#60

Petitioner: PROSOURCE INTERNATIONAL, INC.

Respondent: HORPHAG RESEARCH MANAGEMENT SA
G.R. No.: 180073
Promulgation: November 25, 2009

FACTS:

Respondent is a corporation and owner of trademark PYCNOGENOL, a food supplement sold and
distributed by Zuellig Pharma Corporation. Respondent later discovered that petitioner was also
distributing a similar food supplement using the mark PCO-GENOLS since 1996. This prompted respondent
to demand that petitioner cease and desist from using the aforesaid mark. Respondent filed a Complaint
for Infringement of Trademark with Prayer for Preliminary Injunction against petitioner, in using the name
PCO-GENOLS for being confusingly similar. Petitioner appealed otherwise.

The RTC decided in favor of respondent. It observed that PYCNOGENOL and PCO-GENOLS have the
same suffix "GENOL" which appears to be merely descriptive and thus open for trademark registration by
combining it with other words and concluded that the marks, when read, sound similar, and thus
confusingly similar especially since they both refer to food supplements.

On appeal to the CA, petitioner failed to obtain a favorable decision. The appellate court explained
that under the Dominancy or the Holistic Test, PCO-GENOLS is deceptively similar to PYCNOGENOL.

ISSUE:

Whether or not the names are confusingly similar

RULING:

Yes. There is confusing similarity and the petition is denied. Jurisprudence developed two test to
prove such.

The Dominancy Test focuses on the similarity of the prevalent features of the competing
trademarks that might cause confusion and deception, thus constituting infringement. If the competing
trademark contains the main, essential and dominant features of another, and 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 marks
involved is likely to cause confusion or mistake in the mind of the public or to deceive purchasers. 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.

The Holistic Test entails a consideration of the entirety of the marks as applied to the products,
including the labels and packaging, in determining confusing similarity. Not only on the predominant words
should be the focus but also on the other features appearing on both labels in order that the observer may
draw his conclusion whether one is confusingly similar to the other.

SC applied the Dominancy Test. Both the words have the same suffix "GENOL" which on evidence,
appears to be merely descriptive and furnish no indication of the origin of the article and hence, open for
trademark registration by the plaintiff through combination with another word or phrase. When the two
words are pronounced, the sound effects are confusingly similar not to mention that they are both
described by their manufacturers as a food supplement and thus, identified as such by their public
consumers. And although there were dissimilarities in the trademark due to the type of letters used as well
as the size, color and design employed on their individual packages/bottles, still the close relationship of
the competing products’ name in sounds as they were pronounced, clearly indicates that purchasers could
be misled into believing that they are the same and/or originates from a common source and manufacturer.

#61
Petitioner: NBI MICROSOFT CORPORATION & LOTUS DEVELOPMENT CORP.
Respondent: JUDY C. HWANG, BENITO KEH & YVONNE K. CHUA/BELTRON COMPUTER PHILIPPINES INC., et
al
G.R. No.: 147043
Promulgation: June 21, 2005

FACTS:

Petitioner Microsoft Corp., owns the copyright and trademark to several computer software, while
Private Respondents are President/Managing Director, Gen. Manager, and Director of Beltron Computer
Philippines, Inc. (Beltron) and Taiwan Machinery Display & Trade Center, Inc. (TMTC), both domestic
corporations. Microsoft and Beltron entered into a Licensing Agreement, authorizing Beltron to reproduce
and install no more than one copy of Microsoft software on each Customer System hard disk or Read Only
Memory (ROM) and distribute directly or indirectly and license copies of the Product.

Microsoft terminated the Agreement for Beltron’s non-payment of royalties. Afterwards, Microsoft
learned that respondents were illegally copying and selling Microsoft software. Hence, Microsoft hired the
services of Pinkerton Consulting Services (PCS), a private investigative firm and sought the assistance of the
National Bureau of Investigation (NBI). The investigating agents, posing as representatives of a computer
shop, bought computer hardware and software from Respondents. The items contain Microsoft Software,
and the ROMs are encased in containers with Microsoft packaging. The Agents were not given the Microsoft
end-user license agreements, user’s manuals, registration cards or certificates of authenticity for the
articles they purchased. Based on articles obtained, Petitioner charged Respondents before the DOJ with
Copyright Infringement and Unfair Competition. DOJ dismissed Microsoft’s complaint for lack of merit and
insufficiency of evidence. Hence, this petition.

ISSUE:

Whether or not private respondents are liable for copyright infringement and unfair competition

RULING:

YES. Section 5 of PD 49 enumerates the rights vested exclusively on the copyright owner. The
gravamen of copyright infringement is not merely the unauthorized manufacturing of intellectual works
but rather the unauthorized performance of any of the acts covered by Section 5. Hence, any person who
performs any of the acts under Section 5 without obtaining the copyright owners prior consent renders
himself civilly and criminally liable for copyright infringement.
 Some of the counterfeit CD-ROMs bought from respondents were installer CD-ROMs containing
Microsoft software only or both Microsoft and non-Microsoft software. These articles are counterfeit per
se because Microsoft does not (and could not have authorized anyone to) produce such CD-ROMs. The
copying of the genuine Microsoft software to produce these fake CD-ROMs and their distribution are illegal
even if the copier or distributor is a Microsoft licensee. The illegality of the non-installer CD-ROMs
purchased from respondents and of the Microsoft software pre-installed in the CPU is shown by the
absence of the standard features accompanying authentic Microsoft products, namely, the Microsoft end-
user license agreements, user’s manuals, registration cards or certificates of authenticity.

The counterfeit non-installer CD-ROMs that the Agents bought from respondents also suffice to
support a finding of probable cause to indict respondents for unfair competition under Article 189(1) of the
Revised Penal Code for passing off Microsoft products. From the pictures of the CD-ROMs packaging, one
cannot distinguish them from the packaging of CD-ROMs containing genuine Microsoft software. Such
replication, coupled with the similarity of content of these fake CD-ROMs and the CD-ROMs with genuine
Microsoft software, implies intent to deceive.

#62

Petitioner: UNILEVER PHILIPPINES, INC

Respondent: MICHAEL TAN a.k.a. PAUL D. TAN
G.R. No.: 179367
Promulgation: January 29, 2014

FACTS:

On January 17, 2002, agents of NBI applied for the issuance of search warrants for the search of a
warehouse and an office located in Marikina City, allegedly owned by Michael Tan a.k.a. Paul D. Tan. The
application alleged that Tan had in his possession counterfeit shampoo products which were being sold,
retailed, distributed, dealt with or intended to be disposed of, in violation of the Intellectual Property Code
of the Philippines. The application was granted and search warrants were issued. In the course of the
search, the NBI seized counterfeit Unilever shampoo products from the respondent’s office and
warehouse. The NBI thereafter filed with the DOJ a complaint against the respondent for violation of R.A.
No. 8293, specifically Section 168 (unfair competition). The DOJ dismissed the complaint for insufficiency
of evidence. The CA also dismissed the petition on the ground that the petitioner failed to establish facts
and circumstances that would constitute acts of unfair competition under R.A. No. 8293. The CA took into
account the insufficiency of evidence that would link the respondent to the offense charged. Hence, the
petition.

ISSUE:

Whether or not there exists probable cause in order to indict the respondent of unfair competition

RULING:

Yes. The result of the NBI’s search which yielded several boxes of counterfeit shampoo sachets and
the NBI’s Joint Affidavits in support of the application for search warrants serve as corroborating evidence.
The striking similarities between the genuine Unilever shampoo sachets and the counterfeit sachets seized
by the NBI support the belief that the respondent had been engaged in dealing, manufacturing, selling and
distributing counterfeit Unilever shampoo products. A total of 1,238 assorted counterfeit Unilever products
were found at, and seized from, the respondent’s office. The huge volume and the location where these
shampoos were found (inside a box under a pile of other boxes located inside the respondent’s office) belie
the respondent’s claim of personal consumption. Human experience and common sense dictate that
shampoo products (intended for personal consumption) will ordinarily and logically be found inside the
house, specifically, inside the bathroom or in a private room, not in the consumer’s office.

The failure to prove that the respondent is the owner of the warehouse located on Camia St.,
Marikina City, does not automatically free him from liability. Proof of the warehouse’s ownership is not
crucial to the finding of probable cause. In fact, ownership of the establishment where the counterfeit
products were found is not even an element of unfair competition. While the respondent may not be its
owner, this does not foreclose the possibility that he was the manufacturer or distributor of the counterfeit
shampoo products. Needless to say, what is material to a finding of probable cause is the commission of
acts constituting unfair competition, the presence of all its elements and the reasonable belief, based on
evidence, that the respondent had committed it.

These pieces of evidence are sufficient to form a reasonable ground to believe that the crime of
unfair competition was committed and that the respondent was its author.