filed by the American Wire & Cable Company, owner of the
registered trademark DURAFLEX for electric wires, questioning the
correctness of the decision of the Director of Patents (in Inter Partes Case
No. 290) holding that the label DYNAFLEX and Device for electric wires,
sought to be registered by the Central Banahaw Industries, Inc., is not similar
to herein appellant's patented mark.
On 2 June 1962, Central Banahaw Industries, Inc., applied with the Director
of Patents for registration of the trademark DYNAFLEX and Device to be
used in connection with electric wires, class 20, which mark applicant
allegedly had been using since 29 March 1962. The American Wire and
Cable Co., Inc., another domestic corporation and authorized user since 10
April 1958 of the registered trade mark DURAFLEX and Globe
representation, for electric wires, apparatus, machines and supplies, class
20, opposed the application on the ground that applicant's use of the trade
mark DYNAFLEX would cause confusion or result in mistake to purchasers
intending to buy DURAFLEX electric wires and goods, the mark being
registered allegedly having practically the same spelling, pronunciation and
sound, and covering the same good, as that of the opposer. Besides,
opposer contended that there has been no continuous use in commerce of
the applicant's mark.
After due hearing, the Director of Patents rendered decision holding the
applicant's mark DYNAFLEX not to be similar to the previously registered
trademark DURAFLEX. Consequently, the application of Central Banahaw
Industries for registration of DYNAFLEX was given due course and the
opposition thereto by American Wire & Cable Company dismissed. The latter
interposed the present appeal.
The issue to be resolved in this proceeding is simple: whether or not the
mark DYNAFLEX and Device is registrable as label for electric wires, class
20, considering that the trademark DURAFLEX and Globe representation
also for electric wires, machines and supplies under class 20, has been
registered more than 4 years earlier.
In ruling in favor of the herein application, the Director of Patents said:
... The applicant's trademark is a composite mark consisting of the word
DYNAFLEX printed in small letters of the English alphabet except that letter
"D" is capitalized, within a fanciful device, on top of which is the encircled
initials, in downward sequence, of the Respondent's corporate name, and
jutting out on two sides of the circle are bolts of lightning, symbolic of
electricity.
On the other hand, Opposer's trademark is DURAFLEX in Capitalized print,
except that one cross piece of the letter X is in the form of a bolt of lightning.
The word slants slightly upward, traversing the center of a figure of the earth
or globe.
Resorting now to the semantics of the words, it is clear that both marks are
suffixed by the word FLEX. The word appears in any dictionary having as
common meaning "to bend." In Webster's International Dictionary, it is used
by the British on electric cord. However, one mark (Respondent's) is prefixed
with DYNA suggesting power. It is not in itself a rootword but it has been
INTELLECTUAL PROPERTY LAWS – AMES 2014
commonly associated with any source of power. At most, it could have been
derived from the Greek word "Dynamis" and, generally, the root words
commonly derived therefrom are ''dynam'' and "dynamo". The other
(Opposer's) is prefixed with DURA, suggesting durability, strength and
endurance.
Based on the foregoing comparisons, the trademarks of the parties are
different in appearance, meaning, sound and connotation and hence, are not
confusingly similar.
The pertinent law, Republic Act 166, as amended, on registrability of
trademarks, prescribes:
SEC. 4. — The owner of a trademark, trade name or service-mark used to
distinguish his goods, business or services from the goods, business or
services of others shall have the right to register the same, unless it:
xxx xxx xxx
(d) Consists of or comprises a mark or trade name which so resembles a
mark or trade-name registered in the Philippines by another and not
abandoned, as to be likely, when applied to or used in connection with the
goods, business or services of the applicant, to cause confusion or mistake
or to deceive purchasers. (Emphasis supplied)
It is clear from the above-quoted provision that the determinative factor in a
contest involving registration of trade mark is not whether the challenged
mark would actually cause confusion or deception of the purchasers but
whether the use of such mark would likely cause confusion or mistake on the
part of the buying public. In short, to constitute an infringement of an existing
trademark patent and warrant a denial of an application for registration, the
law does not require that the competing trademarks must be so identical as
to produce actual error or mistake; it would be sufficient, for purposes of the
law, that the similarity between the two labels is such that there is a
possibility or likelihood of the purchaser of the older brand mistaking the
newer brand for it.
The question is, when is a trademark likely to confuse or cause the public to
mistake one for another? Earlier rulings of the Court seem to indicate its
reliance on the dominancy test or the assessment of the essential
ordominant features in the competing labels to determine whether they are
confusingly similar.1 On this matter, the Court said:
It has been consistently held that the question of infringement of a trademark
is to be determined by the test of dominancy. Similarity in size, form, and
color, while relevant, is not conclusive. If the competing trademark contains
the main or essential or dominant features of another, and confusion and
deception is likely to result, infringement takes place. Duplication or imitation
is not necessary, nor is it necessary that the infringing label should suggest
an effort to imitate (C. Neilman Brewing Co. vs. Independent Brewing Co.,
191 F. 489, 495, citing Eagle White Lead Co. vs. Pflugh [CC] 180 Fed. 579).
The question at issue in cases of infringement of trademarks is whether the
use of the marks involved would be likely to cause confusion or mistakes in
the mind of the public or deceive purchasers." (Go Tiong vs. Director of
Patents, 95 Phil. 1, cited in Lim Hoa vs. Director of Patents, 100 Phil. 214). 2
In fact, even their similarity in sound is taken into consideration, where the
marks refer to merchandise of the same descriptive properties, for the
reason that trade idem sonans constitutes a violation of trade mark
patents.3Thus, in he case of Marvex Commercial Co. vs. Hawpia & Co.,4 the
registration of the trademark "Lionpas" for medicated plaster was denied for
being confusingly similar in sound with "Salonpas", a registered mark also for
medicated plaster, the Court saying:
Two letters of "SALONPAS" are missing in "LIONPAS" the first letter a and
the letter s. Be that as it may, when the two words are pronounced, the
sound effects are confusingly similar. And where goods are advertised over
the radio, similarity in sound is of especial significance (Co Tiong Sa vs.
Director of Patents, 95 Phil. 1, citing Nims, The Law of Unfair Competition
and Trademarks, 4th ed., vol. 2, pp. 678-679). "The importance of this rule is
emphasized by the increase of radio advertising in which we are deprived of
help of our eyes and must depend entirely on the ear (Operators, Inc. vs.
Director of Patents, supra.)
Along the same line are the rulings denying registration of a mark containing
the picture of a fish (Bañgus), as label for soy sauce, for being similar to
Page 35
TRADEMARKS
another registered brand of soy sauce that bears the picture of the fish
carp;5 or that of the mark bearing the picture of two roosters with the word
"Bantam", as label for food seasoning (vetsin), which would confuse the
purchasers of the same article bearing the registered mark "Hen Brand" that
features the picture of a hen.6
The present case is governed by the principles laid down in the preceding
cases. The similarity between the competing trademarks, DURAFLEX and
DYNAFLEX, is apparent. Not only are the initial letters and the last half of the
appellations identical, but the difference exists only in two out of the eight
literal elements of the designations. Coupled with the fact that both marks
cover insulated flexible wires under class 20; that both products are
contained in boxes of the same material, color, shape and size; that the
dominant elements of the front designs are a red circle and a diagonal
zigzag commonly related to a spark or flash of electricity; that the back of
both boxes show similar circles of broken lines with arrows at the center
pointing outward, with the identical legend "Cut Out Ring" "Draw From Inside
Circle", no difficulty is experienced in reaching the conclusion that there is a
deceptive similarity that would lead the purchaser to confuse one product
with the other.
The Director of Patents has predicated his decision mostly on the semantic
difference and connotation of the prefixes "Dura" and "Dyna" of the
competing trademarks, unfortunately forgetting that the buyers are less
concerned with the etymology of the words as with their sound and the
dominant features of the design.
Of course, as pointed out in the decision now on appeal there are some
differences in the mark on the front portion of the box. But they pale into
insignificance in view of the close resemblance in the general appearance of
the box and the tradenames of the articles. Indeed, measured against the
dominant-feature standard, applicant's mark must be disallowed. For,
undeniably, the dominant and essential feature of the article is the trademark
itself. Unlike in the case of commodities that are ordinarily picked up by the
purchaser himself from the grocery or market counters, electric wires are
purchased not by their appearance but by the size (voltage) and length and,
most importantly, by brand. It is even within layman's knowledge that
different brands of wire have different characteristics and properties; and for
an essential building item as electric wires and supplies, the owner of the
building would not dare risk his property, perhaps his life, on an unknown or
untested brand. He would only demand for what is recognized to be the best.
Relying on the doctrine enunciated in the Etepha case7 and the earlier ruling
in Lim Hoa vs. Director of Patents,8applicant-appellee contends that the
DYNAFLEX mark would not confuse or deceive the buyers and subscribers
of the DURAFLEX brand, because electrical wires are of great value and the
purchasers thereof are generally intelligent — the architects, engineers and
building contractors. It must be realized, however, that except perhaps in big
constructions, the designing architect or engineer, or the contractor who will
undertake the work of building, does not himself purchase or place the order
for the purchase of the materials to be used therein. The task is oftentimes
delegated to another. Nor are said technical men the ones personally laying
down the wiring system in the building that they could possibly check on
whether or not the correct wires are being used. So that even if the engineer
or contractor will specify in the bill of materials the particular brand of wires
needed, there is no certainty that the desired product will be acquired. For,
unlike the pharmacists or druggists, the dispensers of hardware or electrical
supplies are not generally known to pay as much concern to the brand of
articles asked for by the customer and of a person who knows the name of
the brand but is not acquainted with it is appearance, the likelihood of the
DYNAFLEX product being mistaken for DURAFLEX is not remote.
Of course, as in all other cases of colorable imitations, the unanswered riddle
is why, of the millions of terms and combinations of letters and designs
available, the appellee had to choose those so closely similar to another's
trademark if there was no intent to take advantage of the goodwill generated
by the other mark.
FOR THE FOREGOING CONSIDERATIONS, the decision appealed from is
hereby set aside, and the application for registration of the trademark
DYNAFLEX for electric wires, class 20, is ordered denied. No costs.
INTELLECTUAL PROPERTY LAWS – AMES 2014
Converse Rubber Corp vs Universal Rubber Products, Inc. GR No. L-
27906, 8 Jan. 1987
The undisputed facts of the case are as follows:
Respondent Universal Rubber Products, Inc. filed an application with the
Philippine Patent office for registration of the trademark "UNIVERSAL
CONVERSE AND DEVICE" used on rubber shoes and rubber slippers.
Petitioner Converse Rubber Corporation filed its opposition to the application
for registration on grounds that:
a] The trademark sought to be registered is confusingly similar to the word
"CONVERSE" which is part of petitioner's corporate name "CONVERSE
RUBBER CORPORATION" as to likely deceive purchasers of products on
which it is to be used to an extent that said products may be mistaken by the
unwary public to be manufactured by the petitioner; and,
b] The registration of respondent's trademark will cause great and
irreparable injury to the business reputation and goodwill of petitioner in the
Philippines and would cause damage to said petitioner within the, meaning
of Section 8, R.A. No. 166, as amended.
Thereafter, respondent filed its answer and at the pre-trial, the parties
submitted the following partial stipulation of facts:
1] The petitioner's corporate name is "CONVERSE RUBBER
CORPORATION" and has been in existence since July 31, 1946; it is duly
organized under the laws of Massachusetts, USA and doing business at 392
Pearl St., Malden, County of Middle sex, Massachusetts;
2] Petitioner is not licensed to do business in the Philippines and it is not
doing business on its own in the Philippines; and,
3] Petitioner manufacturers rubber shoes and uses thereon the trademarks
"CHUCK TAYLOR "and "ALL STAR AND DEVICE". 1
At the trial, petitioner's lone witness, Mrs. Carmen B. Pacquing, a duly
licensed private merchant with stores at the Sta. Mesa Market and in Davao
City, testified that she had been selling CONVERSE rubber shoes in the
local market since 1956 and that sales of petitioner's rubber shoes in her
stores averaged twelve to twenty pairs a month purchased mostly by
basketball players of local private educational institutions like Ateneo, La
Salle and San Beda.
Mrs. Pacquing, further stated that she knew petitioner's rubber shoes came
from the United States "because it says there in the trademark Converse
Chuck Taylor with star red or blue and is a round figure and made in U.S.A.
" 2 In the invoices issued by her store, the rubber shoes were described as
"Converse Chuck Taylor", 3 "Converse All Star,"4 "All Star Converse Chuck
Taylor," 5 or "Converse Shoes Chuck Taylor." 6 She also affirmed that she
had no business connection with the petitioner.
Respondent, on the other hand, presented as its lone witness the secretary
of said corporation who testified that respondent has been selling on
wholesale basis "Universal Converse" sandals since 1962 and "Universal
Converse" rubber shoes since 1963. Invoices were submitted as evidence of
such sales. The witness also testified that she had no Idea why respondent
chose "Universal Converse" as a trademark and that she was unaware of the
name "Converse" prior to her corporation's sale of "Universal Converse"
rubber shoes and rubber sandals.
Eventually, the Director of Patents dismissed the opposition of the petitioner
and gave due course to respondent's application. His decision reads in part:
... the only question for determination is whether or not the applicant's partial
appropriation of the Opposer's [petitioner'] corporate name is of such
character that in this particular case, it is calculated to deceive or confuse the
public to the injury of the corporation to which the name belongs ...
I cannot find anything that will prevent registration of the word 'UNIVERSAL
CONVERSE' in favor of the respondent. In arriving at this conclusion, I am
guided by the fact that the opposer failed to present proof that the single
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TRADEMARKS
word "CONVERSE' in its corporate name has become so Identified with the
corporation that whenever used, it designates to the mind of the public that
particular corporation.
The proofs herein are sales made by a single witness who had never dealt
with the petitioner . . . the entry of Opposer's [petitioner's] goods in the
Philippines were not only effected in a very insignificant quantity but without
the opposer [petitioner] having a direct or indirect hand in the transaction so
as to be made the basis for trademark pre- exemption.
Opposer's proof of its corporate personality cannot establish the use of the
word "CONVERSE" in any sense, as it is already stipulated that it is not
licensed to do business in the Philippines, and is not doing business of its
own in the Philippines. If so, it will be futile for it to establish that
"CONVERSE" as part of its corporate name Identifies its rubber shoes.
Besides, it was also stipulated that opposer [petitioner], in manufacturing
rubber shoes uses thereon the trademark "CHUCK TAYLOR" and "ALL
STAR and DEVICE" and none other.
Furthermore, inasmuch as the Opposer never presented any label herein, or
specimen of its shoes, whereon the label may be seen, notwithstanding its
witness' testimony touching upon her Identification of the rubber shoes sold
in her stores, no determination can be made as to whether the word
'CONVERSE' appears thereon.
. . .the record is wanting in proof to establish likelihood of confusion so as to
cause probable damage to the Opposer. 7
Its motion for reconsideration having been denied by the respondent Director
of Patents, petitioner instituted the instant petition for review.
As correctly phrased by public respondent Director of Patents, the basic
issue presented for our consideration is whether or not the respondent's
partial appropriation of petitioner's corporate name is of such character that it
is calculated to deceive or confuse the public to the injury of the petitioner to
which the name belongs.
A trade name is any individual name or surname, firm name, device or word
used by manufacturers, industrialists, merchants and others to Identify their
businesses, vocations or occupations. 8 As the trade name refers to the
business and its goodwill ... the trademark refers to the goods." 9 The
ownership of a trademark or tradename is a property right which the owner is
entitled to protect "since there is damage to him from confusion or reputation
or goodwill in the mind of the public as well as from confusion of goods. The
modern trend is to give emphasis to the unfairness of the acts and to classify
and treat the issue as fraud. 10
From a cursory appreciation of the petitioner's corporate name "CONVERSE
RUBBER CORPORATION,' it is evident that the word "CONVERSE" is the
dominant word which Identifies petitioner from other corporations engaged in
similar business. Respondent, in the stipulation of facts, admitted petitioner's
existence since 1946 as a duly organized foreign corporation engaged in the
manufacture of rubber shoes. This admission necessarily betrays its
knowledge of the reputation and business of petitioner even before it applied
for registration of the trademark in question. Knowing, therefore, that the
word "CONVERSE" belongs to and is being used by petitioner, and is in fact
the dominant word in petitioner's corporate name, respondent has no right to
appropriate the same for use on its products which are similar to those being
produced by petitioner.
A corporation is entitled to the cancellation of a mark that is confusingly
similar to its corporate name."11 "Appropriation by another of the dominant
part of a corporate name is an infringement."12
Respondent's witness had no Idea why respondent chose "UNIVERSAL
CONVERSE" as trademark and the record discloses no reasonable
explanation for respondent's use of the word "CONVERSE" in its trademark.
Such unexplained use by respondent of the dominant word of petitioner's
corporate name lends itself open to the suspicion of fraudulent motive to
trade upon petitioner's reputation, thus:
A boundless choice of words, phrases and symbols is available to one who
wishes a trademark sufficient unto itself to distinguish his product from those
of others. When, however, there is no reasonable explanation for the
defendant's choice of such a mark though the field for his selection was so
broad, the inference is inevitable that it was chosen deliberately to
deceive. 13
INTELLECTUAL PROPERTY LAWS – AMES 2014
The testimony of petitioner's witness, who is a legitimate trader as well as
the invoices evidencing sales of petitioner's products in the Philippines, give
credence to petitioner's claim that it has earned a business reputation and
goodwill in this country. The sales invoices submitted by petitioner's lone
witness show that it is the word "CONVERSE" that mainly Identifies
petitioner's products, i.e. "CONVERSE CHUCK TAYLOR, 14 "CONVERSE
ALL STAR," 15 ALL STAR CONVERSE CHUCK TAYLOR," 16 or
"CONVERSE SHOES CHUCK and TAYLOR." 17 Thus, contrary to the
determination of the respondent Director of Patents, the word "CONVERSE"
has grown to be Identified with petitioner's products, and in this sense, has
acquired a second meaning within the context of trademark and tradename
laws.
Furthermore, said sales invoices provide the best proof that there were
actual sales of petitioner's products in the country and that there was actual
use for a protracted period of petitioner's trademark or part thereof through
these sales. "The most convincing proof of use of a mark in commerce is
testimony of such witnesses as customers, or the orders of buyers during a
certain period. 18 Petitioner's witness, having affirmed her lack of business
connections with petitioner, has testified as such customer, supporting
strongly petitioner's move for trademark pre-emption.
The sales of 12 to 20 pairs a month of petitioner's rubber shoes cannot be
considered insignificant, considering that they appear to be of high
expensive quality, which not too many basketball players can afford to buy.
Any sale made by a legitimate trader from his store is a commercial act
establishing trademark rights since such sales are made in due course of
business to the general public, not only to limited individuals. It is a matter of
public knowledge that all brands of goods filter into the market,
indiscriminately sold by jobbers dealers and merchants not necessarily with
the knowledge or consent of the manufacturer. Such actual sale of goods in
the local market establishes trademark use which serves as the basis for any
action aimed at trademark pre- exemption. It is a corollary logical deduction
that while Converse Rubber Corporation is not licensed to do business in the
country and is not actually doing business here, it does not mean that its
goods are not being sold here or that it has not earned a reputation or
goodwill as regards its products. The Director of Patents was, therefore,
remiss in ruling that the proofs of sales presented "was made by a single
witness who had never dealt with nor had never known opposer [petitioner] x
x x without Opposer having a direct or indirect hand in the transaction to be
the basis of trademark pre- exemption."
Another factor why respondent's applications should be denied is the
confusing similarity between its trademark "UNIVERSAL CONVERSE AND
DEVICE" and petitioner's corporate name and/or its trademarks "CHUCK
TAYLOR" and "ALL STAR DEVICE" which could confuse the purchasing
public to the prejudice of petitioner,
The trademark of respondent "UNIVERSAL CONVERSE and DEVICE" is
imprinted in a circular manner on the side of its rubber shoes. In the same
manner, the trademark of petitioner which reads "CONVERSE CHUCK
TAYLOR" is imprinted on a circular base attached to the side of its rubber
shoes. The deteminative factor in ascertaining whether or not marks are
confusingly similar to each other "is not whether the challenged mark would
actually cause confusion or deception of the purchasers but whether the use
of such mark would likely cause confusion or mistake on the part of the
buying public. It would be sufficient, for purposes of the law, that the
similarity between the two labels is such that there is a possibility or
likelihood of the purchaser of the older brand mistaking the new brand for
it." 19 Even if not an the details just mentioned were identical, with the
general appearance alone of the two products, any ordinary, or even
perhaps even [sic] a not too perceptive and discriminating customer could be
deceived ... " 20
When the law speaks co-purchaser," the reference is to ordinary average
purchaser. 21 It is not necessary in either case that the resemblance be
sufficient to deceive experts, dealers, or other persons specially familiar with
the trademark or goods involve." 22
The similarity y in the general appearance of respondent's trademark and
that of petitioner would evidently create a likelihood of confusion among the
purchasing public. But even assuming, arguendo, that the trademark sought
to be registered by respondent is distinctively dissimilar from those of the
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TRADEMARKS
petitioner, the likelihood of confusion would still subsists, not on the
purchaser's perception of the goods but on the origins thereof. By
appropriating the word "CONVERSE," respondent's products are likely to be
mistaken as having been produced by petitioner. "The risk of damage is not
limited to a possible confusion of goods but also includes confusion of
reputation if the public could reasonably assume that the goods of the parties
originated from the same source. 23
It is unfortunate that respondent Director of Patents has concluded that since
the petitioner is not licensed to do business in the country and is actually not
doing business on its own in the Philippines, it has no name to protect iN the
forum and thus, it is futile for it to establish that "CONVERSE" as part of its
corporate name identifies its rubber shoes. That a foreign corporation has a
right to maintain an action in the forum even if it is not licensed to do
business and is not actually doing business on its own therein has been
enunciated many times by this Court. In La Chemise Lacoste, S.A. vs.
Fernandez, 129 SCRA 373, this Court, reiterating Western Equipment and
Supply Co. vs. Reyes, 51 Phil. 115, stated that:
... a foreign corporation which has never done any business in the
Philippines and which is unlicensed and unregistered to do business here,
but is widely and favorably known in the Philippines through the use therein
of its products bearing its corporate and tradename, has a legal right to
maintain an action in the Philippines to restrain the residents and inhabitants
thereof from organizing a corporation therein bearing the same name as the
foreign corporation, when it appears that they have personal knowledge of
the existence of such a foreign corporation, and it is apparent that the
purpose of the proposed domestic corporation is to deal and trade in the
same goods as those of the foreign corporation.
We further held:
xxx xxx xxx
That company is not here seeking to enforce any legal or control rights
arising from or growing out of, any business which it has transacted in the
Philippine Islands. The sole purpose of the action:
Is to protect its reputation, its corporate name, its goodwill whenever that
reputation, corporate name or goodwill have, through the natural
development of its trade, established themselves.' And it contends that its
rights to the use of its corporate and trade name:
Is a property right, a right in recess which it may assert and protect against
all the world, in any of the courts of the world even in jurisdictions where it
does not transact business-just the same as it may protect its tangible
property, real or personal against trespass, or conversion. Citing sec. 10,
Nims on Unfair Competition and Trademarks and cases cited; secs. 21-22,
Hopkins on Trademarks, Trade Names and Unfair Competition and cases
cited That point is sustained by the authorities, and is well stated in Hanover
Star Milling Co. vs. Allen and Wheeler Co. [208 Fed., 5131, in which the
syllabus says:
Since it is the trade and not the mark that is to be protected, a trademark
acknowledges no territorial boundaries of municipalities or states or nations,
but extends to every market where the trader's goods have become known
and Identified by the use of the mark.
The ruling in the aforecited case is in consonance with the Convention of the
Union of Paris for the Protection of Industrial Property to which the
Philippines became a party on September 27, 1965. Article 8 thereof
provides that "a trade name [corporate name] shall be protected in all the
countries of the Union without the obligation of filing or registration, whether
or not it forms part of the trademark. " [emphasis supplied]
The object of the Convention is to accord a national of a member nation
extensive protection "against infringement and other types of unfair
competition" [Vanitary Fair Mills, Inc. vs. T. Eaton Co., 234 F. 2d 6331.
The mandate of the aforementioned Convention finds implementation in Sec.
37 of RA No. 166, otherwise known as the Trademark Law:
Sec. 37. Rights of Foreign Registrants-Persons who are nationals of,
domiciled or have a bona fide or effective business or commercial
establishment in any foreign country, which is a party to an international
convention or treaty relating to marks or tradenames on the repression of
unfair competition to which the Philippines may be a party, shall be entitled
to the benefits and subject to the provisions of this Act . . . ...
INTELLECTUAL PROPERTY LAWS – AMES 2014
Tradenames of persons described in the first paragraph of this section shall
be protected without the obligation of filing or registration whether or not they
form parts of marks. [emphasis supplied]
WHEREFORE, the decision of the Director of Patents is hereby set aside
and a new one entered denying Respondent Universal Rubber Products,
Inc.'s application for registration of the trademark "UNIVERSAL CONVERSE
AND DEVICE" on its rubber shoes and slippers.
SO ORDERED.
Cluster 4
Confusingly Similar with Well-known Marks, Sec. 123.1 (e, f), Article 6bis,
Paris Convention for the Protection of Intellectual Property Rights, Art
16(2-3) Agreement on Trade Related Aspects of Intellectual Property
Rights
(e) Is identical with, or confusingly similar to, or constitutes a translation of a
mark which is considered by the competent authority of the Philippines to be
well-known internationally and in the Philippines, whether or not it is registered
here, as being already the mark of a person other than the applicant for
registration, and used for identical or similar goods or services: Provided, That
in determining whether a mark is well-known, account shall be taken of the
knowledge of the relevant sector of the public, rather than of the public at
large, including knowledge in the Philippines which has been obtained as a
result of the promotion of the mark;
(f) Is identical with, or confusingly similar to, or constitutes a translation of a
mark considered well-known in accordance with the preceding paragraph,
which is registered in the Philippines with respect to goods or services which
are not similar to those with respect to which registration is applied for:
Provided, That use of the mark in relation to those goods or services would
indicate a connection between those goods or services, and the owner of the
registered mark: Provided further, That the interests of the owner of the
registered mark are likely to be damaged by such use;
Article 6bis of the Paris Convention, the provision referring to the
protection of trademarks:
"a) the mark must be internationally known;
b) the subject of the right must be a trademark, not a patent or copyright or
anything else;
c) the mark must be for use in the same or similar class of goods;
d) the person claiming must be the owner of the mark."
CONVENTION OF PARIS FOR THE PROTECTION OF INDUSTRIAL
PROPERTY of 20th March, 1883 revised at Brussels on 14th December,
1900, at Washington on 2nd June, 1911, at the Hague on 6th November,
1925, at London on 2nd June, 1934, and at Lisbon on 31st October, 1958
xxxxxxxxx
Article 6bis
(1) The countries of the Union undertake, either administratively if their
legislation so permits, or at the request of an interested party, to refuse or to
cancel the registration and to prohibit the use of a trademark which constitutes
a reproduction, imitation or translation, liable to create confusion, of a mark
considered by the competent authority of the country of registration or use to
be well-known in that country as being already the mark of a person entitled to
the benefits of the present Convention and used for identical or similar goods.
These provisions shall also apply when the essential part of the mark
constitutes a reproduction of any such well-known mark or an imitation liable to
create confusion therewith.
(2) A period of at least five years from the date of registration shall be allowed
for seeking the cancellation of such a mark. The countries of the Union may
provide for a period within which the prohibition of use must be sought.
(3) No time limit shall be fixed for seeking the cancellation or the prohibition of
the use of marks registered or used in bad faith.
Art 16(2-3) Agreement on Trade Related Aspects of Intellectual Property
Rights
Article 16
Rights Conferred
Page 38
TRADEMARKS
1. The owner of a registered trademark shall have the exclusive right to
prevent all third parties not having the owner's consent from using in the
course of trade identical or similar signs for goods or services which are
identical or similar to those in respect of which the trademark is registered
where such use would result in a likelihood of confusion. In case of the use of
an identical sign for identical goods or services, a likelihood of confusion shall
be presumed. The rights described above shall not prejudice any existing prior
rights, nor shall they affect the possibility of Members making rights available
on the basis of use.
2. Article 6bis of the Paris Convention (1967) shall apply, mutatis mutandis, to
services. In determining whether a trademark is well-known, Members shall
take account of the knowledge of the trademark in the relevant sector of the
public, including knowledge in the Member concerned which has been
obtained as a result of the promotion of the trademark.
3. Article 6bis of the Paris Convention (1967) shall apply, mutatis mutandis, to
goods or services which are not similar to those in respect of which a
trademark is registered, provided that use of that trademark in relation to those
goods or services would indicate a connection between those goods or
services and the owner of the registered trademark and provided that the
interests of the owner of the registered trademark are likely to be damaged by
such use.
Mirpuri vs. CA (Supra)
246 Corporation vs. Daway, GR. No. 114508, 19 Nov. 1999
This is a petition for review on certiorari under Rule 45 of the 1997 Rules of
Civil Procedure assailing the November 28, 2002 Decision1 of the Court of
Appeals in CA-G.R. SP No. 64660 which dismissed the petition for certiorari
filed by petitioner, as well as the Resolution2 dated February 13, 2003
denying its motion for reconsideration.
The undisputed facts show that on November 26, 1998, respondents
Montres Rolex S.A. and Rolex Centre Phil., Limited, owners/proprietors of
Rolex and Crown Device, filed against petitioner 246 Corporation the instant
suit for trademark infringement and damages with prayer for the issuance of
a restraining order or writ of preliminary injunction3 before the Regional Trial
Court of Quezon City, Branch 90. Respondents alleged that sometime in July
1996, petitioner adopted and, since then, has been using without authority
the mark "Rolex" in its business name "Rolex Music Lounge" as well as in its
newspaper advertisements as – "Rolex Music Lounge, KTV, Disco & Party
Club."
In its answer raising special affirmative defenses, petitioner argued that
respondents have no cause of action because no trademark infringement
exist; that no confusion would arise from the use by petitioner of the mark
"Rolex" considering that its entertainment business is totally unrelated to the
items catered by respondents such as watches, clocks, bracelets and parts
thereof. It also contended that the complaint was not properly verified and
certified against forum shopping considering that Atty. Alonzo Ancheta, the
counsel of record of respondents who signed the verification and
certification, was not authorized to represent respondents. 4
On July 21, 2000, petitioner filed a motion for preliminary hearing on its
affirmative defenses.5 Subsequently, on motion of petitioner, the trial court
issued a subpoena ad testificandum requiring Atty. Alonzo Ancheta to
appear at the preliminary hearing.6 Respondents, in the meantime, filed a
Comment and Opposition7 to the motion for preliminary hearing and a motion
to quash the subpoena ad testificandum.
In an Order dated October 27, 2000, the trial court quashed the subpoena
ad testificandum and denied petitioner’s motion for preliminary hearing on
affirmative defenses with motion to dismiss.8
With the denial of the motion for reconsideration on March 16, 2001,
petitioner filed a petition for certiorari with the Court of Appeals contending
INTELLECTUAL PROPERTY LAWS – AMES 2014
that the trial court gravely abused its discretion in issuing the October 27,
2000 and March 16, 2001 orders.
On November 28, 2002, the Court of Appeals dismissed the petition. The
motion for reconsideration filed by petitioner was denied. Hence, the instant
petition anchored on the following grounds:
I - IN ISSUING THE ASSAILED DECISIONS, THE HONORABLE COURT
OF APPEALS PERFUNCTORILY BRUSHED ASIDE THE CONTROLLING
PRECEDENTS LAID DOWN BY THIS HONORABLE COURT IN ESSO
STANDARD EASTERN, INC. VS. COURT OF APPEALS AND UNITED
CIGARETTE CORPORATION AND OTHER COMPANION CASES
HOLDING THAT NO TRADEMARK INFRINGEMENT CAN POSSIBLY
OCCUR WHERE THE CONTENDING PARTIES DEAL WITH GOODS AND
SERVICES THAT ARE TOTALLY UNRELATED AND NON-COMPETING
WITH EACH OTHER.
II - IN ARBITRARILY AND CAPRICIOUSLY RULING THAT THE ISSUES
RAISED IN PETITIONER’S CERTIORARI PETITION ARE QUESTIONS OF
FACT, THE HONORABLE COURT OF APPEALS VIOLATED NOT ONLY
PETITIONERS SUBSTANTIVE DUE PROCESS RIGHTS BUT ALSO THE
WELL-SETTLED RULE THAT THE ALLEGATIONS OF THE COMPLAINT
IS HYPOTHETICALLY ADMITTED WHEN THE MOTION TO DISMISS IS
GROUNDED UPON LACK OF CAUSE OF ACTION. MOREOVER,
INDEPENDENT OF THE HYPOTHETICALLY ADMITTED FACTS
EMBODIED IN THE COMPLAINT A QUO, THERE ARE SELF-EVIDENT
FACTS AND IMPLIEDLY ADMITTED FACTS CONTAINED IN PRIVATE
RESPONDENTS’ PLEADINGS THAT WOULD CLEARLY AND
UNMISTAKABLY SHOW PRIVATE RESPONDENTS’ LACK OF CAUSE OF
ACTION AGAINST HEREIN PETITIONER.
III - THE HONORABLE COURT OF APPEALS VIOLATED PETITIONER’S
RIGHT TO SUBSTANTIVE DUE PROCESS WHEN IT ARBITRARILY AND
CAPRICIOUSLY RULED THAT WHAT WAS SPECIFICALLY DENIED IN
THE ASSAILED OCTOBER 20, 2000 ORDER IS PETITIONER’S MOTION
FOR PRELIMINARY HEARING ON DEFENDANT’S AFFIRMATIVE
DEFENSES AND NOT PETITIONER’S MOTION TO DISMISS PER SE
CONSIDERING THAT:
A. THERE IS ABSOLUTELY NOTHING IN THE ORDER DATED OCTOBER
20, 2000 OF RESPONDENT JUDGE WHICH SUGGESTS THAT THE
RESOLUTION OF PETITIONER’S MOTION TO DISMISS PER SE WAS
HELD IN ABEYANCE BY THE RESPONDENT JUDGE. HENCE THE SAID
ORDER DATED OCTOBER 20, 2000 ALSO CONSTITUTES A DENIAL ON
THE MERITS OF PETITIONER’S MOTION TO DISMISS PER SE AND NOT
MERELY OF PETITIONER’S MOTION FOR PRELIMINARY HEARING
THEREON.
B. PRIVATE RESPONDENTS’ COMMENT AND OPPOSITION DATED 11
AUGUST 2000, WHICH WAS CITED AND SUSTAINED BY RESPONDENT
JUDGE, CLEARLY TRAVERSED THE MERITS OF THE GROUNDS FOR
PETITIONER’S MOTION TO DISMISS PER SE. HENCE, THE SAID 20
OCTOBER 2000 ORDER’S DENIAL OF PETITIONER’S MOTION IS NOT
LIMITED TO THE MOTION FOR PRELIMINARY HEARING BUT ALSO
CONSTITUTES A DENIAL OF PETITIONER’S MOTION TO DISMISS PER
SE.
IV - IN ARBITRARILY AND CAPRICIOUSLY RULING THAT ATTY.
ALONZO ANCHETA PROPERLY VERIFIED AND CERTIFIED PRIVATE
RESPONDENTS’ COMPLAINT A QUO, THE HONORABLE COURT OF
APPEALS VIOLATED NOT ONLY PETITIONER’S SUBSTANTIVE DUE
PROCESS RIGHTS, BUT ALSO THE DOCTRINE OF SEPARATE
CORPORATE PERSONALITY; CONSIDERING THAT THE RECORDS OF
THIS CASE IS (sic) COMPLETELY BEREFT AND DEVOID OF ANY DULY
EXECUTED SPECIAL POWER OF ATTORNEY, EMANATING FROM
PRIVATE RESPONDENTS, WHICH EXPLICITLY AND SPECIFICALLY
AUTHORIZES ATTY. ALONZO ANCHETA TO REPRESENT PRIVATE
RESPONDENTS MONTRES ROLEX S.A. IN THE FILING OF THE
COMPLAINT A QUO. BY REASON THEREOF, PRIVATE RESPONDENTS
COULD NOT BE DEEMED TO HAVE VOLUNTARILY APPEARED BEFORE
THE RESPONDENT JUDGE; CONSEQUENTLY, THE TRIAL COURT
COULD NOT HAVE VALIDLY ACQUIRED JURISDICTION OVER THE
PERSON OF PRIVATE RESPONDENTS.
V - IN ARBITRARILY AND CAPRICIOUSLY AFFIRMING RESPONDENT
JUDGE’S QUASHAL OF THE SUBPOENA DATED 14 AUGUST 2000
DIRECTED AGAINST ATTY. ALONZO ANCHETA, THE HONORABLE
Page 39
TRADEMARKS
COURT OF APPEALS VIOLATED NOT ONLY PETITIONER’S
SUBSTANTIVE DUE PROCESS RIGHTS, BUT ALSO SECTION 9, RULE
132 AND SECTION 7 RULE 133 OF THE 1989 REVISED RULES ON
EVIDENCE, AND THE RULING OF THIS HONORABLE COURT IN THE
CASE OF PEOPLE VS. RIVERA.9
Simply put, the issues are as follows – (1) whether the trial court denied not
only petitioner’s motion for preliminary hearing on its affirmative defenses but
its motion to dismiss as well; (2) if the answer is in the affirmative, whether or
not the trial court gravely abused its discretion in denying said motions; and
(3) whether the trial court gravely abused its discretion in quashing the
subpoena ad testificandum issued against Atty. Ancheta.
Anent the first issue, we find that what was denied in the order dated
October 27, 2000 was not only the motion for preliminary hearing but the
motion to dismiss as well. A reading of the dispositive portion of said order
shows that the trial court neither qualified its denial nor held in abeyance the
ruling on petitioner’s motion to dismiss thus –
IN VIEW OF THE FOREGOING, the aforecited Motion To Quash Subpoena
Ad Testificandum is granted; and the aforecited Motion For Preliminary
Hearing On Defendant’s Affirmative Defenses With Motion To dismiss The
Instant Complaint Based On Said Affirmative Defenses is
denied.10 (Emphasis supplied)
In issuing the assailed order, the trial court ruled on the merits of petitioner’s
Motion to Dismiss vis-à-visrespondents’ Comment and Opposition which
clearly traversed the affirmative defenses raised by petitioner, to wit:
After carefully going over the pleadings, this Court finds, on the
first motion that the arguments raised in the said motion and the
reply filed in connection thereto appear to be meritorious; and on
the second motion, that the arguments raised in the comments
and opposition and the rejoinder filed by the plaintiffs likewise
appear to be meritorious.11
Moreover, it is presumed that all matters within an issue raised in a case
were passed upon by the court. In the absence of evidence to the contrary,
the presumption is that the court a quo discharged its task properly.12
In Municipality of Biñan Laguna v. Court of Appeals,13 decided under the old
Rules of Civil Procedure, it was held that a preliminary hearing permitted
under Rule 16, Section 5, is not mandatory even when the same is prayed
for. It rests largely on the sound discretion of the trial court, thus –
SEC. 5. Pleading grounds as affirmative defenses. — Any of the
grounds for dismissal provided for in this Rule, except improper
venue, may be pleaded as an affirmative defense, and a
preliminary hearing may be had thereon as if a motion to dismiss
had been filed. (Emphasis supplied)
The use of the word "may" in the aforequoted provision shows that such a
hearing is not a matter of right demandable from the trial court; it is not
mandatory but discretionary. "May" is an auxiliary verb indicating liberty,
opportunity, permission and possibility.14 Such interpretation is specifically
stated under the 1997 Rules of Civil Procedure. Rule 16, Section 6, now
provides that a grant of a preliminary hearing rests on the sound discretion of
the court, to wit –
SEC. 6. Pleading grounds as affirmative defenses.— If no
motion to dismiss has been filed, any of the grounds for dismissal
provided for in this Rule may be pleaded as an affirmative defense
in the answer and,in the discretion of the court, a preliminary
hearing may be had thereon as if a motion to dismiss had
been filed. (Emphasis supplied)
In the case at bar, the Court of Appeals did not err in finding that no abuse of
discretion could be ascribed to the trial court’s denial of petitioner’s motion
for preliminary hearing on its affirmative defenses with motion to dismiss.
The issue of whether or not a trademark infringement exists, is a question of
INTELLECTUAL PROPERTY LAWS – AMES 2014
fact that could best be determined by the trial court.
Under the old Trademark Law15 where the goods for which the identical
marks are used are unrelated, there can be no likelihood of confusion and
there is therefore no infringement in the use by the junior user of the
registered mark on the entirely different goods.16 This ruling, however, has
been to some extent, modified by Section 123.1(f) of the Intellectual Property
Code (Republic Act No. 8293), which took effect on January 1, 1998. The
said section reads:
Sec. 123. Registrability. – 123.1. A mark cannot be registered if it:
xxx xxx xxx
(f) Is identical with, or confusingly similar to, or constitutes a translation of a
mark considered well-known in accordance with the preceding paragraph,
which is registered in the Philippines with respect to goods or services which
are not similar to those with respect to which registration is applied
for: Provided, That use of the mark in relation to those goods or services
would indicate a connection between those goods or services, and the owner
of the registered mark: Provided, further, That the interest of the owner of the
registered mark are likely to be damaged by such use; (Emphasis supplied)
A junior user of a well-known mark on goods or services which are not
similar to the goods or services, and are therefore unrelated, to those
specified in the certificate of registration of the well-known mark is precluded
from using the same on the entirely unrelated goods or services, subject to
the following requisites, to wit:
1. The mark is well-known internationally and in the Philippines. Under Rule
102 of the Rules and Regulations on Trademarks, Service Marks, Trade
Names and Marked or Stamped Containers,17 in determining whether a mark
is well known, the following criteria or any combination thereof may be taken
into account:
(a) the duration, extent and geographical area of any use of the mark, in
particular, the duration, extent and geographical area of any promotion of the
mark, including advertising or publicity and presentation, at fairs or
exhibitions, of the goods and/or services to which the mark applies;
(b) the market share in the Philippines and in other countries, of the goods
and/or services to which the mark applies;
(c) the degree of the inherent or acquired distinction of the mark;
(d) the quality-image or reputation acquired by the mark;
(e) the extent to which the mark has been registered in the world;
(f) the exclusivity of the registration attained by the mark in the world;
(g) the extent to which the mark has been used in the world;
(h) the exclusivity of use attained by the mark in the world;
(i) the commercial value attributed to the mark in the world;
(j) the record of successful protection of the rights in the mark;
(k) the outcome of litigations dealing with the issue of whether the mark is a
well-known mark; and
(l) the presence of absence of identical or similar marks validly registered for
or used on identical or similar goods or services and owned by persons other
than the person claiming that his mark is a well-known mark.
2. The use of the well-known mark on the entirely unrelated goods or
services would indicate a connection between such unrelated goods or
services and those goods or services specified in the certificate of
registration in the well known mark. This requirement refers to the likelihood
of confusion of origin or business or some business connection or
relationship between the registrant and the user of the mark.
3. The interests of the owner of the well-known mark are likely to be
damaged. For instance, if the registrant will be precluded from expanding its
business to those unrelated good or services, or if the interests of the
registrant of the well-known mark will be damaged because of the inferior
quality of the good or services of the user.18
Section 123.1(f) is clearly in point because the Music Lounge of petitioner is
entirely unrelated to respondents’ business involving watches, clocks,
bracelets, etc. However, the Court cannot yet resolve the merits of the
present controversy considering that the requisites for the application of
Section 123.1(f), which constitute the kernel issue at bar, clearly require
determination facts of which need to be resolved at the trial court. The
existence or absence of these requisites should be addressed in a full blown
hearing and not on a mere preliminary hearing. The respondent must be
given ample opportunity to prove its claim, and the petitioner to debunk the
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TRADEMARKS
same.
The same is true with respect to the issue of whether Atty. Alonzo Ancheta
was properly authorized to sign the verification and certification against
forum shopping in behalf of respondents. This could be properly resolved
during the trial together with the substantive issues raised by petitioner.
Considering that the trial court correctly denied petitioner’s motion for
preliminary hearing on its affirmative defenses with motion to dismiss, there
exists no reason to compel Atty. Ancheta to testify. Hence, no abuse of
discretion was committed by the trial court in quashing the subpoena ad
testificandum issued against Atty. Ancheta.
Grave abuse of discretion implies such capricious and whimsical exercise of
judgment as equivalent to lack of jurisdiction, or, in other words, where the
power is exercised in an arbitrary or despotic manner by reason of passion
or personal hostility, and it must be so patent and gross as to amount to an
evasion of positive duty or to a virtual refusal to perform the duty enjoined or
to act at all in contemplation of law. None of these was committed by the trial
court; hence, the Court of Appeals correctly dismissed the petition.
WHEREFORE, in view of all the foregoing, the petition for review on
certiorari filed by petitioner is DENIED. The November 28, 2002 Decision
and the February 13, 2003 Resolution of the Court of Appeals in CA-G.R. SP
No. 64660 which dismissed the petition for certiorari filed by petitioner
are AFFIRMED.
SO ORDERED.
La Chemise Lacoste vs. Fernandez, GR No. L-63796, 2 May 1984
It is among this Court's concerns that the Philippines should not acquire an
unbecoming reputation among the manufacturing and trading centers of the
world as a haven for intellectual pirates imitating and illegally profiting from
trademarks and tradenames which have established themselves in
international or foreign trade.
Before this Court is a petition for certiorari with preliminary injunction filed by
La Chemise Lacoste, S.A., a well known European manufacturer of clothings
and sporting apparels sold in the international market and bearing the
trademarks "LACOSTE" "CHEMISE LACOSTE", "CROCODILE DEVICE"
and a composite mark consisting of the word "LACOSTE" and a
representation of a crocodile/alligator. The petitioner asks us to set aside as
null and void, the order of judge Oscar C. Fernandez, of Branch XLIX,
Regional Trial Court, National Capital Judicial Region, granting the motion to
quash the search warrants previously issued by him and ordering the return
of the seized items.
The facts are not seriously disputed. The petitioner is a foreign corporation,
organized and existing under the laws of France and not doing business in
the Philippines, It is undeniable from the records that it is the actual owner of
the abovementioned trademarks used on clothings and other goods
specifically sporting apparels sold in many parts of the world and which have
been marketed in the Philippines since 1964, The main basis of the private
respondent's case is its claim of alleged prior registration.
In 1975, Hemandas & Co., a duly licensed domestic firm applied for and was
issued Reg. No. SR-2225 (SR stands for Supplemental Register) for the
trademark "CHEMISE LACOSTE & CROCODILE DEVICE" by the Philippine
Patent Office for use on T-shirts, sportswear and other garment products of
the company. Two years later, it applied for the registration of the same
trademark under the Principal Register. The Patent Office eventually issued
an order dated March 3, 1977 which states that:
xxx xxx xxx
... Considering that the mark was already registered in the Supplemental
Register in favor of herein applicant, the Office has no other recourse but to
allow the application, however, Reg. No. SR-2225 is now being contested in
INTELLECTUAL PROPERTY LAWS – AMES 2014
a Petition for Cancellation docketed as IPC No. 1046, still registrant is
presumed to be the owner of the mark until after the registration is declared
cancelled.
Thereafter, Hemandas & Co. assigned to respondent Gobindram Hemandas
all rights, title, and interest in the trademark "CHEMISE LACOSTE &
DEVICE".
On November 21, 1980, the petitioner filed its application for registration of
the trademark "Crocodile Device" (Application Serial No. 43242) and
"Lacoste" (Application Serial No. 43241).The former was approved for
publication while the latter was opposed by Games and Garments in Inter
Partes Case No. 1658. In 1982, the petitioner filed a Petition for the
Cancellation of Reg. No. SR-2225 docketed as Inter Partes Case No. 1689.
Both cases have now been considered by this Court in Hemandas v. Hon.
Roberto Ongpin (G.R. No. 65659).
On March 21, 1983, the petitioner filed with the National Bureau of
Investigation (NBI) a letter-complaint alleging therein the acts of unfair
competition being committed by Hemandas and requesting their assistance
in his apprehension and prosecution. The NBI conducted an investigation
and subsequently filed with the respondent court two applications for the
issuance of search warrants which would authorize the search of the
premises used and occupied by the Lacoste Sports Center and Games and
Garments both owned and operated by Hemandas.
The respondent court issued Search Warrant Nos. 83-128 and 83-129 for
violation of Article 189 of the Revised Penal Code, "it appearing to the
satisfaction of the judge after examining under oath applicant and his
witnesses that there are good and sufficient reasons to believe that
Gobindram Hemandas ... has in his control and possession in his premises
the ... properties subject of the offense," (Rollo, pp. 67 and 69) The NBI
agents executed the two search warrants and as a result of the search found
and seized various goods and articles described in the warrants.
Hemandas filed a motion to quash the search warrants alleging that the
trademark used by him was different from petitioner's trademark and that
pending the resolution of IPC No. 1658 before the Patent Office, any criminal
or civil action on the same subject matter and between the same parties
would be premature.
The petitioner filed its opposition to the motion arguing that the motion to
quash was fatally defective as it cited no valid ground for the quashal of the
search warrants and that the grounds alleged in the motion were absolutely
without merit. The State Prosecutor likewise filed his opposition on the
grounds that the goods seized were instrument of a crime and necessary for
the resolution of the case on preliminary investigation and that the release of
the said goods would be fatal to the case of the People should prosecution
follow in court.
The respondent court was, however, convinced that there was no probable
cause to justify the issuance of the search warrants. Thus, in its order dated
March 22, 1983, the search warrants were recalled and set aside and the
NBI agents or officers in custody of the seized items were ordered to return
the same to Hemandas. (Rollo, p. 25)
The petitioner anchors the present petition on the following issues:
Did respondent judge act with grave abuse of discretion amounting to lack of
jurisdiction,
(i) in reversing the finding of probable cause which he himself had made in
issuing the search warrants, upon allegations which are matters of defense
and as such can be raised and resolved only upon trial on the merits; and
(ii) in finding that the issuance of the search warrants is premature in the
face of the fact that (a) Lacoste's registration of the subject trademarks is still
pending with the Patent Office with opposition from Hemandas; and (b) the
subject trademarks had been earlier registered by Hemandas in his name in
the Supplemental Register of the Philippine Patent Office?
Respondent, on the other hand, centers his arguments on the following
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TRADEMARKS
issues:
I - THE PETITIONER HAS NO CAPACITY TO SUE BEFORE PHILIPPINE
COURTS.
II - THE RESPONDENT JUDGE DID NOT COMMIT A GRAVE ABUSE OF
DISCRETION TANTAMOUNT TO LACK OF JURISDICTION IN ISSUING
THE ORDER DATED APRIL 22, 1983.
Hemandas argues in his comment on the petition for certiorari that the
petitioner being a foreign corporation failed to allege essential facts bearing
upon its capacity to sue before Philippine courts. He states that not only is
the petitioner not doing business in the Philippines but it also is not licensed
to do business in the Philippines. He also cites the case of Leviton Industries
v. Salvador (114 SCRA 420) to support his contention The Leviton case,
however, involved a complaint for unfair competition under Section 21-A of
Republic Act No. 166 which provides:
Sec. 21 — A. Any foreign corporation or juristic person to which a mark or
tradename has been registered or assigned under this Act may bring an
action hereunder for infringement, for unfair competition, or false designation
of origin and false description, whether or not it has been licensed to do
business in the Philippines under Act numbered Fourteen Hundred and Fifty-
Nine, as amended, otherwise known as the Corporation Law, at the time it
brings the complaint; Provided, That the country of which the said foreign
corporation or juristic person is a citizen, or in which it is domiciled, by treaty,
convention or law, grants a similar privilege to corporate or juristic persons of
the Philippines.
We held that it was not enough for Leviton, a foreign corporation organized
and existing under the laws of the State of New York, United States of
America, to merely allege that it is a foreign corporation. It averred in
Paragraph 2 of its complaint that its action was being filed under the
provisions of Section 21-A of Republic Act No. 166, as amended.
Compliance with the requirements imposed by the abovecited provision was
necessary because Section 21-A of Republic Act No. 166 having explicitly
laid down certain conditions in a specific proviso, the same must be
expressly averred before a successful prosecution may ensue. It is therefore,
necessary for the foreign corporation to comply with these requirements or
aver why it should be exempted from them, if such was the case. The foreign
corporation may have the right to sue before Philippine courts, but our rules
on pleadings require that the qualifying circumstances necessary for the
assertion of such right should first be affirmatively pleaded.
In contradistinction, the present case involves a complaint for violation of
Article 189 of the Revised Penal Code. The Leviton case is not applicable.
Asserting a distinctly different position from the Leviton argument, Hemandas
argued in his brief that the petitioner was doing business in the Philippines
but was not licensed to do so. To support this argument, he states that the
applicable ruling is the case of Mentholatum Co., Inc. v. Mangaliman: (72
Phil. 524) where Mentholatum Co. Inc., a foreign corporation and Philippine-
American Drug Co., the former's exclusive distributing agent in the
Philippines filed a complaint for infringement of trademark and unfair
competition against the Mangalimans.
The argument has no merit. The Mentholatum case is distinct from and
inapplicable to the case at bar. Philippine American Drug Co., Inc., was
admittedly selling products of its principal Mentholatum Co., Inc., in the
latter's name or for the latter's account. Thus, this Court held that "whatever
transactions the Philippine-American Drug Co., Inc. had executed in view of
the law, the Mentholatum Co., Inc., did it itself. And, the Mentholatum Co.,
Inc., being a foreign doing business in the Philippines without the license
required by Section 68 of the Corporation Law, it may not prosecute this
action for violation of trademark and unfair competition."
In the present case, however, the petitioner is a foreign corporation not doing
business in the Philippines. The marketing of its products in the Philippines is
done through an exclusive distributor, Rustan Commercial Corporation The
latter is an independent entity which buys and then markets not only
products of the petitioner but also many other products bearing equally well-
known and established trademarks and tradenames. in other words, Rustan
INTELLECTUAL PROPERTY LAWS – AMES 2014
is not a mere agent or conduit of the petitioner.
The rules and regulations promulgated by the Board of Investments pursuant
to its rule-making power under Presidential Decree No. 1789, otherwise
known as the Omnibus Investment Code, support a finding that the petitioner
is not doing business in the Philippines. Rule I, Sec. 1 (g) of said rules and
regulations defines "doing business" as one" which includes, inter alia:
(1) ... A foreign firm which does business through middlemen acting on their
own names, such as indentors, commercial brokers or commission
merchants, shall not be deemed doing business in the Philippines. But such
indentors, commercial brokers or commission merchants shall be the ones
deemed to be doing business in the Philippines.
(2) Appointing a representative or distributor who is domiciled in the
Philippines, unless said representative or distributor has an independent
status, i.e., it transacts business in its name and for its account, and not in
the name or for the account of a principal Thus, where a foreign firm is
represented by a person or local company which does not act in its name but
in the name of the foreign firm the latter is doing business in the Philippines.
xxx xxx xxx
Applying the above provisions to the facts of this case, we find and conclude
that the petitioner is not doing business in the Philippines. Rustan is actually
a middleman acting and transacting business in its own name and or its own
account and not in the name or for the account of the petitioner.
But even assuming the truth of the private respondent's allegation that the
petitioner failed to allege material facts in its petition relative to capacity to
sue, the petitioner may still maintain the present suit against respondent
Hemandas. As early as 1927, this Court was, and it still is, of the view that a
foreign corporation not doing business in the Philippines needs no license to
sue before Philippine courts for infringement of trademark and unfair
competition. Thus, in Western Equipment and Supply Co. v. Reyes (51 Phil.
115), this Court held that a foreign corporation which has never done any
business in the Philippines and which is unlicensed and unregistered to do
business here, but is widely and favorably known in the Philippines through
the use therein of its products bearing its corporate and tradename, has a
legal right to maintain an action in the Philippines to restrain the residents
and inhabitants thereof from organizing a corporation therein bearing the
same name as the foreign corporation, when it appears that they have
personal knowledge of the existence of such a foreign corporation, and it is
apparent that the purpose of the proposed domestic corporation is to deal
and trade in the same goods as those of the foreign corporation.
We further held:
xxx xxx xxx
... That company is not here seeking to enforce any legal or control rights
arising from, or growing out of, any business which it has transacted in the
Philippine Islands. The sole purpose of the action:
Is to protect its reputation, its corporate name, its goodwill, whenever that
reputation, corporate name or goodwill have, through the natural
development of its trade, established themselves.' And it contends that its
rights to the use of its corporate and trade name:
Is a property right, a right in rem, which it may assert and protect against all
the world, in any of the courts of the world-even in jurisdictions where it does
not transact business-just the same as it may protect its tangible property,
real or personal, against trespass, or conversion. Citing sec. 10, Nims on
Unfair Competition and TradeMarks and cases cited; secs. 21-22, Hopkins
on TradeMarks, Trade Names and Unfair Competition and cases cited.' That
point is sustained by the authorities, and is well stated in Hanover Star
Mining Co. v. Allen and Wheeler Co. (208 Fed., 513). in which the syllabus
says:
Since it is the trade and not the mark that is to be protected, a trade-mark
acknowledges no territorial boundaries of municipalities or states or nations,
but extends to every market where the trader's goods have become known
and Identified by the use of the mark.
Our recognizing the capacity of the petitioner to sue is not by any means
novel or precedent setting. Our jurisprudence is replete with cases illustrating
instances when foreign corporations not doing business in the Philippines
Page 42
TRADEMARKS
may nonetheless sue in our courts. In East Board Navigation Ltd, v. Ysmael
and Co., Inc. (102 Phil. 1), we recognized a right of foreign corporation to
sue on isolated transactions. In General Garments Corp. v. Director of
Patents (41 SCRA 50), we sustained the right of Puritan Sportswear Corp., a
foreign corporation not licensed to do and not doing business in the
Philippines, to file a petition for cancellation of a trademark before the Patent
Office.
More important is the nature of the case which led to this petition. What
preceded this petition for certiorari was a letter complaint filed before the NBI
charging Hemandas with a criminal offense, i.e., violation of Article 189 of
the Revised Penal Code. If prosecution follows after the completion of the
preliminary investigation being conducted by the Special Prosecutor the
information shall be in the name of the People of the Philippines and no
longer the petitioner which is only an aggrieved party since a criminal offense
is essentially an act against the State. It is the latter which is principally the
injured party although there is a private right violated. Petitioner's capacity to
sue would become, therefore, of not much significance in the main case. We
cannot snow a possible violator of our criminal statutes to escape
prosecution upon a far-fetched contention that the aggrieved party or victim
of a crime has no standing to sue.
In upholding the right of the petitioner to maintain the present suit before our
courts for unfair competition or infringement of trademarks of a foreign
corporation, we are moreover recognizing our duties and the rights of foreign
states under the Paris Convention for the Protection of Industrial Property to
which the Philippines and France are parties. We are simply interpreting and
enforcing a solemn international commitment of the Philippines embodied in
a multilateral treaty to which we are a party and which we entered into
because it is in our national interest to do so.
The Paris Convention provides in part that:
ARTICLE 1
(1) The countries to which the present Convention applies constitute
themselves into a Union for the protection of industrial property.
(2) The protection of industrial property is concerned with patents, utility
models, industrial designs, trademarks service marks, trade names, and
indications of source or appellations of origin, and the repression of unfair
competition.
xxx xxx xxx
ARTICLE 2
(2) Nationals of each of the countries of the Union shall as regards the
protection of industrial property, enjoy in all the other countries of the Union
the advantages that their respective laws now grant, or may hereafter grant,
to nationals, without prejudice to the rights specially provided by the present
Convention. Consequently, they shall have the same protection as the latter,
and the same legal remedy against any infringement of their rights, provided
they observe the conditions and formalities imposed upon nationals.
xxx xxx xxx
ARTICLE 6
(1) The countries of the Union undertake, either administratively if their
legislation so permits, or at the request of an interested party, to refuse or to
cancel the registration and to prohibit the use of a trademark which
constitutes a reproduction, imitation or translation, liable to create confusion,
of a mark considered by the competent authority of the country of registration
or use to be well-known in that country as being already the mark of a
person entitled to the benefits of the present Convention and used for
Identical or similar goods. These provisions shall also apply when the
essential part of the mark constitutes a reproduction of any such well-known
mark or an imitation liable to create confusion therewith.
xxx xxx xxx
ARTICLE 8
A trade name shall be protected in all the countries of the Union without the
obligation of filing or registration, whether or not it forms part of a trademark.
xxx xxx xxx
ARTICLE 10bis
(1) The countries of the Union are bound to assure to persons entitled to the
benefits of the Union effective protection against unfair competition.
xxx xxx xxx
ARTICLE 10ter
(1) The countries of the Union undertake to assure to nationals of the other
countries of the Union appropriate legal remedies to repress effectively all
the acts referred to in Articles 9, 10 and l0bis.
INTELLECTUAL PROPERTY LAWS – AMES 2014
(2) They undertake, further, to provide measures to permit syndicates and
associations which represent the industrialists, producers or traders
concerned and the existence of which is not contrary to the laws of their
countries, to take action in the Courts or before the administrative authorities,
with a view to the repression of the acts referred to in Articles 9, 10 and
10bis, in so far as the law of the country in which protection is claimed allows
such action by the syndicates and associations of that country.
xxx xxx xxx
ARTICLE 17
Every country party to this Convention undertakes to adopt, in accordance
with its constitution, the measures necessary to ensure the application of this
Convention.
It is understood that at the time an instrument of ratification or accession is
deposited on behalf of a country; such country will be in a position under its
domestic law to give effect to the provisions of this Convention. (61 O.G.
8010)
xxx xxx xxx
In Vanity Fair Mills, Inc. v. T Eaton Co. (234 F. 2d 633) the United States
Circuit Court of Appeals had occasion to comment on the extraterritorial
application of the Paris Convention It said that:
[11] The International Convention is essentially a compact between the
various member countries to accord in their own countries to citizens of the
other contracting parties trademark and other rights comparable to those
accorded their own citizens by their domestic law. The underlying principle is
that foreign nationals should be given the same treatment in each of the
member countries as that country makes available to its own citizens. In
addition, the Convention sought to create uniformity in certain respects by
obligating each member nation 'to assure to nationals of countries of the
Union an effective protection against unfair competition.'
[12] The Convention is not premised upon the Idea that the trade-mark and
related laws of each member nation shall be given extra-territorial
application, but on exactly the converse principle that each nation's law shall
have only territorial application. Thus a foreign national of a member nation
using his trademark in commerce in the United States is accorded extensive
protection here against infringement and other types of unfair competition by
virtue of United States membership in the Convention. But that protection
has its source in, and is subject to the limitations of, American law, not the
law of the foreign national's own country. ...
By the same token, the petitioner should be given the same treatment in the
Philippines as we make available to our own citizens. We are obligated to
assure to nationals of "countries of the Union" an effective protection against
unfair competition in the same way that they are obligated to similarly protect
Filipino citizens and firms.
Pursuant to this obligation, the Ministry of Trade on November 20, 1980
issued a memorandum addressed to the Director of the Patents Office
directing the latter:
xxx xxx xxx
... to reject all pending applications for Philippine registration of signature and
other world famous trademarks by applicants other than its original owners
or users.
The conflicting claims over internationally known trademarks involve such
name brands as Lacoste, Jordache, Gloria Vanderbilt, Sasson, Fila, Pierre
Cardin, Gucci, Christian Dior, Oscar de la Renta, Calvin Klein, Givenchy,
Ralph Lauren, Geoffrey Beene, Lanvin and Ted Lapidus.
It is further directed that, in cases where warranted, Philippine registrants of
such trademarks should be asked to surrender their certificates of
registration, if any, to avoid suits for damages and other legal action by the
trademarks' foreign or local owners or original users.
The memorandum is a clear manifestation of our avowed adherence to a
policy of cooperation and amity with all nations. It is not, as wrongly alleged
by the private respondent, a personal policy of Minister Luis Villafuerte which
expires once he leaves the Ministry of Trade. For a treaty or convention is
not a mere moral obligation to be enforced or not at the whims of an
incumbent head of a Ministry. It creates a legally binding obligation on the
parties founded on the generally accepted principle of international law
of pacta sunt servanda which has been adopted as part of the law of our
land. (Constitution, Art. II, Sec. 3). The memorandum reminds the Director of
Patents of his legal duty to obey both law and treaty. It must also be obeyed.
Hemandas further contends that the respondent court did not commit grave
Page 43
TRADEMARKS
abuse of discretion in issuing the questioned order of April 22, 1983.
A review of the grounds invoked by Hemandas in his motion to quash the
search warrants reveals the fact that they are not appropriate for quashing a
warrant. They are matters of defense which should be ventilated during the
trial on the merits of the case. For instance, on the basis of the facts before
the Judge, we fail to understand how he could treat a bare allegation that the
respondent's trademark is different from the petitioner's trademark as a
sufficient basis to grant the motion to quash. We will treat the issue of
prejudicial question later. Granting that respondent Hemandas was only
trying to show the absence of probable cause, we, nonetheless, hold the
arguments to be untenable.
As a mandatory requirement for the issuance of a valid search warrant, the
Constitution requires in no uncertain terms the determination of probable
cause by the judge after examination under oath or affirmation of the
complainant and the witnesses he may produce (Constitution, Art. IV, Sec.
3). Probable cause has traditionally meant such facts and circumstances
antecedent to the issuance of the warrant that are in themselves sufficient to
induce a cautious man to rely upon them and act in pursuance thereof
(People v. Sy Juco, 64 Phil. 667).
& CROCODILE DEVICE". Significantly, such registration is only in the
Supplemental Register.
A certificate of registration in the Supplemental Register is not prima
facie evidence of the validity of registration, of the registrant's exclusive right
to use the same in connection with the goods, business, or services
specified in the certificate. Such a certificate of registration cannot be filed,
with effect, with the Bureau of Customs in order to exclude from the
Philippines, foreign goods bearing infringement marks or trade names (Rule
124, Revised Rules of Practice Before the Phil. Pat. Off. in Trademark
Cases; Martin, Philippine Commercial Laws, 1981, Vol. 2, pp.513-515).
Section 19-A of Republic Act 166 as amended not only provides for the
keeping of the supplemental register in addition to the principal register but
specifically directs that:
xxx xxx xxx
The certificates of registration for marks and trade names registered on the
supplemental register shall be conspicuously different from certificates
issued for marks and trade names on the principal register.
xxx xxx xxx

This concept of probable cause was amplified and modified by our ruling
The reason is explained by a leading commentator on Philippine Commercial
in Stonehill v. Diokno, (20 SCRA 383) that probable cause "presupposes the
Laws:
introduction of competent proof that the party against whom it is sought has
performed particular acts, or committed specific omissions, violating a given
provision of our criminal laws." The registration of a mark upon the supplemental register is not, as in the
case of the principal register, prima facie evidence of (1) the validity of
registration; (2) registrant's ownership of the mark; and (3) registrant's
The question of whether or not probable cause exists is one which must be
exclusive right to use the mark. It is not subject to opposition, although it may
decided in the light of the conditions obtaining in given situations (Central
be cancelled after its issuance. Neither may it be the subject of interference
Bank v. Morfe, 20 SCRA 507). We agree that there is no general formula or
proceedings. Registration on the supplemental register is not constructive
fixed rule for the determination of the existence of probable cause since, as
notice of registrant's claim of ownership. A supplemental register is provided
we have recognized in Luna v. Plaza(26 SCRA 310), the existence depends
for the registration of marks which are not registrable on the principal register
to a large degree upon the finding or opinion of the judge conducting the
because of some defects (conversely, defects which make a mark
examination. However, the findings of the judge should not disregard the
unregistrable on the principal register, yet do not bar them from the
facts before him nor run counter to the clear dictates of reason. More so it is
supplemental register.) (Agbayani, II Commercial Laws of the Philippines,
plain that our country's ability to abide by international commitments is at
1978, p. 514, citing Uy Hong Mo v. Titay & Co., et al., Dec. No. 254 of
stake.
Director of Patents, Apr. 30, 1963);

The records show that the NBI agents at the hearing of the application for
Registration in the Supplemental Register, therefore, serves as notice that
the warrants before respondent court presented three witnesses under oath,
the registrant is using or has appropriated the trademark. By the very fact
sworn statements, and various exhibits in the form of clothing apparels
that the trademark cannot as yet be entered in the Principal Register, all who
manufactured by Hemandas but carrying the trademark Lacoste. The
deal with it should be on guard that there are certain defects, some obstacles
respondent court personally interrogated Ramon Esguerra, Samuel Fiji, and
which the user must Still overcome before he can claim legal ownership of
Mamerto Espatero by means of searching questions. After hearing the
the mark or ask the courts to vindicate his claims of an exclusive right to the
testimonies and examining the documentary evidence, the respondent court
use of the same. It would be deceptive for a party with nothing more than a
was convinced that there were good and sufficient reasons for the issuance
registration in the Supplemental Register to posture before courts of justice
of the warrant. And it then issued the warrant.
as if the registration is in the Principal Register.

The respondent court, therefore, complied with the constitutional and

statutory requirements for the issuance of a valid search warrant. At that
point in time, it was fully convinced that there existed probable cause. But
after hearing the motion to quash and the oppositions thereto, the
respondent court executed a complete turnabout and declared that there
was no probable cause to justify its earlier issuance of the warrants.
True, the lower court should be given the opportunity to correct its errors, if
there be any, but the rectification must, as earlier stated be based on sound
and valid grounds. In this case, there was no compelling justification for the
about face. The allegation that vital facts were deliberately suppressed or
concealed by the petitioner should have been assessed more carefully
because the object of the quashal was the return of items already seized and
easily examined by the court. The items were alleged to be fake and quite
obviously would be needed as evidence in the criminal prosecution.
Moreover, an application for a search warrant is heard ex parte. It is neither
a trial nor a part of the trial. Action on these applications must be expedited
for time is of the essence. Great reliance has to be accorded by the judge to
the testimonies under oath of the complainant and the witnesses. The
allegation of Hemandas that the applicant withheld information from the
respondent court was clearly no basis to order the return of the seized items.
Hemandas relied heavily below and before us on the argument that it is the
holder of a certificate of registration of the trademark "CHEMISE LACOSTE
The reliance of the private respondent on the last sentence of the Patent
office action on application Serial No. 30954 that "registrant is presumed to
be the owner of the mark until after the registration is declared cancelled" is,
therefore, misplaced and grounded on shaky foundation, The supposed
presumption not only runs counter to the precept embodied in Rule 124 of
the Revised Rules of Practice before the Philippine Patent Office in
Trademark Cases but considering all the facts ventilated before us in the four
interrelated petitions involving the petitioner and the respondent, it is devoid
of factual basis. And even in cases where presumption and precept may
factually be reconciled, we have held that the presumption is rebuttable, not
conclusive, (People v. Lim Hoa, G.R. No. L10612, May 30, 1958,
Unreported). One may be declared an unfair competitor even if his
competing trademark is registered (Parke, Davis & Co. v. Kiu Foo & Co., et
al., 60 Phil. 928; La Yebana Co. v. Chua Seco & Co., 14 Phil. 534).
By the same token, the argument that the application was premature in view
of the pending case before the Patent Office is likewise without legal basis.
The proceedings pending before the Patent Office involving IPC Co. 1658 do
not partake of the nature of a prejudicial question which must first be
definitely resolved.

INTELLECTUAL PROPERTY LAWS – AMES 2014 Page 44

TRADEMARKS
Section 5 of Rule 111 of the Rules of Court provides that:
A petition for the suspension of the criminal action based upon the pendency
of a pre-judicial question in a civil case, may only be presented by any party
before or during the trial of the criminal action.
The case which suspends the criminal prosecution must be a civil case
which is determinative of the innocence or, subject to the availability of other
defenses, the guilt of the accused. The pending case before the Patent
Office is an administrative proceeding and not a civil case. The decision of
the Patent Office cannot be finally determinative of the private respondent's
innocence of the charges against him.
In Flordelis v. Castillo (58 SCRA 301), we held that:
As clearly delineated in the aforecited provisions of the new Civil Code and
the Rules of Court, and as uniformly applied in numerous decisions of this
Court, (Berbari v. Concepcion, 40 Phil. 837 (1920); Aleria v. Mendoza, 83
Phil. 427 (1949); People v. Aragon, 94 Phil. 357 (1954); Brito-Sy v. Malate
Taxicab & Garage, Inc., 102 Phil 482 (1957); Mendiola v. Macadael, 1 SCRA
593; Benitez v. Concepcion, 2 SCRA 178; Zapante v. Montesa, 4 SCRA 510;
Jimenez v. Averia, 22 SCRA 1380.) In Buenaventura v. Ocampo (55 SCRA
271) the doctrine of prejudicial question was held inapplicable because no
criminal case but merely an administrative case and a civil suit were
involved. The Court, however, held that, in view of the peculiar
circumstances of that case, the respondents' suit for damages in the lower
court was premature as it was filed during the pendency of an administrative
case against the respondents before the POLCOM. 'The possibility cannot
be overlooked,' said the Court, 'that the POLCOM may hand down a decision
adverse to the respondents, in which case the damage suit will become
unfounded and baseless for wanting in cause of action.') the doctrine of pre-
judicial question comes into play generally in a situation where a civil action
and a criminal action both penned and there exists in the former an issue
which must be preemptively resolved before the criminal action may
proceed, because howsoever the issue raised in the civil action is resolved
would be determinative juris et de jure of the guilt or innocence of the
accused in the criminal case.
In the present case, no civil action pends nor has any been instituted. What
was pending was an administrative case before the Patent Office.
Even assuming that there could be an administrative proceeding with
exceptional or special circumstances which render a criminal prosecution
premature pending the promulgation of the administrative decision, no such
peculiar circumstances are present in this case.
Moreover, we take note of the action taken by the Patents Office and the
Minister of Trade and affirmed by the Intermediate Appellate Court in the
case of La Chemise Lacoste S. A. v. Ram Sadhwani (AC-G.R. No. SP-
13356, June 17, 1983).
The same November 20, 1980 memorandum of the Minister of Trade
discussed in this decision was involved in the appellate court's decision. The
Minister as the "implementing authority" under Article 6bis of the Paris
Convention for the protection of Industrial Property instructed the Director of
Patents to reject applications for Philippine registration of signature and other
world famous trademarks by applicants other than its original owners or
users. The brand "Lacoste" was specifically cited together with Jordache,
Gloria Vanderbilt, Sasson, Fila, Pierre Cardin, Gucci, Christian Dior, Oscar
dela Renta, Calvin Klein, Givenchy, Ralph Laurence, Geoffrey Beene,
Lanvin, and Ted Lapidus. The Director of Patents was likewise ordered to
require Philippine registrants of such trademarks to surrender their
certificates of registration. Compliance by the Director of Patents was
challenged.
The Intermediate Appellate Court, in the La Chemise Lacoste S.A. v.
Sadhwani decision which we cite with approval sustained the power of the
Minister of Trade to issue the implementing memorandum and, after going
over the evidence in the records, affirmed the decision of the Director of
Patents declaring La Chemise Lacoste &A. the owner of the
disputed trademark and crocodile or alligator device. The Intermediate
INTELLECTUAL PROPERTY LAWS – AMES 2014
Appellate Court speaking through Mr. Justice Vicente V. Mendoza stated:
In the case at bar, the Minister of Trade, as 'the competent authority of the
country of registration,' has found that among other well-known trademarks
'Lacoste' is the subject of conflicting claims. For this reason, applications for
its registration must be rejected or refused, pursuant to the treaty obligation
of the Philippines.
Apart from this finding, the annexes to the opposition, which La Chemise
Lacoste S.A. filed in the Patent Office, show that it is the owner of the
trademark 'Lacoste' and the device consisting of a representation of a
crocodile or alligator by the prior adoption and use of such mark and device
on clothing, sports apparel and the like. La Chemise Lacoste S.A, obtained
registration of these mark and device and was in fact issued renewal
certificates by the French National Industry Property Office.
xxx xxx xxx
Indeed, due process is a rule of reason. In the case at bar the order of the
Patent Office is based not only on the undisputed fact of ownership of the
trademark by the appellee but on a prior determination by the Minister of
Trade, as the competent authority under the Paris Convention, that the
trademark and device sought to be registered by the appellant are well-
known marks which the Philippines, as party to the Convention, is bound to
protect in favor of its owners. it would be to exalt form over substance to say
that under the circumstances, due process requires that a hearing should be
held before the application is acted upon.
The appellant cites section 9 of Republic Act No. 166, which requires notice
and hearing whenever an opposition to the registration of a trademark is
made. This provision does not apply, however, to situations covered by the
Paris Convention, where the appropriate authorities have determined that a
well-known trademark is already that of another person. In such cases, the
countries signatories to the Convention are obliged to refuse or to cancel the
registration of the mark by any other person or authority. In this case, it is not
disputed that the trademark Lacoste is such a well-known mark that a
hearing, such as that provided in Republic Act No. 166, would be
superfluous.
The issue of due process was raised and fully discussed in the appellate
court's decision. The court ruled that due process was not violated.
In the light of the foregoing it is quite plain that the prejudicial question
argument is without merit.
We have carefully gone over the records of all the cases filed in this Court
and find more than enough evidence to sustain a finding that the petitioner is
the owner of the trademarks "LACOSTE", "CHEMISE LACOSTE", the
crocodile or alligator device, and the composite mark of LACOSTE and the
representation of the crocodile or alligator. Any pretensions of the private
respondent that he is the owner are absolutely without basis. Any further
ventilation of the issue of ownership before the Patent Office will be a
superfluity and a dilatory tactic.
The issue of whether or not the trademark used by the private respondent is
different from the petitioner's trade mark is a matter of defense and will be
better resolved in the criminal proceedings before a court of justice instead of
raising it as a preliminary matter in an administrative proceeding.
The purpose of the law protecting a trademark cannot be overemphasized.
They are to point out distinctly the origin or ownership of the article to which
it is affixed, to secure to him, who has been instrumental in bringing into
market a superior article of merchandise, the fruit of his industry and skill,
and to prevent fraud and imposition (Etepha v. Director of Patents, 16 SCRA
495).
The legislature has enacted laws to regulate the use of trademarks and
provide for the protection thereof. Modern trade and commerce demands
that depredations on legitimate trade marks of non-nationals including those
who have not shown prior registration thereof should not be countenanced.
The law against such depredations is not only for the protection of the owner
of the trademark but also, and more importantly, for the protection of
purchasers from confusion, mistake, or deception as to the goods they are
buying. (Asari Yoko Co., Ltd. v. Kee Boc, 1 SCRA 1; General Garments
Corporation v. Director of Patents, 41 SCRA 50).
The law on trademarks and tradenames is based on the principle of business
Page 45
TRADEMARKS
integrity and common justice' This law, both in letter and spirit, is laid upon
the premise that, while it encourages fair trade in every way and aims to
foster, and not to hamper, competition, no one, especially a trader, is justified
in damaging or jeopardizing another's business by fraud, deceipt, trickery or
unfair methods of any sort. This necessarily precludes the trading by one
dealer upon the good name and reputation built up by another (Baltimore v.
Moses, 182 Md 229, 34 A (2d) 338).
The records show that the goodwill and reputation of the petitioner's
products bearing the trademark LACOSTE date back even before 1964
when LACOSTE clothing apparels were first marketed in the Philippines. To
allow Hemandas to continue using the trademark Lacoste for the simple
reason that he was the first registrant in the Supplemental Register of a
trademark used in international commerce and not belonging to him is to
render nugatory the very essence of the law on trademarks and tradenames.
We now proceed to the consideration of the petition in Gobindram
Hemandas Suianani u. Hon. Roberto V Ongpin,et al. (G.R. No. 65659).
Actually, three other petitions involving the same trademark and device have
been filed with this Court.
In Hemandas & Co. v. Intermediate Appellate Court, et al. (G.R. No. 63504)
the petitioner asked for the following relief:
IN VIEW OF ALL THE FOREGOING, it is respectfully prayed (a) that the
Resolutions of the respondent Court of January 3, 1983 and February 24,
1983 be nullified; and that the Decision of the same respondent Court of
June 30, 1983 be declared to be the law on the matter; (b) that the Director
of Patents be directed to issue the corresponding registration certificate in
the Principal Register; and (c) granting upon the petitioner such other legal
and equitable remedies as are justified by the premises.
On December 5, 1983, we issued the following resolution:
Considering the allegations contained, issues raised and the arguments
adduced in the petition for review, the respondent's comment thereon, and
petitioner's reply to said comment, the Court Resolved to DENY the petition
for lack of merit.
The Court further Resolved to CALL the attention of the Philippine Patent
Office to the pendency in this Court of G.R. No. 563796-97 entitled 'La
Chemise Lacoste, S.A. v. Hon. Oscar C. Fernandez and Gobindram
Hemandas' which was given due course on June 14, 1983 and to the fact
that G.R. No. 63928-29 entitled 'Gobindram Hemandas v. La Chemise
Lacoste, S.A., et al.' filed on May 9, 1983 was dismissed for lack of merit on
September 12, 1983. Both petitions involve the same dispute over the use of
the trademark 'Chemise Lacoste'.
The second case of Gobindram Hemandas vs. La Chemise Lacoste, S.A., et
al. (G.R. No. 63928-29) prayed for the following:
I. On the petition for issuance of writ of preliminary injunction, an order be
issued after due hearing:
l. Enjoining and restraining respondents Company, attorneys-in-fact, and
Estanislao Granados from further proceedings in the unfair competition
charges pending with the Ministry of Justice filed against petitioner;
2. Enjoining and restraining respondents Company and its attorneys-in-fact
from causing undue publication in newspapers of general circulation on their
unwarranted claim that petitioner's products are FAKE pending proceedings
hereof; and
3. Enjoining and restraining respondents Company and its attorneys-in-fact
from sending further threatening letters to petitioner's customers unjustly
stating that petitioner's products they are dealing in are FAKE and
threatening them with confiscation and seizure thereof.
II. On the main petition, judgment be rendered:
l. Awarding and granting the issuance of the Writ of Prohibition, prohibiting,
stopping, and restraining respondents from further committing the acts
complained of;
2. Awarding and granting the issuance of the Writ of Mandamus, ordering
and compelling respondents National Bureau of Investigation, its
aforenamed agents, and State Prosecutor Estanislao Granados to
immediately comply with the Order of the Regional Trial Court, National
INTELLECTUAL PROPERTY LAWS – AMES 2014
Capital Judicial Region, Branch XLIX, Manila, dated April 22, 1983, which
directs the immediate return of the seized items under Search Warrants Nos.
83-128 and 83-129;
3. Making permanent any writ of injunction that may have been previously
issued by this Honorable Court in the petition at bar: and
4. Awarding such other and further relief as may be just and equitable in the
premises.
As earlier stated, this petition was dismissed for lack of merit on September
12, 1983. Acting on a motion for reconsideration, the Court on November 23,
1983 resolved to deny the motion for lack of merit and declared the denial to
be final.
Hemandas v. Hon. Roberto Ongpin (G.R. No. 65659) is the third petition.
In this last petition, the petitioner prays for the setting aside as null and void
and for the prohibiting of the enforcement of the following memorandum of
respondent Minister Roberto Ongpin:
MEMORANDUM:
FOR: THE DIRECTOR OF PATENTS
Philippine Patent Office
xxx xxx xxx
Pursuant to Executive Order No. 913 dated 7 October 1983 which
strengthens the rule-making and adjudicatory powers of the Minister of Trade
and Industry and provides inter alia, that 'such rule-making and adjudicatory
powers should be revitalized in order that the Minister of Trade and Industry
can ...apply more swift and effective solutions and remedies to old and new
problems ... such as the infringement of internationally-known tradenames
and trademarks ...'and in view of the decision of the Intermediate Appellate
Court in the case of LA CHEMISE LACOSTE, S.A., versus RAM
SADWHANI [AC-G.R. Sp. No. 13359 (17) June 1983] which affirms the
validity of the MEMORANDUM of then Minister Luis R. Villafuerte dated 20
November 1980 confirming our obligations under the PARIS CONVENTION
FOR THE PROTECTION OF INDUSTRIAL PROPERTY to which the
Republic of the Philippines is a signatory, you are hereby directed to
implement measures necessary to effect compliance with our obligations
under said convention in general, and, more specifically, to honor our
commitment under Section 6 bis thereof, as follows:
1. Whether the trademark under consideration is well-known in the
Philippines or is a mark already belonging to a person entitled to the benefits
of the CONVENTION, this should be established, pursuant to Philippine
Patent Office procedures in inter partes and ex parte cases, according to any
of the following criteria or any combination thereof:
(a) a declaration by the Minister of Trade and Industry that' the trademark
being considered is already well-known in the Philippines such that
permission for its use by other than its original owner will constitute a
reproduction, imitation, translation or other infringement;
(b) that the trademark is used in commerce internationally, supported by
proof that goods bearing the trademark are sold on an international scale,
advertisements, the establishment of factories, sales offices, distributorships,
and the like, in different countries, including volume or other measure of
international trade and commerce;
(c) that the trademark is duly registered in the industrial property office(s) of
another country or countries, taking into consideration the dates of such
registration;
(d) that the trademark has been long established and obtained goodwill and
general international consumer recognition as belonging to one owner or
source;
(e) that the trademark actually belongs to a party claiming ownership and
has the right to registration under the provisions of the aforestated PARIS
CONVENTION.
2. The word trademark, as used in this MEMORANDUM, shall include
tradenames, service marks, logos, signs, emblems, insignia or other similar
devices used for Identification and recognition by consumers.
3. The Philippine Patent Office shall refuse all applications for, or cancel the
registration of, trademarks which constitute a reproduction, translation or
imitation of a trademark owned by a person, natural or corporate, who is a
citizen of a country signatory to the PARIS CONVENTION FOR THE
PROTECTION OF INDUSTRIAL PROPERTY.
4. The Philippine Patent Office shall give due course to the Opposition in
cases already or hereafter filed against the registration of trademarks entitled
Page 46
TRADEMARKS
to protection of Section 6 bis of said PARIS CONVENTION as outlined
above, by remanding applications filed by one not entitled to such protection
for final disallowance by the Examination Division.
5. All pending applications for Philippine registration of signature and other
world famous trademarks filed by applicants other than their original owners
or users shall be rejected forthwith. Where such applicants have already
obtained registration contrary to the abovementioned PARIS CONVENTION
and/or Philippine Law, they shall be directed to surrender their Certificates of
Registration to the Philippine Patent Office for immediate cancellation
proceedings.
6. Consistent with the foregoing, you are hereby directed to expedite the
hearing and to decide without delay the following cases pending before your
Office:
1. INTER PARTES CASE NO. 1689-Petition filed by La Chemise Lacoste,
S.A. for the cancellation of Certificate of Registration No. SR-2225 issued to
Gobindram Hemandas, assignee of Hemandas and Company;
2. INTER PARTES CASE NO. 1658-Opposition filed by Games and
Garments Co. against the registration of the trademark Lacoste sought by La
Chemise Lacoste, S.A.;
3. INTER PARTES CASE NO. 1786-Opposition filed by La Chemise
Lacoste, S.A. against the registration of trademark Crocodile Device and
Skiva sought by one Wilson Chua.
Considering our discussions in G.R. Nos. 63796-97, we find the petition in
G.R. No. 65659 to be patently without merit and accordingly deny it due
course.
In complying with the order to decide without delay the cases specified in the
memorandum, the Director of Patents shall limit himself to the ascertainment
of facts in issues not resolved by this decision and apply the law as
expounded by this Court to those facts.
One final point. It is essential that we stress our concern at the seeming
inability of law enforcement officials to stem the tide of fake and counterfeit
consumer items flooding the Philippine market or exported abroad from our
country. The greater victim is not so much the manufacturer whose product
is being faked but the Filipino consuming public and in the case of
exportations, our image abroad. No less than the President, in issuing
Executive Order No. 913 dated October 7, 1983 to strengthen the powers of
the Minister of Trade and Industry for the protection of consumers, stated
that, among other acts, the dumping of substandard, imitated, hazardous,
and cheap goods, the infringement of internationally known tradenames and
trademarks, and the unfair trade practices of business firms has reached
such proportions as to constitute economic sabotage. We buy a kitchen
appliance, a household tool, perfume, face powder, other toilet articles,
watches, brandy or whisky, and items of clothing like jeans, T-shirts, neck,
ties, etc. — the list is quite length — and pay good money relying on the
brand name as guarantee of its quality and genuine nature only to explode in
bitter frustration and genuine nature on helpless anger because the
purchased item turns out to be a shoddy imitation, albeit a clever looking
counterfeit, of the quality product. Judges all over the country are well
advised to remember that court processes should not be used as
instruments to, unwittingly or otherwise, aid counterfeiters and intellectual
pirates, tie the hands of the law as it seeks to protect the Filipino consuming
public and frustrate executive and administrative implementation of solemn
commitments pursuant to international conventions and treaties.
WHEREFORE, the petition in G.R. NOS. 63797-97 is hereby GRANTED.
The order dated April 22, 1983 of the respondent regional trial court is
REVERSED and SET ASIDE. Our Temporary Restraining Order dated April
29, 1983 is ma(i.e. PERMANENT. The petition in G.R. NO. 65659 is
DENIED due course for lack of merit. Our Temporary Restraining Order
dated December 5, 1983 is LIFTED and SET ASIDE, effective immediately.
SO ORDERED.
CONTRA: Philip Morris, Inc. vs. CA GR No. 91332, 16 July 1993
In the petition before us, petitioners Philip Morris, Inc., Benson and Hedges
(Canada), Inc., and Fabriques of Tabac Reunies, S.A., are ascribing
whimsical exercise of the faculty conferred upon magistrates by Section 6,
Rule 58 of the Revised Rules of Court when respondent Court of Appeals
INTELLECTUAL PROPERTY LAWS – AMES 2014
lifted the writ of preliminary injunction it earlier had issued against Fortune
Tobacco Corporation, herein private respondent, from manufacturing and
selling "MARK" cigarettes in the local market.
Banking on the thesis that petitioners' respective symbols "MARK VII",
"MARK TEN", and "LARK", also for cigarettes, must be protected against
unauthorized appropriation, petitioners twice solicited the ancillary writ in the
course the main suit for infringement but the court of origin was
unpersuaded.
Before we proceed to the generative facts of the case at bar, it must be
emphasized that resolution of the issue on the propriety of lifting the writ of
preliminary injunction should not be construed as a prejudgment of the suit
below. Aware of the fact that the discussion we are about to enter into
involves a mere interlocutory order, a discourse on the aspect infringement
must thus be avoided. With these caveat, we shall now shift our attention to
the events which spawned the controversy.
As averred in the initial pleading, Philip Morris, Incorporated is a corporation
organized under the laws of the State of Virginia, United States of America,
and does business at 100 Park Avenue, New York, New York, United States
of America. The two other plaintiff foreign corporations, which are wholly-
owned subsidiaries of Philip Morris, Inc., are similarly not doing business in
the Philippines but are suing on an isolated transaction. As registered
owners "MARK VII", "MARK TEN", and "LARK" per certificates of registration
issued by the Philippine Patent Office on April 26, 1973, May 28, 1964, and
March 25, 1964, plaintiffs-petitioners asserted that defendant Fortune
Tobacco Corporation has no right to manufacture and sell cigarettes bearing
the allegedly identical or confusingly similar trademark "MARK" in
contravention of Section 22 of the Trademark Law, and should, therefore, be
precluded during the pendency of the case from performing the acts
complained of via a preliminary injunction (p. 75, Court of Appeals Rollo in
AC-G.R. SP No. 13132).
For its part, Fortune Tobacco Corporation admitted petitioners' certificates of
registration with the Philippine Patent Office subject to the affirmative and
special defense on misjoinder of party plaintiffs. Private respondent alleged
further that it has been authorized by the Bureau of Internal Revenue to
manufacture and sell cigarettes bearing the trademark "MARK", and that
"MARK" is a common word which cannot be exclusively appropriated (p.158,
Court of Appeals Rollo in A.C.-G.R. SP No. 13132). On March 28, 1983,
petitioners' prayer for preliminary injunction was denied by the Presiding
Judge of Branch 166 of the Regional Trial Court of the National Capital
Judicial Region stationed at Pasig, premised upon the following propositions:
Plaintiffs admit in paragraph 2 of the complaint that ". . . they are
not doing business in the Philippines and are suing on an isolated
transaction . . .". This simply means that they are not engaged in the sale,
manufacture, importation, expor[t]ation and advertisement of their cigarette
products in the Philippines. With this admission, defendant asks: ". . . how
could defendant's "MARK" cigarettes cause the former "irreparable damage"
within the territorial limits of the Philippines?" Plaintiffs maintain that since
their trademarks are entitled to protection by treaty obligation under Article 2
of the Paris Convention of which the Philippines is a member and ratified by
Resolution No. 69 of the Senate of the Philippines and as such, have the
force and effect of law under Section 12, Article XVII of our Constitution and
since this is an action for a violation or infringement of a trademark or trade
name by defendant, such mere allegation is sufficient even in the absence of
proof to support it. To the mind of the Court, precisely, this is the issue in the
main case to determine whether or not there has been an invasion of
plaintiffs' right of property to such trademark or trade name. This claim of
plaintiffs is disputed by defendant in paragraphs 6 and 7 of the Answer;
hence, this cannot be made a basis for the issuance of a writ of preliminary
injunction.
There is no dispute that the First Plaintiff is the registered owner of
trademar[k] "MARK VII" with Certificate of Registration No. 18723, dated
April 26,1973 while the Second Plaintiff is likewise the registered owner of
trademark "MARK TEN" under Certificate of Registration No. 11147, dated
May 28, 1963 and the Third Plaintiff is a registrant of trademark "LARK" as
shown by Certificate of Registration No. 10953 dated March 23, 1964, in
addition to a pending application for registration of trademark "MARK VII"
filed on November 21, 1980 under Application Serial No. 43243, all in the
Philippine Patent Office. In same the manner, defendant has a pending
application for registration of the trademark "LARK" cigarettes with the
Philippine Patent Office under Application Serial No. 44008. Defendant
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TRADEMARKS
contends that since plaintiffs are "not doing business in the Philippines"
coupled the fact that the Director of Patents has not denied their pending
application for registration of its trademark "MARK", the grant of a writ of
preliminary injunction is premature. Plaintiffs contend that this act(s) of
defendant is but a subterfuge to give semblance of good faith intended to
deceive the public and patronizers into buying the products and create the
impression that defendant's goods are identical with or come from the same
source as plaintiffs' products or that the defendant is a licensee of plaintiffs
when in truth and in fact the former is not. But the fact remains that with its
pending application, defendant has embarked in the manufacturing, selling,
distributing and advertising of "MARK" cigarettes. The question of good faith
or bad faith on the part of defendant are matters which are evidentiary in
character which have to be proven during the hearing on the merits; hence,
until and unless the Director of Patents has denied defendant's application,
the Court is of the opinion and so holds that issuance a writ of preliminary
injunction would not lie.
There is no question that defendant has been authorized by the Bureau of
Internal Revenue to manufacture cigarettes bearing the trademark "MARK"
(Letter of Ruben B. Ancheta, Acting Commissioner addressed to Fortune
Tobacco Corporation dated April 3, 1981, marked as Annex "A", defendant's
"OPPOSITION, etc." dated September 24, 1982). However, this authority is
qualified . . . that the said brands have been accepted and registered by the
Patent Office not later than six (6) months after you have been
manufacturing the cigarettes and placed the same in the market." However,
this grant ". . . does not give you protection against any person or entity
whose rights may be prejudiced by infringement or unfair competition in
relation to your indicated trademarks/brands". As aforestated, the registration
of defendant's application is still pending in the Philippine Patent Office.
It has been repeatedly held in this jurisdiction as well as in the United States
that the right or title of the applicant for injunction remedy must be clear and
free from doubt. Because of the disastrous and painful effects of an
injunction, Courts should be extremely careful, cautious and conscionable in
the exercise of its discretion consistent with justice, equity and fair play.
There is no power the exercise of which is more delicate which requires
greater caution, deliberation, and sound discretion, or (which is) more
dangerous in a doubtful case than the issuing of an injunction; it is the strong
arm of equity that never ought to be extended unless to cases of great injury,
where courts of law cannot afford an adequate or commensurate remedy in
damages. The right must be clear, the injury impending or threatened, so as
to be averted only by the protecting preventive process of injunction.
(Bonaparte v. Camden, etc. N. Co., 3 F. Cas. No. 1, 617, Baldw. 205, 217.)
Courts of equity constantly decline to lay down any rule which injunction shall
be granted or withheld. There is wisdom in this course, for it is impossible to
foresee all exigencies of society which may require their aid to protect rights
and restrain wrongs. (Merced M. Go v. Freemont, 7 Gal. 317, 321; 68 Am.
Dec. 262.)
It is the strong arm of the court; and to render its operation begin and useful,
it must be exercised with great discretion, and when necessary requires it.
(Attorney-General v. Utica Inc. Co., P. John Ch. (N.Y.) 371.)
Having taken a panoramic view of the position[s] of both parties as viewed
from their pleadings, the picture reduced to its minimum size would be this:
At the crossroads are the two (2) contending parties, plaintiffs vigorously
asserting the rights granted by law, treaty and jurisprudence to restrain
defendant in its activities of manufacturing, selling, distributing and
advertising its "MARK" cigarettes and now comes defendant who countered
and refused to be restrained claiming that it has been authorized temporarily
by the Bureau of Internal Revenue under certain conditions to do so as
aforestated coupled by its pending application for registration of trademark
"MARK" in the Philippine Patent Office. This circumstance in itself has
created a dispute between the parties which to the mind of the Court does
not warrant the issuance of a writ of preliminary injunction.
It is well-settled principle that courts of equity will refuse an application for
the injunctive remedy where the principle of law on which the right to
preliminary injunction rests is disputed and will admit of doubt, without a
decision of the court of law establishing such principle although satisfied as
to what is a correct conclusion of law upon the facts. The fact, however, that
there is no such dispute or conflict does not in itself constitute a justifiable
ground for the court to refuse an application for the injunctive relief.
(Hackensack Impr. Commn. v. New Jersey Midland P. Co., 22 N.J. Eg. 94.)
Hence, the status quo existing between the parties prior to the filing of this
case should be maintained. For after all, an injunction, without reference to
the parties, should be violent, vicious nor even vindictive. (pp. 338-
341, Rollo in G.R. No. 91332.)
INTELLECTUAL PROPERTY LAWS – AMES 2014
In the process of denying petitioners' subsequent motion for reconsideration
of the order denying issuance of the requested writ, the court of origin took
cognizance of the certification executed on January 30, 1984 by the
Philippine Patent Office attesting to the fact that private respondent's
application for registration is still pending appropriate action. Apart from this
communication, what prompted the trial court judge to entertain the idea of
prematurity and untimeliness of petitioners' application for a writ of
preliminary injunction was the letter from the Bureau of Internal Revenue
date February 2, 1984 which reads:
MRS. TERESITA GANDIONGCO OLEDAN
Legal Counsel
Fortune Tobacco Corporation
Madam:
In connection with your letter dated January 25, 1984, reiterating your query
as to whether your label approval automatically expires or becomes null and
void after six (6) months if the brand is not accepted and by the patent office,
please be informed that no provision in the Tax Code or revenue regulation
that requires an applicant to comply with the aforementioned condition order
that his label approved will remain valid and existing.
Based on the document you presented, it shows that registration of this
particular label still pending resolution by the Patent Office. These being so ,
you may therefore continue with the production said brand of cigarette until
this Office is officially notified that the question of ownership of "MARK"
brand is finally resolved.
Very truly yours,
TEODORO D. PAREÑO
Chief, Manufactured Tobacco
Tax Division
TAN-P6531-D2830-A-6
(p. 348, Rollo.)
It appears from the testimony of Atty. Enrique Madarang, Chief of the
Trademark Division of the then Philippine Patent Office that Fortune's
application for its trademark is still pending before said office (p. 311, Rollo).
Petitioners thereafter cited supervening events which supposedly transpired
since March 28, 1983, when the trial court first declined issuing a writ of
preliminary injunction, that could alter the results of the case in that Fortune's
application had been rejected, nay, barred by the Philippine Patent Office,
and that the application had been forfeited by abandonment, but the trial
court nonetheless denied the second motion for issuance of the injunctive
writ on April 22, 1987, thus:
For all the prolixity of their pleadings and testimonial evidence, the plaintiffs-
movants have fallen far short of the legal requisites that would justify the
grant of the writ of preliminary injunction prayed for. For one, they did not
even bother to establish by competent evidence that the products
supposedly affected adversely by defendant's trademark now subject of an
application for registration with the Philippine Patents Office, are in actual
use in the Philippines. For another, they concentrated their fire on the
alleged abandonment and forfeiture by defendant of said application for
registration.
The Court cannot help but take note of the fact that in their complaint
plaintiffs included a prayer for issuance preliminary injunction. The petition
was duly heard, and thereafter matter was assiduously discussed lengthily
and resolved against plaintiffs in a 15-page Order issued by the
undersigned's predecessor on March 28, 1983. Plaintiffs' motion for
reconsideration was denied in another well-argued 8 page Order issued on
April 5, 1984,, and the matter was made to rest.
However, on the strength of supposed changes in the material facts of this
case, plaintiffs came up with the present motion citing therein the said
changes which are: that defendant's application had been rejected and
barred by the Philippine Patents Office, and that said application has been
deemed abandoned and forfeited. But defendant has refiled the same.
Plaintiffs' arguments in support of the present motion appear to be a mere
rehash of their stand in the first above-mentioned petition which has already
been ruled upon adversely against them. Granting that the alleged changes
in the material facts are sufficient grounds for a motion seeking a favorable
grant of what has already been denied, this motion just the same cannot
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prosper.
In the first place there is no proof whatsoever that any of plaintiffs' products
which they seek to protect from any adverse effect of the trademark applied
for by defendant, is in actual use and available for commercial purposes
anywhere in the Philippines. Secondly as shown by plaintiffs' own evidence
furnished by no less than the chief of Trademarks Division of the Philippine
Patent Office, Atty. Enrique Madarang, the abandonment of an application is
of no moment, for the same can always be refiled. He said there is no
specific provision in the rules prohibiting such refiling (TSN, November 21,
1986, pp. 60 & 64, Raviera). In fact, according to Madarang, the refiled
application of defendant is now pending before the Patents Office. Hence, it
appears that the motion has no leg to stand on. (pp. 350-351, Rollo in G. R.
No. 91332.)
Confronted with this rebuff, petitioners filed a previous petition
for certiorari before the Court, docketed as G.R. No. 78141, but the petition
was referred to the Court of Appeals.
The Court of Appeals initially issued a resolution which set aside the court of
origin's order dated April 22, 1987, and granted the issuance of a writ of
preliminary injunction enjoining Fortune, its agents, employees, and
representatives, from manufacturing, selling, and advertising "MARK"
cigarettes. The late Justice Cacdac, speaking for the First Division of the
Court of Appeals in CA-G.R. SP No. 13132, remarked:
There is no dispute that petitioners are the registered owners of the
trademarks for cigarettes "MARK VII", "MARK TEN", and "LARK".(Annexes
B, C and D, petition). As found and reiterated by the Philippine Patent Office
in two (2) official communications dated April 6, 1983 and January 24, 1984,
the trademark "MARK" is "confusingly similar" to the trademarks of
petitioners, hence registration was barred under Sec. 4 (d) of Rep. Act. No.
166, as amended (pp. 106, 139, SCA rollo). In a third official communication
dated April 8, 1986, the trademark application of private respondent for the
"MARK" under Serial No. 44008 filed on February 13, 1981 which was
declared abandoned as of February 16, 1986, is now deemed forfeited, there
being no revival made pursuant to Rule 98 of the Revised Rules of
Practitioners in Trademark Cases." (p. 107, CA rollo). The foregoing
documents or communications mentioned by petitioners as "the changes in
material facts which occurred after March 28, 1983", are not also questioned
by respondents.
Pitted against the petitioners' documentary evidence, respondents pointed to
(1) the letter dated January 30, 1979 (p. 137, CA rollo) of Conrado P. Diaz,
then Acting Commissioner of Internal Revenue, temporarily granting the
request of private respondent for a permit to manufacture two (2) new brands
of cigarettes one of which is brand "MARK" filter-type blend, and (2) the
certification dated September 26, 1986 of Cesar G. Sandico, Director of
Patents (p. 138, CA rollo) issued upon the written request of private
respondents' counsel dated September 17, 1986 attesting that the records of
his office would show that the "trademark MARK" for cigarettes is now the
subject of a pending application under Serial No. 59872 filed on September
16, 1986.
Private respondent's documentary evidence provides the reasons
neutralizing or weakening their probative values. The penultimate paragraph
of Commissioner Diaz' letter of authority reads:
Please be informed further that the authority herein granted does not give
you protection against any person or entity whose rights may be prejudiced
by infringement or unfair competition in relation to your above-named
brands/trademark.
while Director Sandico's certification contained similar
conditions as follows:
This Certification, however, does not give protection as against any person
or entity whose right may be prejudiced by infringement or unfair competition
in relation to the aforesaid trademark nor the right to register if contrary to the
provisions of the Trademark Law, Rep. Act No. 166 as amended and the
Revised Rules of Practice in Trademark Cases.
The temporary permit to manufacture under the trademark "MARK" for
cigarettes and the acceptance of the second application filed by private
respondent in the height of their dispute in the main case were evidently
made subject to the outcome of the said main case or Civil Case No. 47374
of the respondent Court. Thus, the Court has not missed to note the absence
of a mention in the Sandico letter of September 26, 1986 of any reference to
the pendency of the instant action filed on August 18, 1982. We believe and
hold that petitioners have shown a prima facie case for the issuance of the
writ of prohibitory injunction for the purposes stated in their complaint and
INTELLECTUAL PROPERTY LAWS – AMES 2014
subsequent motions for the issuance of the prohibitory writ. (Buayan Cattle
Co. vs. Quintillan, 125 SCRA 276)
The requisites for the granting of preliminary injunction are the existence of
the right protected and the facts against which the injunction is to be directed
as violative of said right. (Buayan Cattle Co. vs. Quintillan, supra; Ortigas &
Co. vs. Ruiz, 148 SCRA 326). It is a writ framed according to the
circumstances of the case commanding an act which the Court regards as
essential to justice and restraining an act it deems contrary to equity and
good conscience (Rosauro vs. Cuneta, 151 SCRA 570). If it is not issued,
the defendant may, before final judgment, do or continue the doing of the act
which the plaintiff asks the court to restrain, and thus make ineffectual the
final judgment rendered afterwards granting the relief sought by the plaintiff
(Calo vs. Roldan, 76 Phil. 445). Generally, its grant or denial rests upon the
sound discretion of the Court except on a clear case of abuse (Belish
Investment & Finance Co. vs. State House, 151 SCRA 636). Petitioners'
right of exclusivity to their registered trademarks being clear and beyond
question, the respondent court's denial of the prohibitive writ constituted
excess of jurisdiction and grave abuse discretion. If the lower court does not
grant preliminary injunction, the appellate court may grant the same. (Service
Specialists, Inc. vs. Sheriff of Manila, 145 SCRA 139). (pp. 165-167, Rollo in
G.R. No. 91332.)
After private respondent Fortune's motion for reconsideration was rejected, a
motion to dissolve the disputed writ of preliminary injunction with offer to post
a counterbond was submitted which was favorably acted upon by the Court
of Appeals, premised on the filing of a sufficient counterbond to answer for
whatever perjuicio petitioners may suffer as a result thereof, to wit:
The private respondent seeks to dissolve the preliminary injunction
previously granted by this Court with an offer to file a counterbond. It was
pointed out in its supplemental motion that lots of workers employed will be
laid off as a consequence of the injunction and that the government will
stand to lose the amount of specific taxes being paid by the
private respondent. The specific taxes being paid is the sum total of
P120,120, 295.98 from January to July 1989.
The petitioners argued in their comment that the damages caused by the
infringement of their trademark as well as the goodwill it generates are
incapable of pecuniary estimation and monetary evaluation and not even the
counterbond could adequately compensate for the damages it will incur as a
result of the dissolution of the bond. In addition, the petitioner further argued
that doing business in the Philippines is not relevant as the injunction
pertains to an infringement of a trademark right.
After a thorough re-examination of the issues involved and the arguments
advanced by both parties in the offer to file a counterbond and the opposition
thereto, WE believe that there are sound and cogent reasons for US to grant
the dissolution of the writ of preliminary injunction by the offer of the private
respondent to put up a counterbond to answer for whatever damages the
petitioner may suffer as a consequence of the dissolution of the preliminary
injunction.
The petitioner will not be prejudiced nor stand to suffer irreparably as a
consequence of the lifting of the preliminary injunction considering that they
are not actually engaged in the manufacture of the cigarettes with the
trademark in question and the filing of the counterbond will amply answer for
such damages.
While the rule is that an offer of a counterbond does not operate to dissolve
an injunction previously granted, nevertheless, it is equally true that an
injunction could be dissolved only upon good and valid grounds subject to
the sound discretion of the court. As WE have maintained the view that there
are sound and good reasons to lift the preliminary injunction, the motion to
file a counterbond is granted. (pp. 53-54, Rollo in G.R. No. 91332.)
Petitioners, in turn, filed their own motion for re-examination geared towards
reimposition of the writ of preliminary injunction but to no avail (p. 55, Rollo in
G.R. No. 91332).
Hence, the instant petition casting three aspersions that respondent court
gravely abused its discretion tantamount to excess of jurisdiction when:
I. . . . it required, contrary to law and jurisprudence, that in order that
petitioners may suffer irreparable injury due to the lifting of the injunction,
petitioners should be using actually their registered trademarks in commerce
in the Philippines;
II. . . . it lifted the injunction in violation of section 6 of Rule 58 of the Rules of
Court; and
III. . . . after having found that the trial court had committed grave abuse of
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TRADEMARKS
discretion and exceeded its jurisdiction for having refused to issue the writ of which they desire to impress upon us is the protection they enjoy under the
injunction to restrain private respondent's acts that are contrary to equity and Paris Convention of 1965 to which the Philippines is a signatory. Yet, insofar
good conscience, it made a complete about face for legally insufficient as this discourse is concerned, there is no necessity to treat the matter with
grounds and authorized the private respondent to continue performing the an extensive response because adherence of the Philippines to the 1965
very same acts that it had considered contrary to equity and good international covenant due to pact sunt servanda had been acknowledged
conscience, thereby ignoring not only the mandates of the Trademark Law, in La Chemise (supra at page 390).
the international commitments of the Philippines, the judicial admission of
private respondent that it will have no more right to use the trademark
Given these confluence of existing laws amidst the cases involving
"MARK" after the Director of Patents shall have rejected the application to
trademarks, there can be no disagreement to the guiding principle in
register it, and the admonitions of the Supreme Court. (pp. 24-25, Petition;
commercial law that foreign corporations not engaged in business in the
pp. 25-26, Rollo.)
Philippines may maintain a cause of action for infringement primarily
because of Section 21-A of the Trademark Law when the legal standing to
To sustain a successful prosecution of their suit for infringement, petitioners, sue is alleged, which petitioners have done in the case at hand.
as foreign corporations not engaged in local commerce, rely on section 21-A
of the Trademark Law reading as follows:
In assailing the justification arrived at by respondent court when it recalled
the writ of preliminary injunction, petitioners are of the impression that actual
Sec. 21-A. Any foreign corporation or juristic person to which a mark or use of their trademarks in Philippine commercial dealings is not an
trade-name has been registered or assigned under this act may bring an indispensable element under Article 2 of the Paris Convention in that:
action hereunder for infringement, for unfair competition, or false designation
of origin and false description, whether or not it has been licensed to do
(2) . . . . no condition as to the possession of a domicile or establishment in
business in the Philippines under Act Numbered Fourteen hundred and fifty-
the country where protection is claimed may be required of persons entitled
nine, as amended, otherwise known as the Corporation Law, at the time it
to the benefits of the Union for the enjoyment of any industrial property of
brings complaint: Provided, That the country of which the said foreign
any industrial property rights. (p. 28, Petition; p. 29, Rollo in G.R. No. 91332.)
corporation or juristic person is a citizen or in which it is domiciled, by treaty,
convention or law, grants a similar privilege to corporate or juristic persons of
the Philippines. (As inserted by Sec. 7 of Republic Act No. 638.) Yet petitioners' perception along this line is nonetheless resolved by
to drive home the point that they are not precluded from initiating a cause of Sections 2 and 2-A of the Trademark Law which speak loudly, about
action in the Philippines on account of the principal perception that another necessity of actual commercial use of the trademark in the local forum:
entity is pirating their symbol without any lawful authority to do so. Judging
from a perusal of the aforequoted Section 21-A, the conclusion reached by
Sec. 2. What are registrable. — Trademarks, tradenames and service marks
petitioners is certainly correct for the proposition in support thereof is
embedded in the Philippine legal jurisprudence. owned by persons, corporations, partnerships or associations domiciled in
the Philippines and by persons, corporations, partnerships or associations
domiciled in any foreign country may be registered in accordance with the
Indeed, it was stressed in General Garments Corporation vs. Director of provisions of this Act; Provided, That said trademarks, tradenames, or
Patents (41 SCRA 50 [1971]) by then Justice (later Chief Justice) Makalintal service marks are actually in use in commerce and services not less than
that: two months in the Philippines before the time the applications for registration
are filed; And provided, further, That the country of which the applicant for
registration is a citizen grants by law substantially similar privileges to
Parenthetically, it may be stated that the ruling in the Mentholatum case was
citizens of the Philippines, and such fact is officially certified, with a certified
subsequently derogated when Congress, purposely to "counteract the
true copy of the foreign law translated into the English language, by the
effects" of said case, enacted Republic Act No. 638, inserting Section 21-A
government of the foreign country to the Government of the Republic of the
in the Trademark Law, which allows a foreign corporation or juristic person to
Philippines. (As amended by R.A. No. 865).
bring an action in Philippine courts for infringement of a mark or tradename,
for unfair competition, or false designation of origin and false description,
Sec. 2-A. Ownership of trademarks, tradenames and service marks; how
"whether or not it has been licensed to do business in the Philippines under
acquired. — Anyone who lawfully produces or deals in merchandise of any
Act Numbered Fourteen hundred and fifty-nine, as amended, otherwise
kind or who engages in any lawful business, or who renders any lawful
known as the Corporation Law, at the time it brings complaint."
service in commerce, by actual use thereof in manufacture or trade, in
Petitioner argues that Section 21-A militates against respondent's capacity to
business,and in the service rendered, may appropriate to his exclusive use a
maintain a suit for cancellation, since it requires, before a foreign corporation
trademark, a tradename, or a service mark not so appropriated by another,
may bring an action, that its trademark or tradename has been registered
to distinguish his merchandise, business or service from the merchandise,
under the Trademark Law. The argument misses the essential point in the
business or service of others. The ownership or possession of a trademark,
said provision, which is that the foreign corporation is allowed thereunder to
tradename, service mark, heretofore or hereafter appropriated, as in this
sue "whether or not it has been licensed to do business in the Philippines"
section provided, shall be recognized and protected in the same manner and
pursuant to the Corporation Law (precisely to counteract the effects of the
to the same extent as are other property rights known to the law. (As
decision in the Mentholatum case). (at p. 57.)
amended by R.A. No. 638). (Kabushi Kaisha Isetan vs. Intermediate
Appellate Court, 203 SCRA 583 [1991], at pp. 589-590; emphasis supplied.)
However, on May, 21, 1984, Section 21-A, the provision under consideration,
was qualified by this Court in La Chemise Lacoste S.A. vs. Fernandez (129
Following universal acquiescence and comity, our municipal law on
SCRA 373 [1984]), to the effect that a foreign corporation not doing business
trademarks regarding the requirement of actual use in the Philippines must
in the Philippines may have the right to sue before Philippine Courts, but
subordinate an international agreement inasmuch as the apparent clash is
existing adjective axioms require that qualifying circumstances necessary for
being decided by a municipal tribunal (Mortensen vs. Peters, Great Britain,
the assertion of such right should first be affirmatively pleaded (2 Agbayani
High Court of Judiciary of Scotland, 1906, 8 Sessions 93; Paras,
Commercial Laws of the Philippines, 1991 Ed., p. 598; 4 Martin, Philippine
International Law and World Organization, 1971 Ed., p. 20). Withal, the fact
Commercial Laws, Rev. Ed., 1986, p. 381). Indeed, it is not sufficient for a
that international law has been made part of the law of the land does not by
foreign corporation suing under Section 21-A to simply allege its alien origin.
any means imply the primacy of international law over national law in the
Rather, it must additionally allege its personality to sue. Relative to this
municipal sphere. Under the doctrine of incorporation as applied in most
condition precedent, it may be observed that petitioners were not remiss in
countries, rules of international law are given a standing equal, not superior,
averring their personality to lodge a complaint for infringement (p. 75,Rollo in
to national legislative enactments (Salonga and Yap, Public International
AC-G.R. SP No. 13132) especially so when they asserted that the main
Law, Fourth ed., 1974, p. 16).
action for infringement is anchored on an isolated transaction (p. 75, Rollo in
AC-G.R. SP No. 13132; Atlantic Mutual Ins. Co. vs. Cebu Stevedoring Co.,
Inc., 17 SCRA 1037 (1966), 1 Regalado, Remedial Law Compendium, Fifth The aforequoted basic provisions of our Trademark Law, according to
Rev. Ed., 1988, p. 103). Justice Gutierrez, Jr., in Kabushi Kaisha Isetan vs. Intermediate Appellate
Court (203 SCRA 583 [1991]), have been construed in this manner:
Another point which petitioners considered to be of significant interest, and

INTELLECTUAL PROPERTY LAWS – AMES 2014 Page 50

TRADEMARKS
A fundamental principle of Philippine Trademark Law is that actual use in
commerce in the Philippines is a pre-requisite to the acquisition of ownership
over a trademark or a tradename.
xxx xxx xxx
These provisions have been interpreted in Sterling Products International,
Inc. v. Farbenfabriken Bayer Actiengesellschaft (27 SCRA 1214 [1969]) in
this way:
A rule widely accepted and firmly entrenched because it has come down
through the years is that actual use in commerce or business is a
prerequisite to the acquisition of the right of ownership over a trademark.
xxx xxx xxx
. . . Adoption alone of a trademark would not give exclusive right thereto.
Such right grows out of their actual use. Adoption is not use. One may make
advertisements, issue circulars, give out price lists on certain goods; but
these alone would not give exclusive right of use. For trademark is a creation
of use. The underlying reason for all these is that purchasers have come to
understand the mark as indicating the origin of the wares. Flowing from this
is the trader's right to protection in the trade he has built up and the goodwill
he has accumulated from use of the trademark. . . .
In fact, a prior registrant cannot claim exclusive use of the trademark unless
it uses it in commerce.
We rule[d] in Pagasa Industrial Corporation v. Court of Appeals (118 SCRA
526 [1982]):
3. The Trademark law is very clear. It requires actual commercial use of the
mark prior to its registration. There is no dispute that respondent corporation
was the first registrant, yet it failed to fully substantiate its claim that it used in
trade or business in the Philippines the subject mark; it did not present proof
to invest it with exclusive, continuous adoption of the trademark which should
consist among others, of considerable sales since its first use. The invoices
(Exhibits 7, 7-a, and 8-b) submitted by respondent which were dated way
back in 1957 show that the zippers sent to the Philippines were to be used
as "samples" and "of no commercial value". The evidence for respondent
must be clear, definite and free from inconsistencies. (Sy Ching v. Gaw Lui,
44 SCRA 148-149) "Samples" are not for sale and therefore, the fact of
exporting them to the Philippines cannot be considered to be equivalent to
the "use" contemplated by the law. Respondent did not expect income from
such "samples". There were no receipts to establish sale, and no proof were
presented to show that they were subsequently sold in the Philippines.
(Pagasa Industrial Corp. v. Court of Appeals, 118 SCRA 526 [1982];
Emphasis Supplied)
The records show that the petitioner has never conducted any business in
the Philippines. It has never promoted its tradename or trademark in the
Philippines. It is unknown to Filipino except the very few who may have
noticed it while travelling abroad. It has never paid a single centavo of tax to
the Philippine government. Under the law, it has no right to the remedy it
seeks. (at pp. 589-591.)
In other words, petitioners may have the capacity to sue for infringement
irrespective of lack of business activity in the Philippines on account of
Section 21-A of the Trademark Law but the question 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 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.
Going back to the first assigned error, we can not help but notice the manner
the ascription was framed which carries with it the implied but unwarranted
assumption of the existence of petitioners' right to relief. It must be
emphasized that this aspect of exclusive dominion to the trademarks,
together with the corollary allegation of irreparable injury, has yet to be
established by petitioners by the requisite quantum of evidence in civil cases.
It cannot be denied that our reluctance to issue a writ of preliminary
injunction is due to judicial deference to the lower courts, involved as there is
mere interlocutory order (Villarosa vs. Teodoro, Sr., 100 Phil. 25 [1956]). In
point of adjective law, the petition has its roots on a remedial measure which
is but ancillary to the main action for infringement still pending factual
determination before the court of origin. It is virtually needless to stress the
obvious reality that critical facts in an infringement case are not before us
more so when even Justice Feliciano's opinion observes that "the evidence
INTELLECTUAL PROPERTY LAWS – AMES 2014
is scanty" and that petitioners "have yet to submit copies or photographs of
their registered marks as used in cigarettes" while private respondent has
not, for its part, "submitted the actual labels or packaging materials used in
selling its "Mark" cigarettes." Petitioners therefore, may not be permitted to
presume a given state of facts on their so called right to the trademarks
which could be subjected to irreparable injury and in the process, suggest
the fact of infringement. Such a ploy would practically place the cart ahead of
the horse. To our mind, what appears to be the insurmountable barrier to
petitioners' portrayal of whimsical exercise of discretion by the Court of
Appeals is the well-taken remark of said court that:
The petitioner[s] will not be prejudiced nor stand to suffer irreparably as a
consequence of the lifting of the preliminary injunction considering that they
are not actually engaged in the manufacture of the cigarettes with the
trademark in question and the filing of the counterbond will amply answer for
such damages. (p. 54. Rollo in G.R. No. 91332.)
More telling are the allegations of petitioners in their complaint (p.
319, Rollo G.R. No. 91332) as well as in the very petition filed with this Court
(p. 2, Rollo in G.R. No. 91332) indicating that they are not doing business in
the Philippines, for these frank representations are inconsistent and
incongruent with any pretense of a right which can breached (Article 1431,
New Civil Code; Section 4, Rule 129; Section 3, Rule 58, Revised Rules of
Court). Indeed, to be entitled to an injunctive writ, petitioner must show that
there exists a right to be protected and that the facts against which injunction
is directed are violative of said right (Searth Commodities Corporation vs.
Court of Appeals, 207 SCRA 622 [1992]). It may be added in this connection
that albeit petitioners are holders of certificate of registration in the
Philippines of their symbols as admitted by private respondent, the fact of
exclusive ownership cannot be made to rest solely on these documents
since dominion over trademarks is not acquired by the mere fact of
registration alone and does not perfect a trademark right (Unno Commercial
Enterprises, Inc. vs. General Milling Corporation, 120 SCRA 804 [1983]).
Even if we disregard the candid statements of petitioners anent the absence
of business activity here and rely on the remaining statements of the
complaint below, still, when these averments are juxtaposed with the denials
and propositions of the answer submitted by private respondent, the
supposed right of petitioners to the symbol have thereby been controverted.
This is not to say, however, that the manner the complaint was traversed by
the answer is sufficient to tilt the scales of justice in favor of private
respondent. Far from it. What we are simply conveying is another basic tenet
in remedial law that before injunctive relief may properly issue, complainant's
right or title must be undisputed and demonstrated on the strength of one's
own title to such a degree as to unquestionably exclude dark clouds of
doubt, rather than on the weakness of the adversary's evidence, inasmuch
as the possibility of irreparable damage, without prior proof of transgression
of an actual existing right, is no ground for injunction being mere damnum
absque injuria (Talisay-Silay Milling Co., Inc. vs. CFI of Negros Occidental,
42 SCRA 577 [1971]; Francisco, Rules of Court, Second ed., 1985, p. 225; 3
Martin, Rules of Court, 1986 ed., p. 82).
On the economic repercussion of this case, we are extremely bothered by
the thought of having to participate in throwing into the streets Filipino
workers engaged in the manufacture and sale of private respondent's
"MARK" cigarettes who might be retrenched and forced to join the ranks of
the many unemployed and unproductive as a result of the issuance of a
simple writ of preliminary injunction and this, during the pendency of the case
before the trial court, not to mention the diminution of tax revenues
represented to be close to a quarter million pesos annually. On the other
hand, if the status quo is maintained, there will be no damage that would be
suffered by petitioners inasmuch as they are not doing business in the
Philippines.
With reference to the second and third issues raised by petitioners on the
lifting of the writ of preliminary injunction, it cannot be gainsaid that
respondent court acted well within its prerogatives under Section 6, Rule 58
of the Revised Rules of Court:
Sec. 6. Grounds for objection to, or for motion of dissolution of injunction. —
The injunction may be refused or, if granted ex parte, may be dissolved,
upon the insufficiency of the complaint as shown by the complaint itself, with
or without notice to the adverse party. It may also be refused or dissolved on
other grounds upon affidavits on the part of the defendants which may be
Page 51
TRADEMARKS
opposed by the plaintiff also by affidavits. It may further be refused or, if
granted, may be dissolved, if it appears after hearing that although the
plaintiff is entitled to the injunction, the issuance or continuance thereof, as
the case may be, would cause great damage to the defendant while the
plaintiff can be fully compensated for such damages as he may suffer, and
the defendant files a bond in an amount fixed by the judge conditioned that
he will pay all damages which the plaintiff may suffer by the refusal or the
dissolution of the injunction. If it appears that the extent of the preliminary
injunction granted is too great, it must be modified.
Under the foregoing rule, injunction may be refused, or, if granted, may be
dissolved, on the following instances:
(1) If there is insufficiency of the complaint as shown by the allegations
therein. Refusal or dissolution may be granted in this case with or without
notice to the adverse party.
(2) If it appears after hearing that although the plaintiff is entitled to the
injunction, the issuance or continuance thereof would cause great damage to
the defendant, while the plaintiff can be fully compensated for such damages
as he may suffer. The defendant, in this case, must file a bond in an amount
fixed by the judge conditioned that he will pay all damages which plaintiff
may suffer by the refusal or the dissolution of the injunction.
(3) On the other grounds upon affidavits on the part of the defendant which
may be opposed by the plaintiff also affidavits.
Modification of the injunction may also be ordered by the court if it appears
that the extent of the preliminary injunction granted is too great. (3 Martin,
Rules of Court, 1986 ed., p. 99; Francisco,supra, at p. 268.)
In view of the explicit representation of petitioners in the complaint that they
are not engaged in business in the Philippines, it inevitably follows that no
conceivable damage can be suffered by them not to mention the foremost
consideration heretofore discussed on the absence of their "right" to be
protected. At any rate, and assuming in gratia argumenti that respondent
court erroneously lifted the writ it previously issued, the same may be cured
by appeal and not in the form of a petition for certiorari (Clark vs. Philippine
Ready Mix Concrete Co., 88 Phil. 460 [1951]). Verily, and mindful of the rule
that a writ of preliminary injunction is an interlocutory order which is always
under the control of the court before final judgment, petitioners' criticism
must fall flat on the ground, so to speak, more so when extinction of the
previously issued writ can even be made without previous notice to the
adverse party and without a hearing (Caluya vs. Ramos, 79 Phil. 640 [1974];
3 Moran, Rules of Court, 1970 ed., p. 81).
WHEREFORE, the petition is hereby DISMISSED and the Resolutions of the
Court of Appeals dated September 14, 1989 and November 29, 1989 are
hereby AFFIRMED.
SO ORDERED.
Cluster 5
Customary / Usual signs, Sec 123.1 (i)
(i) Consists exclusively of signs or of indications that have become customary
or usual to designate the goods or services in everyday language or in bona
fide and established trade practice;
Marks that acquired Secondary Meanings, Sec. 123.2 in relation to Sec.
123.1 (j-l)
(j) Consists exclusively of signs or of indications that may serve in trade to
designate the kind, quality, quantity, intended purpose, value, geographical
origin, time or production of the goods or rendering of the services, or other
characteristics of the goods or services;
INTELLECTUAL PROPERTY LAWS – AMES 2014
(k) Consists of shapes that may be necessitated by technical factors or by the
nature of the goods themselves or factors that affect their intrinsic value;
(l) Consists of color alone, unless defined by a given form; or
Ang vs. Teodoro GR No. L-48226, 14 December 1942 (SUPRA)
Ong Ai Gui vs. Director of Patent, GR No. L-6235, 28 March 1995
On November 8, 1948, Ong Ai Gui alias Tan Ai Gui filed an application
(No. 803) with the Director of Patents for the registration of the following
trade-name: "20th Century Nylon Shirts Factory." It is stated in connection
with the application that the trade-name was used for the first time by the
applicant on September 12, 1941 for his business described as follows:
"General merchandise dealing principally in textiles, haberdasheries; also
operating as manufacturer of shirts, pants and other men's and woman's
wears." Upon the filing of the application, the same was referred by the
Director to an examiner. The latter in a report dated August 18, 1950 held
that the words "shirts factory" are not registrable; so the applicant made a
disclaimer of said words (shirts factory) inserting a statement to that effect
in his original application. On August 13, 1951 the Director ordered the
publication of the trade-name in the official Gazette.
Publication was made but before the expiration of the period for filing
opposition, Atty. J. A. Wolfson, on behalf of E. I. De Pont de Nemours and
Company, presented on February 27, 1952, an opposition on the ground
that the word "nylon" was a name coined by E. I. Du Pont de Nemours and
Company as the generic name of a synthetic fabric material, invented,
patented, manufactured and sold by it and that this word is a generic term;
that the use of the name "nylon" is descriptive or deceptively
misdescriptive of the goods, business of manufactures of the applicant;
that the use of the name would produce confusion in trade and would
deceive the public; and that "nylon" is not distinctive of applicant's goods;
business and manufactures and applicant does not claim that it has so
become. This opposition, however, was dismissed by the Director on the
ground that at the time it was submitted Atty. J. A. Wolfson did not have,
nor did he submit, authority to file it (opposition) in the corporate name,
and that the subsequent authorization from the corporation to that effect
did not cure the general defect in the opposition.
But while he dismissed the opposition, the Director ruled that the
application must be disapproved unless the word "nylon" is also
disclaimed. The grounds for the disapproval of the application were as
follows:
"Nylon" is merely descriptive of the business of shirt-making if the shirts
are made of nylon. It is deceptively misdescriptive of said business, if the
shirts are not made of nylon. In either case, its registration in the Principal
Register as a trade-name, or as a part of a trade-name, is expressly
forbidden by subsection (e) of Section 4 of Republic Act No. 166, as
amended by Section 2 of Republic Act No. 638.
xxx xxx xxx
But even if the trade-name here in question were applied for under the
said subsection (f), "Nylon" would still have to be disclaimed. Used in
connection with shirt-making, "Nylon" can never become distinctive, can
never acquire secondary meaning, because it is a generic term, like
cotton, silk, linen, or ramie. Just as no length of use and no amount of
advertising will make "cotton," "silk," "linen," or "ramie," distinctive of shirts
or of the business of making them, so no length of use and no amount of
advertising will make "nylon" distinctive of shirts or of the business of
manufacturing them."
Again the above decision applicant has filed an appeal to this Court.
During the pendency of this appeal, E. I. Du Pont de Nemours and Co.
filed a petition to intervene, which petition was granted. It has also,
Page 52
TRADEMARKS
through counsel, filed a brief answering the arguments of the applicant-
appellant and supporting the decision appealed from.
There are two main questions raised in the appeal, one legal and the other
procedural. The legal question is put up by the claim of the applicant-
appellant that while he admits that the term "nylon" is by itself alone
descriptive and generic, what he desires to register is not the said word
alone but the whole combination of "20th Century Nylon Shirts Factory." It
is to be noted in answer to this contention that the Director of Patents has
not completely denied the registration of the whole trade-name. He has
made a conditional denial only, permitting the registration of the name but
with the disclaimer of the terms "shirt factory" and "nylon." The import of
the decision is that the trade-name may be registered, but applicant-
appellant may not be entitled to the exclusive use of the terms "shirts
factory" and "nylon" as against any other who may subsequently use the
said terms, juris publici, incapable of appropriation by any single individual
to the exclusion of others. This is supported by reason and authority.
A word or a combination of words which is merely descriptive of
an article of trade, or of its composition, characteristics, or
qualities, cannot be appropriated and protected as a trademark
to the exclusion of its use by others. The reason for this is that
inasmuch as all persons have an equal right to produce and
vend similar articles, they also have the right to describe them
properly and to use any appropriate to himself exclusively any
word or expression, properly descriptive of the article, its
qualities, ingredients, or characteristics, and thus limit other
persons in the use of language appropriate to the description of
their manufactures, the right to the use of such language being
common to all. This rule excluding descriptive terms has also
been held to apply to trade-names. As to whether words
employed fall within this prohibition, it is said that the true test is
not whether they are exhaustively descriptive of the article
designated, but whether in themselves, and as they are
commonly used by those who understand their meaning, they
are reasonably indicative and descriptive of the thing intended. If
they are thus descriptive, and not arbitrary, they cannot be
appropriated from general use and become the exclusive
property of anyone. (52 Am. Jur. 542-543.) .
. . . If the trade-name consists of a descriptive word, no
monopoly of the right to use the same can be acquired. This is
but a corollary of the proposition that a descriptive word cannot
be the subject of a trade mark. G. & C. Merriam Co. vs. Salfield
(C. C. A.) 198, 369. Other may use the same or similar
descriptive word in connection with their own wares, provided
they take proper steps to prevent the public being deceived. . . .
(Richmond Remedies Co. vs. Dr. Miles Medical Co., 16 E. (sd)
598.)
. . . The so-called descriptive terms, which may be used to
described the product adequately, can not be monopolized by a
single user and are available to all. It is only natural that the
trade will prefer those marks which bear some reference to the
article itself. Therefore, even those descriptive marks which are
distinctive by themselves can be appropriated by others with
impunity. A descriptive word may be admittedly distinctive,
especially if the user is the first creator of the article. It will,
however, be denied protection, not because it lacks
distinctiveness, but rather because others are equally entitled to
its use. . . (2 Callman. Unfair Competition and Trade Marks, pp.
869-870.)
The claim that a combination of words may be registered as a trade-name
is no justification for not applying the rules or principles hereinabove
mentioned. The use of a generic term in a trade-name is always
conditional, i. e., subject to the limitation that the registrant does not
acquire the exclusive right to the descriptive or generic term or word.
. . . A combination of marks or words may constitute a valid
trademark or (in the case of words) a tradename even though
some of the constituent portions thereof would not be subject,
separately, to exclusive appropriation as such. Thus, although a
word may be descriptive and not subject to exclusive use as a
INTELLECTUAL PROPERTY LAWS – AMES 2014
trademark, it may properly become the subject of a trademark
by combination with another word or term which is
nondescriptive, although no exclusive right to then descriptive
word or term id created . . . (52 Am. Jur. 553.)
The citation of appellant himself supports the decision thus: ". . . although
perhaps not entitled to protection against infringement by the use of the
descriptive matter by another." (Frost vs. Rindskopt, 42 Fed. 408.)
It must also be noted that no claim is made in the application that the
trade-name sought to be registered has acquired what is known as a
secondary meaning within the provisions of paragraph (f) of section 4 of
Republic Act No. 166. All that the applicant declares in his statement
accompanying his application is that the said trade-name has been
continuously used by it in business in the Philippines for about seven
years, without allegation or proof that the trade-name has become
distinctive of the applicant's business or services. Furthermore, the use of
the term "nylon" in the trade-name is both "descriptive" and "deceptively
and misdescriptive" of the applicant-appellant's business, for apparently he
does not use nylon in the manufacture of the shirts, pants and wears that
he produces and sells. How can a secondary meaning be acquired if
appellant's products are not made of nylon? Certainly no exclusive right
can be acquired by deception of fraud.
The procedural question arises from the fact that after the Director had
ordered publication and notwithstanding dismissal of an opposition, the
Director nevertheless conditionally denied the application after its
publication and failed to give applicant opportunity for a hearing, as
specifically required by section 7 of Republic Act No. 166.
It is argued that after approval of the findings of the commissioner to whom
the application id referred and giving of the order of publication, it
becomes the ministerial duty of the Director to issue the corresponding
certificate of registration and that his power is confined to this issuance
alone. The answer to this argument is the fact that the law allows
oppositions to be filed after publication, thus:
Sec. 8. Opposition. — Any person who believes that he would
be damaged by the registration of a mark or trade-name may,
upon payment of the required fee and within thirty days after the
publication under the first paragraph of section seven hereof, file
with the Director an opposition to the application. Such
opposition shall be in writing and verified by the oppositor, or by
any person on his behalf who knows the facts, and shall specify
the grounds on which it is based and include a statement of the
facts relied upon. Copies of certificates of registration of marks
or trade-names registered in other countries or other supporting
documents mentioned in the opposition shall be filed therewith,
together with the translation thereof into English, if not in the
English language. For good cause shown and upon payment of
the required surcharge, the time for filing an opposition may be
extended for an additional thirty days by the Director, who shall
notify the applicant of such extension. (Republic Act No. 166.)
Of what use is the period given to oppositors to register their oppositions if
such oppositions are not to be given consideration at all, because the
Director has only the ministerial duty after publication to issue the
certificate of registration; the first is that conducted in the Office of the
Director and taking place prior to publication, and the second, that
conducted after publication, in which the public is given the opportunity to
contest the application. In the first, the application is referred to an
examiner, who, after study and investigation makes a report and
recommendation to the Director who, upon finding that applicant is entitled
to registration, orders publication of the publication. (Sec. 7, Rep. Act No.
166.) If he finds that applicant is not entitled to registration, he may then
and there dismiss the application. In the second, opportunity is offered the
public or any interested party to come in and object to the petition (Sec.
8, Id.), giving proofs and reasons for the objection, applicant being given
opportunity also to submit proofs or arguments in support of the
application. (Sec. 9, Id.) It is the decision of the Director, given after this
hearing, or opportunity to every interested party to be heard, that finally
terminates the proceedings and in which the registration is finally approved
or disapproved. Thereafter, notice of the issuance of the certificate of
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TRADEMARKS
registration is published. (Sec. 10, Id.)
It is evident that the decision of the Director after the first step, ordering
publication, can not have any finality. Of what use is the second step in the
proceedings, if the Director is bound by his first decision, giving course to
the publication? His first decision is merely provisional, in the sense that
the application appears to be meritorious and is entitled to be given course
leading to the more formal and important second step of hearing and trial,
where the public and interested parties are allowed to take part.
The argument that the Director failed to comply with paragraph 2 of
section 7, Republic Act No. 166 cannot be raised in the case at bar,
because the Director did not find that the applicant is not entitled to
registration. He actually found that he is entitled to registration and that is
why an order for the publication of the application was issued. How can
the Director comply with the provisions of said paragraph 2 if he did not
disapprove the applicant's petition for registration?
We, therefore, find that the errors assigned in the appeal have not been
committed id hereby respondent Director of Patents. His decision is
hereby affirmed, with costs against the applicant-appellant.
Lyceum of the Phil vs. CA (SUPRA)
Arce Sons and Co. vs. Selecta Biscuits GR No. L-14761, 28 Jan. 1961
On August 31, 1955, Selecta Biscuit Company, Inc., hereinafter referred to
as respondent, filed with the Philippine Patent Office a petition for the
registration of the word "SELECTA" as trade-mark to be use in its bakery
products alleging that it is in actual use thereof for not less than two
months before said date and that "no other persons, partnership,
corporation or association ... has the right to use said trade-mark in the
Philippines, either in the identical form or in any such near resemblance
thereto, as might be calculated to deceive." Its petition was referred to an
examiner for study who found that the trade-mark sought to be registered
resembles the word "SELECTA" used by the Acre and Sons and
Company, hereinafter referred to as petitioner, in its milk and ice cream
products so that its use by respondent will cause confusion as to the origin
of their respective goods. Consequently, he recommended that the
application be refused. However, upon reconsideration, the Patent Office
ordered the publication of the application for purposes of opposition.
In due time, petitioner filed its opposition thereto on several grounds,
among which are: (1) that the mark "SELECTA" had been continuously
used by petitioner in the manufacture and sale of its products, including
cakes, bakery products, milk and ice cream from the time of its
organization and even prior thereto by its predecessor-in-interest, Ramon
Arce; (2) that the mark "SELECTA" has already become identified with
name of the petitioner and its business; (3) that petitioner had warned
respondent not to use said mark because it was already being used by the
former, but that the latter ignored said warning; (4) that respondent is
using the word "SELECTA" as a trade-mark as bakery products in unfair
competition with the products of petitioner thus resulting in confusion in
trade; (5) that the mark to which the application of respondent refers has
striking resemblance, both in appearance and meaning, to petitioner's
mark as to be mistaken therefor by the public and cause respondent's
goods to be sold as petitioner's; and (6) that actually a complaint has been
filed by the petitioner against respondent for unfair competition in the
Court of First Instance of Manila asking for damages and for the issuance
of a writ of injunction against respondent enjoining the latter for continuing
with the use of said mark.
On September 28, 1958, the Court of First Instance of Manila rendered
decision in the unfair competition case perpetually enjoining respondent
from using the name "SELECTA" as a trade-mark on the goods
INTELLECTUAL PROPERTY LAWS – AMES 2014
manufactured and/or sold by it and ordering it to pay petitioner by way of
damages all the profits it may have realized by the use of said name, plus
the sum of P5,000.00 as attorney's fee and costs of suit. From this
decision, respondent brought the matter on appeal to the Court of Appeals
wherein the case was docketed as CA-G.R. No. 24017-R.
Inasmuch as the issues of the facts in the case of unfair competition are
substantially identical with those raised before the Patent Office, the
parties at the hearing thereof, agreed to submit the evidence they
introduced before the Court of First Instance of Manila to said office, and
on the strength thereof, the Director of Patents, on December 7, 1958,
rendered decision dismissing petitioner's opposition and stating that the
registration of the trade-mark "SELECTA" in favor of applicant Selecta
Biscuits Company, Inc. will not cause confusion or mistake nor will deceive
the purchasers as to the cause damage to petitioner. Hence, petitioner
interposed the present petition for review.
On September 7, 1960, this Court issued a resolution of the following
tenor:
In G.R. No. L-14761 (Arce Sons and Company vs. Selecta
Biscuits Company, Inc., et al.), considering that the issue raised
and evidence presented in this appeal are the same as those
involved and presented in Civil Case No. 32907, entitled Arce
Sons and Company vs. Selecta Biscuit Company, Inc. of the
Court of First Instance of Manila, presently pending appeal in
the Court of Appeals, docketed as CA-G.R. No. 24017-R, the
Court resolved to require the parties, or their counsel, to inform
this Court why the appeal pending before the Court of Appeals
should not be forwarded to this Court in order that the two cases
may be consolidated and jointly decided, to avoid any conflicting
decision, pursuant to the provisions of section 17, paragraph 5,
of the Judiciary Act of 1948 (Republic Act No. 296).
And having both petitioner and respondent manifested in writing that they
do not register any objection that the case they submitted on appeal to the
Court of Appeals be certified to this Court so that it may be consolidated
with the present case, the two cases are now before us for consolidated
decision.
The case for petitioner is narrated in the decision of the court a quo as
follows: .
"In 1933, Ramon Arce, predecessor in interest of the plaintiff,
started a milk business in Novaliches, Rizal, using the name
'SELECTA' as a trade-name as well as a trade-mark. He begun
selling and distributing his products to different residences,
restaurants and offices, in bottles on the caps of which were
inscribed the words 'SELECTA FRESH MILK.' As his business
prospered, he thought of expanding and, in facts, he expanded
his business by establishing a store at Nos. 711-713 Lepanto
Street. While there, he began to cater, in addition to milk, ice
cream, sandwiches and other food products. As his catering and
ice cream business prospered in a big way, he placed a sign
signboard in his establishment with the name 'SELECTA'
inscribed thereon. This signboard was place right in front of the
said store. For the sake of efficiency, the Novaliches place was
made the pasteurizing plant and its products were distributed
through the Lepanto store. Special containers made of tin cans
with the words 'SELECTA' written on their covers and
'embossed or blown' on the bottles themselves were used.
Similarly, exclusive bottles for milk products were ordered from
Getz Brothers with the word 'SELECTA 'blown on them. The
sandwiches which were sold and distributed were wrapped in
carton boxes with covers bearing the name 'SELECTA.' To the
ordinary cars being used for the delivery of his products to serve
outside orders were added to a fleet of five (5) delivery trucks
with the word 'SELECTA ' prominently painted on them. Sales
were made directly at the Lepanto store or by means of
deliveries to specified addresses, restaurants and offices inside
Manila and its suburbs and sometimes to customers in the
provinces. As time passed, new products were produced for
sale, which as cheese (cottage cheese) with special containers
especially ordered from the Philippine Education Company with
Page 54
TRADEMARKS
the 'SELECTA ' written on their covers. 'Selecta' was chosen by the organizers of defendant who are
Chinese citizens as a translation of the Chinese word 'Ching
Suan' which means 'mapili' in Tagalog, and Selected' in English
The war that broke out on December 8, 1941, did not stop
(t.s.n. p, id.). Thereupon, the Articles of Incorporation of Selecta
Ramon Arce from continuing with his business. After a brief
Biscuit Company, Inc. were registered with the Securities and
interruption of about a mouth, that is, during the end of January,
Exchange Commission (t.s.n. P.5. id.), and at the same time
1942, and early February, 1942, he resumed his business using
registered as a business name with the Bureau of Commerce
the same trade-name and trade-mark, but this time, on a large
which issued certificate of registration No. 55594 (Exhibit 3;
scale. He entered the restaurant business. Dairy products ice
Exhibit 3-A). The same name Selecta Biscuit Company, Inc. was
cream, milk, sandwiches continued to be sold and distributed by
also subsequently registered with the Bureau of Internal
him. However, Ramon Arce was again forced to discontinue the
Revenue which issued Registration Certificate No. 35764
business on October, 1944, because time was beginning to be
(Exhibit 4, t.s.n., p. id.). Inquiries were also made with the Patent
precarious. American planes started to bomb Manila and one of
Office of 'Selecta'; after an official of the Patent referred to index
his sons, Eulalio Arce, who was managing the business, was
cards information was furnished to the effect that defendant
seized by the Japanese. Liberation came and immediately
could register the name 'Selecta' with the Bureau of Patents
thereafter. Ramon Arce once more resumed his business, even
(t.s.n. ,p.7, id). Accordingly, the corresponding petition for
more actively, by adding another store located at the corner of
registration of trade-mark was filed (Exhs. 5,5-A, Exhibit 5-B).
Lepanto and Azcarraga Streets. Continuing to use the name
Defendant actually operated its business factory on June 20,
'Selecta,' he added bakery products to his line of business. With
1955, while the petition for registration of trade-mark 'Selecta'
a firewood type of oven, about one-half the size of the
was filed with the Philippine Patent Office only on September 1,
courtroom, he made his own bread, cookies, pastries and
1955, for the Philippine Patent Office informed the defendant
assorted bakery products. Incidentally, Arce's bakery was
that the name should first be used before registration (t.s.n. p.8
transferred to Balintawak, Quezon City — another expansion of
,id.). The factory of defendant is located at Tuazon Avenue,
his business — where the bakery products are now being baked
Northern Hills, Malabon, Rizal, showing plainly on its wall facing
thru the use of firewood, electric and gas oven. These bakery
the streets the name 'SELECTA BISCUIT COMPANY, INC.'
products, like his other products, are being sold the store itself
(Exhs. 6, 6-a 6-B, t.s.n., p. 9, id.). It is significant to note that
and /or delivered to people ordering them in Manila and even
Eulalio Arce, Managing Partner of the plaintiff resided and
Baguio. Like the other products, special carton boxes in different
resides near the defendant's factory, only around 150 meters
sizes, according to the bakery products, with the name 'Selecta'
away ; in fact, Arce use to pass in front of the factory of
on top of the covers are provided for these bakery products. For
defendant while still under construction and up to the present
the cakes, special boxes and labels reading 'Selecta Cakes for
time (t.s.n., pp. 9, 10, id.). Neither Eulalio Arce nor any other
all occasions' are made. For the milk products, special bottle
person in representation of the plaintiff complained to the
caps and bottles with the colored words 'Quality Always Selecta
defendant about the use of the name 'Selecta Biscuit' until of the
Fresh Milk, One Pint' inscribed and blown on the sides of the
present complaint.
bottles - an innovation from the old bottles and caps used
formerly. Similar, special boxes with the name 'Selecta 'are
provided for fried chicken sold to customers. There are other factories using 'Selecta as trade-mark for biscuit
(t.s.n., p. 12; Exhs. 7, 7-A,7-B; Exhibit 8, 8-A, 8-B; Exhibits
Exhibit 9, 9-A, 9-B); defendant in fact uses different kinds of
Business being already well established, Ramon Arce decided
trade-mark (Exhibit 10, 10-A, to 10-W, t.s.n., p. 17).
to retire, so that his children can go on with the business. For
this purpose, he transferred and leased to them all his rights,
interest and participations in the business, including the use of The biscuits, cookies, and crackers manufactured and sold by
the name of 'Selecta,' sometime in the year 1950, at a monthly defendant are wrapped in cellophane pouches and place inside
rental of P10,000.00, later reduced to P6,500.00. He further tin can (Exh. 11; t.s.n. p. 19); the products of defendant are sold
wrote the Bureau of Commerce letter dated February 10, 1950, through the length and breadth of the Philippines through agents
requesting cancellation of the business name 'Selecta with more than one hundred 600 stores as customers buying on
Restaurant' to give way to the registration of the same 'Selecta' credit (t.s.n.) pp. 19, 20, Exh. 12; t.s.n., p. 10, June 20, 1958).
and asked that the same be registered in the name of Arce Sons Defendant employs more than one hundred (100) laborers and
& Company, a co-partnership entered into by and among his employees presently although it started with around seventy
children on February 10, 1950. Said co-partnership was (70) employees and laborers (t.s.n. p. 24); its present
organized, so its articles of co-partnership state, 'conduct a first capitalization fully paid is Two Hundred Thirty Four Thousand
class restaurant business; to engage in the manufacture and Pesos (P234,000.00.)additional capitalization's were duly
sale of ice cream, milk, cakes and other dairy and bakery authorized by the Securities and Exchange Commission (Exhs.
products; and to carry on such other legitimate business as may 13, 13-A) there was no complaint whatsoever from plaintiff saw
produce profit'; Arce Sons & Company has thus continued the defendant's business growing bigger and bigger and flourishing
lucrative business of their predecessor in interest. It is now, and (t.s.n., p. 21); when plaintiff filed its complaint.
has always been, engaged in the restaurant business, the sale
of milk, and the production and sale of cakes, dairy products and
Defendant advertises its products through radio broadcast and
bakery products. Arce Sons & Company are now making bakery
spot announcement (Exhs. 14, 14-A to 14-L; inclusive Exhs. 15,
products like bread rolls, pan de navaro, pan de sal, and other
15-A, 15-B, 15-C; Exh. 16, 16-A, 16-B to 16-E, inclusive; Exhs.
types, of cookies and biscuit of the round, hard and other types,
17, 17-B to 17-L, inclusive); the broadcasts scripts announced
providing thereof special boxes with the same "Selecta'.
therein through the radio clearly show, among others, that
Selecta Biscuit are manufactured by Selecta Company, Inc. at
Pursuing the policy of expansion adopted by their predecessor, Tuazon Avenue, Northern Hills, Malabon, Rizal, with Telephone
Arce Sons & Company established another store the now ]No. 2-13-27 (Exhs. 23-A 23-B, 23-D, 23-E, 23-F).
famous 'Selecta Dewey Boulevard', with seven (7) delivery
trucks with the 'Selecta ' conspicuously painted on them, to
Besides the signboard, 'Selecta Biscuit Company, Inc.' on the
serve, deliver, and cater to customers in and outside of Manila."
building itself, defendant has installed signboard along the
.
highways to indicate the location of the factory of defendant
(Exhs. 18, 18-A); delivery trucks defendant are plainly carrying
The case for respondent on the other hand, is expressed as follows: signboards Selecta Biscuit Company, Inc., Tuazon Avenue,
Northern Hills Malabon, Rizal, Telephone No. 2-13-27 (Exhs. 19,
19-A, 19-B, 19-C 19-D,19-E,19-F). Defendant is using modern
Defendant was organized and registered as a corporation under
machineries in its biscuit factory (Exhs. 20, 20-A, 20-B, 19-C,
the name and style of Selecta Biscuit Company, Inc. on March
20-D, 20-E). The defendant sells its products thoughout 20-C,
2, 1955 (Exhibit 2-A; p. 3, April 17, 1958) but started operation
20-D,20-E). The defendant sells its product throughout the
as a biscuit factory on June 20 1955 (t.s.n. p.3, id). The name

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TRADEMARKS
Philippines, including Luzon , Visayas, Mindanao; its customers distinguish them from those manufactured, sold or dealt in by
count, among others, 600 stores buying on credit; its stores others." (Section 38, Republic Act No. 166).
buying on cash number around 50 (t.s.n.), p. 10). Sales in
Manila and suburbs are minimal, (Exh. 12). Defendant is a
Verily, the word 'SELECTA' has been chosen by petitioner and has been
wholesaler and not a retailer of biscuits, cookies and crackers.
inscribed on all its products to serve not only as a sign or symbol that may
This is the nature of the operation of the business of the
indicate that they are manufactured and sold by it but as a mark of
defendant."
authenticity that may distinguish them from the products manufactured and
sold by other merchants or businessmen. The Director of Patents,
At the outset one cannot but note that in the two cases appealed before us therefore, erred in holding that petitioner made use of that word merely as
which involve the same parties and the same issues of fact and law, the a trade-name and not as a trade-mark within the meaning of the law.1
Court a quo and the Director of Patents have rendered contradictory
decisions. While the former is of the opinion that the word 'SELECTA' has
The word 'SELECTA', it is true, may be an ordinary or common word in the
been used by the petitioner, or its predecessor-in-interest, as a trade-mark
sense that may be used or employed by any one in promoting his
in the sale and distribution of its dairy and bakery products as early as
business or enterprise, but once adopted or coined in connection with
1933 to the extent that it has acquired a proprietary connotation so that to
one's business as an emblem, sign or device to characterize its products,
allow respondent to use it now as a trade-mark in its business would be an
or as a badge of authenticity, it may acquire a secondary meaning as to be
usurpation of petitioner's goodwill and an infringement of its property right,
exclusively associated with its products and business.2 In this sense, its
the Director of Patents entertained a contrary opinion. He believes that the
used by another may lead to confusion in trade and cause damage to its
word as used by the petitioner functions only to point to the place of
business. And this is the situation of petitioner when it used the word
business or location of its restaurant while the same word as used by
'SELECTA' as a trade-mark. In this sense, the law gives its protection and
respondent points to the origin of the products its manufactures and sells
guarantees its used to the exclusion of all others a (G. & C. Merriam Co. v.
and he predicates this distinction upon the fact that while the goods of
Saalfield, 198 F. 369, 373). And it is also in the sense that the law
petitioner are only served within its restaurant or sold only on special
postulates that "The ownership or possession of a trade-mark, . . . shall be
orders in the City of Manila, respondent's goods are ready-made and are
recognized and protected in the same manner and to the same extent, as
for sale throughout the length and breadth of the country. He is of the
are other property rights known to the law," thereby giving to any person
opinion that the use of said trade-mark by respondent has not resulted in
entitled to the exclusive use of such trade-mark the right to recover
confusion in trade contrary to the finding of the court a quo. Which of this
damages in a civil action from any person who may have sold goods of
opinions is correct is the issue now for determination.
similar kind bearing such trade-mark (Sections 2-A and 23, Republic Act
No. 166, as amended).
It appears that Ramon Arce, predecessor-in-interest of petitioner, started
his milk business as early as 1933. He sold his milk products in bottles
The term 'SELECTA' may be placed at par with the words "Ang Tibay"
covered with caps on which the words 'SELECTA FRESH MILK' were
which this Court has considered not merely as a descriptive term within
inscribed. Expanding his business, he established a store at Lepanto
the meaning of the Trade-mark Law but as a fanciful or coined phrase, or
Street, City of Manila, where he sold, in addition to his products, ice
a trade-mark. In that case, this Court found that respondent has constantly
cream, sandwiches and other food products, placing right in front of his
used the term "Ang Tibay" , both as a trade-mark and a trade-name, in the
establishment a signboard with the name 'SELECTA' inscribed thereon.
manufacture and sale of slippers, shoes and indoor baseballs for twenty-
Special containers made of tin cans with the word 'SELECTA' written on
two years before petitioner registered it as a trade-name for pants and
their covers were used for his products. Bottle with the same word
shirts so that it has performed during that period the function of a trade-
embossed on their sides were used for his milk products. The sandwiches
mark to point distinctively, or by its own meaning or by association, to the
he sold and distributed were wrapped in carton boxes with covers bearing
origin or ownership of the wares to which it applies. And holding that
the same name. He used several cars and trucks for delivery purposes on
respondent was entitled to protection in the use of that trade-mark, this
the sides of which were written the same word. As new products were
Court made the following comment:
produced for sale, the same were placed in containers with the same
name written on their covers. After the war, he added to his business such
items as cakes, bread, cookies, pastries, and assorted bakery products. The function of a trade-mark is to point distinctively, either by its
Then his business was acquired by petitioner, a co-partnership organized own meaning or by association, to the origin or ownership of the
by his sons, the purposes of which are "to conduct a first class restaurant wares to which it is applied. 'Ang Tibay' as used by the
business; to engage in the manufacture and sale of ice cream, milk, cakes respondent to designate his wares, had exactly performed that
and other products; and to carry on such other legitimate business as may function for twenty-two years before the petitioner adopted it as
produce profit." a trade-mark in her own business. 'Ang Tibay' shoes and
slippers are, by association, known throughout the Philippines
as products of the 'Ang Tibay" factory owned and operated by
The foregoing unmistakably show that petitioner, through its predecessor-
the respondent. Even if 'AngTibay', therefore, were not capable
in-interest, had made use of the word "SELECTA" not only as a trade-
of exclusive appropriation as a trade-mark, the application of the
name indicative of the location of the restaurant where it manufactures and
doctrine of secondary meaning could nevertheless be fully
sells its products, but as trade-mark is used. This is not only in accordance
sustained because, in any event, by respondent's long and
with its general acceptation but with our law on the matter. "
exclusive appropriation with reference to an article on the
market, because geographically or otherwise descriptive, might
Trade-mark' or trade-name', distinction being highly technical, is nevertheless have been used so long and exclusively by one
sign, device, or mark by which articles produced are dealt in by producer with reference to his article that, in that trade and to
particular person or organization are distinguished or that branch of the purchasing public, the word or phrase has
distinguishable from those produced or dealt in by other." come to mean that article was his product." (Ang v.
(Church of God v. Tomlinson Church of God, 247 SW 2d, Teodoro, supra.).
63,64)"
The rationale in the Ang Tibay case applies on all fours to the case of
A 'trade-mark' is a distinctive mark of authenticity through which petitioner.
the merchandise of a particular producer or manufacturer may
be distinguished from that of others, and its sole function is to
But respondent claims that it adopted the trade-mark 'SELECTA' in good
designate distinctively the origin of the products to which it is
faith and not precisely to engage in unfair competition with petitioner. It
attached." (Reynolds & Reynolds Co. v. Nordic, et. al., 114F 2d,
tried to establish that respondent was organized as a corporation under
278) "
the name of Selecta Biscuit Company, Inc. on March 2, 1955 and started
operations as a biscuit factory on June 20, 1955; that the name
The term 'trade-mark' includes any word, name, symbol, 'SELECTA' was chosen by the organizers of respondent who are Chinese
emblem, sign or device or any combination thereof adopted and citizens as a translation of the Chinese word "Ching Suan" which means
used by a manufacturer or merchant to identify his goods and "mapili" in Tagalog, and "Selected" in English; that , thereupon, it

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TRADEMARKS
registered its articles of incorporation with the Securities and Exchange business operation of the parties.
Commission and the name 'SELECTA' as a business name with the
Bureau of Commerce which issued to it Certificate of Registration No.
We have read carefully the reasons advanced in support of the points
55594; and that it also registered the same trade-name with the Bureau of
raised by counsel in an effort to make inroads into the findings of the
Internal Revenue and took steps to obtain a patent from the Patent Office
court a quo on unfair competition, but we believe them to be substantial
by filing with it as application for the registration of said trade-name.
and untenable. They appear to be well answered and refuted by counsel
for petitioner in his brief, which refutation we do not need to repeat here.
The suggestion that the name 'SELECTA' was chosen by the organizers of Suffice it to state that we agree with the authorities and reasons advanced
respondent merely as a translation from a Chinese word "Ching Suan" therein which incidentally constitute the best support of the decision of the
meaning "mapili" in the dialect is betrayed by the very manner of its court a quo.
selection, for if the only purpose is to make an English translation of that
word and not to compete with the business of petitioner, why chose the
With regard to the claim that petitioner failed to present sufficient evidence
word 'SELECTA', a Spanish word, and not "Selected", the English
on the contract of lease of the business from its predecessor-in-interest,
equivalent thereof, as was done by other well-known enterprises? In the
we find that under the circumstances secondary evidence is admissible.
words of petitioner's counsel, "Why with all the words in the English
dictionary and all the words in the Spanish dictionary and all the phrases
that could be coined, should defendant-appellant (respondent) choose In view of the foregoing, we hold that the Director of Patents committed an
'SELECTA' if its purpose was not and is not to fool the people and to error in dismissing the opposition of petitioner and in holding that the
damage plaintiff-appellee?" In this respect, we find appropriate the registration of the trade-mark 'SELECTA' in favor of respondent will not
following comment of the trial court: cause damage to petitioner, and consequently, we hereby reverse his
decision.
Eventually, like the plaintiff, one is tempted to ask as to why with
the richness in words of the English language and with the Consistently with this finding, we hereby affirm the decision of the court a
affluence of the Spanish vocabulary or, for that matter, of our quo rendered in G.R. No. L-17981. No costs.
own dialects, should the defendant choose the controverted
word "Selecta", which has already acquired a secondary
meaning by virtue of plaintiff's prior and continued use of the
same as a trade-mark or trade-name of its products? The
explanation given by Sy Hap, manager of the defendant, that What are the rights conferred by registration?
the word 'Selecta' was chosen for its bakery products by the
organizers of said company from the Chinese word 'Ching Suan'
meaning 'mapili', which in English translation , is to say the least,
very weak and untenable. Sy Hap himself admitted that he had
Exclusive use, Sec. 147
known Eulalio Arce, the person managing plaintiff's business,
since 1954; that since he began to reside at 10th Avenue, Grace Section 147. Rights Conferred. - 147.1. The owner of a registered mark shall
Park, he had known the Selecta Restaurant on Azcarraga Street have the exclusive right to prevent all third parties not having the owner's
and Dewey Blvd. and that he even had occasion to eat in one of consent from using in the course of trade identical or similar signs or
the restaurants of the plaintiff. All of these circumstances tend to containers for goods or services which are identical or similar to those in
conspire in inducing one to doubt defendant's motive for using respect of which the trademark is registered where such use would result in a
the same word "Selecta" for its bakery products. To allow the likelihood of confusion. In case of the use of an identical sign for identical
defendant here to use the word "Selecta" in spite of the fact that goods or services, a likelihood of confusion shall be presumed.
this word has already been adopted and exploited by Ramon
Arce and by his family thru the organization of Arce Sons and 147.2. The exclusive right of the owner of a well-known mark defined in
Company, for the maintenance of its goodwill, for which said Subsection 123.1(e) which is registered in the Philippines, shall extend to
plaintiff and its predecessor have spent time, effort and fortune, goods and services which are not similar to those in respect of which the mark
is to permit business pirates and buccaneers to appropriate for is registered: Provided, That use of that mark in relation to those goods or
themselves and to their profit and advantage the trade names services would indicate a connection between those goods or services and the
and trade marks of well established merchants with all their owner of the registered mark: Provided further, That the interests of the owner
attendant good will and commercial benefit. Certainly, this of the registered mark are likely to be damaged by such use. (n)
cannot be allowed, and it becomes the duty of the court to
protect the legitimate owners of said trade-names and trade-
marks, for under the law, the same constitute one kind of
property right entitled to the necessary legal protection. Importation of Drugs and Medicines, Sec. 72.1
Section 72. Limitations of Patent Rights. - The owner of a patent has no right
to prevent third parties from performing, without his authorization, the acts
Other points raised by respondent to show that the trial court erred in referred to in Section 71 hereof in the following circumstances:
holding that the adoption by it of the word 'SELECTA' is tantamount to
unfair competition are: (1) that its products are biscuits, crackers, and
cookies, wrapped in cellophane packages, place in tin containers, and that 72.1. Using a patented product which has been put on the market in the
its products may last a year with out spoilage, while the ice cream, milk, Philippines by the owner of the product, or with his express consent, insofar as
cakes and other bakery products which petitioner manufactures last only such use is performed after that product has been so put on the said market;
for two or three days; (2) that the sale and distribution of petitioner's
products are on retail basis, limited to the City of Manila and suburbs, and
its place of business is localized at Azcarraga, corner of Lepanto Street
Are there any exceptions to the conferred rights? Sec 148
and at Dewey Blvd., Manila, while that of respondent is on a wholesale
basis, extending throughout the length and breadth of the Philippines; (3) Section 148. Use of Indications by Third Parties for Purposes Other than
that petitioner's signboard on its place of business reads 'SELECTA' and those for which the Mark is Used. - Registration of the mark shall not confer on
on its delivery trucks "Selecta, Quality Always, Restaurant and Caterer, the registered owner the right to preclude third parties from using bona fide
Azcarraga, Dewey Blvd., Balintawak and Telephone number," in contrast their names, addresses, pseudonyms, a geographical name, or exact
with respondent's signboard on its factory which reads "Selecta Biscuit indications concerning the kind, quality, quantity, destination, value, place of
Company, Inc.," and on its delivery trucks "Selecta Biscuit Company, Inc., origin, or time of production or of supply, of their goods or services: Provided,
Tuason Avenue, Malabon, Rizal, Telephone No. 2-13-27; (4) that the That such use is confined to the purposes of mere identification or information
business name of petitioner is different from the business name of and cannot mislead the public as to the source of the goods or services. (n)
respondent; (5) that petitioner has only a capital investment of P25,000.00
whereas respondent has a fully paid-up stock in the amount of
P234,000.00 out of the P500,000.00 authorized capital, (6) that the use of
the name 'SELECTA' by respondent cannot lead to confusion in the

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TRADEMARKS
May an application or registration be transferred or assigned? Sec 149
What about licensing? Sec. 150
Section 149. Assignment and Transfer of Application and Registration. -
149.1. An application for registration of a mark, or its registration, may be
assigned or transferred with or without the transfer of the business using the
mark. (n)
149.2. Such assignment or transfer shall, however, be null and void if it is
liable to mislead the public, particularly as regards the nature, source,
manufacturing process, characteristics, or suitability for their purpose, of the
goods or services to which the mark is applied.
149.3. The assignment of the application for registration of a mark, or of its
registration, shall be in writing and require the signatures of the contracting
parties. Transfers by mergers or other forms of succession may be made by
any document supporting such transfer.
149.4. Assignments and transfers of registrations of marks shall be recorded
at the Office on payment of the prescribed fee; assignment and transfers of
applications for registration shall, on payment of the same fee, be provisionally
recorded, and the mark, when registered, shall be in the name of the assignee
or transferee.
149.5. Assignments and transfers shall have no effect against third parties
until they are recorded at the Office. (Sec. 31, R.A. No. 166a)
Section 150. License Contracts. - 150.1. Any license contract concerning the
registration of a mark, or an application therefor, shall provide for effective
control by the licensor of the quality of the goods or services of the licensee in
connection with which the mark is used. If the license contract does not
provide for such quality control, or if such quality control is not effectively
carried out, the license contract shall not be valid.
150.2. A license contract shall be submitted to the Office which shall keep its
contents confidential but shall record it and publish a reference thereto. A
license contract shall have no effect against third parties until such recording is
effected. The Regulations shall fix the procedure for the recording of the
license contract. (n)
What are the grounds to cancel registration? Secs. 151 and 154
Section 151. Cancellation. - 151.1. A petition to cancel a registration of a mark
under this Act may be filed with the Bureau of Legal Affairs by any person who
believes that he is or will be damaged by the registration of a mark under this
Act as follows:
(a) Within five (5) years from the date of the registration of the mark
under this Act.
(b) At any time, if the registered mark becomes the generic name for
the goods or services, or a portion thereof, for which it is registered,
or has been abandoned, or its registration was obtained fraudulently
or contrary to the provisions of this Act, or if the registered mark is
being used by, or with the permission of, the registrant so as to
misrepresent the source of the goods or services on or in connection
with which the mark is used. If the registered mark becomes the
generic name for less than all of the goods or services for which it is
registered, a petition to cancel the registration for only those goods
or services may be filed. A registered mark shall not be deemed to
be the generic name of goods or services solely because such mark
is also used as a name of or to identify a unique product or service.
The primary significance of the registered mark to the relevant public
rather than purchaser motivation shall be the test for determining
whether the registered mark has become the generic name of goods
or services on or in connection with which it has been used. (n)
INTELLECTUAL PROPERTY LAWS – AMES 2014
(c) At any time, if the registered owner of the mark without legitimate
reason fails to use the mark within the Philippines, or to cause it to
be used in the Philippines by virtue of a license during an
uninterrupted period of three (3) years or longer.
151.2. Notwithstanding the foregoing provisions, the court or the administrative
agency vested with jurisdiction to hear and adjudicate any action to enforce
the rights to a registered mark shall likewise exercise jurisdiction to determine
whether the registration of said mark may be cancelled in accordance with this
Act. The filing of a suit to enforce the registered mark with the proper court or
agency shall exclude any other court or agency from assuming jurisdiction
over a subsequently filed petition to cancel the same mark. On the other hand,
the earlier filing of petition to cancel the mark with the Bureau of Legal Affairs
shall not constitute a prejudicial question that must be resolved before an
action to enforce the rights to same registered mark may be decided. (Sec. 17,
R.A. No. 166a)
Section 154. Cancellation of Registration. - If the Bureau of Legal Affairs finds
that a case for cancellation has been made out, it shall order the cancellation
of the registration. When the order or judgment becomes final, any right
conferred by such registration upon the registrant or any person in interest of
record shall terminate. Notice of cancellation shall be published in the IPO
Gazette. (Sec. 19, R.A. No. 166a)
What is Trademark Infringement? Secs. 155-156
Can damages be recovered? Secs. 156-158
Section 155. Remedies; Infringement. - Any person who shall, without the
consent of the owner of the registered mark:
155.1. Use in commerce any reproduction, counterfeit, copy, or colorable
imitation of a registered mark or the same container or a dominant feature
thereof in connection with the sale, offering for sale, distribution, advertising of
any goods or services including other preparatory steps necessary to carry out
the sale of any goods or services on or in connection with which such use is
likely to cause confusion, or to cause mistake, or to deceive; or
155.2. Reproduce, counterfeit, copy or colorably imitate a registered mark or a
dominant feature thereof and apply such reproduction, counterfeit, copy or
colorable imitation to labels, signs, prints, packages, wrappers, receptacles or
advertisements intended to be used in commerce upon or in connection with
the sale, offering for sale, distribution, or advertising of goods or services on or
in connection with which such use is likely to cause confusion, or to cause
mistake, or to deceive, shall be liable in a civil action for infringement by the
registrant for the remedies hereinafter set forth: Provided, That the
infringement takes place at the moment any of the acts stated in Subsection
155.1 or this subsection are committed regardless of whether there is actual
sale of goods or services using the infringing material. (Sec. 22, R.A. No 166a)
Section 156. Actions, and Damages and Injunction for Infringement. - 156.1.
The owner of a registered mark may recover damages from any person who
infringes his rights, and the measure of the damages suffered shall be either
the reasonable profit which the complaining party would have made, had the
defendant not infringed his rights, or the profit which the defendant actually
made out of the infringement, or in the event such measure of damages
cannot be readily ascertained with reasonable certainty, then the court may
award as damages a reasonable percentage based upon the amount of gross
sales of the defendant or the value of the services in connection with which the
mark or trade name was used in the infringement of the rights of the
complaining party. (Sec. 23, first par., R.A. No. 166a)
156.2. On application of the complainant, the court may impound during the
pendency of the action, sales invoices and other documents evidencing sales.
(n)
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156.3. In cases where actual intent to mislead the public or to defraud the
complainant is shown, in the discretion of the court, the damages may be
doubled. (Sec. 23, first par., R.A. No. 166)
156.4. The complainant, upon proper showing, may also be granted injunction.
(Sec. 23, second par., R.A. No. 166a)
Section 157. Power of Court to Order Infringing Material Destroyed. - 157.1 In
any action arising under this Act, in which a violation of any right of the owner
of the registered mark is established, the court may order that goods found to
be infringing be, without compensation of any sort, disposed of outside the
channels of commerce in such a manner as to avoid any harm caused to the
right holder, or destroyed; and all labels, signs, prints, packages, wrappers,
receptacles and advertisements in the possession of the defendant, bearing
the registered mark or trade name or any reproduction, counterfeit, copy or
colorable imitation thereof, all plates, molds, matrices and other means of
making the same, shall be delivered up and destroyed.
157.2. In regard to counterfeit goods, the simple removal of the trademark
affixed shall not be sufficient other than in exceptional cases which shall be
determined by the Regulations, to permit the release of the goods into the
channels of commerce. (Sec. 24, R.A. No. 166a)
Section 158. Damages; Requirement of Notice. - In any suit for infringement,
the owner of the registered mark shall not be entitled to recover profits or
damages unless the acts have been committed with knowledge that such
imitation is likely to cause confusion, or to cause mistake, or to deceive. Such
knowledge is presumed if the registrant gives notice that his mark is registered
by displaying with the mark the words '"Registered Mark" or the letter R within
a circle or if the defendant had otherwise actual notice of the registration. (Sec.
21, R.A. No. 166a)
What is Unfair Competition? Sec. 168
Section 168. Unfair Competition, Rights, Regulation and Remedies. - 168.1. A
person who has identified in the mind of the public the goods he manufactures
or deals in, his business or services from those of others, whether or not a
registered mark 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.
168.2. Any person who shall 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.
168.3. In particular, and without in any way limiting the scope of protection
against unfair competition, the following shall be deemed guilty of unfair
competition:
(a) Any person, who is selling his goods and gives them the general
appearance of goods of another manufacturer or dealer, either as to
the goods themselves or in the wrapping of the packages in which
they are contained, or the devices or words thereon, or in any other
feature of their appearance, which would be likely to 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 such goods with a like purpose;
(b) Any person who by any artifice, or device, or who employs any
other means calculated to induce the false belief that such person is
offering the services of another who has identified such services in
the mind of the public; or
INTELLECTUAL PROPERTY LAWS – AMES 2014
(c) Any person who shall make any false statement in the course of
trade or who shall commit any other act contrary to good faith of a
nature calculated to discredit the goods, business or services of
another.
168.4. The remedies provided by Sections 156, 157 and 161 shall apply
mutatis mutandis. (Sec. 29, R.A. No. 166a)
Unfair Competition
Involves the employing deception or any other means contrary to good faith
by which a person passes off his goods or business or services for those of
one who has already established goodwill thereto (Sec. 168.2 IPL)
The essential elements of unfair competition with respect to goods are:
i. Confusing similarity in the general appearance of the goods; and
ii. Fraud or intent to deceive public and defraud a competitor
TEST of unfair competition: whether the acts of the defendant have the intent
of deceiving or are calculated to deceive the ordinary buyer making his
purchases under the ordinary conditions of the particular trade to which the
controversy relates.
- CLR, Sundiang and Aquino
How is trademark infringement similar / dissimilar to unfair competition?
To False Designation of Origin and False Description or Representation?
Sec. 169
Section 169. False Designations of Origin; False Description or
Representation. - 169.1. Any person who, on or in connection with any goods
or services, or any container for goods, uses in commerce any word, term,
name, symbol, or device, or any combination thereof, or any false designation
of origin, false or misleading description of fact, or false or misleading
representation of fact, which:
(a) Is likely to cause confusion, or to cause mistake, or to deceive as
to the affiliation, connection, or association of such person with
another person, or as to the origin, sponsorship, or approval of his or
her goods, services, or commercial activities by another person; or
(b) In commercial advertising or promotion, misrepresents the
nature, characteristics, qualities, or geographic origin of his or her or
another person's goods, services, or commercial activities, shall be
liable to a civil action for damages and injunction provided in
Sections 156 and 157 of this Act by any person who believes that he
or she is or is likely to be damaged by such act.
169.2. Any goods marked or labelled in contravention of the provisions of this
Section shall not be imported into the Philippines or admitted entry at any
customhouse of the Philippines. The owner, importer, or consignee of goods
refused entry at any customhouse under this section may have any recourse
under the customs revenue laws or may have the remedy given by this Act in
cases involving goods refused entry or seized. (Sec. 30, R.A. No. 166a)
Infringement of Trademark vs. Unfair Competition
i. In IT, there is unauthorized use of a trademark, while UC under the IPC
involves passing off of one’s goods as those of another and giving one’s
goods the appearance of another
ii. It is not necessary to establish fraudulent intent in case of IT while it is
necessary to establish fraudulent intent in UC case
iii. Registration of the trademark is necessary for the filing of an action for IT
while prior registration of a trademark is not necessary un UC
iv. UC is broader as it includes cases that are covered not only by the IPC but
also by Art. 27 of the New Civil Code (Del Monte Corp. et al. vs. CA)
- CLR, Sundiang and Aquino
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Ang vs. Teodoro (SUPRA)
Ang Si Heng vs. Wellington Department Store Inc. GR No. L-4531, 10
Jan. 1953
The plaintiffs-appellants herein are engaged in the business of
manufacturing shirts, pants, drawers, and other articles of wear for men,
women, and children. They have been in that business since the year 1938,
having obtained the registration for the said articles the trademark of
"Wellington." In the year 1940 they registered the business name
"Wellington Company," and this registration of the name was renewed on
June 11, 1946. Their invoices, stationery, and signboard bear the trade
name "Wellington Company," and in newspaper advertisements they
described their business as "Wellington Shirt Factory." It does not appear,
however, that their trademark for their articles of wear was again registered
after August 27, 1938, nor their trade name registered after 1946.
Defendant Benjamin Chua applied for the registration of the business name
"Wellington Department Store" on May 7, 1946. His application therefor
was approved by the Bureau of Commerce, and a certificate issued in his
favor. On June 8, 1946, this business name was transferred to Wellington
Department Store, Inc., of which he is the president. It does not appear,
however, that his application with the Bureau of Commerce for the
registration of the business name "Wellington Department Store" has been
renewed, and neither does it appear that the business name "Wellington
Company" applied for by plaintiffs-appellants has also been renewed.
The plaintiffs-appellants allege that the use of the words "Wellington
Department Store" as a business name and as a corporate name by the
defendant-appellee deceives the public into buying defendant corporation's
goods under the mistaken belief that the names are the plaintiff's or have
the same source as plaintiffs' goods, thereby resulting in damage to them.
They, therefore, pray that the defendant corporation be enjoined from using
the business name "Wellington Department Store" and the corporate name
"Wellington Department Store, Inc"; that the Director of Commerce be
ordered to cancel the registration of said business name, and the Securities
and Exchange Commissioner be also ordered to cancel the corporate name
"Wellington Department Store, Inc." In their answer the defendants
Wellington Department Store, Inc., and Benjamin Chua allege, by way of
special defense, that the plaintiffs are engaged in the manufacture or
production of shirts, pants, drawers, and other articles of wear for men,
women, and children, and keep a dry goods store for the sale of the same,
whereas they (the defendants) are not engaged in the same business or in
the manufacture or sale of articles with the trademark "Wellington," and that
they are keeping a store for articles such as shoes, hats, toys, perfumes,
bags, apparels, and the like, most of which are different from those
manufactured and sold by plaintiffs-appellants.
Upon the above issues the parties went to trial, and thereafter the court a
quo dismissed the complaint and absolved the defendants therefrom,
holding that the corporate name "Wellington Department Store Inc.," has
not been previously acquired and appropriated by any person or
corporation, citing the case of Compañia General de Tabacos vs. Alhambra
Cigar & etc. Co., 33 Phil., 485, and Walter E. Olsen & Co. vs. Lambert, 42
Phil., 633. Against this decision the plaintiffs have prosecuted this appeal,
contending that the appellees' business is similar and identical to that of the
appellants; that the use of the business name "Wellington Department
Store, Inc.," misleads and confuses the public; that plaintiffs-appellants
have acquired a property right in the name "Wellington;" and that if the
defendants-appellees are not liable for any infringement of tradename, at
least they are liable for unfair competition.
The term "Wellington" is either a geographical name (see Webster's
International Dictionary, where it is said to be the capital of New Zealand;
urban district of Shropshire, England and of Somersetshire, England; co.
seat, of Summer co., Kans, etc.), or the surname of a person. But mere
geographical names are ordinarily regarded as common property, and it is
a general rule that the same cannot be appropriated as the subject of an
INTELLECTUAL PROPERTY LAWS – AMES 2014
exclusive trademark or trade name. (52 Am. Jur., 548.) Even if Wellington
were a surname, which is not even that of the plaintiffs-appellants, it cannot
also be validly registered as a trade name. (Section 4, Paragraph (e),
Republic Act. No. 166.) As the term cannot be appropriated as a trademark
or a trade name, no action for violation thereof can be maintained, as none
is granted by the statute in such cases. The right to damages and for an
injunction for infringement of a trademark or a trade name is granted only to
those entitled to the exclusive use of a registered trademark or trade name.
(Section 23, Republic Act No. 166.) It is evident, therefore, that no action
may lie in favor of the plaintiffs-appellants herein for damages or injunctive
relief for the use by the defendants-appellees of the name "Wellington."
The complaint, however, alleges that the defendants-appellees have the
actual intent to mislead the public and to defraud the plaintiffs, as by the
use of the name "Wellington Department Store, "they have deceived the
public into buying its goods under the mistaken belief that the same are the
plaintiffs' or have the same source as the plaintiffs' goods. The action is
evidently one for unfair competition, which is defined in Chapter VI, Section
29, of Republic Act No. 166, not one for violation of a trademark or a
tradename. In order to determine whether defendants are liable in this
respect and have deceived the public into believing that the goods they sell
are of plaintiffs' manufacture or proceed from the same source as plaintiffs'
goods, all the surrounding circumstances must be taken into account,
especially the identity or similarity of their business, how far the names are
a true description of the kind and quality of the articles manufactured or the
business carried on, the extent of the confusion which may be created or
produced, the distance between the place of business of one and the other
party, etc. (Chas S. Higgins Co. vs. Higgins Soap Co., 144 N.Y. 462, 39
N.E. 490, 27 L.R.A. 42, 43 Am. St. Rep. 769.)
While there is similarity between the trademark or trade name "Wellington
Department Store," no confusion or deception can possibly result or arise
from such similarity because the latter is a "department store," while the
former does purport to be so. The name "Wellington" is admittedly the
name of the trademark on the shirts, pants, drawers, and other articles of
wear for men, women and children, whereas the name used by the
defendant indicates not these manufactured articles or any similar
merchandise, but a department store. Neither can the public be said to be
deceived into the belief that the goods being sold in defendant's store
originate from the plaintiffs, because the evidence shows that defendant's
store sells no shirts or wear bearing the trademark "Wellington," but other
trademarks. Neither could such deception be by any possibility produced
because defendant's store is situated on the Escolta, while plaintiffs' store
or place of business is located in another business district far away from the
Escolta. The mere fact that two or more customers of the plaintiffs thought
of the probable identity of the products sold by one and the other is not
sufficient proof of the supposed confusion that the public has been led into
by the use of the name adopted by the defendants. No evidence has
been submitted that customers of the plaintiffs-appellants had actually been
misled into purchasing defendant's articles and merchandise, for the very
witnesses who have supposedly noted the use of plaintiffs' trade name do
not claim to have actually purchased any articles from defendant's store.
The concept of unfair competition has received the attention of this Court in
two previous cases, that of Ang vs. Teodoro1 (2 Off. Gaz., No. 7, 673)
and Teodoro Kalaw Ng Khe vs. Lever Brothers Co.2 (G.R. No. 46817,
promulgated on April 18, 1941.) In the first case this Court stated that even
a name or phrase not capable of appropriation as trademark or trade name
may, by long and exclusive use by a business with reference thereto or to
its products, acquire a proprietary connotation, such that the name or
phrase to the purchasing public becomes associated with the business or
the products and entitled to protection against unfair competition. But in the
case at bar, the principle therein enunciated cannot be made to apply
because the evidence submitted by the appellants did not prove that their
business has continued for so long a time that it has become of
consequence and acquired a goodwill of considerable value, such that its
articles and products have acquired a well-known reputation and confusion
will result by the use of the disputed name by the defendants' department
store. It is true that appellants business appears to have been established a
few years before the war and appellees' after liberation, yet it seems
appellees' business and goodwill are the products of their own individual
initiative, not wrested by unfair competition from appellants' business and
goodwill.
In the case of Kalaw Ng Khe vs. Lever Brothers Co., this Court citing a well-
Page 60
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considered opinion of the Court of Appeals published in 39 Off. Gaz., 1479-
1486, No. 62, May 21, 1941, declared that it is not necessary that the
articles of the petitioner be exactly similar to those handled by respondents
in order that unfair competition may be said to arise, and that it is sufficient
for the articles to fall under the general category of toilet articles. It might be
true that, inasmuch as appellees' department store deals on shirts and
other articles of wear while appellants produce the same articles, some
competition would arise between them. It is not, however, competition that
the law seeks to prevent, but unfair competition, wherein a newcomer in
business tries to grab or steal away the reputation or goodwill of the
business of another. As the court stated in said case, "the tendency of the
courts has been to widen the scope of protection in the field of unfair
competition. They have held that there is no fetish in the word
"competition," and that the invocation of equity rest more vitally on the
element of unfairness." As we have stated, appellant have not shown any
well-established reputation or goodwill previous to the establishment of
appellees' business, such that it can be said that something was unfairly
taken by the use of such reputation by the appellees' department store.
We agree, therefore, with the trial court that plaintiffs-appellants have not
been able to show the existence of a cause of action for unfair competition
against the defendants-appellees.
The judgment appealed from is, therefore, affirmed, with costs against the
plaintiffs-appellants.
Mc Donald’s Corp vs. LC Big Make Burger (SUPRA)
Can a Foreign Corporation not engaged in business in the Philippines
bring an action for trademark infringement before Philippine courts? Sec
160 IPC and Rule 3 AM No. 10-3-10-SC
Section 160. Right of Foreign Corporation to Sue in Trademark or Service
Mark Enforcement Action. - Any foreign national or juridical person who meets
the requirements of Section 3 of this Act and does not engage in business in
the Philippines may bring a civil or administrative action hereunder for
opposition, cancellation, infringement, unfair competition, or false designation
of origin and false description, whether or not it is licensed to do business in
the Philippines under existing laws. (Sec. 21-A, R.A. No. 166a)
RULE 3 – COMMENCEMENT OF ACTION
Section 2. Who may file an action under these Rules. – Any intellectual
property right owner, or anyone possessing any right, title of interest under
claim of ownership in any intellectual property right, whose right may have
been violated, may file an action under these Rules.
Any person who is a national of who is domiciled or has a real and effective
industrial establishment in a country which is a party to any convention, treaty
or agreement relating to intellectual property rights or the repression of unfair
competition, to which the Philippines is also a party, or extends reciprocal
rights to nationals of the Philippines by law, shall be entitled to file an action
under these Rules.
Any foreign national or juridical person who meets the requirements of the
immediately preceding paragraph, and does not engage in business in the
Philippines, may also file an action under these Rules.
INTELLECTUAL PROPERTY LAWS – AMES 2014
What are the defenses against Infringement?
Bona Fide Prior User, Sec. 159..1, Sec. 1 Rule 16 AM No. 10-3-10 SC
Innocent Infringer, Sec. 159.2
Against Publishers or Distributors, Sec. 159.3
Imported Drugs and Medicines, Sec. 159.4
AM No. 10-3-10 Rule 16
Sec. 1 Evidence in Good Faith – In cases of patent infringement, trademark
infringement and copyright infringement, fraudulent intent on the part of the
defendant or the accused need not be established. Good faith is not a defense
unless the defendant of the accused claims to be a prior user under Sec. 73
and 159 of the IPC or when damages may be recovered under Sec. 76, 156
ad 216 of the Code.
Section 159. Limitations to Actions for Infringement. - Notwithstanding any
other provision of this Act, the remedies given to the owner of a right infringed
under this Act shall be limited as follows:
159.1. Notwithstanding the provisions of Section 155 hereof, a registered mark
shall have no effect against any person who, in good faith, before the filing
date or the priority date, was using the mark for the purposes of his business
or enterprise: Provided, That his right may only be transferred or assigned
together with his enterprise or business or with that part of his enterprise or
business in which the mark is used.
159.2. Where an infringer who is engaged solely in the business of printing the
mark or other infringing materials for others is an innocent infringer, the owner
of the right infringed shall be entitled as against such infringer only to an
injunction against future printing.
159.3. Where the infringement complained of is contained in or is part of paid
advertisement in a newspaper, magazine, or other similar periodical or in an
electronic communication, the remedies of the owner of the right infringed as
against the publisher or distributor of such newspaper, magazine, or other
similar periodical or electronic communication shall be limited to an injunction
against the presentation of such advertising matter in future issues of such
newspapers, magazines, or other similar periodicals or in future transmissions
of such electronic communications. The limitations of this subparagraph shall
apply only to innocent infringers: Provided, That such injunctive relief shall not
be available to the owner of the right infringed with respect to an issue of a
newspaper, magazine, or other similar periodical or an electronic
communication containing infringing matter where restraining the
dissemination of such infringing matter in any particular issue of such
periodical or in an electronic communication would delay the delivery of such
issue or transmission of such electronic communication is customarily
conducted in accordance with the sound business practice, and not due to any
method or device adopted to evade this section or to prevent or delay the
issuance of an injunction or restraining order with respect to such infringing
matter. (n)
Section 159.4. Importation of Medicine. There is no infringement of
trademarks or trade names of imported or sold drugs and medicines as well as
imported or sold off-patent drugs and medicines which bears marks that have
not been tampered, unlawfully modified or infringed upon.
What are the penalties that could be imposed? Civil, Administrative,
Criminal – Sec 170, Damages – Sec 156 and 158, Injunctive Relief – Sec.
156
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Philip Morris et. Al vs. CA (SUPRA)
Developers Group of Companies, Inc. vs. CA GR No. 104583 8 March
1993
The core question before us is whether or not the petitioner was entitled to
the writ of preliminary injunction issued by the trial court pending trial on the
merits of the charge of infringement against the private respondent. We
shall resolve only this question and not the merits of the petitioner's
complaint.
The complaint was filed on April 15, 1991, by Developers Group of
Companies, Inc. for "Infringement and Damages with Injunction" against
Shangri-La International Hotel Management, Ltd., et al. It was docketed as
Civil Case No. Q-91-8476 in the Regional Trial Court of Quezon City.
The plaintiff alleged that the Bureau of Patents had granted it Certificate of
Registration No. 31904 for the trademark "Shangri-La", and "S"-logo, for
restaurant services, as recorded in its Principal Register on May 31, 1983.
The defendant was illegally using the said trade mark and logo, thus
causing prejudice to the plaintiff for which it was entitled to damages.
Developers also prayed for the issuance of a restraining order and/or
preliminary injunction and asked that, after trial, judgment be rendered
ordering all signs, prints, advertisements and other materials in the
possession of or being used by Shangri-La bearing the subject service
mark and S-logo be ordered destroyed.
In its answer, Shangri-La claimed that it was the legal and beneficial owner
of the said mark and logo which it and its related Kuok Group of Companies
had first adopted in 1962 and caused to be specially designed in 1975 for
their hotel business in China, Hong Kong, Malaysia, Singapore and
Thailand. It also alleged that, even before the complaint was filed, it had
already filed with the Bureau of Patents a petition against Developers for
the cancellation of the registration of the trade mark Shangri-La and "S"
logo in the latter's name and for the registration of the same in the name of
Shangri-La.
On July 2, 1991, Judge Felix M. de Guzman issued the following order:
Acting upon plaintiff's prayer for the issuance of a writ of preliminary
injunction as contained in its verified complaint, filed thru counsel on April
15, 1991;chanrobles virtual law library
It appearing after hearing that plaintiff is entitled to the relief herein prayed
for:
WHEREFORE, the Court hereby orders the issuance of a writ of
preliminary injunction directing the defendants, their agents,
representatives, licensees, assignees and all other persons acting under
their authority and permission to desist from using and continuing the use of
plaintiff's mark "SHANGRI-LA", and "S-logo" or any reproduction,
counterfeit, copy, or colorable imitation thereof, in the promotion or
advertisement of their hotel, management business, and realty projects and
services in any manner whatsoever, upon filing of a bond in the amount of
P1,250,000.00 to answer for payment of damages that defendants may
sustain by reason of the issuance of the writ, should the Court finally decide
that plaintiff is not entitled thereto.
SO ORDERED.
On July 12, 1991, he issued another order, to wit:
Acting on the "Urgent Ex-Parte Motion to Remove The Signs "Shangri-La"
and "S-logo" Used by The Defendants And To Cite Defendants For
INTELLECTUAL PROPERTY LAWS – AMES 2014
Contempt," filed thru counsel on July 11, 1991;chanrobles virtual law library
It appearing per the Sheriff's Report, defendants have not removed the
signs and or S-logo, the use of which was sought to be enjoined in the
Order of this Court, despite proper service of the writ upon defendants
Shangri-La, et al., thru its House counsel, Atty. Cynthia M. Laureta;
Considering that plaintiff shall sustain increased damages in the continuous
use of the signs and logo because of the confusion of the public as to the
nature and source of the business offered by the plaintiff;
Wherefore, the Deputy Sheriff concerned is hereby directed to remove the
signs "Shangri-La and S-logo" being used by the defendants in the
premises in defiance of the writ of preliminary injunction issued in the
instant case.
As prayed for further, should police assistance be necessary for the
effective implementation of this Order, the Philippine National Police (PNP)
or any police agency is hereby directed to assist the said Court officer in the
execution hereof.
With respect to the second motion "that defendants be cited for contempt
,"of the Court defers the resolution of the same.
SO ORDERED.
On August 1, 1991, Shangri-La filed a motion to lift the preliminary
injunction, to which an opposition was filed by Developers on August 23,
1991. On September 20, 1991, the motion and opposition were declared
submitted for resolution, but on September 25, 1991, Shangri-La, through a
new counsel, withdrew its motion. It then filed with the respondent Court of
Appeals a petition for certiorari with application for temporary, restraining
order and preliminary injunction against the orders issued by the trial court
on July 2, 1991, and July 12, 1991.chanroblesvirtualawlibrarychanrobles
virtual law library
On November 20, 1991, the Court of Appeals 1 rendered its decision,
disposing as follows:
IN LIGHT OF ALL THE FOREGOING, We find and so hold that the orders
dated July 2 and 12, 1991 were issued with grave abuse of discretion.
WHEREFORE, premises considered, the petition is hereby granted. The
orders dated July 2 and July 12, 1991 issued by the respondent court in
Civil Case No. Q-91-8476 are hereby declared NULL and VOID and
consequently SET ASIDE.
SO ORDERED.
A motion for reconsideration was filed by Developers but this was denied
on March 11, 1992.chanroblesvirtualawlibrarychanrobles virtual law library
Developers is now before this Court alleging inter alia that the petition
for certiorari filed with the Court of Appeals on September 25, 1991 was
premature. Its reason is that the motion to lift the preliminary injunction filed
by Shangri-La had yet to be resolved by the trial court.
Shangri-La's answer is that the writ of preliminary injunction was issued by
the trial court as early as July 5, 1991, and the motion to lift was heard on
August 9, 1991, but from the latter date and until September 20, 1991, the
trial judge had made no effort to resolve the said motion. It therefore had to
seek faster redress from the appellate court.
The general rule is that certiorari will not lie unless the lower court has,
through a motion for reconsideration (or a motion to lift in this case) been
given a chance to correct the errors imputed to it. However, this rule admits
of exceptions, as (1) where the issue raised is purely one of law; (2) where
the public interest is involved; and (3) in case of urgency. 2Does the
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petitioner come under the rule or the exceptions?
We note that on September 25, 1991, instead of allowing the withdrawal of
the motion to lift, the trial court required the former counsel of Shangri-La to
comment thereon within 5 days. This was a correct order because he had
not yet withdrawn his appearance and was still the counsel of record of
Shangri-La although the motion was filed by another counsel. Nevertheless,
we agree that the order would result in further delay in the proceedings to
the prejudice of Shangri-La, which would in the meantime be prevented
from continuing the use of the disputed mark and logo. Furthermore, the
motion to lift had already been withdrawn precisely so it could be raised in
the appellate court. We feel therefore that Shangri-La's immediate recourse
to the Court of Appeals without awaiting resolution of its withdrawn motion
to lift the injunction was not premature.
Now to the propriety of the injunction order.
Section 3, Rule 58, of the Revised Rules of Court provides:
Sec. 3. Grounds for issuance of preliminary injunction. - A preliminary
injunction may be granted at any time after the commencement of the
action and before judgment when it is established:chanrobles virtual law
library
(a) That the plaintiff is entitled to the relief demanded, and the whole or part
of such relief consists in restraining the commission or continuance of the
acts complained of, or in the performance of an act or acts, either for a
limited period or perpetually;
(b) That the commission or continuance of some act complained of during
the litigation or the non-performance thereof would probably work injustice
to the plaintiff; orchanrobles
(c) That the defendants is doing, threatens, or is about to do, or is procuring
or suffering to be done, some act probably in violation of the plaintiff's rights
respecting the subject of the action, and tending to render the judgment
ineffectual
Developers bases what it calls its clear legal right to the service mark and
logo on the Certificate of Registration issued by the Bureau of Patents
which it says can be interpreted broadly enough to cover not only
restaurant services but also the hotel business, in which Shangri-La is
engaged. Specifically, it invokes Section 20 of Republic Act No. 166,
providing as follows:
Sec. 20. Certificate of Registration prima facie evidence of validity. - A
certificate of registration of a mark or trade-name shall be prima
facie evidence of the validity of the registration, the registrant's ownership
of the mark or trade-name, and of the registrant's exclusive right to use the
same in connection with the goods, business or services specified in the
certificate, subject to any conditions and limitations stated therein.
On the other hand, Shangri-La claims that it had instituted Inter Partes
Case No. 3145 for Cancellation of Registration against Developers, on the
ground of fraud, and applied for registration of the service mark and logo in
its name in Inter Partes Case No. 3529, to protect its claimed rights to the
said name and emblem. These cases were already pending in 1988 before
the Bureau of Patents when the complaint for infringement was filed by
Developers in the Regional Trial Court of Quezon City three years later.
The conflicting claims of the parties to the subject service mark and logo
give us the impression that the right claimed by the plaintiff as its basis for
asking for injunctive relief is far from clear. The prima facie validity of its
registration has been put into serious question by the above-stated cases
filed by Shangri-La in the Bureau of Patents three years ahead of the
complaint. While it is not required that Developer's claimed right be
conclusively established at this stage, it is nevertheless necessary to show,
at least tentatively, that it exists and is not vitiated by any substantial
challenge or contradiction, such as has been made by the private
respondent. In our view, the petitioner has failed to comply with this
INTELLECTUAL PROPERTY LAWS – AMES 2014
requirement.
As for the alleged damages, we find that Developers has not adduced any
evidence of injury, either actual or imminent, resulting from the acts
complained of against Shangri-La. There was no finding of the trial court
affirming the claim for damages nor is there any support for it in the record.
In fact, the order dated July 2, 1991, did not state, much leas explain, the
reasons for the issuance of the writ of preliminary injunction, simply saying
that it appeared "after hearing that plaintiff is entitled to the relief prayed
for." That was all. But that was not enough.
In Olalia v. Hizon 3 this Court hold:
A preliminary injunction is an order granted at any stage of an action prior
to final judgment, requiring a person to refrain from a particular act. As the
term itself suggests, it is merely temporary, subject to the final disposition of
the principal action. The justification for the preliminary injunction is
urgency. It is based on evidence tending to show that the action
complained of must be stayed lest the movant suffer irreparable injury or
the final judgment granting the relief sought become ineffectual.
Necessarily, that evidence need only be a "sampling," as it were, and
intended merely to give the court an idea of the justification for the
preliminary injunction pending the decision of the case on the merits. The
evidence submitted at the hearing on the motion for the preliminary
injunction is not conclusive of the principal action, which has yet to be
decided.
xxx xxx xxxc
While to reiterate, the evidence to be submitted at the hearing on the
motion for preliminary injunction need not be conclusive and complete, we
find that the private respondent has not shown, at least tentatively, that she
has been irreparably injured during the five-month period the petitioner was
operating under the trade name of Pampanga's Pride. On this ground
alone, we find that the preliminary injunction should not have been issued
by the trial court. It bears repeating that as a preliminary injunction is
intended to prevent irreparable injury to the plaintiff, that possibility should
be clearly established, if only provisionally, to justify the restraint of the act
complained against. No such injury has been shown by the private
respondent. Consequently, we must conclude that the issuance of the
preliminary injunction in this case, being utterly without basis, was tainted
with grave abuse of discretion that we can correct on certiorari.
The parties have gone to great lengths in arguing their respective positions
on the merits of the infringement case but this is neither the time nor the
place for such debate. The validity of the petitioner's complaint is a matter
addressed initially to the trial court and cannot be resolved at this time by
this Court.
Our conclusion is that Developers has not justified the issuance of the writ
of preliminary injunction by proving that it has a legal right to the disputed
mark and logo and that it has sustained injury as a result of the use thereof
by Shangri-La. The Court of Appeals did not err in setting aside the orders
of the trial court dated July 2, 1991, and July 12, 1991, for having been
issued with grave abuse of discretion.
WHEREFORE, the challenged decision of the Court of Appeals is
AFFIRMED. The Regional Trial Court of Quezon City is directed to proceed
to the trial on the merits of Civil Case No. 0-91-8476 and to decide it with all
deliberate dispatch.
SO ORDERED.
Conrad and Company vs. CA, Filtrite and Victoria Biscuits GR No.
115115, 18 July 1995
In an Amended Decision, dated 20 April 1994, the Court of
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Appeals reversed an order of the Regional Trial Court ("RTC") which
dismissed Civil Case No. 91-3119 for "Injunction with Damages with Prayer
for Preliminary Injunction" filed by herein private respondents Fitrite, Inc.,
and Victoria Biscuits Co., Inc., against petitioner Conrad and Company, Inc.
The RTC, acting on a motion to dismiss filed by petitioner, ordered the
dismissal of the complaint. Accordingly, for purposes of this review, the
facts alleged in the complaint, narrated by the appellate court and
hereunder reproduced, should be deemed hypothetically admitted.
. . . Plaintiffs appellants FITRITE, INC. and VICTORIA BISCUIT CO., INC.
[private respondents here], both domestic corporations, are engaged in the
business of manufacturing, selling and distributing biscuits and cookies
bearing the trademark "SUNSHINE" in the Philippines. Defendant
CONRAD AND COMPANY [petitioner here] is also engaged in the business
of importing, selling and distributing biscuits and cookies in the Philippines.
Sometime in April 1982, plaintiff FITRITE filed in the Bureau of Patents,
Trademarks and Technology Transfer (hereto referred as BPTTT)
applications for registration of the trademark "SUNSHINE," both in the
Supplemental and Principal Registers, to be used on biscuits and cookies.
Since March 31, 1981 FITRITE had exclusively used this trademark in the
concept of owner on its biscuits and cookies. On May 20, 1983
FITRITE's application for this trademark in the Supplemental Register was
approved by the BPTTT and FITRITE was issued a Certificate of
Registration No. SR-6217 for a term of 20 years from the date of approval.
On March 22, 1990 FITRITE's application for the same trademark in
the Principal Register was approved by BPTTT and FITRITE was issued a
Certificate of Registration No. 47590 for a term of 20 years from said date
of approval. On June 28, 1984 FITRITE authorized its sister company, co-
plaintiff VICTORIA BISCUIT CO., to use this trademark on its biscuits and
cookies, as well as to manufacture, promote, sell and distribute products
bearing said trademark.
On September 7, 1990, FITRITE assigned its trademark "SUNSHINE AND
DEVICE LABEL," together with its interest and business goodwill to said
VICTORIA BISCUIT. From the time FITRITE was issued the Certificate of
Registration for this trademark on May 20, 1983 up to the filing of the
complaint a quo FITRITE and VICTORIA BISCUIT have been
manufacturing, selling and distributing on a massive scale biscuits and
cookies bearing this trademark; so that through the years of extensive
marketing of plaintiffs' biscuits and cookies with this trademark, their
products have become popularly known and enjoyed wide acceptability in
Metro Manila and in the provinces.
Then sometime in June 1990, through the affidavit executed on May 30,
1990 by defendant CONRAD's own Import Manager and Executive
Assistant by the name of Raul Olaya, plaintiffs succeeded in tracing and
discovered that CONRAD had been importing, selling and distributing
biscuits and cookies, and other food items bearing this trademark in the
Philippines. Although CONRAD had never before been engaged in the
importation, sale and distribution of products similar to those of plaintiffs, on
April 18, 1988 CONRAD was suddenly designated exclusive importer and
dealer of the products of "Sunshine Biscuits, Inc." for sale in the Philippine
market; and on April 21, 1988, per the affidavit of said Raul Olaya,
CONRAD made its first importation, which was continuously repeated up to
the present (May 30, 1990 [date of the affidavit]), altogether consisting of
51,575 cartons and amounting to $579,224.35.
Those acts of CONRAD, done without plaintiffs' consent, were deliberately
calculated to mislead and deceive the purchasers by making them believe
that its (CONRAD'S) "Sunshine" products had originated from plaintiffs and
thereby inducing them to patronize those products, all to the damage and
prejudice of both the purchasing public and plaintiffs. Through their counsel,
plaintiffs addressed a letter to CONRAD demanding, among other things,
that it cease and desist from continuing with those acts, but the demand
was ignored. Being acts of infringement and unfair competition in violation
of plaintiffs' rights, plaintiffs can validly avail themselves of the remedies
against infringement under Sec. 23 of Republic Act No. 166, as amended,
as well as of the remedies against unfair competition under
Sec. 29 of the same statute. 1
In seeking the dismissal of the complaint filed by private respondents with
the trial court, petitioner invoked, among other grounds, litis pendentia, the
doctrine of primary jurisdiction and failure to state a cause of action.
The trial court, agreeing with petitioner, granted the motion to dismiss the
INTELLECTUAL PROPERTY LAWS – AMES 2014
complaint in an Order, dated 26 February 1992, reading thusly:
The Court agrees with defendant that internationally accepted trademarks
enjoy protection under Philippine laws. Defendant having been granted
distributorship by Sunshine Biscuits USA over Philippine territory it follows
that the resolution of the issue with respect to the ownership of Sunshine
Biscuits which is the basis of plaintiffs' claim is lodged under the exclusive
jurisdiction of the BPTTT.The action filed by defendant's principal in whose
name the trademark "SUNSHINE BISCUITS" is
alleged to be registered in the United States should be considered as
including defendant Conrad and Company, Inc., it being the
beneficiary/agent/assignee of said Sunshine Biscuits, Inc. Thus, the Court
finds the ground of forum shopping applicable to the case at bar. It cannot
also be denied that there is another action pending between the same
parties for the same cause. Plaintiffs, therefore, should not have filed this
case with this court. It must, therefore, be summarily dismissed. The ground
of
litis pendentia is no doubt meritorious. The doctrine of primary jurisdiction
should be made to apply in this case considering that the BPTTT had
already acquired jurisdiction over the suit brought by defendant's principal
against the plaintiffs involving the right of plaintiffs to use said trademark.
No doubt the BPTTT is better situated, considering its experience and
special knowledge to determine the matters of fact involved. Indeed, the
rulings laid down by the Supreme Court on the point is along this trend.
WHEREFORE, premises considered, the Motion To Dismiss filed by
defendant is hereby GRANTED. The instant case filed by plaintiffs is
hereby ordered DISMISSED. 2 (Emphasis ours)
Unsuccessful in their attempt to have the order reconsidered, private
respondents brought the case to the Court of Appeals (CA-G.R. CV No.
38822).
In an amended decision, dated 20 April 1994, the appellate
court reversed the order of the trial court and ordered the reinstatement of
the case, holding, in part, thusly:
1. It was a motion to dismiss that CONRAD filed instead of an answer
where its "affirmative defense" could have been alleged and later raised in
a motion for preliminary hearing for reception of evidence and not, as
CONRAD did, raise such defense in a mere motion to dismiss, although
such defense involved factual matters outside of the allegations contained
in the complaint;
2. No evidence whatever had been introduced before the outright dismissal,
despite the fact that the factual issues involved in CONRAD's "affirmative
defense" were whether the "SUNSHINE" trademark has been registered in
the United States of America as claimed by CONRAD; if so registered,
whether such registration antedated the registered trademark of FITRITE in
the Philippines; whether Sunshine Biscuits, Inc., CONRAD's principal, is the
actual registrant thereof; and whether CONRAD is truly an agent of
Sunshine Biscuits, Inc. who is protected by the alleged American
"SUNSHINE" trademark and therefore vested with the legal capacity to
raise such "affirmative defense" in the action a quo; etc.; and
3. Unless and until FITRITE's certificates both in the Supplemental and
Principal Registers as registrant of said "SUNSHINE" trademark are
cancelled by BPTTT, or so long as said "SUNSHINE" trademark has not
been successfully proved by CONRAD in the action
a quo as belonging to Sunshine Biscuits, Inc. or so long as said trademark
has not been successfully proved by Sunshine Biscuits, Inc. in the
cancellation proceeding before BPTTT as belonging to it (Sunshine
Biscuits), for all legal intents and purposes the trademark belongs to
FITRITE and all those acts of importing, selling and distributing by
CONRAD constitute infringement as defined in said Sec. 22 of Republic Act
No. 166, as amended.
xxx xxx xxx
In sum, we find the appeal impressed with merit, considering that FITRITE
is the registrant of the "SUNSHINE" trademark in the Philippines; that
CONRAD's claim that its principal, Sunshine Biscuits, Inc., is the registrant
of a "SUNSHINE" trademark in the United States of America is a mere
allegation still subject to proof; that there is no identity of causes of action
and because the cause before BPTTT is the cancellability of FITRITE's
registration while the cause in the case a quo is infringement by CONRAD
of said "SUNSHINE" trademark of FITRITE; that there is implied admission
that CONRAD has been importing, selling and distributing biscuits, cookies
and other food items bearing said "SUNSHINE" trademark without
FITRITE's consent; that so long as the cancellation proceeding remains
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pending in BPTTT, said "SUNSHINE" trademark belongs exclusively to Philippines goods bearing the trademark "Sunshine and Device Label" duly
FITRITE in the Philippines, and any person using it without FITRITE's registered with BPTTT in private respondents' name.
consent is guilty of infringement.
Petitioner, invoking the case of Developers Group of Companies vs. Court
WHEREFORE, the Court hereby:
of Appeals (219 SCRA 715), contends that the "Petitions for Cancellation"
(1) SETS ASIDE the appealed order dated February 26, 1992 dismissing
of Fitrite's Certificate of Registration No. SR-6217 and No. 47590 in the
the complaint a quo;
Supplemental Register and the Principal Register, respectively, which
(2) REINSTATES the complaint;
Sunshine Biscuits, Inc., of the United States of America filed in 1989 and in
(3) ORDERS defendant Conrad and Company, Inc. to file its answer within
1990 (docketed Inter Partes Case No. 3397 and 3739) with BPTTT cast a
the reglementary period from receipt hereof;
cloud of doubt on private respondents' claim of ownership and exclusive
(4) ORDERS the lower court to proceed with the action a quo, although for
right to the use of the trademark "Sunshine." Considering that this matter is
a good cause shown the lower court, in its sound discretion, may suspend
at issue before the BPTTT, which has primary jurisdiction over the case,
the action pending outcome of the cancellation proceeding between
petitioner argues, an injunctive relief from any court would be precipitate
Sunshine Biscuits, Inc. and Fitrite, Inc. in Inter Partes Case
and improper.
No. 3397 before BPTTT, subject to the condition provided for in No. (5)
below;
(5) ORDERS defendant-appellee Conrad and Company, Inc. to desist and The appellate court, in disposing of petitioner's argument, points out:
refrain from importing, manufacturing, selling and distributing in the
Philippines any goods bearing the trademark "SUNSHINE & DEVICE
LABEL" registered in FITRITE's name pending final decision in the action a Notwithstanding those provisions, it is CONRAD's contention — relying on
quo, it being understood that this order, to effect such desistance and the ruling in Industrial Enterprises, Inc. vs. Court of Appeals (G.R. No.
88550, 184 SCRA 426 [1990]) — that, because technical matters or
enjoin defendant-appellee from the aforesaid activities, shall be considered
as the Writ of Injunction itself and an integral part of this Amended intricate issues of fact regarding the ownership of the trademark in question
Decision. are involved, its determination requires the expertise, specialized skills and
knowledge of the proper administrative body, which is BPTTT, which has
No pronouncement as to costs.
SO ORDERED. 3 (Emphasis ours.) the primary jurisdiction over the action a quo; and therefore the trial court
should, and as it correctly did, yield its jurisdiction to BPTTT.
The trial court erred in adopting such fallacious argument. The issue
In the instant petition for review, which has additionally prayed for a writ of involved in the action a quo is not whether the "SUNSHINE" trademark in
preliminary injunction or for a temporary restraining order, petitioner tells us question is registerable or cancellable — which is the issue pending in
that the appellate court has erred — BPTTT that may be technical in nature requiring "expertise, specialized
skills and knowledge" — since the trademark has already been registered
in both the Supplemental and Principal Registers of BPTTT in the name of
1. When it ordered the issuance of a writ of preliminary injunction, upon
FITRITE; actually, the issue involved in the action a quois whether
private respondents, posting of a bond in the sum of P10,000.00, despite
CONRAD's acts of importing, selling and distributing biscuits, cookies and
the pendency of the cancellation proceedings in Inter Partes case Nos.
other food items bearing said registered "SUNSHINE" trademark in the
3397 and 3739, and in subsequently amending its decision by issuing the
Philippines without the consent of its registrant (FITRITE) constitute
writ of preliminary injunction itself.
infringement thereof in contemplation of Sec. 22 of Republic Act No. 166,
2. When respondent court failed to apply and totally disregarded the
as amended. Under Sec. 22, the elements that constitute infringement are
provisions of the Paris Convention for the protection of industrial property,
simply (1) the use by any person, without the consent of the registrant, (2)
as well as the memorandum of the Minister of Trade, dated November 20,
of any registered mark or trade-name in connection with the sale, business
1980.
or services, among other things, bearing such registered mark or trade-
3. In holding that the doctrine of primary jurisdiction by the Bureau of
name. This, clearly, is a factual question that does not require any
Patents, Trademarks and Technology Transfer (BPTTT) is not applicable in
specialized skill and knowledge for resolution to justify the exercise of
this case, and in further holding that the issues involved in this case is not
primary jurisdiction by BPTTT.
whether the "SUNSHINE" trademark in question is registerable or
But, even assuming — which is not the case — that the issue involved here
cancellable.
is technical in nature requiring specialized skills and knowledge,
4. Respondent court erred in holding that the ground of litis pendentia under
still Industrialized Enterprises does not authorize the outright dismissal of a
the Rules of Court does not apply in this case for the reason that the cause
case originally cognizable in the courts; what it says is where primary
of action in the cancellation proceedings before the BPTTT is not the same
jurisdiction comes into play in a case "the judicial process is suspended
as the cause of action in the case a quo.
pending referral of such issues to the administrative body for its view. 5
5. In ordering the lower court to proceed with the action a quo, although for
a good cause shown the lower court, in its sound discretion, may suspend
the action pending outcome of the cancellation proceeding between We cannot see any error in the above disquisition. It might be mentioned
Sunshine Biscuits, Inc. and Fitrite, Inc. in inter partes Case No. 3397 and that while an application for the administrative cancellation of a registered
3739 before BPTTT. 4 trademark on any of the grounds enumerated in Section 17 6 of Republic
Act No. 166, as amended, otherwise known as the Trade-Mark Law, falls
under the exclusive cognizance of BPTTT (Sec. 19, Trade-Mark Law), an
The petition was given due course; however, neither a writ of preliminary
action, however, for infringement or unfair competition, as well as the
injunction nor a restraining order was issued by this Court.
remedy of injunction and relief for damages, is explicitly and unquestionably
within the competence and jurisdiction of ordinary courts.
Unadorned, the issues would revolve simply around the question of
whether or not the Court of Appeals committed reversible error (1) in
Private respondents are the holder of Certificate of Registration No. 47590
allowing the trial court to proceed with the case for "injunction with
(Principal Register) for the questioned trademark. In Lorenzana
damages" filed by private respondents notwithstanding the pendency of an
vs. Macagba, 154 SCRA 723, cited with approval in Del Monte Corporation
administrative case for the cancellation of the former's trademark filed by
vs. Court of Appeals, 181 SCRA 410, we have declared that registration in
supposedly "petitioner's principal" with the Bureau of Patents, Trademarks
the Principal Register gives rise to a presumption of validity of the
and Technology Transfer ("BPTTT"); and (2) in meanwhile issuing an
registration and of the registrant's ownership and right to the exclusive use
injunction order against petitioner.
of the mark. It is precisely such a registration that can serve as the basis for
an action for infringement. 7 An invasion of this right entitles the registrant to
We find for private respondents. court protection and relief. Section 23 and Section 27, Chapter V, of the
Trade-Mark Law provides:
The assailed amended decision of the appellate court reinstated the
complaint for "Injunction with Damages with Prayer for Preliminary Sec. 23. Actions, and damages and injunction for infringement. — Any
Injunction" filed by private respondents with the trial court and ordered person entitled to the exclusive use of a registered mark or trade-name may
petitioner to file its answer. The appellate court enjoined petitioner in the recover damages in a civil action from any person who infringes his rights,
meantime from importing, manufacturing, selling and distributing in the and the measure of the damages suffered shall be either the reasonable

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TRADEMARKS
profit which the complaining party would have made, had the defendant not against petitioner.
infringe his said rights, or the profit which the defendant actually made out
of the infringement, or in the event such measure of damages cannot be
readily ascertained with reasonable certainty, then the court may award as
damages a reasonable percentage based upon the amount of gross sales
of the defendant or the value of the services in connection with which the
mark or trade-name was used in the infringement of the rights of the
complaining party. In cases where actual intent to mislead the public or to
defraud the complaining party shall be shown, in the discretion of the court,
the damages may be doubled.
The complaining party, upon proper showing, may also be granted
injunction.
Sec. 27. Jurisdiction of [Regional Trial Court]. All actions under this Chapter
and Chapters VI and VII hereof shall be brought before the proper
[Regional Trial Court].

Surely, an application with BPTTT for an administrative cancellation of a

registered trade mark cannot per sehave the effect of restraining or
preventing the courts from the exercise of their lawfully conferred
jurisdiction. A contrary rule would unduly expand the doctrine of primary
jurisdiction which, simply expressed, would merely behoove regular courts,
in controversies involving specialized disputes, to defer to the findings of
resolutions of administrative tribunals on certain technical matters. This
rule, evidently, did not escape the appellate court for it likewise decreed
that for "good cause shown, the lower court, in its sound discretion, may
suspend the action pending outcome of the cancellation proceedings"
before BPTTT.

Needless to say, we cannot at this stage delve into the merits of

the cancellation case. In this instance, the sole concern, outside
of the jurisdictional aspect of the petition hereinbefore discussed,
would be that which focuses on the propriety of the injunction
order of the appellate court. On this score, the appellate court
has said:

Thus, having the exclusive right over said trademark, FITRITE should be
protected in the use thereof (Philips Export B.V. vs. Court of Appeals, G.R.
No. 96161, 206 SCRA 457 [1992]); and considering that it is apparent from
the record that the invasion of the right FITRITE sought to protect is
material and substantial; that such right of FITRITE is clear and
unmistakable; and that there is an urgent necessity to prevent serious
damage to FITRITE's business interest, goodwill and profit, thus under the
authority of Sec. 23 of said Republic Act No. 166, as amended, a
preliminary injunction may be issued in favor of FITRITE to maintain the
status quo pending trial of the action a quo on the meritswithout prejudice to
the suspension of such action if the aforesaid cancellation proceeding
before the BPTTT has not been concluded. 8 (Emphasis supplied.)

The appellate court's finding that there is an urgent necessity for the
issuance of the writ of preliminary injunction pending resolution by BPTTT
of the petition for cancellation filed by Sunshine USA in Inter Partes Case
No. 3397 would indeed appear to have merit. The prematurity of petitioner's
motion to dismiss places the case at bench quite apart from that
of Developers Group of Companies, Inc. vs. Court of Appeals, 219 SCRA
715. The allegations of the complaint, perforced hypothetically deemed
admitted by petitioner, would here justify the issuance by appellate court of
its injunction order. Petitioner, itself, does not even appear to be a party in
the administrative case (Inter Partes Case No. 3397). The averment that
Sunshine USA is petitioner's principal, and that it has a prior foreign
registration that should be respected conformably with the Convention of
the Union of Paris for the Protection of Industrial Property are mere
asseverations in the motion to dismiss which, along with some other factual
assertions, are yet to be established.

All given, we find no reversible error on the part of the appellate court in its
appealed decision.

In closing, the Court would urge the Bureau of Patents, Trademarks and
Technology Transfer to resolve with dispatch the administrative cases (Inter
Partes Case No. 3397 and No. 3739) referred to in this decision.

WHEREFORE, the petition for review is DENIED for lack of merit, and the
questioned amended decision of the Court of Appeals is AFFIRMED. Costs

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