Case number 1

Victorio P. Diaz vs People of the Philippines and Levi Strauss [Phils.], Inc.

G.R. No. 180677 February 18, 2003

Facts:

Levi Strauss Philippines, Inc. (Levi’s Philippines) is a licensee of Levi’s. After receiving information
that Diaz was selling counterfeit LEVI’S 501 jeans in his tailoring shops in Almanzaand Talon,
Las Piñas City, Levi’s Philippines hired a private investigation group to verify the information.
Surveillance and the purchase of jeans from the tailoring shops of Diaz established that the jeans
bought from the tailoring shops of Diaz were counterfeit or imitations of LEVI’S 501. Armed with
search warrants, NBI agents searched the tailoring shops of Diaz and seized several fake LEVI’S
501 jeans from them. Levi’s Philippines claimed that it did not authorize the making and selling of
the seized jeans; that each of the jeans were mere imitations of genuine LEVI’S 501 jeans by
each of them bearing the registered trademarks, like the arcuate design, the tab, and the leather
patch; and that the seized jeans could be mistaken for original LEVI’S 501 jeans due to the
placement of the arcuate, tab, and two-horse leather patch.

On his part, Diaz admitted being the owner of the shops searched, but he denied
any criminal liability. Diaz stated that he did not manufacture Levi’s jeans, and that he used the
label “LS Jeans Tailoring” in the jeans that he made and sold; that the label “LS Jeans Tailoring”
was registered with the Intellectual Property Office; that his shops received clothes for sewing or
repair; that his shops offered made-to-order jeans, whose styles or designs were done in
accordance with instructions of the customers; that since the time his shops began operating in
1992, he had received no notice or warning regarding his operations; that the jeans he produced
were easily recognizable because the label “LS Jeans Tailoring,” and the names of the customers
were placed inside the pockets, and each of the jeans had an “LSJT” red tab; that “LS” stood for
“Latest Style;” and that the leather patch on his jeans had two buffaloes, not two horses.

Issue:

Whether there exists a likelihood of confusion between the trademarks of Levi’s and Diaz.

Held:

The Court held, through the application of the holistic test, that there was no likelihood of confusion
between the trademarks involved. Accordingly, the jeans trademarks of Levi’s Philippines and
Diaz must be considered as a whole in determining the likelihood of confusion between them.
The maongpants or jeans made and sold by Levi’s Philippines, which included LEVI’S 501, were
very popular in the Philippines. The consuming public knew that the original LEVI’S 501 jeans
were under a foreign brand and quite expensive. Such jeans could be purchased only in malls or
boutiques as ready-to-wear items, and were not available in tailoring shops like those of Diaz’s
as well as not acquired on a “made-to-order” basis. Under the circumstances, the consuming
public could easily discern if the jeans were original or fake LEVI’S 501, or were manufactured by
other brands of jeans.

Diaz used the trademark “LS JEANS TAILORING” for the jeans he produced and sold in his
tailoring shops. His trademark was visually and aurally different from the trademark “LEVI
STRAUSS & CO” appearing on the patch of original jeans under the trademark LEVI’S 501. The
word “LS” could not be confused as a derivative from “LEVI STRAUSS” by virtue of the “LS” being
connected to the word “TAILORING”, thereby openly suggesting that the jeans bearing the
trademark “LS JEANS TAILORING”came or were bought from the tailoring shops of Diaz, not
from the malls or boutiques selling original LEVI’S 501 jeans to the consuming public.

The prosecution also alleged that the accused copied the “two horse design” of the petitioner-
private complainant but the evidence will show that there was no such design in the seized jeans.
Instead, what is shown is “buffalo design.” Again, a horse and a buffalo are two different animals
which an ordinary customer can easily distinguish.

The prosecution further alleged that the red tab was copied by the accused. However, evidence
will show that the red tab used by the private complainant indicates the word “LEVI’S” while that
of the accused indicates the letters “LSJT” which means LS JEANS TAILORING. Again, even an
ordinary customer can distinguish the word LEVI’S from the letters LSJT.

In terms of classes of customers and channels of trade, the jeans products of the private
complainant and the accused cater to different classes of customers and flow through the different
channels of trade. The customers of the private complainant are mall goers belonging to class A
and B market group – while that of the accused are those who belong to class D and E market
who can only afford Php 300 for a pair of made-to-order pants.

Case number 2
ABS-CBN Corp., petitioner vs. GMA Pres. and CEO Atty. Felipe Gozon, GMA Vice President
and COO Gilberto Duavit Jr., Marissa L. Flores, Jessica A. Soho, GMA Head of News
Operations Grace Dela Peña-Reyes, GMA News Program Manager
John Oliver Manalastas, et. al., respondents.
G.R. No. 195956, 1 March 2015
Ponente: Justice Marvic F. Leonen
FACTS
On August 13, 2004, petitioner ABS-CBN filed a criminal complaint against respondent GMA for
(alleged) act of copyright infringement under Sections 177 and
211 of the Intellectual Property Code (RA 8293, as amended), because the respondent aired
footage of the arrival and homecoming of OFW Angelo dela Cruz
at NAIA from Iraq without the petitioner's consent. ABS-CBN stated that it has an agreement with
Reuter's that the petition will contribute news and content that it owns and makes to Reuters in
exchange of the latter's news and video material, and Reuters will ensure that ABS-CBN's
materials cannot be aired in the country.
The respondent was a subscriber of Reuter's and CNN live feeds. After it received the live feed
of Angelo Dela Cruz's arrival and homecoming from Reuter's, it immediately aired the video from
that news feed. The respondent alleged that its news staff was not aware that there was (a news
embargo) agreement between ABS- CBN and Reuters. Respondent alleged that it was not also
aware that it aired petitioner's footage.
Assistant City Prosecutor Dindo Venturanza issued resolution on 3 December 2004 which found
probable cause to indict Dela Peña-Reyes and Manalastas. The respondents appealed the
Prosccutor's resolution before DOJ. DOJ Secretary Raul M. Gonzalez ruled in favor of
respondents in his resolution dated 1 August 2005 and held that good faith may be raised as a
defense in the case.
Meanwhile, DOJ Acting Secretary Alberto C. Agra issued a resolution on 29 June 2010 which
reversed Sec. Gonzalez's resolution and found probable cause to charge Dela Pena ̃ -Reyes,
Manalastas, as well as to indict Gozon, Duavit, Jr., Flores, and Soho for violation of the Intellectual
Property Code (due to copyright infringement).
The Court of Appeals rendered a decision on 9 November 2010, which granted the Petition for
Certiorari to reverse and set aside DOJ Sec. Alberto Agra's resolution and a prayer for issuance
of a temporary restraining order and/or Writ of Preliminary Injunction.

The appellate court stated that the petitioner has copyright of its news coverage, but respondents’
act of airing five (5) seconds of the homecoming footage without notice of the “No Access
Philippines” restriction of the live Reuter's video feed, was undeniably attended by good faith and
thus, serves to exculpate from criminal liability under the Intellectual Property Code.
ISSUES
W/N there is probable cause to find respondents to be held liable criminally for the case of
copyright infringement under the Intellectual Property Law (RA 8293, as amended)?
HELD
The Supreme Court PARTIALLY GRANTED ABS-CBN’s petition and ordered RTC Q.C. Branch
93 to continue with the criminal proceedings against Grace Dela Peña-
Reyes and John Oliver Manalastas due to copyright infringement.
The other respondents, Atty. Felipe Gozon, Gilberto Duavit Jr., Marissa L. Flores, and Jessica A.
Soho were held not liable for the (criminal) act of copyright infringement. The Court held that their
mere membership in GMA7's Board of Directors does not mean that they have knowledge,
approval, or participation in the criminal act of copyright infringement., as there is a need for their
direct/active participation in such act. Also, there was lack of proof that they actively participated
or exercised moral ascendancy over Manalastas and Dela Cruz-Pena.
Contrary to GMA’s contention, the Supreme Court deemed GMA's mere act of rebroadcast of
ABS-CBN’s news footage (arrival and homecoming of OFW Angelo dela Cruz at NAIA from Iraq
last 22 July 2004) for 2 mins and 40 secs.without the latter's authority creates probable cause to
find GMA's news personnel Manalastas and Dela Peña-Reyes criminally liable for violating
provisions of Intellectual Property Code (Section 216-217 of RA 8293, as amended
) that imposes strict liability for copyright infringement, since they have not been diligent in their
functions to prevent that footage from being aired on television. They knew that there would be
consequences in carrying ABS-CBN’s footage in their broadcast – which is why they allegedly cut
the feed from Reuters upon seeing ABS-CBN’s logo
and reporter.
The difference of an act mala in se and mala prohibita was stated in the present case. Acts mala
in se requires presence of criminal intent and the person's knowledge of the nature of his/her act,
while in acts mala prohibita, presence of criminal intent and the person's knowledge is not
necessary. The Court also stated that Philippine laws on copyright infringement does not require
criminal intent (mens rea) and does not support good faith as a defense. Thus, the act of
infringement and not the intent is the one that causes the damage.
It held that ABS-CBN's video footage is copyrightable because it is under “audiovisual works and
cinematographic works and works produced by a process

Case number 3
EY Industrial Vs. Shen Dar
G.R. No. 184850

Facts:

 EY Industrial Sales is a domestic corporation engaged in the production, distribution and

sale of air compressors.
 Shen Dar is a Taiwan-based foreign corporation engaged in the manufacture of
compressors.
 From 1997-2004, EY Industrial imported air compressors from Shen Dar.
 In 1997, Shen Dar filed a Trademark Application with the Intellectual Property Office (IPO)
for the mark “Vespa” for the use of air compressors. It was approved in 2007.
 In 1999, EY Industrial filed a Trademark Application also for the mark “VESPA” for the use
of air compressors. It was approved in 2004.
 Shen Dar filed a Petition for Cancellation of the Industrial’s EYES COR with the Bureau of
Legal Affairs contending that: a. there was a violation of Section 123.1 (D) of the Intellectual
Property Code which provides that: A mark cannot be registered if it is identical to a mark with an
earlier filing or priority date. b. EY Industrial is only a distributor of the air compressors
 On the other hand, EY Industrial alleged that it is the sole assembler and fabricator of
VESPA air compressors since the early 1990s and that Shen Dar supplied them air compressors
with the mark “SD” and not “VESPA”

Issues:
1. Who between EY Industrial and Shen Dar is entitled to the trademark “VESPA”. EY
INDUSTRIAL SALES
2. WON the Bureau of Legal Affairs has the power to cancel the application of Shen Dar even if
it is Shen Dar who filed the case? YES

Held:

1st: EY INDUSTRIAL has the right to the trademark.

Based on the evidence, EYIS owns the “VESPA” trademark; it has prior use, as shown by various
sales invoices.

Ownership of a mark or trade name may be acquired not necessarily by registration but by
adoption and use in trade or commerce. As between actual use of a mark without registration,
and registration of the mark without actual use thereof, the former prevails over the latter.

For 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 pre-requisite to the acquisition of the right of
ownership. It is non sequitur to hold that porque EYIS is a distributor, it is no longer the owner.

FIRST-TO-FILE RULE

Under Section 123.1 of IPO provision, the registration of a mark is prevented with the filing of an
earlier application for registration.

This must not, however, be interpreted to mean that ownership should be based upon an earlier
filing date. While RA 8293 (IPC) removed the previous requirement of proof of actual use prior
to the filing of an application for registration of a mark, proof of prior and continuous use is
necessary to establish ownership of a mark. Such ownership constitutes sufficient evidence to
oppose the registration of a mark.

When we talk about trademark, we are just talking about the mark. It does not include the product.
Shen Dar is the manufacturer of the product, but they did not name the product as VESPA. It was
EY that named the VESPA, and used the VESPA, even though they were only the distributors.
It
was EY that actually used the trademark through the use of receipts, and other documents.

The first to file rule – According to the SC that Shen Dar filed under the old IPC where prior use
is the one applied.


2nd: BLA has the power to cancel the application.

Shen Dar challenges the propriety of such cancellation on the ground that there was no petition
for cancellation as required under Sec. 151 of RA 8293.

The IPO Director General stated that, despite the fact that the instant case was for the cancellation
of the COR issued in favor of EYIS, the interests of justice dictate, and in view of its findings, that
the COR of Shen Dar must be cancelled.

The above rule reflects the oft-repeated legal principle that quasi-judicial and administrative
bodies are not bound by technical rules of procedure. Such principle, however, is tempered by
fundamental evidentiary rules, including due process.

The fact that no petition for cancellation was filed against the COR issued to Shen Dar does not
preclude the cancellation of Shen Dar’s COR. It must be emphasized that, during the hearing for
the cancellation of EYIS’ COR before the BLA, Shen Dar tried to establish that it, not EYIS, was
the true owner of the mark “VESPA” and, thus, entitled to have it registered. Shen Dar had more
than sufficient opportunity to present its evidence and argue its case, and it did. It was given its
day in court and its right to due process was respected. The IPO Director General’s disregard of
the procedure for the cancellation of a registered mark was a valid exercise of his discretion.

Remember, EY’s application was the one granted, and it is Shen Dar’s application that was
cancelled.
It does not mean that even you were the one who filed, it your application cannot be
cancelled. The BLA, who has jurisdiction over the case, were able to determine that it is Shen
Dar’s trademark that should not have been issued with registration, even it is the plaintiff.

Case number 4

Taiwan Kolin vs Kolin ElectronicsG. R. No. 209843 March 25, 2015

Facts:
Taiwan Kolin Corp sought to register the trademark “KOLIN” in Class 9 on the following
combination of goods: television sets, cassette recorder, VCD Amplifiers, camcorders and other
audio/video electronic equipment, flat iron, vacuum cleaners, cordless handsets, videophones,
facsimile machines, teleprinters, cellular phones and automatic goods vending machine.
Kolin Electronics opposed the application on the ground that thetrademark “KOLIN” is identical,
if not confusingly similar, with its registered trademark “KOLIN” which covers the following
products under Class 9 of the Nice Classification (NCL): automatic voltage regulator, converter,
recharger, stereo booster, AC-DC regulated power supply, step-down transformer, and PA
amplified AC-DC. Kolin Electronics argued that the products are not only closely-related because
they fall under the same classification, but also because they are inherently similar for being
electronic products and are plugged into electric sockets and perform a useful function.

Issue: W/N the products are closely-related

Held:
No, the products are not related and the use of the trademark KOLIN on them would not likely
cause confusion. To confer exclusive use of a trademark, emphasis should be on the similarity
or relatedness of the goods and/or services involved and not on the arbitrary classification or
general description of their properties or characteristics.
First, products classified under Class 9 can be further classified into five categories. Accordingly,
the goods covered by the competing marks between Taiwan Kolin and Kolin Electronics fall under
different categories. Taiwan Kolin’s goods are categorized as audio visual equipments,
while Kolin Electronics’ goods fall under devices for controlling the distribution and use of
electricity. Thus, it is erroneous to assume that all electronic products are closely related and that
the coverage of one electronic product necessarily precludes the registration of a similar mark
over another.
Second, the ordinarily intelligent buyer is not likely to be confused. The distinct visual and aural
differences between the two trademarks “KOLIN”, although appear to be minimal, are sufficient
to distinguish between one brand or another. The casual buyer is predisposed to be more
cautious, discriminating, and would prefer to mull over his purchase because the products
involved are various kind of electronic products which are relatively luxury items and not
considered affordable. They are not ordinarily consumable items such as soy sauce, ketsup or
soap which are of minimal cost. Hence, confusion is less likely.

Case number 5

CASE TITLE: CENTURY CHINESE MEDICINE CO., et. al vs. PEOPLE OF THE PHILIPPINES
and LING NALAU

PETITIONER’S CLAIMS:
Petitioners contend that the products seized from their respective stores cannot be the subject of
the search warrants and seizure as those Top Gel products are not fruits of any crime, infringed
product nor intended to be used in any crime; that they are legitimate distributors who are
authorized to sell the same, since those genuine top gel products bore the original
trademark/trade name of TOP GEL MCA, owned and distributed by Yu. Petitioners also claim that
despite the RTC's order to release the seized TOP GEL products, not one had been returned;
that one or two samples from each petitioner's' drugstore would have sufficed in case there is a
need to present them in a criminal prosecution, and that confiscation of thousands of these
products was an overkill. Petitioners also argue that the issue that the RTC erred in applying
the rules on search and seizure in anticipation of a civil action was never raised in the RTC.

RESPONDENT’S CLAIMS: Respondent Ling Na Lau, doing business under the name and style
Worldwide Pharmacy, is the sole distributor and registered trademark owner of TOP GEL T.G. &
DEVICE OF A LEAF papaya whitening soap for a period of ten years from 2003. Respondent
claims that the petitioners in this case were selling counterfeit whitening papaya soaps bearing
the general appearance of their products. There was an investigation, which led to seizures of the
petitioner's products because the NBI ruled that it was counterfeit.

ISSUE/S: WON the CA erred in reversing the RTC's quashal of the assailed search warrants

RULING:
- The applications for the issuance of the assailed search warrants were for violations of Sections
155 and168, both in relation to Section 170 of Republic Act (RA) No. 8293, otherwise known as
the Intellectual Property Code of the Philippines. Section 155, in relation to Section 170, punishes
trademark infringement; while Section 168, in relation to Section 170, penalizes unfair
competition. The SC agrees with the CA that A.M. No. 02-1-06-SC, which provides for the Rules
on the Issuance of the Search and Seizure in Civil Actions for Infringement of Intellectual Property
Rights, is not applicable in this case as the search warrants were not applied based thereon, but
in anticipation of criminal actions for violation of intellectual property rights under RA 8293.- It was
established that respondent had asked the NBI for assistance to conduct investigation and search
warrant implementation for possible apprehension of several drugstore owners selling imitation
or counterfeit TOP GEL T.G. & DEVICE OF A LEAF papaya whitening soap. Also, in his affidavit
to support his application for the issuance of the search warrants, NBI Agent Furing stated that
"the items to be seized will be used as relevant evidence in the criminal actions that are likely to
be instituted." Hence, Rule 126of the Rules of Criminal Procedure applies.- The affidavits of NBI
Agent Furing and his witnesses, Esmael and Ling, clearly showed that they are seeking protection
for the trademark "TOP GEL T.G. and DEVICE OF A LEAF" registered to respondent by the IPO
on 2003. While petitioners claim that the product they are distributing was owned by Yu with the
trademark TOP GEL MCA and MCA DEVISE, it was different from the trademark TOP GEL T.G.
and DEVICEOF A LEAF subject of the application.

Case number 6
UFC PHILIPPINES v BARRIO FIESTA
GR No. 198889

Facts:
Petitioner Nutri-Asia, Inc. (petitioner) is a corporation duly organized and existing under Philippine
laws. It is the emergent entity in a merger with UFC Philippines Inc. that was completed on Feb.
11, 2009.

On April 4, 2002, respondent Barrio Fiesta Manufacturing Coroporation filed ofr the mark “PAPA
BOY & DEVICE” for goods under Class 30, specifically for “lechon sauce.” The Intellectual
Property Office (IPO) published said application for opposition in the IP Phil e-Gazette on Sept. 8
2006.

Petitioner Nutri-asia filed with the IPO Bureau of Legal Affairs a Verified Notice of Opposition to
the application alleging that the mark “PAPA” is for use on banana catsup and other similar goods
first used in 1954 by Neri Papa.

After using “PAPA” for 27 years, Neri Papa subsequently assigned the mark to Herman Reyes
who filed an application to register the said “PAPA” mark for use on banana catsup, chili sauce,
achara, banana chips and instate ube powder.
On November 7, 2006 the registration was assigned to Nutri-Asia. The company has not
abandoned the use of the mark “PAPA” and the variations (such as “PAPA BANANA CATSUP
label” and “PAPA KETSARAP”.) thereof as it continued the use of the mark up to the present.
Petitioner further allege that “PAPA BOY & DEVICE” is identical to the mark “PAPA” owned by
Nutri-Asia and duly registered in its favor. The petitioner contends that the use of “PAPA” by the
respondent-applicant would likely result in confusion and deception. The consuming public,
particularly the unwary customers, will be deceived, confused, and mistaken into believing that
respondent-applicant's goods come from Nutri-Asia, which is particularly true since Southeast
Asia Food Inc, sister company of Nutri-Asia, have been major manufacturers and distributors of
lechon sauce since 1965 under the registered mark “Mang Tomas”.

The IPO-BLA rejected Barrio Fiesta’s application for “PAPA BOY & DEVICE”. Respondent
appealed before the IPO Director General, but the appeal was denied. The CA, however, reversed
the decision of the IPO-BLA and ruled to grant the application.

Petitioner brought the case before the Supreme Court, seeking the reversal of the decision and
resolution of the CA.

Issue:
Whether or not by using the “dominant feature” of Nutri-Asia’s “PAPA” mark for “PAPA BOY &
DEVICE” would constitute trademark infringement.

Held:
Petition has merit.

In Dermaline, Inc. v. Myra Pharmaceuticals, Inc., 43 we defined a trademark as "any distinctive

word, name, symbol, emblem, sign, or device, or any combination thereof, adopted and used by
a manufacturer or merchant on his goods to identify and distinguish them from those
manufactured, sold, or dealt by others." We held that a trademark is "an intellectual property
deserving protection by law."

The Intellectual Property Code provides:

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.

To determine the likelihood of confusion, the Rules of Procedure for Intellectual Property Rights
Cases, Rule 18, provides:
RULE 18
Evidence in Trademark Infringement and Unfair Competition Cases
SECTION 1. Certificate of Registration. - A certificate of
registration of a mark shall be prima facie evidence of:
a) the validity of the registration;
b) the registrant's ownership of the mark; and
c) the registrant's exclusive right to use the same in connection
with the goods or services and those that are related thereto
 specified in the certificate.

SECTION 3. Presumption of Likelihood of Confusion. -

Likelihood of confusion shall be presumed in case an identical sign or
mark is used for identical goods or services.

SECTION 4. Likelihood of Confusion in Other Cases. - In

determining whether one trademark is confusingly similar to or is a
colorable imitation of another, the court must consider 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. Visual, aural, connotative comparisons and
overall impressions engendered by the marks in controversy as they are
encountered in the realities of the marketplace must be taken into account.
Where there are both similarities and differences in the marks, these must
be weighed against one another to see which predominates.

In determining likelihood of confusion between marks used on

non-identical goods or services, several factors may be taken into account,
such as, but not limited to:
a) the strength of plaintiffs mark;
b) the degree of similarity between the plaintiffs and the defendant's
marks;
c) the proximity of the products or services;
d) the likelihood that the plaintiff will bridge the gap;
e) evidence of actual confusion;
f) the defendant's good faith in adopting the mark;
g) the quality of defendant's product or service; and/or
h) the sophistication of the buyers.

"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.

SECTION 5. Determination of Similar and Dissimilar Goods or

Services. - Goods or services may not be considered as being similar or
dissimilar to each other on the ground that, in any registration or
publication by the Office, they appear in different classes of the Nice
Classification.

On the other hand, R.A. No. 166 defines a "trademark" as any distinctive word, name, symbol,
emblem, sign, or device, or any combination thereof, adopted and used by a manufacturer or
merchant on his goods to identify and distinguish them from those manufactured, sold, or dealt
by another. A trademark, being a special property, is afforded protection by law. But for one to
enjoy this legal protection, legal protection ownership of the trademark should right be
established.

The ownership of a trademark is acquired by its registration and its actual use by the manufacturer
or distributor of the goods made available to the purchasing public. The prima facie presumption
brought by the registration of a mark may be challenge in an appropriate action. Moreover the
protection may likewise be defeated by evidence of prior use by another person. This is because
the trademark is a creation of use and belongs to one who first used it in trade or commerce.

The essential element of infringement under the law is that the infringing mark is likely to
cause confusion. There are two tests used to determine likelihood of confusion: the dominancy
test and the holistic test. The dominancy test applies to this case.

The Dominancy Test

focuses on the similarity of the prevalent or dominant features of the
competing trademarks that might cause confusion, mistake, and deception
in the mind of the purchasing public. Duplication or imitation is not
necessary; neither is it required that the mark sought to be registered
suggests an effort to imitate. Given more consideration are the aural and
visual impressions created by the marks on the buyers of goods, giving
little weight to factors like prices, quality, sales outlets, and market
segments.
xx xx

The Totality Test

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. 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.

There are two types of confusion in trademark infringement: confusion of goods and confusion of
business. In Sterling Products International, Inc. v. Farbenfabriken Bayer Aktiengesellschaft, the
Court distinguished the two types of confusion:

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." In which case,
"defendant's goods are then bought as the plaintiff's, and
the poorer quality of the former reflects adversely on the
plaintiff's reputation." 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."
In relation to this, the court has held that 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. The scope of protection thus extends to
protection from infringers with related goods.

It cannot be denied that since petitioner’s product, catsup, and respondent’s product, lechon
sauce, are both household products in similar packaging the public could think that petitioner
Nutri-Asia has expanded its product mix to include lechon sauce, which is not unlikely considering
the nature of petitioner’s business.

Moreover, the CA erred in finding that “PAPA” is a common term of endearment for “father” and
therefore could not be claimed for exclusive use and ownership. What was registered was not
“Papa” as denied in dictionary, but “Papa” as the last name of the owner of the brand, making it
a registrable mark.

Case number 7
WILTON DY v. KONINKLIJKE PHILIPS ELECTRONICS, GR No. 186088, 2017-03-22
Facts:
On 12 April 2000, petitioner PHILITES filed a trademark application (Application Serial Number
4-2000-002937) covering its fluorescent bulb, incandescent light, starter and ballast. After
publication, respondent Koninklijke Philips Electronics, N.V. ("PHILIPS") filed a Verified Notice of
Opposition on 17 March 2006, alleging the following:
(a) The approval of Application Serial No. 4-2000-002937 is contrary to the following provisions
of Republic Act No. [RA] 8293 or the Intellectual Property Code of the Philippines... approval...
will cause grave and irreparable damage and injury to opp... ose.
use and registration of the applied for mark by [petitioner] will mislead the public as to the origin,
nature, quality, and characteristic of the goods on which it is affixed... application for registration
is tantamount to fraud as it seeks to register and obtain legal protection for an identical or
confusingly similar mark that clearly infringes upon the established rights of the [respondent] over
its registered and internationally well-known mark... egistration of the trademark PHILITES &
LETTER P DEVICE in the name of the [petitioner] will violate the proprietary rights and interests,
business reputation and goodwill of the [respondent] over its trademark, considering that the
distinctiveness of the trademark PHILIPS will be diluted... registration of the applied for mark will
not only prejudice the Opposer, but will also cause [petitioner] to unfairly profit commercially from
the goodwill, fame and notoriety of Opposer's trademark and reputation.
registration and use of the applied for mark in connection with goods under Class 11 will weaken
the unique and distinctive significance of mark PHILIPS
On 8 August 2006, petitioner filed a Verified Answer, stating that its PHILITES & LETTER P
DEVICE trademark and respondent's PHILIPS have vast dissimilarities in terms of spelling, sound
and meaning... on 9 November 2006, IPP-BLA Director Estrellita Beltran-Abelardo rendered a
Decision[8] denying the Opposition filed by respondent PHILIPS
Application... filed by Respondent-Applicant, Wilton Dy and/or Philites Electronic & Lighting
Products on 12 April 2000 for the mark "PHILITES & LETTER P DEVICE" used on fluorescent
bulb, incandescent light, starter, ballast under class 11, is
GRANTED
IPP-BLA concluded that the PHILIPS and PHILITES marks were so unlike, both visually and
aurally. It held that no confusion was likely to occur, despite their contemporaneous use...
observations:
The Philips shield mark has four stars in different sizes located at the north east and south west
portions inside a circle within the shield. There are three wavy lines dissecting the middle of the
circle. None of these appear in the respondent's mark.[Respondent] declares that the word Philips
is the surname of the brothers who founded the Philips company engaged in manufacturing and
selling lighting products. [Petitioner] on the other hand has testified that the word Philites is coined
from the word 'Philippines' and 'lights,' hence 'Philites.' This Bureau finds that there is no dictionary
meaning to the [petitioner's] mark. It is a coined and arbitrary word capable of appropriation as a
trademark. x x xMoreover, by mere pronouncing the two marks, the phonetic sounds produced
when each mark is uttered are not the same. The last syllable of respondent's mark is uttered in
a long vowel sound, while the last vowel of the opposer's mark is not.
the IPP-DG noted that "[t]he dominant feature of the [respondent's] trademark is 'PHILIPS' while
that of the [petitioner's] trademark is 'PHILITES.' While the first syllables of the marks are identical
- 'PHI' - the second syllables are not. The differences in the last syllable accounted for the variance
of the trademarks visually and aurally."
Moreover, there were "glaring differences and dissimilarities in the design and general
appearance of the Philips shield emblem mark and the letter 'P' of Philites mark."
Upon intermediate appellate review, the CA rendered a Decision... the Petition for Review .is
GRANTED. The Decision dated 16 April 2008 of the Director General of the Intellectual Property
Office in Appeal No. 14-06-28; IPC No. 14-2006-00034 is REVERSED and SET ASIDE.
the CA reasoned that the "drawing of the trademark submitted by [petitioner] has a different
appearance from that of [petitioner's] actual wrapper or packaging that contain the light bulbs,
which We find confusingly similar with that of [respondent's] registered trademark and packaging."
"self-serving [petitioner's] asseveration that the mark 'PHILITES' is a coined or arbitrary mark from
the words 'Philippines' and 'lights.'
Issues:
Whether or not respondent's mark is a registered and well-known mark in the Philippines
Whether or not the mark applied for by petitioner is identical or confusingly similar with that of
respondent
Ruling:
Petition is bereft of merit.
A trademark is "any distinctive word, name, symbol, emblem, sign, or device, or any combination
thereof, adopted and used by a manufacturer or merchant on his goods to identify and distinguish
them from those manufactured, sold, or dealt by others.
Respondent opposes petitioner's application on the ground that PHILITES' registration will
mislead the public over an identical or confusingly similar mark of PHILIPS, which is registered
and internationally well-known mark.
respondent invokes the following provisions of Section 123:
(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: (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;
(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.
Respondent's mark is a registered and well-known mark in the Philippines.There is no question
that respondent's mark PHILIPS is already a registered and well-known mark in the Philippines.
'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,' cannot be registered by
another in the Philippines."
Petitioner seeks to register a mark nearly resembling that of respondent, which may likely to
deceive or cause confusion among consumers.Despite respondent's diversification to numerous
and varied industries,[33] the records show that both parties are engaged in the same line of
business: selling identical or similar goods such as fluorescent bulbs, incandescent lights, starters
and ballasts.In determining similarity and likelihood of confusion, jurisprudence has developed
two tests: the dominancy test, and the holistic or totality test.
he dominancy test focuses on "the similarity of the prevalent or dominant features of the
competing trademarks that might cause confusion, mistake, and deception in the mind of the
purchasing public. Duplication or imitation is not necessary... neither is it required that the mark
sought to be registered suggests an effort to imitate. Given more consideration are the aural and
visual impressions created by the marks on the buyers of goods, giving little weight to factors like
prices, quality, sales outlets, and market segments."... the holistic or totality test necessitates a
"consideration of the entirety of the marks as applied to the products, including the labels and
packaging, in determining confusing similarity. The discerning eye of the observer must focus not
only on the predominant words, but also on the other features appearing on both labels so that
the observer may draw conclusion on whether one is confusingly similar to the other."
Applying the dominancy test to this case requires us to look only at the mark submitted by
petitioner in its application, while we give importance to the aural and visual impressions the mark
is likely to create in the minds of the buyers. We agree with the findings of the CA that the mark
"PHILITES" bears an uncanny resemblance or confusing similarity with respondent's mark
"PHILIPS," to wit:
An examination of the trademarks shows that their dominant or prevalent feature is the five-letter
"PHILI", "PHILIPS" for petitioner, and "PHILITES" for respondent. The marks are confusingly
similar with each other such that an ordinary purchaser can conclude an association or relation
between the marks. The consuming public does not have the luxury of time to ruminate the
phonetic sounds of the trademarks, to find out which one has a short or long vowel sound.
Most importantly, both trademarks are used in the sale of the same goods, which are light bulbs.
Infusing similarity becomes even more prominent when we examine the entirety of the marks
used by petitioner and respondent, including the way the products are packaged. In using the
holistic test, we find that there is a confusing similarity between the registered marks PHILIPS
and PHILITES, and note that the mark petitioner seeks to register-is vastly different from that
which it actually uses in the packaging of its products. We quote with approval the findings of the
CA as follows:
A comparison between petitioner's registered trademark "PHILIPS" as used in the wrapper or
packaging of its light bulbs and that of respondent's applied for trademark "PHILITES" as depicted
in the container or actual wrapper/packaging of the latter's light bulbs will readily show that there
is a strong similitude and likeness between the two trademarks that will likely cause deception or
confusion to the purchasing public.
the Petition for Review on Certiorari is hereby DENIED

Case number 8
TAIWAN KOLIN CORPORATION v. KOLIN ELECTRONICS CO., GR No. 209843, 2015-03-25
Facts:
The assailed issuances effectively denied petitioner's trademark application for the use of
"KOLIN" on its television and DVD players.
Taiwan Kolin filed with the Intellectual Property Office (IPO), then Bureau of Patents, Trademarks,
and Technology Transfer, a trademark application,... for the use of "KOLIN" on a combination of
goods,... including colored televisions, refrigerators, window-type and split-type air conditioners,
electric fans and water dispensers. Said goods allegedly fall under Classes 9, 11, and 21 of the
Nice Classification (NCL).
Application... would eventually be considered abandoned for Taiwan Kolin's failure to respond to
IPO's Paper No. 5 requiring it to elect one class of good for its coverage. However, the same
application was subsequently revived... with petitioner electing Class 9 as the subject of its
application, particularly: television sets, cassette recorder, VCD Amplifiers, camcorders and other
audio/video electronic equipment, flat iron, vacuum cleaners, cordless handsets,... videophones,
facsimile machines, teleprinters, cellular phones and automatic goods vending machine. The
application would in time be duly published.[... respondent Kolin Electronics Co., Inc. (Kolin
Electronics) opposed petitioner's revived application,... As argued, the mark Taiwan Kolin seeks
to register is identical, if not confusingly similar, with its "KOLIN"... mark registered on November
23, 2003, covering the following products under Class 9 of the NCL: automatic voltage regulator,
converter, recharger, stereo booster, AC-DC regulated power supply, step-down transformer, and
PA amplified AC-DC
"KOLIN" registration was, as it turns out, the subject of a prior legal dispute
In the said case, Kolin Electronics' own application was opposed by Taiwan Kolin,... being, as
Taiwan Kolin claimed, the prior registrant and user of the "KOLIN" trademark, having registered
the same in Taipei, Taiwan
The Bureau of Legal Affairs of the IPO (BLA-IPO), however, did not accord priority right to Taiwan
Kolin's Taipei... registration absent evidence to prove that it has already used the said mark in the
Philippines as early as 1988. On appeal, the IPO Director General affirmed the BLA-IPO's
Decision. Taiwan Kolin elevated the case to the CA, but without injunctive relief, Kolin
Electronics was able to register the "KOLIN" trademark on November 23, 2003 for its products.[6]
Subsequently, the CA, on July 31, 2006, affirmed[7] the Decision of the Director General.
In answer to respondent's opposition... etitioner argued that it should be accorded the benefits of
a foreign-registered mark under Secs. 3 and 131.1 of Republic Act No. 8293, otherwise known
as the Intellectual Property Code of the
Philippines (IP Code);[8] that it has already registered the "KOLIN" mark in the People's Republic
of China, Malaysia and Vietnam, all of which are parties to the Paris Convention for the Protection
of Industrial Property (Paris Convention) and the
Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS);and that benefits
accorded to a well-known mark should be accorded to petitioner.
Ruling of the BLA-IPO... the BLA-IPO denied petitioner's application... hus, petitioner appealed
the above Decision to the Office of the Director General of the IPO.
Ruling of the IPO Director General... the IPO Director General rendered a Decision[15] reversing
that of the BLA-IPO in the following wise:... hereby GIVEN DUE COURSE subject to the use
limitation or restriction for the goods "television and DVD player"
In so ruling, the IPO Director General ratiocinated that product classification alone cannot serve
as the decisive factor in the resolution of whether or not the goods are related and that emphasis
should be on the similarity of the products involved and not on the arbitrary... classification or
general description of their properties or characteristics. As held, the mere fact that one person
has adopted and used a particular trademark for his goods does not prevent the adoption and
use of the same trademark by others on articles of a different... description.[16]
Aggrieved, respondent elevated the case to the CA.
he CA found for Kolin Electronics, on the strength of the following premises: (a) the mark sought
to be registered by Taiwan Kolin is confusingly similar to the one already registered in favor of
Kolin Electronics; (b) there are no other designs,... special shape or easily identifiable earmarks
that would differentiate the products of both competing companies;[17] and (c) the intertwined use
of television sets with amplifier, booster and voltage regulator bolstered the fact that televisions
can be... considered as within the normal expansion of Kolin Electronics,[
Respondent avers that Kolin Electronics' and Taiwan Kolin's products are closely-related not only
because both fall under Class 9 of the NCL, but mainly because they both relate to electronic
products, instruments, apparatus, or appliances.[34] Pushing the... point, respondent would argue
that Taiwan Kolin and Kolin Electronics' goods are inherently similar in that they are all plugged
into electric sockets and perform a useful function.[3
Issues:
The Issue
The primordial issue to be resolved boils down to whether or not petitioner is entitled to its
trademark registration of "KOLIN" over its specific goods of television sets and DVD players.
Petitioner postulates, in the main, that its goods are not closely related to those of
Kolin Electronics. On the other hand, respondent hinges its case on the CA's findings that its and
petitioner's products are closely-related. Thus, granting petitioner's application for trademark
registration, according to respondent, would cause confusion as to the... public.
Ruling:
The petition is impressed with merit.
Identical marks may be registered for... products from the same classification
The parties admit that their respective sets of goods belong to Class 9 of the NCL, which includes
the following:[22]
Class 9
Scientific, nautical, surveying, photographic, cinematographic, optical, weighing, measuring,
signalling, checking (supervision), life-saving and teaching apparatus and instruments; apparatus
and instruments for conducting, switching, transforming, accumulating, regulating or... controlling
electricity; apparatus for recording, transmission or reproduction of sound or images; magnetic
data carriers, recording discs; compact discs, DVDs and other digital recording media;
mechanisms for coin-operated apparatus; cash registers, calculating machines, data...
processing equipment, computers; computer software; fire-extinguishing apparatus.
But mere uniformity in categorization, by itself, does not automatically preclude the registration of
what appears to be an identical mark, if that be the case.
It is hornbook doctrine, as held in the above-cited cases, that emphasis should be on the similarity
of the products... involved and not on the arbitrary classification or general description of their
properties or characteristics. The mere fact that one person has adopted and used a trademark
on his goods would not, without more, prevent the adoption and use of the same trademark by
others on... unrelated articles of a different kind.[2
Taiwan Kolin's goods are classified as home appliances as opposed to Kolin Electronics' goods
which are power supply and audio equipment accessories;
Taiwan Kolin's television sets and DVD players perform distinct function and purpose from Kolin
Electronics' power supply and audio equipment; and
Taiwan Kolin sells and distributes its various home appliance products on wholesale and to
accredited dealers, whereas Kolin Electronics' goods are sold and flow through electrical and
hardware stores.
The ordinarily intelligent buyer... is not likely to be confused
While both competing marks refer to the word "KOLIN" written in upper case letters and in bold
font, the Court at once notes the distinct visual and aural differences between them: Kolin
Electronics' mark is italicized and colored black while that of Taiwan Kolin is white in... pantone
red color background. The differing features between the two, though they may appear minimal,
are sufficient to distinguish one brand from the other.
The... products of the contending parties are relatively luxury items not easily considered
affordable. Accordingly, the casual buyer is predisposed to be more cautious and discriminating
in and would prefer to mull over his purchase. Confusion and deception, then, is less... likely.[
All told, We are convinced that petitioner's trademark registration not only covers unrelated good,
but is also incapable of deceiving the ordinary intelligent buyer. The ordinary purchaser must be
thought of as having, and credited with, at least a modicum of intelligence to be... able to see the
differences between the two trademarks in question
WHEREFORE, in view of the foregoing, the petition is hereby GRANTED. The Decision and the
Resolution of the Court of Appeals in CA-G.R. SP No. 122565, dated April 30, 2013 and
November 6, 2013, respectively, are hereby REVERSED and SET ASIDE.
Accordingly, the Decision of the Intellectual Property Office Director General in Inter Partes Case
No. 14-2006-00096, dated November 23, 2011, is hereby REINSTATED.
Principles:
Citing Sec. 123(d) of the IP Code,[11] the BLA-IPO held that a mark cannot be registered if it is
identical with a registered mark belonging to a different proprietor in respect of the same or
closely-related goods.
But mere uniformity in categorization, by itself, does not automatically preclude the registration of
what appears to be an identical mark, if that be the case.
It is hornbook doctrine, as held in the above-cited cases, that emphasis should be on the similarity
of the products... involved and not on the arbitrary classification or general description of their
properties or characteristics. The mere fact that one person has adopted and used a trademark
on his goods would not, without more, prevent the adoption and use of the same trademark by
others on... unrelated articles of a different kind.[27]... whether or not the products of the parties
involved are related the doctrine in Mighty Corporation is authoritative. There, the Court held that
the goods should be tested against several factors before arriving at... a sound conclusion on the
question of relatedness. Among these are:
(a) the business (and its location) to which the goods belong;
(b) the class of product to which the goods belong;
(c) the product's quality, quantity, or size, including the nature of the package, wrapper or
container;
(d) the nature and cost of the articles;
(e) the descriptive properties, physical attributes or essential characteristics with reference to
their form, composition, texture or quality;
(f) the purpose of the goods;
(g) whether the article is bought for immediate consumption, that is, day-to-day household items;
(h) the fields of manufacture;
(i) the conditions under which the article is usually purchased; and
(j) the channels of trade through which the goods flow, how they are distributed, marketed,
displayed and sold.[3
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 x x x.(emphasis added)
Case # 9
SAMSON V. DAWAY AND CATERPILLAR, INC.
G.R. NO. 160054-55, July 21, 2004

YNARES-SANTIAGO,J.:

FACTS:
Two informations for unfair competition were filed against Samson, the registered owner of ITTI
shoes. The infomations state that Samson did then and there willfully, unlawfully and feloniously
distribute, sell and/or offer for sale CATERPILLAR products such as footwear, garments, clothing,
bags, accessories and paraphernalia which are closely identical to and/or colorable imitations of
the authentic Caterpillar products and likewise using trademarks, symbols and/or designs as
would cause confusion, mistake or deception on the part of the buying public to the damage and
prejudice of CATERPILLAR, INC., the prior adopter, user and owner of the following
internationally: “CATERPILLAR,” “CAT,” “CATERPILLAR & DESIGN,” “CAT AND DESIGN,”
“WALKING MACHINES” and “TRACK-TYPE TRACTOR & DESIGN.”

Samson filed a motion to suspend the arraignment and other proceedings in view of the existence
of an alleged prejudicial question involving a civil case for unfair competition pending with the
same branch, and also in view of the pendency of a petition for review filed with the Secretary of
Justice assailing the Chief State Prosecutor’s resolution finding probable cause to charge
petitioner with unfair competition.

The TC judge denied the motion and arraignment ensued. Thereafter, Samson filed a motion to
quash the informations contending that since under Section 170 of R.A. No. 8293, the penalty of
imprisonment for unfair competition does not exceed six years, the offense is cognizable by the
Municipal Trial Courts and not by the Regional Trial Court, per R.A. No. 7691. The TC judge
denied the motion. Hence, this petition for certiorari.

ISSUE/S:
1. Which court has jurisdiction over criminal and civil cases for violation of intellectual property
rights?
2. Did the TC judge commit grave abuse of discretion when he refused to suspend the
proceedings on the ground of existence of prejudicial question and a pending petition for review
before the Sec. of Justice on the finding of probable cause for unfair competition?

RULING:
1. RTC. Under Section 170 of R.A. No. 8293, which took effect on January 1, 1998, the criminal
penalty for infringement of registered marks, unfair competition, false designation of origin and
false description or representation, is imprisonment from 2 to 5 years and a fine ranging from Fifty
Thousand Pesos to Two Hundred Thousand Pesos. Corollarily, Section 163 of the same Code
states that actions (including criminal and civil) under Sections 150, 155, 164, 166, 167, 168 and
169 shall be brought before the proper courts with appropriate jurisdiction under existing laws.

The existing law referred to in the foregoing provision is Section 27 of R.A. No. 166 (The
Trademark Law) which provides that jurisdiction over cases for infringement of registered marks,
unfair competition, false designation of origin and false description or representation, is lodged
with the CFI (now RTC). We find no merit in the claim of Samson that R.A. No. 166 was expressly
repealed by R.A. No. 8293. The use of the phrases “parts of Acts” and “inconsistent herewith”
only means that the repeal pertains only to provisions which are repugnant or not susceptible of
harmonization with R.A. No. 8293.7 Section 27 of R.A. No. 166, however, is consistent and in
harmony with Section 163 of R.A. No. 8293. Had R.A. No. 8293 intended to vest jurisdiction over
violations of intellectual property rights with the Metropolitan Trial Courts, it would have expressly
stated so under Section 163 thereof.

Moreover, the settled rule in statutory construction is that in case of conflict between a general
law and a special law, the latter must prevail. Jurisdiction conferred by a special law to Regional
Trial Courts must prevail over that granted by a general law to Municipal Trial Courts. In the case
at bar, R.A. No. 8293 and R.A. No. 166 are special laws conferring jurisdiction over violations of
intellectual property rights to the Regional Trial Court. They should therefore prevail over R.A. No.
7691, which is a general law. Hence, jurisdiction over the instant criminal case for unfair
competition is properly lodged with the Regional Trial Court even if the penalty therefor is
imprisonment of less than 6 years, or from 2 to 5 years and a fine ranging from P50,000.00 to
P200,000.00.

In fact, to implement and ensure the speedy disposition of cases involving violations of intellectual
property rights under R.A. No. 8293, the Court issued A.M. No. 02-1-11-SC dated February 19,
2002 designating certain Regional Trial Courts as Intellectual Property Courts. On June 17, 2003,
the Court further issued a Resolution consolidating jurisdiction to hear and decide Intellectual
Property Code and Securities and Exchange Commission cases in specific Regional Trial Courts
designated as Special Commercial Courts.

2. NO. Samson failed to substantiate his claim that there was a prejudicial question. He made no
discussion in support of said prayer in his petition and reply to comment. Neither did he attach a
copy of the complaint in Civil Case nor quote the pertinent portion thereof to prove the existence
of a prejudicial question. At any rate, there is no prejudicial question if the civil and the criminal
action can, according to law, proceed independently of each other.

In the case at bar, the common element in the acts constituting unfair competition under Section
168 of R.A. No. 8293 is fraud. Pursuant to Article 33 of the Civil Code, in cases of defamation,
fraud, and physical injuries, a civil action for damages, entirely separate and distinct from the
criminal action, may be brought by the injured party. Hence, Civil Case No. Q-00-41446, which
as admitted by Caterpilar also relate to unfair competition, is an independent civil action under
Article 33 of the Civil Code. As such, it will not operate as a prejudicial question that will justify the
suspension of the criminal cases at bar.

While the pendency of a petition for review is a ground for suspension of the arraignment, the
aforecited provision limits the deferment of the arraignment to a period of 60 days reckoned from
the filing of the petition with the reviewing office. It follows, therefore, that after the expiration of
said period, the trial court is bound to arraign the accused or to deny the motion to defer
arraignment.

In the instant case, Samson failed to establish that respondent Judge abused his discretion in
denying his motion to suspend. His pleadings and annexes submitted before the Court do not
show the date of filing of the petition for review with the Secretary of Justice.15Moreover, the
Order dated August 9, 2002 denying his motion to suspend was not appended to the petition. He
thus failed to discharge the burden of proving that he was entitled to a suspension of his
arraignment and that the questioned orders are contrary to Section 11 (c), Rule 116 of the Revised
Rules on Criminal Procedure. Indeed, the age-old but familiar rule is that he who alleges must
prove his allegations.

Case # 10
EMERALD GARMENT vs. THE H.D. LEE COMPANY
G.R. No. 210693, June 7, 2017

Reyes, J.:

Facts:
This is a Petition for Review on Certiorari 1 filed by Emerald Garment Manufacturing Corporation
(Emerald) against The H.D. Lee Company, Inc. (H.D. Lee) to assail the Decision 2 and Resolution
3 of the Court of Appeals (CA), dated April 8, 2013 and January 6, 2014, respectively. The CA
reversed the Decision of the Intellectual Property Office's (IPO) then Director General Ricardo R.
Blancaflor (DG Blancaflor) in Inter Partes Case, approving H.D. Lee's application for registration
of the trademark "LEE & OGIVE CURVE DESIGN."

H.D. Lee filed before the IPO an application for the registration of the trademark, "LEE & OGIVE
CURVE DESIGN" and claimed that the said mark was first used in the Philippines. Relative
thereto, on outer clothing categorized under Class 25, which includes jeans, casual pants,
trousers, slacks, shorts, jackets, vests, shirts, blouses, sweaters, tops, skirts, jumpers, caps, hats,
socks, shoes, suspenders, belts and bandannas, was filed. Within three years from the filing of
the application, H.D. Lee submitted to the IPO a Declaration of Actual Use of the mark. 5 H.D.
Lee's application was published in the Intellectual Property Philippines' Electronic Gazette for
Trademarks, which was belatedly released on January 5, 2007. 6 Emerald opposed argued that
the approval of the application will violate the exclusive use of its marks, "DOUBLE REVERSIBLE
WA VE LINE," and "DOUBLE CURVE LINES," which it has been using on a line of clothing
apparel since October 1, 1973 7 and 1980, respectively.

DG Blancaflor rendered a Decision reversing the findings of Atty. Abelardo based on the grounds
cited as follows:
That H.D. Lee has established by substantial evidence that it is the owner of LEE &
OGIVECURVE DESIGN.

That Emerald has trademark applications and/or registrations in the Philippines on marks similar
to [H.D. Lee] and which were filed and/or registered earlier than H.D. Lee's trademark application
is not sufficient to overcome the pieces of evidence proving H.D. Lee's ownership of LEE & OGIVE
CURVE DESIGN. c. H.D. Lee has shown that LEE & OGIVE CURVE DESIGN is a well-known
mark.

Furthermore, there is nothing in the records which explained how [Emerald] came to use a highly
distinctive sign such as a "Back Pocket Design" or the "Double Curve Lines" which are identical
or confusingly similar to the well-known mark LEE & OGIVE CURVE DESIGN. The absence of
any explanation on how Emerald conceived these marks gives credence to the position that H.D.
Lee is the owner and creator of LEE & OGIVE CURVE DESIGN and is, therefore, entitled to the
registration of this mark.

Emerald filed a petition for review under Rule 43 of the Rules of Court, which the CA denied in
the herein assailed decision which ruled that H.D. Lee substantially complied with the procedural
requirements in filing before the IPO a petition for registration of the mark "LEE & OGIVE CURVE
DESIGN." Hence, the petition.

Issue:
Whether or not the EMERALD GARMENT MANUFACTURING CORPORATION has the rights
over the registration of the marks "DOUBLE CURVE LINES' and "DOUBLE REVERSIBLE WAVE
LINE' as against H.D. Lee's "OGIVE CURVE DESIGN."

Ruling:
The instant petition is impressed with merit. The reason for this is that litigation must end and
terminate sometime and somewhere, and it is essential to an effective and efficient administration
of justice that, once a judgment has become final, the winning party be not deprived of the fruits
of the verdict. Courts must guard against any scheme calculated to bring about that result and
must frown upon any attempt to prolong the controversies. The Court also emphatically instructs
anent the concept and application of res judicata, viz.:"a final judgment or decree on the merits
by a court of competent jurisdiction is conclusive of the rights of the parties or their privies in all
later suits on all points and matters determined in the former suit." The elements for res judicata
to apply are as follows: (a) the former judgment was final; (b) the court that rendered it had
jurisdiction over the subject matter and the parties; (c) the judgment was based on the merits; and
(d) between the first and the second actions, there was an identity of parties, subject matters, and
causes of action.

H.D. Lee argues that the principle of conclusiveness of judgment does not apply since no identity
of issue exists between the instant petition, on one hand, and G.R. No. 195415, on the other. The
Court finds the foregoing untenable as the issues all point to the registrability of the confusingly
similar marks "DOUBLE CURVE LINES," "DOUBLE REVERSIBLE WAVE LINE," and "OGIVE
CURVE DESIGN." Further, H.D. Lee's claim that the instant petition involves the mark "LEE &
OGIVE CURVE DESIGN' and not "OGIVE CURVE DESIGN' is specious and a clear attempt to
engage into hair-splitting distinctions. A thorough examination of the pleadings submitted by H.D.
Lee itself shows that indeed, the focus is the "OGIVE CURVE DESIGN," which remains to be the
dominant feature of the mark sought to be registered.

The Court needs to stress that in G.R. No. 195415 and Inter Partes Case No. 3498 before the
IPO, Emerald had already established with finality its rights over the registration of the marks
"DOUBLE CURVE LINES' and "DOUBLE REVERSIBLE WAVE LINE' as against H.D. Lee's
"OGIVE CURVE DESIGN."

Case # 11
COCA BOTTLERS VS. GOMEZ
GR NO. 154491, NOVEMBER 14, 2008

BRION, J.:

Facts:
CCBPI, the petitioner applied for a search warrant against Pepsi Cola Product Philippines, Inc.
(PCPPI) for allegedly hoarding empty bottles of Coke bottles which same act is punishable under
IP Code, and further claimed that the empty bottles be confiscated. Following the search warrant,
the police seized and brought to MTC 2,464 Litro and 4,036 of 12 oz. of empty Coke bottles.

The petitioner after seizing the bottles, filed with the Office of the City Prosecutor of Naga
complaint against two Pepsi Officers, namely Garcia and Gomez, for violation of Sec. 168.3 (c) in
relation to Sec. 170 of the IP Code.
The respondents counter-claim was, as represented by Galicia and Gomez, that the bottles came
from the various Pepsi retailers and wholesalers who included them in their return to make-up for
their shortages of empty Pepsi bottles. They also have no way of ascertaining before hand the
return of empty coke bottles as they simply received what had been delivered; the presence of
the bottles in their yard was not intentional nor deliberate. The respondent also filed motions for
the return of the seized bottles and quash the search warrant for the warrant itself existed no
probable cause to justify the issuance.

The petition was denied both by the MTC and the RTC. Bypassing the CA, the petitioner files a
petition for review on certiorari under Rule 45 of the Rules of Court to reverse the decision of the
RTC.

Issues:

Is the hoarding of a competitor's product containers punishable as unfair competition under the
Intellectual Property Code (IP Code, Republic Act No. 8293) that would entitle the aggrieved party
to a search warrant against the hoarder?

Ruling:

In the context of the present case, the question is whether the act charged - alleged to be hoarding
of empty Coke bottles - constitutes an offense under Section 168.3 (c) of the IP Code.

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.

The petitioner theorizes that the above section does not limit the scope of protection on the
particular acts enumerated as it expands the meaning of unfair competition to include "other acts
contrary to good faith of a nature calculated to discredit the goods, business or... services of
another." Allegedly, the respondents' hoarding of Coca Cola empty bottles is one such act.

We do not agree with the petitioner's expansive interpretation of Section 168.3 (c).

What unfair competition is, is further particularized under Section 168.3 when it provides specifics
of what unfair competition is "without in any way limiting the scope of protection against unfair
competition." Part of these particulars is provided under Section 168.3(c)... which provides the
general "catch-all" phrase that the petitioner cites. Under this phrase, a person shall be guilty of
unfair competition "who shall commit any other act contrary to good faith of a nature calculated to
discredit the goods, business or services of... another."
The critical question, however, is not the intrinsic unfairness of the act of hoarding; what is...
critical for purposes of Section 168.3 (c) is to determine if the hoarding, as charged, "is of a nature
calculated to discredit the goods, business or services" of the petitioner.

Under all the above approaches, we conclude that the "hoarding" - as defined and charged by the
petitioner - does not fall within the coverage of the IP Code and of Section 168 in particular. It
does not relate to any patent, trademark, trade name or service mark that the... respondents have
invaded, intruded into or used without proper authority from the petitioner.

In this light, hoarding for purposes of destruction is closer to what another law - R.A. No. 623

If it serves any purpose at all in our discussions, it is to show that the underlying factual situation
of the present case is in fact covered by another law, not by the IP Code that the petitioner cites.

Viewed in this light, the lack of probable cause to support the disputed search warrant at once
becomes apparent.

Principles:

Articles 168.1 and 168.2, as quoted above, provide the concept and general rule on the definition
of unfair competition. The law does not thereby cover every unfair act committed in the course of
business; it covers only acts characterized by "deception or... any other means contrary to good
faith" in the passing off of goods and services as those of another who has established goodwill
in relation with these goods or services, or any other act calculated to produce the same result.

Case # 12
MIGHTY CORP. vs. E&J GALLO
G.R. NO. 154342, July 14, 2004

CORONA, J.:

FACTS:
On March 12, 1993, E. & J. GALLO WINERY and THE ANDRESONS GROUP, INC (respondents)
sued MIGHTY CORPORATION and LA CAMPANA FABRICA DE TABACO, INC. (petitioners) in
the RTC-Makati for trademark and trade name infringement and unfair competition, with a prayer
for damages and preliminary injunction.

They claimed that petitioners adopted the Gallo trademark to ride on Gallo Winery’s and Gallo
and Ernest & Julio Gallo trademark’s established reputation and popularity, thus causing
confusion, deception and mistake on the part of the purchasing public who had always associated
Gallo and Ernest and Julio & Gallo trademarks with Gallo Winery’s wines.

In their answer, petitioners alleged, among other affirmative defenses that: petitioners Gallo
cigarettes and Gallo Winery’s wine were totally unrelated products. To wit:

1. Gallo Winery’s GALLO trademark registration certificates covered wines only, and not
cigarettes;
2. GALLO cigarettes and GALLO wines were sold through different channels of trade;
3. the target market of Gallo Winery’s wines was the middle or high-income bracket while Gallo
cigarette buyers were farmers, fishermen, laborers and other low-income workers;
4. that the dominant feature of the Gallo cigarette was the rooster device with the manufacturer’s
name clearly indicated as MIGHTY CORPORATION, while in the case of Gallo Winery’s wines,
it was the full names of the founders-owners ERNEST & JULIO GALLO or just their surname
GALLO;

The Makati RTC denied, for lack of merit, respondent’s prayer for the issuance of a writ of
preliminary injunction. CA likewise dismissed respondent’s petition for review on certiorari.

After the trial on the merits, however, the Makati RTC held petitioners liable for committing
trademark infringement and unfair competition with respect to the GALLO trademark.

On appeal, the CA affirmed the Makati RTC’s decision and subsequently denied petitioner’s
motion for reconsideration.

ISSUE: Whether GALLO cigarettes and GALLO wines were identical, similar or related goods for
the reason alone that they were purportedly forms of vice.

RULING: NO.
Wines and cigarettes are not identical, similar, competing or related goods.

In resolving whether goods are related, several factors come into play:
 the business (and its location) to which the goods belong
 the class of product to which the good belong
 the product’s quality, quantity, or size, including the nature of the package, wrapper or
container
 the nature and cost of the articles
 the descriptive properties, physical attributes or essential characteristics with reference to
their form, composition, texture or quality
 the purpose of the goods
 whether the article is bought for immediate consumption, that is, day-to-day household
items
 the field of manufacture
 the conditions under which the article is usually purchased and
 the articles of the trade through which the goods flow, how they are distributed, marketed,
displayed and sold.

The test of fraudulent simulation is to the likelihood of the deception of some persons in some
measure acquainted with an established design and desirous of purchasing the commodity with
which that design has been associated. The simulation, in order to be objectionable, must be as
appears likely to mislead the ordinary intelligent buyer who has a need to supply and is familiar
with the article that he seeks to purchase.

The petitioners are not liable for trademark infringement, unfair competition or damages.

Case number 13
SAMSON V. DAWAY AND CATERPILLAR, INC.
G.R. NO. 160054-55
FACTS: Two informations for unfair competition were filed against Samson, the registered
owner of ITTI shoes. The infomations state that Samson did then and there willfully,
unlawfully and feloniously distribute, sell and/or offer for sale CATERPILLAR products
such as footwear, garments, clothing, bags, accessories and paraphernalia which are
closely identical to and/or colorable imitations of the authentic Caterpillar products and
likewise using trademarks, symbols and/or designs as would cause confusion, mistake or
deception on the part of the buying public to the damage and prejudice of CATERPILLAR,
INC., the prior adopter, user and owner of the following internationally: “CATERPILLAR,”
“CAT,” “CATERPILLAR & DESIGN,” “CAT AND DESIGN,” “WALKING MACHINES” and
“TRACK-TYPE TRACTOR & DESIGN.”

Samson filed a motion to suspend the arraignment and other proceedings in view of the
existence of an alleged prejudicial question involving a civil case for unfair competition
pending with the same branch, and also in view of the pendency of a petition for review
filed with the Secretary of Justice assailing the Chief State Prosecutor’s resolution finding
probable cause to charge petitioner with unfair competition.

The TC judge denied the motion and arraignment ensued. Thereafter, Samson filed a
motion to quash the informations contending that since under Section 170 of R.A. No.
8293, the penalty of imprisonment for unfair competition does not exceed six years, the
offense is cognizable by the Municipal Trial Courts and not by the Regional Trial Court, per
R.A. No. 7691. The TC judge denied the motion. Hence, this petition for certiorari.

ISSUE/S:
1. Which court has jurisdiction over criminal and civil cases for violation of intellectual
property rights?
2. Did the TC judge commit grave abuse of discretion when he refused to suspend the
proceedings on the ground of existence of prejudicial question and a pending petition for
review before the Sec. of Justice on the finding of probable cause for unfair competition?

RULING:
1. RTC. Under Section 170 of R.A. No. 8293, which took effect on January 1, 1998, the
criminal penalty for infringement of registered marks, unfair competition, false designation
of origin and false description or representation, is imprisonment from 2 to 5 years and a
fine ranging from Fifty Thousand Pesos to Two Hundred Thousand Pesos. Corollarily,
Section 163 of the same Code states that actions (including criminal and civil) under
Sections 150, 155, 164, 166, 167, 168 and 169 shall be brought before the proper courts
with appropriate jurisdiction under existing laws.

The existing law referred to in the foregoing provision is Section 27 of R.A. No. 166 (The
Trademark Law) which provides that jurisdiction over cases for infringement of registered
marks, unfair competition, false designation of origin and false description or
representation, is lodged with the CFI (now RTC). We find no merit in the claim of Samson
that R.A. No. 166 was expressly repealed by R.A. No. 8293. The use of the phrases “parts
of Acts” and “inconsistent herewith” only means that the repeal pertains only to
provisions which are repugnant or not susceptible of harmonization with R.A. No. 8293.7
Section 27 of R.A. No. 166, however, is consistent and in harmony with Section 163 of R.A.
No. 8293. Had R.A. No. 8293 intended to vest jurisdiction over violations of intellectual
property rights with the Metropolitan Trial Courts, it would have expressly stated so under
Section 163 thereof.

Moreover, the settled rule in statutory construction is that in case of conflict between a
general law and a special law, the latter must prevail. Jurisdiction conferred by a special
law to Regional Trial Courts must prevail over that granted by a general law to Municipal
Trial Courts. In the case at bar, R.A. No. 8293 and R.A. No. 166 are special laws conferring
jurisdiction over violations of intellectual property rights to the Regional Trial Court. They
should therefore prevail over R.A. No. 7691, which is a general law. Hence, jurisdiction
over the instant criminal case for unfair competition is properly lodged with the Regional
Trial Court even if the penalty therefor is imprisonment of less than 6 years, or from 2 to 5
years and a fine ranging from P50,000.00 to P200,000.00.

In fact, to implement and ensure the speedy disposition of cases involving violations of
intellectual property rights under R.A. No. 8293, the Court issued A.M. No. 02-1-11-SC
dated February 19, 2002 designating certain Regional Trial Courts as Intellectual Property
Courts. On June 17, 2003, the Court further issued a Resolution consolidating jurisdiction
to hear and decide Intellectual Property Code and Securities and Exchange Commission
cases in specific Regional Trial Courts designated as Special Commercial Courts.

2. NO. Samson failed to substantiate his claim that there was a prejudicial question. He
made no discussion in support of said prayer in his petition and reply to comment. Neither
did he attach a copy of the complaint in Civil Case nor quote the pertinent portion thereof
to prove the existence of a prejudicial question. At any rate, there is no prejudicial question
if the civil and the criminal action can, according to law, proceed independently of each
other.

In the case at bar, the common element in the acts constituting unfair competition under
Section 168 of R.A. No. 8293 is fraud. Pursuant to Article 33 of the Civil Code, in cases of
defamation, fraud, and physical injuries, a civil action for damages, entirely separate and
distinct from the criminal action, may be brought by the injured party. Hence, Civil Case
No. Q-00-41446, which as admitted by Caterpilar also relate to unfair competition, is an
independent civil action under Article 33 of the Civil Code. As such, it will not operate as
a prejudicial question that will justify the suspension of the criminal cases at bar.

While the pendency of a petition for review is a ground for suspension of the arraignment,
the aforecited provision limits the deferment of the arraignment to a period of 60 days
reckoned from the filing of the petition with the reviewing office. It follows, therefore, that
after the expiration of said period, the trial court is bound to arraign the accused or to deny
the motion to defer arraignment.

In the instant case, Samson failed to establish that respondent Judge abused his
discretion in denying his motion to suspend. His pleadings and annexes submitted before
the Court do not show the date of filing of the petition for review with the Secretary of
Justice.15Moreover, the Order dated August 9, 2002 denying his motion to suspend was
not appended to the petition. He thus failed to discharge the burden of proving that he was
entitled to a suspension of his arraignment and that the questioned orders are contrary to
Section 11 (c), Rule 116 of the Revised Rules on Criminal Procedure. Indeed, the age-old
but familiar rule is that he who alleges must prove his allegations.
Case number 14
GREAT WHITE SHARK ENTERPRISES v. DANILO M. CARALDE, GR No. 192294, 2012-11-
21
Facts:
Caralde filed before the Bureau of Legal Affairs (BLA), IPO a trademark application seeking to
register the mark "SHARK & LOGO" for his manufactured goods under Class 25, such as slippers,
shoes and sandals. Petitioner Great White Shark Enterprises,... Inc. (Great White Shark), a
foreign corporation domiciled in Florida, USA, opposed[3] the application claiming to be the owner
of the mark consisting of a representation of a shark in color, known as "GREG NORMAN
LOGO"... the confusing similarity between the two (2) marks is likely to deceive or confuse the...
purchasing public into believing that Caralde's goods are produced by or originated from it, or are
under its sponsorship, to its damage and prejudice.
n his Answer,[5] Caralde explained that the subject marks are distinctively different from one
another and easily distinguishable. When compared, the only similarity in the marks is in the word
"shark" alone, differing in other factors such as... appearance, style, shape, size, format, color,
ideas counted by marks, and even in the goods carried by the parties.
The Ruling of the BLA Director... the BLA Director rendered a Decision[7] rejecting Caralde's
application... that the overall impression it create [sic] is that the two competing marks are at least
strikingly similar to each another [sic], hence, the likelihood of confusion of goods... is likely to
occur. x x x x
Moreover, the goods of the competing marks falls [sic] under the same Class 25
The Ruling of the IPO Director General
PO Director General affirmed[9] the final rejection of Caralde's application, ruling that the
competing marks are indeed confusingly similar.
The Ruling of the Court of Appeals... he CA reversed and set aside the foregoing Decision and
directed the IPO to grant Caralde's application for registration of the mark "SHARK & LOGO." The
CA found no confusing similarity between the subject marks notwithstanding that... both contained
the shape of a shark as their dominant feature. It observed that Caralde's mark is more fanciful
and colorful, and contains several elements which are easily distinguishable from that of the Great
White Shark's mark. It further opined that considering... their price disparity, there is no likelihood
of confusion as they travel in different channels of trade.[11]
Issues:
Issues Before The Court
THE COURT OF APPEALS ERRED IN RULING THAT THE RESPONDENT'S MARK SUBJECT
OF THE APPLICATION BEING OPPOSED BY THE PETITIONER IS NOT CONFUSINGLY
SIMILAR TO PETITIONER'S REGISTERED MARK.
THE COURT OF APPEALS ERRED IN RULING THAT THE COST OF GOODS COULD
NEGATE LIKELIHOOD OF CON[F]USION.
THE COURT OF APPEALS ERRED IN REVERSING THE PREVIOUS RESOLUTIONS OF THE
DIRECTOR GENERAL AND THE BLA.[12]
Ruling:
he petition lacks merit.
A trademark device is susceptible to registration if it is crafted fancifully or arbitrarily and is capable
of identifying and distinguishing the goods of one manufacturer or seller from those of
another. Apart from its commercial utility, the benchmark of trademark... registrability is
distinctiveness.[13] Thus, a generic figure, as that of a shark in this case, if employed and
designed in a distinctive manner, can be a registrable trademark device, subject to the provisions
of the IP Code.
Corollarily, Section 123.1(d) of the IP Code provides that a mark cannot be registered if it is
identical with a registered mark belonging to a different proprietor with an earlier filing or priority
date, with respect to the same or closely related goods or services, or has a... near resemblance
to such mark as to likely deceive or cause confusion.
n determining similarity and likelihood of confusion, case law has developed the Dominancy Test
and the Holistic or Totality Test.
Irrespective of both tests, the Court finds no confusing similarity between the subject
marks. While both marks use the shape of a shark, the Court noted distinct visual and aural
differences between them. In Great White Shark's "GREG NORMAN LOGO," there is an... outline
of a shark formed with the use of green, yellow, blue and red[16] lines/strokes, to wit:
(see image Decision G.R. No. 192294 p.8)
In contrast, the shark in Caralde's "SHARK & LOGO" mark[17] is illustrated in letters outlined in
the form of a shark with the letter "S" forming the head, the letter "H" forming the fins, the letters
"A" and "R" forming the body, and the... letter "K" forming the tail. In addition, the latter mark
includes several more elements such as the word "SHARK" in a different font underneath the
shark outline, layers of waves, and a tree on the right side, and liberally used the color blue with
some parts in red,... yellow, green and white.[18] The whole design is enclosed in an elliptical
shape with two linings, thus:
As may be gleaned from the foregoing, the visual dissimilarities between the two (2) marks are
evident and significant, negating the possibility of confusion in the minds of the ordinary
purchaser, especially considering the distinct aural difference between the... marks.
WHEREFORE, the Court resolves to DENY the instant petition and AFFIRM the assailed
December 14, 2009 Decision of the Court of Appeals (CA) for failure to show that the CA
committed reversible error in setting aside the Decision of the IPO Director
General and allowing the registration of the mark "SHARK & LOGO" by respondent Danilo M.
Caralde, Jr.
Principles:
The "ordinary purchaser" refers to one "accustomed to buy, and therefore to some extent familiar
with, the goods in question."[15]
Facts:
Caralde filed before the Bureau of Legal Affairs (BLA), IPO a trademark application seeking to
register the mark "SHARK & LOGO" for his manufactured goods under Class 25, such as slippers,
shoes and sandals. Petitioner Great White Shark Enterprises,... Inc. (Great White Shark), a
foreign corporation domiciled in Florida, USA, opposed[3] the application claiming to be the owner
of the mark consisting of a representation of a shark in color, known as "GREG NORMAN
LOGO"... the confusing similarity between the two (2) marks is likely to deceive or confuse the...
purchasing public into believing that Caralde's goods are produced by or originated from it, or are
under its sponsorship, to its damage and prejudice.
n his Answer,[5] Caralde explained that the subject marks are distinctively different from one
another and easily distinguishable. When compared, the only similarity in the marks is in the word
"shark" alone, differing in other factors such as... appearance, style, shape, size, format, color,
ideas counted by marks, and even in the goods carried by the parties.
The Ruling of the BLA Director... the BLA Director rendered a Decision[7] rejecting Caralde's
application... that the overall impression it create [sic] is that the two competing marks are at least
strikingly similar to each another [sic], hence, the likelihood of confusion of goods... is likely to
occur. x x x x
Moreover, the goods of the competing marks falls [sic] under the same Class 25
The Ruling of the IPO Director General
PO Director General affirmed[9] the final rejection of Caralde's application, ruling that the
competing marks are indeed confusingly similar.
The Ruling of the Court of Appeals... he CA reversed and set aside the foregoing Decision and
directed the IPO to grant Caralde's application for registration of the mark "SHARK & LOGO." The
CA found no confusing similarity between the subject marks notwithstanding that... both contained
the shape of a shark as their dominant feature. It observed that Caralde's mark is more fanciful
and colorful, and contains several elements which are easily distinguishable from that of the Great
White Shark's mark. It further opined that considering... their price disparity, there is no likelihood
of confusion as they travel in different channels of trade.[11]
Issues:
Issues Before The Court
THE COURT OF APPEALS ERRED IN RULING THAT THE RESPONDENT'S MARK SUBJECT
OF THE APPLICATION BEING OPPOSED BY THE PETITIONER IS NOT CONFUSINGLY
SIMILAR TO PETITIONER'S REGISTERED MARK.
THE COURT OF APPEALS ERRED IN RULING THAT THE COST OF GOODS COULD
NEGATE LIKELIHOOD OF CON[F]USION.
THE COURT OF APPEALS ERRED IN REVERSING THE PREVIOUS RESOLUTIONS OF THE
DIRECTOR GENERAL AND THE BLA.[12]
Ruling:
he petition lacks merit.
A trademark device is susceptible to registration if it is crafted fancifully or arbitrarily and is capable
of identifying and distinguishing the goods of one manufacturer or seller from those of
another. Apart from its commercial utility, the benchmark of trademark... registrability is
distinctiveness.[13] Thus, a generic figure, as that of a shark in this case, if employed and
designed in a distinctive manner, can be a registrable trademark device, subject to the provisions
of the IP Code.
Corollarily, Section 123.1(d) of the IP Code provides that a mark cannot be registered if it is
identical with a registered mark belonging to a different proprietor with an earlier filing or priority
date, with respect to the same or closely related goods or services, or has a... near resemblance
to such mark as to likely deceive or cause confusion.
n determining similarity and likelihood of confusion, case law has developed the Dominancy Test
and the Holistic or Totality Test.
Irrespective of both tests, the Court finds no confusing similarity between the subject
marks. While both marks use the shape of a shark, the Court noted distinct visual and aural
differences between them. In Great White Shark's "GREG NORMAN LOGO," there is an... outline
of a shark formed with the use of green, yellow, blue and red[16] lines/strokes, to wit:
(see image Decision G.R. No. 192294 p.8)
In contrast, the shark in Caralde's "SHARK & LOGO" mark[17] is illustrated in letters outlined in
the form of a shark with the letter "S" forming the head, the letter "H" forming the fins, the letters
"A" and "R" forming the body, and the... letter "K" forming the tail. In addition, the latter mark
includes several more elements such as the word "SHARK" in a different font underneath the
shark outline, layers of waves, and a tree on the right side, and liberally used the color blue with
some parts in red,... yellow, green and white.[18] The whole design is enclosed in an elliptical
shape with two linings, thus:
As may be gleaned from the foregoing, the visual dissimilarities between the two (2) marks are
evident and significant, negating the possibility of confusion in the minds of the ordinary
purchaser, especially considering the distinct aural difference between the... marks.
WHEREFORE, the Court resolves to DENY the instant petition and AFFIRM the assailed
December 14, 2009 Decision of the Court of Appeals (CA) for failure to show that the CA
committed reversible error in setting aside the Decision of the IPO Director
General and allowing the registration of the mark "SHARK & LOGO" by respondent Danilo M.
Caralde, Jr.
Principles:
The "ordinary purchaser" refers to one "accustomed to buy, and therefore to some extent familiar
with, the goods in question."[15]

Case number 15
GR 174379 August 31, 2016 J. Leonen
E.I. Dupont De Nemours and Co. (assignee of inventors David Carino, Jonas Duncia and
Pancras Wong) v. IPO Director Emma Francisco, Bureau of Patents Director Efipanio
Velasco, Therapharma, Inc.

FACTS
 Petitioner is a Delaware- based corporation. In 1987, petitioner filed an application for PH
patent before Bureau of Patents.
 Said application was for Angiotensin II Receptor Blocking Imidazole (losartan), an invention
related to the treatment of hypertension and congestive heart failure. The product (under the
 brandnames Cozaar and Hyzaar) was produced and marketed by Merck, Sharpe, and Dohme
Corporation, licensee of petitioner.
 Said application was handled by a Filipino lawyer, Atty. Nicanor Mapili.
 In 2000, petitioner’s new counsel, Ortega, et al., sent the IPO a letter requesting that an office
action be issued on the petitioner’s patent application.
 On January 30, 2002, IPO Patent Examiner sent an office action (Paper No. 2) stating that
there were no documents shown that the authority to prosecute the patent application was
transferred from Atty. Mapili to Ortega, et al. Hence, an official revocation of Power of Attorney
of Atty. Mapili and appointment of Ortega, et al. by petitioner is required before further action
can be undertaken on the patent application. Also, it was noted by the Examiner that the
application was deemed abandoned since it took 13 years for petitioner to request for an office
action.
 On May 29, 2002, petitioner replied to Paper No. 2 by submitting a Power of Attorney
authorizing Ortega, et al. to handle its patent application.
 Petitioner also filed petition for revival of its patent application.
 In its petition, they argued that it was only in 1996 that they became aware of Atty. Mapili’s
death when its senior-level lawyer visited PH, and that it was only on January 30, 2002, that
it received a notice of abandonment sent by IPO (Paper No. 2).
 On April 18, 2002, Director of Patents denied the petition for revival for having been filed out
of time. It ruled that although it appears that Atty. Mapili was remiss in his obligations as
counsel for the petitioner, the abandoned application cannot be revived because of the
limitations provided in Rule 115 of Revised Rules of Practice.
 Petitioner appealed to Director-General of IPO. On August 26, 2002, said appeal was denied.
 On November 21, 2003, petitioner appealed to CA.
 On August 31, 2004, CA granted the appeal allowing the revival of the patent application. CA
believed that petitioner should be accorded some relief from the gross negligence of its former
counsel, Atty. Mapili.
 IPO moved to reconsider. Meanwhile, Therapharma moved for leave to intervene arguing that
CA’s decision affected its “vested” rights to sell its own product. Therapharma alleged that it
was granted application by BFAD for a losartan product “Lifezar,” a medication for
hypertension, and that prior to its application, it made sure that no patent application for similar
products exists and that petitioner’s application was considered abandoned by the Bureau of
Patents.
 In January 2006, CA granted the motion for leave to intervene of Therapharma.
 Petitioner moved to reconsider. In August 2006, CA reversed its August 31, 2004 decision
ruling that the public interest would be prejudiced by the revival of petitioner’s patent
application. CA held that petitioner and Atty. Mapili were inexcusably negligent. CA also found
that Therapharma had already invested P20M to develop its own losartan product.
 On October 19, 2006, petitioner filed the present case. Petitioner argues that it was not
negligent in the prosecution of its patent application since it was Atty. Mapili or his heirs who
failed to inform it of crucial developments with regard to its patent application. It argues that
as a client in a foreign country, it does not have immediate supervision over its local counsel
so it should not be bound by its counsel's negligence.

ISSUE/RULING
WON the patent application of petitioner should be revived – NO
 Under Chapter VII, Section 1 ll(a) of the 1962 Revised Rules of Practice, a patent application
is deemed abandoned if the applicant fails to prosecute the application within 4 months from
the date of the mailing of the notice of the last action by the Bureau of Patents, Trademarks,
and Technology Transfer, and not from applicant's actual notice.
 Sec. 113 of 1962 Revised Rules of Practice, an abandoned patent application may only be
revived within 4 months from the date of abandonment, provided it is shown to the satisfaction
of the Director that the delay was unavoidable. An application not revived within the specified
period shall be deemed forfeited.
 Sec. 113 has since been superseded by Section 133.4 of the Intellectual Property Code, Rule
930 of the Rules and Regulations on Inventions, and Rule 929 of the Revised Implementing
Rules and Regulations for Patents, Utility Models and Industrial Design. The period of four (4)
months from the date of abandonment, however, remains unchanged.
 According to the records of the Bureau of Patents, Trademarks, and Technology Transfer
Chemical Examining Division, petitioner filed its patent application on July 10, 1987. It was
assigned to an examiner on June 7, 1988. An Office Action was mailed to Atty. Mapili, on July
19, 1988. Because petitioner failed to respond within the allowable period, the application was
deemed abandoned on September 20, 1988. Under Sec. 113, petitioner had until January 20,
1989 to file for a revival of the patent application. Its Petition for Revival, however, was filed
on May 29, 2002, 13 years after the date of abandonment.
 Even if the delay was unavoidable, or the failure to prosecute was due to fraud, accident,
mistake, or excusable negligence, or the petition was accompanied by a complete proposed
response, or all fees were paid, the same would still be denied since these regulations only
provide a 4-month period within which to file for the revival of the application. The rules do not
provide any exception that could extend this four (4)-month period to 13 years. Petitioner’s
patent application, therefore, should not be revived since it was filed beyond the allowable
period.
 Even assuming that the 4-month period could be extended, petitioner was inexcussably
negligent in the prosecution of its patent application. Negligence is inexcusable if its
commission could have been avoided through ordinary diligence and prudence. It is also
settled that negligence of counsel binds the client as this "ensures against the resulting
uncertainty and tentativeness of proceedings if clients were allowed to merely disown their
counsels' conduct."
 Petitioner's resident agent, Atty. Mapili, was undoubtedly negligent in failing to respond to the
Office Action sent by the Bureau of Patents, Trademarks, and Technology Transfer on June
19, 1988. Because of his negligence, petitioner's patent application was declared abandoned.
He was again negligent when he failed to revive the abandoned application within 4 months
from the date of abandonment.
 Petitioner tries to disown Atty. Mapili 's conduct by arguing that it was not informed of the
abandonment of its patent application or of Atty. Mapili's death. By its own evidence, however,
petitioner requested a status update from Atty. Mapili only on July 18, 1995, 8 years after the
filing of its application. It alleged that it only found out about Atty. Mapili 's death sometime in
March 1996, as a result of its senior patent attorney's visit to the Philippines. Although it was
in petitioner's discretion as a foreign client to put its complete trust and confidence on its local
resident agent, there was a correlative duty on its part to be diligent in keeping itself updated
on the progress of its patent applications. Its failure to be informed of the abandonment of its
patent application was caused by its own lack of prudence.
 In Bernardo v. CA, "no prudent party will leave the fate of his case entirely to his lawyer. It is
the duty of a party-litigant to be in contact with his counsel from time to time in order to be
informed of the progress of his case." Even if Atty. Mapili's death prevented petitioner from
submitting a petition for revival on time, it was clearly negligent when it subsequently failed to
immediately apprise itself of the status of its patent application.
 Furthermore, contrary to the posturing of petitioner, Schuartz is applicable. Petitioner attempts
to distinguish itself from Schuartz by arguing that the petitioners in Schuartz had actual notice
 of abandonment while petitioner here was only able to have actual notice when it received
Paper No. 2.
 The 4-month period in Sec. 111 of the 1962 Revised Rules of Practice, however, is not
counted from actual notice of abandonment but from mailing of the notice. Since it appears
from the Intellectual Property Office's records that a notice of abandonment was mailed to
petitioner's resident agent on July 19, 1988, the time for taking action is counted from this
period. Petitioner's patent application cannot be revived simply because the period for revival
has already lapsed and no extension of this period is provided for by the 1962 Revised Rules
of Practice.
 Moreover, Public interest will be prejudiced if, despite petitioner's inexcusable negligence, its
petition for revival is granted. Even without a pending patent application and the absence of
any exception to extend the period for revival, petitioner was already threatening to pursue
legal action against Therapharma if it continued to develop and market its losartan product,
Lifezar. Once petitioner is granted a patent for its losartan products, Cozaar and Hyzaar, the
loss of competition in the market for losartan products may result in higher prices. For the
protection of public interest, petitioner’s patent application should be considered a forfeited
patent application.

WHEREFORE, the Petition is DENIED. The Resolution dated January 31, 2006 and the
Amended Decision dated August 30, 2006 of the Court of Appeals are AFFIRMED. SO
ORDERED.

Case number 16
Hon Ne Chan v Honda Motors

Nature of the Petition

PETITION for review on certiorari of the decision and
resolution of the Court of Appeals.

DOCTRINE
The validity of the issuance of a search warrant rests upon the following factors:
(1) it must be issued upon probable cause;
(2) the probable cause must be determined by the judge himself and not by the applicant
or any other person;
(3) in the determination of probable cause, the judge must examine, under oath or
affirmation, the complainant and such witnesses as the latter may produce; and
(4) the warrant issued must particularly describe the place to be searched and persons or
things to be seized.

Search warrants are not issued on loose, vague or doubtful basis of fact, or on mere suspicion or
belief.
Probable cause, as far as the issuance of a search warrant is concerned, has been uniformly
defined as such facts and circumstances which would lead a reasonable, discreet and prudent
man to believe that an offense has been committed, and that the objects sought in connection
with the offense are in the place sought to be searched.

FACTS:
 On 14 November 2003, the National Bureau of Investigation (NBI), through Special
Investigator (SI) Glenn Lacaran, applied for search warrants with the RTC
against petitioners for alleged violation of Section 168 in relation to Section 170 of Republic
Act No. 8293 or the Intellectual Property Code of the Philippines
 On the same date, RTC Judge Artemio S. Tipon issued two (for Hon Ne Chan and Yunji
Zeng) search warrants.
 On the strength of these search warrants, NBI agents conducted a search of petitioners’
premises and seized items from the petitioner.
 Motion to Quash Search Warrants and to Return Illegally Seized Items, averring therein
that the search warrants were issued despite the absence of probable cause and that they
were in the nature of general search warrants.
 Trial court ordered the NBI to return to petitioners the articles seized
 CA reversed the RTC

ISSUES
1) Whether probable cause existed in the issuance of the subject search warrants;
2) Whether said search warrants were in the nature of general search warrants and
therefore null and void; and
3) Whether there existed an offense to which the issuance of the search warrants was
connected.

HELD/RATIO:

The validity of the issuance of a search warrant rests upon the following factors:
(1) it must be issued upon probable cause;
(2) the probable cause must be determined by the judge himself and not by the applicant
or any other person;
(3) in the determination of probable cause, the judge must examine, under oath or
affirmation, the complainant and such witnesses as the latter may produce; and
(4) the warrant issued must particularly describe the place to be searched and persons or
things to be seized.

1) Whether probable cause existed in the issuance of the subject search warrants
NO.
Petitioners Argue:
 The statement “[Lacaran] has information and verily believes that (petitioners) are in
possession or has in their control properties” failed to meet the condition that probable
cause must be shown to be within the personal knowledge of the complainant or the
witnesses he may produce and not based on mere hearsay
Court:
Next paragraph of the above quoted application for search warrant states that “Lacaran
„personally verified the report and found [it] to be a fact.”

Probable cause, as far as the issuance of a search warrant is concerned, has been
uniformly defined as such facts and circumstances which would lead a reasonable,
discreet and prudent man that an offense has been committed, and that the objects sought
in connection with the offense are in the place sought to be searched to believe that an
offense has been committed, and that the objects sought in connection with the offense
are in the place sought to be searched.

Microsoft Corporation and Lotus Development Corporation v. Maxicorp, Inc: “The

determination of probable cause does not call for the application of rules and standards of
proof that a judgment of conviction requires after trial on the merits. As implied by the
words themselves, probable cause is concerned with probability, not absolute or even
moral certainty. The prosecution need not present at this stage reasonable doubt. The
standards of judgment
are those of a reasonably prudent man, not the exacting calibrations of a judge after a full-
blown trial.”

2) Whether said search warrants were in the nature of general search warrants and
therefore null and void
NO.

Petitioners Argue:
The search warrants in question partook the nature of general search warrants in that they
included motorcycles bearing the model name “WAVE.”
Court
It is elemental that in order to be valid, a search warrant must particularly describe the
place to be searched and the things to be seized. It is not, however, required that the
things to be seized must be described in precise and minute detail as to leave no room for
doubt on the part of the searching authorities.

3) Whether there existed an offense to which the issuance of the search warrants was
connected.
YES.
Petitioners Argue:
The search warrants were issued in relation to no particular offense.
Court
Application for Search Warrant filed by
respondents are complaining about was
established. It is quite obvious then that
intotheir established goodwill involving
infringement
NBI SI Lacaran, it is clearly stated that what
the alleged violation of the goodwill they have
their cause of action arose out of the intrusion
the two motorcycle models and not patent

Case number 17
PACITA I. HABANA, ALICIA L. CINCO and JOVITA N. FERNANDO vs. FELICIDAD C.
ROBLES and GOODWILL TRADING CO., INC.
G.R. No. 131522, July 19, 1999

FACTS: Pacita Habana et al., are authors and copyright owners of duly issued of the book,
College English For Today (CET). Respondent Felicidad Robles was the author of the book
Developing English Proficiency (DEP). Petitioners found that several pages of the respondent's
book are similar, if not all together a copy of petitioners' book. Habana et al. filed an action for
damages and injunction, alleging respondent’s infringement of copyrights, in violation of P.D. 49.
They allege respondent Felicidad C. Robles being substantially familiar with the contents of
petitioners' works, and without securing their permission, lifted, copied, plagiarized and/or
transposed certain portions of their book CET.

On the other hand, Robles contends that the book DEP is the product of her own intellectual
creation, and was not a copy of any existing valid copyrighted book and that the similarities may
be due to the authors' exercise of the "right to fair use of copyrighted materials, as guides."

The trial court ruled in favor of the respondents, absolving them of any liability. Later, the Court
of Appeals rendered judgment in favor of respondents Robles and Goodwill Trading Co., Inc. In
this appeal, petitioners submit that the appellate court erred in affirming the trial court's decision.

ISSUE: Whether Robles committed infringement in the production of DEP.

HELD: A perusal of the records yields several pages of the book DEP that are similar if not
identical with the text of CET. The court finds that respondent Robles' act of lifting from the book
of petitioners substantial portions of discussions and examples, and her failure to acknowledge
the same in her book is an infringement of petitioners' copyrights.

In the case at bar, the least that respondent Robles could have done was to acknowledge
petitioners Habana et. al. as the source of the portions of DEP. The final product of an author's
toil is her book. To allow another to copy the book without appropriate acknowledgment is injury
enough.

Case number 18

JUNO BATISTIS v. PEOPLE, GR No. 181571, 2009-12-16

Facts:

agents of the National Bureau of Investigation (NBI) conducted a test-buy in the premises of
Batistis, and thereby confirmed that he was actively engaged in the manufacture, sale and
distribution of counterfeit Fundador brandy products.

Search Warrant No. 01-2576,[10] authorizing the search of the premises of

Batistis located at No.1664 Onyx St., San Andres Bukid, Sta. Ana, Manila. The search yielded 20
empty Carlos I bottles, 10 empty bottles of Black Label whiskey, two empty bottles of Johnny
Walker Swing, an empty bottle of Remy Martin XO, an empty... bottle of Chabot, 241 empty
Fundador bottles, 163 boxes of Fundador, a half sack of Fundador plastic caps, two filled bottles
of Fundador brandy, and eight cartons of empty Jose Cuervo bottles.

Issues:

The CA affirmed the decision of the RTC imposing the "the penalty of imprisonment of TWO (2)
YEARS and to pay a fine of FIFTY THOUSAND (P50,000.00) PESOS."

Ruling:

We rule that the penalty thus fixed was contrary to the Indeterminate Sentence Law,[26] as
amended by Act No. 4225. We modify the penalty.

The straight penalty the CA imposed was contrary to the Indeterminate Sentence Law, whose
Section 1 requires that the penalty of imprisonment should be an indeterminate sentence.

modify the penalty to imprisonment ranging from two years, as minimum, to three years, as
maximum, and a fine of

P50,000.00.

Principles:
Intellectual Property Code provides the penalty for infringement of trademark, to wit:

Section 170. Penalties.

a criminal penalty of imprisonment from two (2) years to five (5) years and a fine ranging from
Fifty thousand pesos (P50,000) to Two hundred thousand... pesos(P200,000), shall be imposed

The need for specifying the minimum and maximum periods of the indeterminate sentence is to
prevent the unnecessary and excessive deprivation of liberty and to enhance the economic
usefulness of the accused, since he may be exempted from serving the entire sentence,...
depending upon his behavior and his physical, mental, and moral record. The requirement of
imposing an indeterminate sentence in all criminal offenses whether punishable by the Revised
Penal Code or by special laws, with definite minimum and maximum terms, as the Court... deems
proper within the legal range of the penalty specified by the law must, therefore, be deemed
mandatory.

We are aware that an exception was enunciated in People v. Nang Kay,[30] a prosecution for
illegal possession of firearms punished by a special law... with imprisonment of not less than five
years nor more than ten years. There, the Court sustained the straight penalty of five years and
one day imposed by the trial court (Court of First Instance of Rizal) because the application of the

Indeterminate Sentence Law would be unfavorable to the accused by lengthening his prison
sentence.

Case number 19

TANDUAY DISTILLERS, INC., PETITIONER, VS. GINEBRA SAN MIGUEL, INC.,

RESPONDENT

[ G.R. No. 164324, August 14, 2009 ]

The Facts
Tanduay, a corporation organized and existing under Philippine laws, has been engaged in the
liquor business since 1854. In 2002, Tanduay developed a new gin product distinguished by its
sweet smell, smooth taste, and affordable price. Tanduay claims that it engaged the services of
an advertising firm to develop a brand name and a label for its new gin product. The brand name
eventually chosen was "Ginebra Kapitan" with the representation of a revolutionary Kapitan on
horseback as the dominant feature of its label. Tanduay points out that the label design of
"Ginebra Kapitan" in terms of color scheme, size and arrangement of text, and other label features
were precisely selected to distinguish it from the leading gin brand in the Philippine market,
"Ginebra San Miguel." Tanduay also states that the "Ginebra Kapitan" bottle uses a resealable
twist cap to distinguish it from "Ginebra San Miguel" and other local gin products with bottles
which use the crown cap or tansan.[6]

After filing the trademark application for "Ginebra Kapitan" with the Intellectual Property Office
(IPO) and after securing the approval of the permit to manufacture and sell "Ginebra Kapitan"
from the Bureau of Internal Revenue, Tanduay began selling "Ginebra Kapitan" in Northern and
Southern Luzon areas in May 2003. In June 2003, "Ginebra Kapitan" was also launched in Metro
Manila.[7]

On 13 August 2003, Tanduay received a letter from San Miguel's counsel. The letter informed
Tanduay to immediately cease and desist from using the mark "Ginebra" and from committing
acts that violate San Miguel's intellectual property rights.[8]

On 15 August 2003, San Miguel filed a complaint for trademark infringement, unfair competition
and damages, with applications for issuance of TRO and Writ of Preliminary Injunction against
Tanduay before the Regional Trial Court of Mandaluyong. The case was raffled to Branch 214
and docketed as IP Case No. MC-03-01 and Civil Case No. MC-03-073.[9]

On 25 and 29 August and 4 September 2003, the trial court conducted hearings on the TRO. San
Miguel submitted five affidavits, but only one affiant, Mercedes Abad, was presented for cross-
examination because the trial court ruled that such examination would be inconsistent with the
summary nature of a TRO hearing.[10] San Miguel submitted the following pieces of evidence:[11]

1. Affidavit of Mercedes Abad, President and Managing Director of the research firm NFO Trends,
Inc. (NFO Trends), to present, among others, market survey results which prove that gin drinkers
associate the term "Ginebra" with San Miguel, and that the consuming public is being misled that
"Ginebra Kapitan" is a product of San Miguel;

2. Market Survey results conducted by NFO Trends to determine the brand associations of the
mark "Ginebra" and to prove that the consuming public is confused as to the manufacturer of
"Ginebra Kapitan";
3. Affidavit of Ramon Cruz, San Miguel's Group Product Manager, to prove, among others, the
prior right of San Miguel to the mark "Ginebra" as shown in various applications for, and
registrations of, trademarks that contain the mark "Ginebra." His affidavit included documents
showing that the mark "Ginebra" has been used on San Miguel's gin products since 1834;

4. Affidavits of Leopoldo Guanzon, Jr., San Miguel's Trade and Promo Merchandising Head for
North Luzon Area, and Juderick Crescini, San Miguel's District Sales Supervisor for South Luzon-
East Area, to prove, among others, that Tanduay's salesmen or distributors misrepresent
"Ginebra Kapitan" as San Miguel's product and that numerous retailers of San Miguel's gin
products are confused as to the manufacturer of "Ginebra Kapitan"; and

5. Affidavit of Jose Reginald Pascual, San Miguel's District Sales Supervisor for the North-Greater
Manila Area, to prove, among others, that gin drinkers confuse San Miguel to be the manufacturer
of "Ginebra Kapitan" due to the use of the dominant feature "Ginebra."

Tanduay filed a Motion to Strike Out Hearsay Affidavits and Evidence, which motion was denied
by the trial court. Tanduay presented witnesses who affirmed their affidavits in open court, as
follows:[12]

1. Ramoncito Bugia, General Services Manager of Tanduay. Attached to his affidavit were various
certificates of registration of trademarks containing the word "Ginebra" obtained by Tanduay and
other liquor companies, to prove that the word "Ginebra" is required to be disclaimed by the IPO.
The affidavit also attested that there are other liquor companies using the word "Ginebra" as part
of their trademarks for gin products aside from San Miguel and Tanduay.

2. Herbert Rosales, Vice President of J. Salcedo and Associates, Inc., the advertising and
promotions company hired by Tanduay to design the label of "Ginebra Kapitan." His affidavit
attested that the label was designed to make it "look absolutely different from the Ginebra San
Miguel label."
On 23 September 2003, the trial court issued a TRO prohibiting Tanduay from manufacturing,
selling and advertising "Ginebra Kapitan

The Issue
The central question for resolution is whether San Miguel is entitled to the writ of preliminary
injunction granted by the trial court as affirmed by the CA. For this reason, we shall deal only with
the questioned writ and not with the merits of the case pending before the trial court.

The Ruling of the Court

Clear and Unmistakable Right

Section 1, Rule 58 of the Rules of Court defines a preliminary injunction as an order granted at
any stage of a proceeding prior to the judgment or final order, requiring a party or a court, agency,
or a person to refrain from a particular act or acts.

A preliminary injunction is a provisional remedy for the protection of substantive rights and
interests. It is not a cause of action in itself but merely an adjunct to the main case. Its objective
is to prevent a threatened or continuous irreparable injury to some of the parties before their
claims can be thoroughly investigated and advisedly adjudicated. It is resorted to only when there
is a pressing need to avoid injurious consequences which cannot be remedied under any standard
compensation.[34]

Section 3, Rule 58 of the Rules of Court provides:

SECTION 3. Grounds for issuance of a writ of preliminary injunction.--A preliminary injunction

may be granted when it is established:
(a) That the applicant is entitled to the relief demanded, and the whole or part of such relief
consists in restraining the commission or continuance of the act or acts complained of, or in
requiring the performance of an act or acts, either for a limited period or perpetually;

(b) That the commission, continuance or non-performance of the act or acts complained of during
the litigation would probably work injustice to the applicant; or

(c) That a party, court, agency or a person is doing, threatening, or is attempting to do, or is
procuring or suffering to be done, some act or acts probably in violation of the rights of the
applicant respecting the subject of the action or proceeding, and tending to render the judgment
ineffectual.

Before an injunctive writ is issued, it is essential that the following requisites are present: (1) the
existence of a right to be protected and (2) the acts against which the injunction is directed are
violative of the right. The onus probandi is on the movant to show that the invasion of the right
sought to be protected is material and substantial, that the right of the movant is clear and
unmistakable, and that there is an urgent and paramount necessity for the writ to prevent serious
damage.[35]

San Miguel claims that the requisites for the valid issuance of a writ of preliminary injunction were
clearly established. The clear and unmistakable right to the exclusive use of the mark "Ginebra"
was proven through the continuous use of "Ginebra" in the manufacture, distribution, marketing
and sale of gin products throughout the Philippines since 1834. To the gin-drinking public, the
word "Ginebra" does not simply indicate a kind of beverage; it is now synonymous with San
Miguel's gin products.[36]

San Miguel contends that "Ginebra" can be appropriated as a trademark, and there was no error
in the trial court's provisional ruling based on the evidence on record. Assuming that "Ginebra" is
a generic word which is proscribed to be registered as a trademark under Section 123.1(h) [37] of
Republic Act No. 8293 or the Intellectual Property Code (IP Code),[38] it can still be appropriated
and registered as a trademark under Section 123.1(j)[39] in relation to Section 123.2[40] of the IP
Code, considering that "Ginebra" is also a mark which designates the kind of goods produced by
San Miguel.[41] San Miguel alleges that although "Ginebra," the Spanish word for "gin," may be a
term originally incapable of exclusive appropriation, jurisprudence dictates that the mark has
become distinctive of San Miguel's products due to its substantially exclusive and continuous use
as the dominant feature of San Miguel's trademarks since 1834. Hence, San Miguel is entitled to
a finding that the mark is deemed to have acquired a secondary meaning.[42] San Miguel states
that Tanduay failed to present any evidence to disprove its claims; thus, there is no basis to set
aside the grant of the TRO and writ of preliminary injunction.[43]

San Miguel states that its disclaimer of the word "Ginebra" in some of its registered marks is
without prejudice to, and did not affect, its existing or future rights over "Ginebra," especially since
"Ginebra" has demonstrably become distinctive of San Miguel's products.[44] San Miguel adds that
it did not disclaim "Ginebra" in all of its trademark registrations and applications like its registration
for "Ginebra Cruz de Oro," "Ginebra Ka Miguel," "Ginebra San Miguel" bottle, "Ginebra San
Miguel," and "Barangay Ginebra."[45]

Tanduay asserts that not one of the requisites for the valid issuance of a preliminary injunction is
present in this case. Tanduay argues that San Miguel cannot claim the exclusive right to use the
generic word "Ginebra" for its gin products based on its registration of the composite marks
"Ginebra San Miguel," "Ginebra S. Miguel 65," and "La Tondeña Cliq! Ginebra Mix," because in
all of these registrations, San Miguel disclaimed any exclusive right to use the non-registrable
word "Ginebra" for gin products.[46] Tanduay explains that the word "Ginebra," which is disclaimed
by San Miguel in all of its registered trademarks, is an unregistrable component of the composite
mark "Ginebra San Miguel." Tanduay argues that this disclaimer further means that San Miguel
does not have an exclusive right to the generic word "Ginebra."[47] Tanduay states that the word
"Ginebra" does not indicate the source of the product, but it is merely descriptive of the name of
the product itself and not the manufacturer thereof.[48]

Tanduay submits that it has been producing gin products under the brand names Ginebra 65,
Ginebra Matador, and Ginebra Toro without any complaint from San Miguel. Tanduay alleges that
San Miguel has not filed any complaint against other liquor companies which use "Ginebra" as
part of their brand names such as Ginebra Pinoy, a registered trademark of Webengton Distillery;
Ginebra Presidente and Ginebra Luzon as registered trademarks of Washington Distillery, Inc.;
and Ginebra Lucky Nine and Ginebra Santiago as registered trademarks of Distileria Limtuaco &
Co., Inc.[49] Tanduay claims that the existence of these products, the use and registration of the
word "Ginebra" by other companies as part of their trademarks belie San Miguel's claim that it
has been the exclusive user of the trademark containing the word "Ginebra" since 1834.

Tanduay argues that before a court can issue a writ of preliminary injunction, it is imperative that
San Miguel must establish a clear and unmistakable right that is entitled to protection. San
Miguel's alleged exclusive right to use the generic word "Ginebra" is far from clear and
unmistakable. Tanduay claims that the injunction issued by the trial court was based on its
premature conclusion that "Ginebra Kapitan" infringes "Ginebra San Miguel."[50]

In Levi Strauss & Co. v. Clinton Apparelle, Inc.,[51] we held:

While the matter of the issuance of a writ of preliminary injunction is addressed to the sound
discretion of the trial court, this discretion must be exercised based upon the grounds and in the
manner provided by law. The exercise of discretion by the trial court in injunctive matters is
generally not interfered with save in cases of manifest abuse. And to determine whether there
was grave abuse of discretion, a scrutiny must be made of the bases, if any, considered by the
trial court in granting injunctive relief. Be it stressed that injunction is the strong arm of equity
which must be issued with great caution and deliberation, and only in cases of great injury where
there is no commensurate remedy in damages.[52]

The CA upheld the trial court's ruling that San Miguel has sufficiently established its right to prior
use and registration of the word "Ginebra" as a dominant feature of its trademark. The CA ruled
that based on San Miguel's extensive, continuous, and substantially exclusive use of the word
"Ginebra," it has become distinctive of San Miguel's gin products; thus, a clear and unmistakable
right was shown.

We hold that the CA committed a reversible error. The issue in the main case is San Miguel's
right to the exclusive use of the mark "Ginebra." The two trademarks "Ginebra San Miguel" and
"Ginebra Kapitan" apparently differ when taken as a whole, but according to San Miguel, Tanduay
appropriates the word "Ginebra" which is a dominant feature of San Miguel's mark.

It is not evident whether San Miguel has the right to prevent other business entities from using
the word "Ginebra." It is not settled (1) whether "Ginebra" is indeed the dominant feature of the
trademarks, (2) whether it is a generic word that as a matter of law cannot be appropriated, or (3)
whether it is merely a descriptive word that may be appropriated based on the fact that it has
acquired a secondary meaning.

The issue that must be resolved by the trial court is whether a word like "Ginebra" can acquire a
secondary meaning for gin products so as to prohibit the use of the word "Ginebra" by other gin
manufacturers or sellers. This boils down to whether the word "Ginebra" is a generic mark that is
incapable of appropriation by gin manufacturers.

In Asia Brewery, Inc. v. Court of Appeals,[53] the Court ruled that "pale pilsen" are generic words,
"pale" being the actual name of the color and "pilsen" being the type of beer, a light bohemian
beer with a strong hops flavor that originated in Pilsen City in Czechoslovakia and became famous
in the Middle Ages, and hence incapable of appropriation by any beer manufacturer.[54]Moreover,
Section 123.1(h) of the IP Code states that a mark cannot be registered if it "consists exclusively
of signs that are generic for the goods or services that they seek to identify."

In this case, a cloud of doubt exists over San Miguel's exclusive right relating to the word
"Ginebra." San Miguel's claim to the exclusive use of the word "Ginebra" is clearly still in dispute
because of Tanduay's claim that it has, as others have, also registered the word "Ginebra" for its
gin products. This issue can be resolved only after a full-blown trial.

In Ong Ching Kian Chuan v. Court of Appeals,[55] we held that in the absence of proof of a legal
right and the injury sustained by the movant, the trial court's order granting the issuance of an
injunctive writ will be set aside, for having been issued with grave abuse of discretion.

We find that San Miguel's right to injunctive relief has not been clearly and unmistakably
demonstrated. The right to the exclusive use of the word "Ginebra" has yet to be determined in
the main case. The trial court's grant of the writ of preliminary injunction in favor of San Miguel,
despite the lack of a clear and unmistakable right on its part, constitutes grave abuse of discretion
amounting to lack of jurisdiction.
Irreparable Injury
Tanduay points out that the supposed damages that San Miguel will suffer as a result of
Tanduay's infringement or unfair competition cannot be considered irreparable because the
damages are susceptible of mathematical computation. Tanduay invokes Section 156.1 of the IP
Code[61] as the basis for the computation of damages.[62]

San Miguel avers that it stands to suffer irreparable injury if the manufacture and sale of Tanduay's
"Ginebra Kapitan" are not enjoined. San Miguel claims that the rough estimate of the
damages[63] it would incur is simply a guide for the trial court in computing the appropriate docket
fees. San Miguel asserts that the full extent of the damage it would suffer is difficult to measure
with any reasonable accuracy because it has invested hundreds of millions over a period of 170
years to establish goodwill and reputation now being enjoyed by the "Ginebra San Miguel"
mark.[64] San Miguel refutes Tanduay's claim that the injury which San Miguel stands to suffer can
be measured with reasonable accuracy as the legal formula to determine such injury is provided
in Section 156.1 of the IP Code. San Miguel reasons that if Tanduay's claim is upheld, then there
would never be a proper occasion to issue a writ of preliminary injunction in relation to complaints
for infringement and unfair competition, as the injury which the owner of the mark suffers, or
stands to suffer, will always be susceptible of mathematical computation.[65]
In Levi Strauss & Co. v. Clinton Apparelle, Inc.,[66] this Court upheld the appellate court's ruling
that the damages Levi Strauss & Co. had suffered or continues to suffer may be compensated in
terms of monetary consideration. This Court, quoting Government Service Insurance System v.
Florendo,[67] held:

x x x a writ of injunction should never issue when an action for damages would adequately
compensate the injuries caused. The very foundation of the jurisdiction to issue the writ of
injunction rests in the probability of irreparable injury, inadequacy of pecuniary compensation and
the prevention of the multiplicity of suits, and where facts are not shown to bring the case within
these conditions, the relief of injunction should be refused.

Based on the affidavits and market survey report submitted during the injunction hearings, San
Miguel has failed to prove the probability of irreparable injury which it will stand to suffer if the sale
of "Ginebra Kapitan" is not enjoined. San Miguel has not presented proof of damages incapable
of pecuniary estimation. At most, San Miguel only claims that it has invested hundreds of millions
over a period of 170 years to establish goodwill and reputation now being enjoyed by the "Ginebra
San Miguel" mark such that the full extent of the damage cannot be measured with reasonable
accuracy. Without the submission of proof that the damage is irreparable and incapable of
pecuniary estimation, San Miguel's claim cannot be the basis for a valid writ of preliminary
injunction.

Case number 20

McDonald’s Corporation v. L.C. Big Mak Burger (G.R. No. 143993)

Facts:

Petitioner McDonald’s, an American corporation operating a global chain of fast-food restaurants,

is the owner of the ‘Big Mac’ mark for its double-decker hamburger sandwich here and in the US.
Meanwhile, respondent L.C., a domestic corporation which operates fast-food outlets and snack
vans applied for the registration of the ‘Big Mak’ mark for its hamburger sandwiches. Petitioner
opposed on the ground that ‘Big Mak’ was a colorable imitation of its registered ‘Big Mac’ mark
for the same food products. Respondents denied there is colorable imitation and argued that
petitioner cannot exclusively appropriate the mark ‘Big Mac’ because the word ‘Big’ is a generic
and descriptive term. Petitioner filed a complaint for trademark infringement and unfair
competition. The trial court found for petitioners. CA held otherwise.

Issues:

(1) Whether or not the word ‘Big Mac’ can be exclusively appropriated by petitioner;

(2) Whether or not there is colorable imitation resulting in likelihood of confusion;

(3) Whether or not there is unfair competition.

Ruling:

(1) YES. A mark is valid if it is “distinctive” and thus not barred from registration under Section 4
of RA 166. However, once registered, not only the mark’s validity but also the registrant’s
ownership of the mark is prima facie presumed. The “Big Mac” mark, which should be treated in
its entirety and not dissected word for word, is neither generic nor descriptive. Generic marks are
commonly used as the name or description of a kind of goods, such as “Lite” for beer or
“Chocolate Fudge” for chocolate soda drink. Descriptive marks, on the other hand, convey the
characteristics, functions, qualities or ingredients of a product to one who has never seen it or
does not know it exists, such as “Arthriticare” for arthritis medication. On the contrary, “Big Mac”
falls under the class of fanciful or arbitrary marks as it bears no logical relation to the actual
characteristics of the product it represents. As such, it is highly distinctive and thus valid.
Significantly, the trademark “Little Debbie” for snack cakes was found arbitrary or fanciful.

(2) YES. In determining likelihood of confusion, jurisprudence has developed two tests, the
dominancy test and the holistic test. 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. This Court, however, has relied on the
dominancy test rather than the holistic test. 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 feature thereof.”

Applying the dominancy test, the Court finds that respondents’ use of the “Big Mak” mark results
in likelihood of confusion. Aurally the two marks are the same, with the first word of both marks
phonetically the same, and the second word of both marks also phonetically the same. Visually,
the two marks have both two words and six letters, with the first word of both marks having the
same letters and the second word having the same first two letters. 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. 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.”

(3) YES. 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. 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. Actual fraudulent intent need not be shown. 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. 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.

Respondents’ goods are hamburgers which are also the goods of petitioners. 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. 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. We hold that
as found by the RTC, respondent corporation is liable for unfair competition.
21. G.R. No. 205972

November 9, 2016

CATERPILLAR,INC., Petitioner
vs.
MANOLO P. SAMSON, Respondent

x-----------------------x

G.R. No. 164352

CATERPILLAR,INC., Petitioner,
vs.
MANOLO P. SAMSON, Respondent.

DECISION

BERSAMIN, J.:

The determination of probable cause to charge a person in court for a criminal offense is
exclusively lodged in the Executive Branch of the Government, through the Department of Justice.
Initially, the determination is done by the investigating public prosecutor, and on review by the
Secretary of Justice or his duly authorized subordinate. The courts will respect the determination,
unless the same shall be shown to have been made in grave abuse of discretion amounting to
lack or excess of jurisdiction.

The Cases

Before us are the consolidated cases of G.R. No. 2059721 and G.R. No. 164352.2

G.R. No. 164352 involves the appeal by petition for review on certiorari of Caterpillar, Inc.
(Caterpillar) to reverse the decision promulgated on January 21, 20043 by the Court of Appeals
(CA) in CA-G.R. SP No. 75526, and the resolution promulgated on June 30, 2004 denying the
motion for reconsideration thereof.4

G.R. No. 205972 relates to the appeal brought by Caterpillar to assail the decision and resolution
promulgated in CA-G.R. SP No. 102316 respectively on May 8, 20125 and February 12,
2013,6 whereby the CA affirmed the resolutions of the Department of Justice (DOJ) finding that
there was no probable cause to indict Manolo P. Samson (Samson) for unfair competition.

Antecedents

Caterpillar is a foreign corporation engaged in the manufacture and distribution of footwear,

clothing and related items, among others. Its products are known for six core trademarks, namely,
"CATERPILLAR", "CAT" "CATERPILLAR & DESIGN" "CAT AND DESIGN", "WALKING
MACHINES" and "TRACK-TYPE TRACTOR & DESIGN (Core Marks),7 all of which are alleged
as internationally known. On the other hand, Samson, doing business under the names and styles
of Itti Shoes Corporation, Kolm's Manufacturing Corporation and Caterpillar Boutique and General
Merchandise, is the proprietor of various retail outlets in the Philippines selling footwear, bags,
clothing, and related items under the trademark "CATERPILLAR", registered in 1997 under
Trademark Registration No. 64705 issued by the Intellectual Property Office (IPO).8

G.R. No. 164352

On July 26, 2000, upon application of the National Bureau of Investigation (NBI), the Regional
Trial Court (RTC), Branch 56, in Makati City issued Search Warrants Nos. 00-022 to 00-032,
inclusive, all for unfair competition,9 to search the establishments owned, controlled and operated
by Samson. The implementation of the search warrants on July 27, 2000 led to the seizure of
various products bearing Caterpillar's Core Marks.

Caterpillar filed against Samson several criminal complaints for unfair competition in the
Department of Justice (DOJ), docketed as LS. Nos. 2000-13 54 to 2000-13 64, inclusive.

Additionally, on July 31, 2000, Caterpillar commenced a civil action against Samson and his
business entities, with the IPO as a nominal party10 - for Unfair Competition, Damages and
Cancellation of Trademark with Application for Temporary Restraining Order (TRO) and/or Writ
of Preliminary Injunction - docketed as Civil Case No. Q-00-41446 of the RTC in Quezon City. In
said civil action, the RTC denied Caterpillar's application for the issuance of the TRO on August
17, 2000.

The DOJ, through Senior State Prosecutor Jude R. Romano, issued a joint resolution dated
November 15, 200111recommending that Samson be criminally charged with unfair competition
under Section 168.3 (a),12 in relation to Section 123.l(e),13 Section 131.114 and Section 170,15 all
of Republic Act No. 8293, or the Intellectual Property Code of the Philippines (IP Code).

However, because Samson and his affiliate companies allegedly continued to sell and distribute
products clothed with the general appearance of its own products, Caterpillar again applied for
another set of search warrants against Samson and his businesses. The RTC, Branch 172, in
Valenzuela City issued Search Warrants Nos. 12-V-00,16 13-V-00,17 20-V-0018 and 29-V-
0019 upon application of the NBI, by virtue of the implementation of which several goods were
seized and confiscated by the NBI agents.

As a consequence, Caterpillar filed 26 criminal complaints for unfair competition on January 31,
2001, docketed as LS. Nos. 2001-42 to 2001-67, against Samson and/or the occupants of his
affiliate entities before the DOJ.20 In due course, the DOJ, through State Prosecutor Zenaida M.
Lim, issued a joint resolution dated September 28, 200121recommending the filing of criminal
complaints for unfair competition under Section 168.3(a), in relation to Section 123 .1, Section
131.1 and Section 170 of the IP Code. Accordingly, six criminal complaints were filed in the RTC,
Branch 256, in Muntinlupa City, presided by Judge Alberto L. Lerma, docketed as Criminal Cases
Nos. 02-238 to 02-243.

On January 17 and 22, 2002, Samson filed a petitions for review with the Office of the Secretary
of Justice to appeal the joint resolutions in LS. Nos. 2000-1354 to 2000-136422 and LS. Nos. 2001-
042 to 2001-067.23

On May 30, 2002, Samson filed a Motion to Suspend Arraignment in Criminal Cases Nos. 02-238
to 243,24 citing the following as grounds:25
I.

THERE EXISTS PREJUDICIAL QUESTIONS PENDING LITIGATION BEFORE THE REGIONAL

TRIAL COURT OF QUEZON CITY, BRANCH 90, IN CIVIL CASE NO. Q-00-41446 ENTITLED:
"CATERPILLAR, INC., ET AL. VS. ITTI SHOES CORPORATION, ET AL.," THE FINAL
RESOLUTIONS OF WHICH WILL DETERMINE THE OUTCOME OF THE INSTANT CRIMINAL
CASES.

II.

ACCUSED HAS FILED PETITIONS FOR REVIEW WITH THE DEPARTMENT OF JUSTICE
ASSAILING THE RESOLUTIONS OF THE CHIEF STATE PROSECUTOR WHO CAUSED THE
FILING OF THE INSTANT CASES AND ARE STILL PENDING THEREIN UP TO THE
PRESENT.

In the meanwhile, on July 10, 2002, the DOJ, through Secretary Hernando B. Perez, issued a
resolution26 denying Samson's petition for review in I.S. Nos. 2000-1354 to 2000-1364. Samson's
motion for reconsideration was likewise denied on May 26, 2003.

On September 23, 2002, Presiding Judge Lerma of the RTC granted Samson's Motion to
Suspend Arraignment, and suspended the arraignment and all other proceedings in Criminal
Cases Nos. 02-240 to 02-243 until Civil Case No. Q-00-41446 was finally resolved,27 holding:

After a careful scrutiny of the case, this Court finds that private complainant, in Civil Case No. Q-
00-41446, seeks for the cancellation of the trademark "CATERPILLAR" which is registered in the
name of the accused and to prevent the latter from using the said trademark ("CATERPILLAR"),
while the issue in the instant case is the alleged unlawful use by the accused of the trademark
"CATERPILLAR" which is claimed to be owned by the private complainant. From the foregoing,
this Court believes that there exists a prejudicial question since the determination of who is really
the lawful or registered user of the trademark "CATERPILLAR" will ultimately determine whether
or not the instant criminal action shall proceed. Clearly, the issues raised in Civil Case No. Q-00-
41446 is similar or intimately related to the issue in the case at bar for if the civil case will be
resolved sustaining the trademark registration of the accused for the trademark CATERPILLAR,
then the latter would have all the authority to continue the use of the said trademark as a
consequence of a valid registration, and by reason of which there may be no more basis to
proceed with the instant criminal action.28

After the RTC denied its motion for reconsideration29 on December 5, 2002,30 Caterpillar elevated
the matter to the CA by petition for certiorari on February 14, 2003,31 docketed as C.A.-G.R. SP
No. 75526 entitled Caterpillar, Inc. v. Hon. Alberto L. Lerma, in his capacity as Presiding Judge
of Branch 256 of the Regional Trial Court, Muntinlupa City, and Manolo P. Samson, alleging grave
abuse of discretion amounting to lack or excess of jurisdiction on the part of the RTC in
suspending the arraignment and other proceedings in Criminal Cases Nos. 02-238 to 02-243 on
the ground of the existence of an alleged prejudicial question in Civil Case No. Q-00-41446 then
pending in the RTC in Quezon City whose resolution would determine the outcome of the criminal
cases.

Meanwhile, on January 13, 2003, Acting Justice Secretary Ma. Merceditas N. Gutierrez reversed
and set aside the resolution issued by State Prosecutor Lim in I.S. No. 2001-042 to 2001-067,
and directed the Chief State Prosecutor to cause the withdrawal of the criminal informations filed
against Samson in court,32 disposing as follows:

ACCORDINGLY, the assailed joint resolution is hereby REVERSED and SET ASIDE. The Chief
State Prosecutor is directed to forthwith cause the withdrawal of the informations filed in court
against respondent Manolo P. Samson and to report action taken hereon within ten (10) days
from receipts hereof.33

Acting Justice Secretary Gutierrez based her resolution on the order dated June 26, 2001,
whereby the RTC of Valenzuela City, Branch 172, had quashed the 26 search warrants upon
motion of Samson.34 Consequently, the goods seized and confiscated by virtue of the quashed
search warrants could no longer be admitted in evidence

Correspondingly, Presiding Judge Lerma of the RTC ordered the withdrawal of Criminal Cases
Nos. 02-240 to 02-243 on February 4, 2003.35

Aggrieved, Caterpillar assailed the order of Judge Lerma for the withdrawal of Criminal Cases
Nos. 02-240 to 02-2432003 by petition for certiorari in the CA on October 16, 2003, docketed as
CA-G.R. SP No. 79937,36 and the CA ultimately granted the petition for certiorari,37 setting aside
the assailed January 13, 2003 resolution of the Acting Justice Secretary and directing the re-filing
of the withdrawn informations against Samson. The Court ultimately affirmed the CA's dec ision
through the resolution promulgated on October 17, 2005 in G.R. No. 169199, and ruling that
probable cause existed for the re-filing of the criminal charges for unfair competition under the IP
Code.38

In the assailed January 21, 2004 decision,39 the CA dismissed Caterpillar's petition for certiorari in
CA-G.R. SP No. 75526, viz.:

Petition has no merit.

The mere fact that public respondent denied petitioner's motion for reconsideration does not justify
this petition on the ground of abuse of discretion. Grave abuse of discretion means such
capricious and whimsical exercise of judgment as is 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. (Benito
vs. Comelec, 349 SCRA 705).

Petitioner in this case failed to overcome the burden of showing how public respondent acted with
grave abuse of discretion in granting private respondent's motion and denying his own motion for
reconsideration. What is clear is that public respondent court acted judiciously. A petition
for certiorariunder Rule 65 of the Rules of Court will prosper only if there is showing of grave
abuse of discretion or an act without or in excess of jurisdiction on the part of respondent tribunal
(Garcia vs. HRET, 312 SCRA 353).

Granting arguendo that public respondent court erred in its ruling, still a petition for certiorari under
Rule 65 cannot be justified. Where the court has jurisdiction over the subject matter, the orders
or decision upon all questions pertaining to the cause are orders or decisions within its jurisdiction
and however erroneous they may be, they cannot be corrected by certiorari (De Baron vs. Court
of Appeals, 368 SCRA 407).
WHEREFORE, foregoing premises considered, the Petition having no merit in fact and in law is
hereby DENIED DUE COURSE and ordered DISMISSED. With costs to Petitioners.

SO ORDERED.40

Caterpillar sought the reconsideration of the dismissal, but the CA denied the motion on June 30,
2004.41

Hence, Caterpillar appealed the CA's decision in C.A.-G.R. SP No. 75526 (G.R. No. 164352).

G .R. No. 205972

In the meanwhile, in August 2002, upon receiving the information that Samson and his affiliate
entities continuously sold and distributed products bearing Caterpillar's Core Marks without
Caterpillar's consent, the latter requested the assistance of the Regional Intelligence and
Investigation Division of the National Region Public Police (RIID-NCRPO) for the conduct of an
investigation. Subsequently, after the investigation, the RIID-NCRPO applied for and was granted
16 search warrants against various outlets owned or operated by Samson in Mandaluyong,
Quezon City, Manila, Caloocan, Makati, Parañaque, Las Piñas, Pampanga and Cavite. The
warrants were served on August 27, 2002,42 and as the result products bearing Caterpillar's Core
Marks were seized and confiscated. Consequently, on the basis of the search warrants issued by
the various courts, Caterpillar again instituted criminal complaints in the DOJ for violation of
Section 168.3(a), in relation to Sections 131.3, 123.l(e) and 170 of the IP Code against Samson,
docketed as LS. Nos. 2002-995 to 2002-997; 2002-999 to 2002-1010; and 2002-1036.

After the conduct of the preliminary investigation, the DOJ, through State Prosecutor Melvin
J.Abad, issued a joint resolution dated August 21, 2003 dismissing the complaint upon finding
that there was no probable cause to charge Samson with unfair competition.43

Caterpillar moved for the reconsideration of the dismissal, but State Prosecutor Abad denied the
motion on June 18, 2004.44

The Secretary of Justice affirmed the dismissal of the complaint through the resolution issued on
September 19, 2005,45 and denied Caterpillar's motion for reconsideration on December 20,
2007.

Accordingly, Caterpillar appealed to the CA through a petition for review under Rule 43, Rules of
Court (C.A.-G.R. SP No. 102316).46

On May 8, 2012,47 however, the CA denied due course to Caterpillar's petition for review, viz.:

WHEREFORE, premises considered, the petition is DENIED DUE COURSE, and

accordingly, DISMISSED.

SO ORDERED.48

The CA opined that an appeal under Rule 43 to assail the resolution by the Secretary of Justice
determining the existence or non-existence of probable cause was an improper remedy; and that
while it could treat an appeal as a special civil action for certiorari under Rule 65, it could not do
so therein because the allegations of the petition did not sufficiently show grave abuse of
discretion on the part of the Secretary of Justice in issuing the assailed resolutions.

Caterpillar filed a motion for reconsideration, but the CA denied the motion for its lack of merit on
February 12, 2013.49

Hence, Caterpillar commenced G.R. No. 205972.

Issues

Caterpillar submits that the CA erred as follows:

G.R. No. 164352

A.

THE COURT OF APPEALS COMMITTED SERIOUS REVERSIBLE ERROR IN DENYING DUE

COURSE TO CATERPILLAR INC.'S PETITION FOR CERTIORARI.

B.

THE COURT OF APPEALS COMMITTED SERIOUS REVERSIBLE ERROR IN NOT HOLDING

THAT THE ORDER SUSPENDING PROCEEDINGS IN CRIMINAL CASES NOS. 02-238 TO 02-
243, ON THE BASIS OF AN ALLEGED PREJUDICIAL QUESTION, WAS CONTRARY TO LAW
AND ESTABLISHED JURISPRUDENCE.

C.

THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS REVERSIBLE ERROR IN

NOT HOLDING THAT A CRIMINAL COMPLAINT FOR UNFAIR COMPETITION CAN PROCEED
INDEPENDENTLY OF, AND SIMULTANEOUS WITH, THE CIVIL CASE FOR THE SAME. 50

Caterpillar posits that the suspension of proceedings in Criminal Cases Nos. 02-238 to 02-243
was contrary to Rule 111 of the Rules of Court, Article 33 of the Civil Code on independent civil
actions, and Section 170 of the IP Code, which specifically provides that the criminal penalties for
unfair competition were independent of the civil and administrative sanctions imposed by law; that
the determination of the lawful owner of the "CATERPILLAR" trademark in Civil Case No. Q-00-
41446 would not be decisive of the guilt of Samson for unfair competition in Criminal Cases Nos.
02-238 to 02-243 because registration was not an element of the crime of unfair competition; that
the civil case sought to enforce Samson's civil liability arising from the IP Code while the criminal
cases would enforce Samson's liability arising from the crime of unfair competition; and that the
Court already ruled in Samson v. Daway51 that Civil Case No. Q-00-41446 was an independent
civil action under Article 33 of the Civil Code and, as such, could proceed independently of the
criminal actions.

In his comment,52 Samson counters that the issues of the lawful and registered owner of the
trademark, the true owner of the goodwill, and whether "CATERPILLAR" was an internationally
well-known mark are intimately related to the issue of guilt in the criminal actions, the resolution
of which should determine whether or not the criminal actions for unfair competition could
proceed.

G.R. No. 205972

In this appeal, the petitioner interposes that:

THE HONORABLE COURT OF APPEALS ERRED IN DISMISSING THE PETITIONER'S

PETITION FOR REVIEW SOLELY ON THE GROUND OF AN ALLEGED WRONG REMEDY,
DESPITE PETITIONERS HAVING CLEARLY ESTABLISHED THAT THE SECRETARY OF
JUSTICE ACTED WITH GRAVE ABUSE OF DISCRETION IN ISSUING THE RESOLUTIONS
DATED 19 SEPTEMBER 2005 AND 20 DECEMBER 2007, AFFIRMING THE FINDINGS OF THE
INVESTIGATING PROSECUTOR THAT NO PROBABLE CAUSE EXISTS TO CHARGE THE
RESPONDENT OF THE CRIME OF UNFAIR COMPETITION.53

Caterpillar seeks the liberal interpretation of procedural rules in order to serve the higher interest
of substantial justice following the denial by the CA of its petition for being an incorrect remedy;
and insists that it presented substantial evidence to warrant a finding of probable cause for unfair
competition against Samson.

In sum, the issues to be resolved in these consolidated cases are: firstly, whether or not the CA
committed a reversible error in ruling that the trial court a quo did not commit grave abuse of
discretion in suspending the criminal proceedings on account of a prejudicial question;
and, secondly, whether or not the CA committed reversible error in upholding the decision of the
Secretary of Justice finding that there was no probable cause to charge Samson with unfair
competition.

Rulings of the Court

G.R. No. 164352

The appeal in G.R. No. 164352 is meritorious.

We note, to begin with, that Civil Case No. Q-00-41446, the civil case filed by Caterpillar in the
RTC in Quezon City, was for unfair competition, damages and cancellation of trademark, while
Criminal Cases Nos. Q-02-108043-44 were the criminal prosecution of Samson for unfair
competition. A common element of all such cases for unfair competition - civil and criminal -
was fraud. Under Article 33 of the Civil Code, a civil action entirely separate and distinct from the
criminal action may be brought by the injured party in cases of fraud, and such civil action shall
proceed independently of the criminal prosecution. In view of its being an independent civil action,
Civil Case No. Q-00-41446 did not operate as a prejudicial question that justified the suspension
of the proceedings in Criminal Cases Nos. Q-02-108043-44.

In fact, this issue has already been raised in relation to the suspension of the arraignment of
Samson in Criminal Cases Nos. Q-02-108043-44 in Samson v. Daway,54 and the Court resolved
it against Samson and in favor of Caterpillar thusly:

Anent the second issue, petitioner failed to substantiate his claim that there was a prejudicial
question. In his petition, he prayed for the reversal of the March 26, 2003 order which sustained
the denial of his motion to suspend arraignment and other proceedings in Criminal Case Nos. Q-
02-108043-44. For unknown reasons, however, he made no discussion in support of said prayer
in his petition and reply to comment. Neither did he attach a copy of the complaint in Civil Case
No. Q-00-41446 nor quote the pertinent portion thereof to prove the existence of a prejudicial
question.

At any rate, there is no prejudicial question if the civil and the criminal action can, according to
law, proceed independently of each other. Under Rule 111, Section 3 of the Revised Rules on
Criminal Procedure, in the cases provided in Articles 32, 33, 34 and 2176 of the Civil Code, the
independent civil action may be brought by the offended party. It shall proceed independently of
the criminal action and shall require only a preponderance of evidence.

In the case at bar, the common element in the acts constituting unfair competition under Section
168 of R.A. No. 8293 is fraud. Pursuant to Article 33 of the Civil Code, in cases of
defamation, fraud, and physical injuries, a civil action for damages, entirely separate and distinct
from the criminal action, may be brought by the injured party. Hence, Civil Case No. Q-00-41446,
which as admitted by private respondent also relate to unfair competition, is an
independent civil action under Article 33 of the Civil Code. As such, it will not operate as
a prejudicial question that will justify the suspension of the criminal cases at bar.55 (Bold
emphasis supplied)

Secondly, a civil action for damages and cancellation of trademark cannot be considered a
prejudicial question by which to suspend the proceedings in the criminal cases for unfair
competition. A prejudicial question is that which arises in a civil case the resolution of which is a
logical antecedent of the issues to be determined in the criminal case. It must appear not only
that the civil case involves facts upon which the criminal action is based, but also that the
resolution of the issues raised in the civil action will necessarily be determinative of the criminal
case.56 As stated in Librodo v. Judge Coscolluela, Jr.:57

A prejudicial question is one based on a fact distinct and separate from the crime but so intimately
connected with it that it determines the guilt or innocence of the accused, and for it to suspend
the criminal action, it must appear not only that said case involves facts intimately related to those
upon which the criminal prosecution would be based but also that in the resolution of the issue or
issues raised in the civil case, the guilt or innocence of the accused would necessarily be
determined. It comes into play generally in a situation where a civil action and a criminal
action are both pending 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.58 (Bold underscoring supplied for emphasis)

The elements of a prejudicial question are provided in Section 7 of Rule 111, Rules of Court, to
wit: (a) a previously instituted civil action involves an issue similar to or intimately related to the
issue raised in the subsequent criminal action, and (b) the resolution of such issue determines
whether or not the criminal action may proceed.59

An examination of the nature of the two kinds of cases involved is necessary to determine whether
a prejudicial question existed.

An action for the cancellation of trademark like Civil Case No. Q-00-41446 is a remedy available
to a person who believes that he is or will be damaged by the registration of a mark. 60 On the
other hand, the criminal actions for unfair competition (Criminal Cases Nos. Q-02-108043-44)
involved the determination of whether or not Samson had given his goods the general appearance
of the goods of Caterpillar, with the intent to deceive the public or defraud Caterpillar as his
competitor.61 In the suit for the cancellation of trademark, the issue of lawful registration should
necessarily be determined, but registration was not a consideration necessary in unfair
competition.62 Indeed, unfair competition is committed if the effect of the act is "to pass off to the
public the goods of one man as the goods of another;"63 it is independent of registration. As
fittingly put in R.F. & Alexander & Co. v. Ang,64 "one may be declared unfair competitor even if his
competing trade-mark is registered."

Clearly, the determination of the lawful ownership of the trademark in the civil action was not
determinative of whether or not the criminal actions for unfair competition shall proceed against
Samson.

G.R. No. 205972

The petition for review on certiorari in G.R. No. 205972 is denied for being bereft of merit.1âwphi1

Firstly, Caterpillar assailed the resolution of the Secretary of Justice by filing a petition for review
under Rule 43 of the Rules of Court. Such resort to the petition for review under Rule 43 was
erroneous,65 and the egregious error warranted the denial of the appeal. The petition for review
under Rule 43 applied to all appeals to the CA from quasi-judicial agencies or bodies, particularly
those listed in Section 1 of Rule 43. However, the Secretary of Justice, in the review of the findings
of probable cause by the investigating public prosecutor, was not exercising a quasi-judicial
function, but performing an executive function.66

Moreover, the courts could intervene in the determination of probable cause only through the
special civil action for certiorari under Rule 65 of the Rules of Court, not by appeal through the
petition for review under Rule 43. Thus, the CA could not reverse or undo the findings and
conclusions on probable cause by the Secretary of Justice except upon clear demonstration of
grave abuse of discretion amounting to lack or excess of jurisdiction committed by the Secretary
of Justice.67 Caterpillar did not so demonstrate.

And, secondly, even discounting the technicalities as to consider Caterpillar's petition for review
as one brought under Rule 65, the recourse must still fail.

Probable cause for the purpose of filing an information in court consists in such facts and
circumstances as would engender a well-founded belief that a crime has been committed and the
accused may probably be guilty thereof.68The determination of probable cause lies solely within
the sound discretion of the investigating public prosecutor after the conduct of a preliminary
investigation. It is a sound judicial policy to refrain from interfering with the determination of what
constitutes sufficient and convincing evidence to establish probable cause for the prosecution of
the accused.69 Thus, it is imperative that by the nature of his office, the public prosecutor cannot
be compelled to file a criminal information in court if he is not convinced of the sufficiency of the
evidence adduced for a finding of probable cause.70 Neither can he be precluded from filing an
information if he is convinced of the merits of the case.

In not finding probable cause to indict Samson for unfair competition, State Prosecutor Abad as
the investigating public prosecutor discharged the discretion given to him by the law. Specifically,
he resolved as follows:
It appears from the records that respondent started marketing his (class 25) products bearing the
trademark Caterpillar as early as 1992. In 1994, respondent caused the registration of the
trademark "Caterpillar With A Triangle Device Beneath The Letter [A]" with the Intellectual
Property Office. Sometime on June 16, 1997, the IPO issued Certificate of Registration No. 64705
which appears to be valid for twenty (20) years, or up to June 16, 2017. Upon the strength of this
registration, respondent continued with his business of marketing shoes, slippers, sandals, boots
and similar Class 25 items bearing his registered trademark "Caterpillar". Under the law,
respondent's operative act of registering his Caterpillar trademark and the concomitant
approval/issuance by the governmental entity concerned, conferred upon him the exclusive right
to use said trademark unless otherwise declared illegal. There being no evidence to controvert
the fact that respondent's Certificate of Registration No. 64705 covering Caterpillar trademark
was fraudulently or illegally obtained, it necessarily follows that its subsequent use and/or being
passed on to the public militates malice or fraudulent intent on the part of respondent. Otherwise
stated and from the facts obtaining, presumption of regularity lies, both from the standpoint of
registration and use/passing on of the assailed Caterpillar products.

Complainant's argument that respondent may still be held liable for unfair competition by reason
of his having passed on five (5) other Caterpillar products like "Cat", "Caterpillar", "Cat and
Design", "Walking Machines" and "Track-Type Tractor Design" is equally difficult to sustain. As
may be gleaned from the records, respondent has been engaged in the sale and distribution of
Caterpillar products since 1992 leading to the establishment of numerous marketing outlets. As
such, it would be difficult to assail the presumption that respondent has already established
goodwill insofar as his registered Caterpillar products are concerned. On the other hand,
complainant's registration of the other Caterpillar products appears to have been caused only in
1995. In this premise, respondent may be considered as prior user, while the latter, a subsequent
one. Jurisprudence dictates that prior user of the trademark by one, will controvert the claim by a
subsequent one.71

We reiterate that the full discretionary authority to determine the existence of probable cause is
lodged in the Executive Branch of the Government, through the public prosecutor, in the first
instance, and the Secretary of Justice, on review. Such authority is exclusive, and the courts are
prohibited from encroaching on the executive function, unless there is a clear showing of grave
abuse of discretion amounting to lack or excess of jurisdiction on the part of the public prosecutor
or the Secretary of Justice. As declared in Callo-Claridad v. Esteban:72

A public prosecutor alone determines the sufficiency of evidence that establishes the probable
cause justifying the filing of a criminal information against the respondent because the
determination of existence of a probable cause is the function of the public prosecutor. Generally,
the public prosecutor is afforded a wide latitude of discretion in the conduct of a preliminary
investigation. Consequently, it is a sound judicial policy to refrain from interfering in the conduct
of preliminary investigations, and to just leave to the Department of Justice the ample latitude of
discretion in the determination of what constitutes sufficient evidence to establish probable cause
for the prosecution of supposed offenders. Consistent with this policy, courts do not reverse the
Secretary of Justice's findings and conclusions on the matter of probable cause except in clear
cases of grave abuse of discretion. By way of exception, however, judicial review is permitted
where the respondent in the preliminary investigation clearly establishes that the public prosecutor
committed grave abuse of discretion, that is, when the public prosecutor has exercised his
discretion in an arbitrary, capricious, whimsical or despotic manner by reason of passion or
personal hostility, patent and gross enough as to amount to an evasion of a positive duty or virtual
refusal to perform a duty enjoined by law. Moreover, the trial court may ultimately resolve the
existence or nonexistence of probable cause by examining the records of the preliminary
investigation when necessary for the orderly administration of justice. Although policy
considerations call for the widest latitude of deference to the public prosecutor's findings, the
courts should never shirk from exercising their power, when the circumstances warrant, to
determine whether the public prosecutor's findings are supported by the facts, and by the law.

Relevantly, grave abuse of discretion means such capricious or whimsical exercise of judgment
that is equivalent to lack of jurisdiction. The abuse of discretion must be grave, as when 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 a positive duty or to a virtual refusal
to perform the duty enjoined, or to act at all, in contemplation of law, as to be equivalent to having
acted without jurisdiction.73 Herein, Caterpillar did not show the grave abuse of discretion on the
part of the Secretary of Justice.

WHEREFORE, the Court GRANTS the petition for review in G.R. No. 164352; SETS ASIDE the
decision promulgated on January 21, 2004 in CA-G.R. SP No. 75526; DIRECTS the Regional
Trial Court in Muntinlupa City to reinstate Criminal Cases Nos. Q-02-108043-44 and forthwith try
and decide them without undue delay; DENIES the petition for review on certiorari in G.R. No.
205972; and ORDERS respondent Manolo P. Samson to pay the costs of suit. SO ORDERED.

22.) G.R. No. 180528

CIVIL SERVICE COMMISSION,

Petitioner, Present:

PUNO, C.J.,

- versus -
QUISUMBING,
YNARES-SANTIAGO,
CARPIO,
CORONA,
NELIA O. TAHANLANGIT, CARPIO MORALES,
Respondent. CHICO-NAZARIO,
VELASCO, JR.,
NACHURA,
LEONARDO-DE CASTRO,
BRION,
PERALTA, and
BERSAMIN, JJ.
Promulgated:
July 27, 2009

x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

DECISION

CARPIO MORALES, J.:

 Via petition for review, the Civil Service Commission (CSC or petitioner) seeks the reversal
of the Court of Appeals Decision of September 17, 2007[1] and Resolution of November 9,
2007[2] reversing and setting aside petitioners Resolution Nos. 03-0237[3] of February 21,
2003 and 03-0814[4] of July 30, 2003 insofar as they refer to Nelia Tahanlangit (respondent).

On January 1, 1998, the Bureau of Patents, Trademarks and Technology Transfer (BPTTT) was,
pursuant to Republic Act No. 8293, The Intellectual Property Code of the Philippines, reorganized
into what is now known as the Intellectual Property Office (IPO).

As a consequence of the reorganization, 137 incumbents of the BPTTT including respondent

were appointed to new positions in the approved staffing pattern of the IPO. Under the BPTTT
plantilla, respondent occupied the position of Trademark Principal Examiner I -- a position said to
be comparable to the item of Intellectual Property Rights Specialist I (IPRS-I) under the new IPO
plantilla to which she was appointed.

By Decision[5] of May 8, 2001, petitioners National Capital Regional [NCR] Office disapproved
respondents permanent appointment, along with those of two (2) other appointees, Manuel S.
Rojas (Rojas) and Ferdinand G. Quevedo (Quevedo), on the ground that they did not qualify to
the respective positions to which they were appointed, respondent and Rojas having lacked the
requisite educational qualifications, and Quevedo have lacked the appropriate eligibility.

In the meantime, or on December 31, 2001, Quevedo availed himself of early retirement under
Republic Act No. 1616.

Then Department of Trade and Industry Secretary Manuel Roxas II, in his capacity as the
appointing authority, appealed the NCR Office Decision to petitioner which it, by Resolution No.
03-0237 of February 21, 2003, affirmed.

On March 11, 2003, Rojas reached the mandatory retirement age of 65 years. The IPO sought
reconsideration of petitioners Resolution No. 03-0237 which petitioner partly granted by
Resolution No. 03-0814 of July 30, 2003. Petitioner held that since Quevedos retirement took
effect on December 31, 2001, prior to the issuance of Resolution No. 03-0237 on February 21,
2003, his appointment as Intellectual Property Rights Specialist II should no longer be disturbed,
as the same remained valid and subsisting at the time of his availment of optional retirement.
 Petitioner further held that the same ruling applied to Rojas, who retired mandatorily on
March 11, 2003, after its Resolution No. 03-0237 was issued on February 21, 2003; but in view
of the timely filing by Rojas of a motion for reconsideration of said Resolution, his appointment to
the position of Intellectual Property Rights Specialist I should also be deemed valid and subsisting.
Petitioner affirmed the disapproval of respondents appointment, however.

Respondent appealed petitioners Resolution of July 30, 2003 to the Court of Appeals. In
the meantime or on August 31, 2003, she optionally retired under Republic Act No. 8291, The
Government Service Insurance System Act of 1997.

By the assailed Decision dated September 17, 2003, the appellate court granted
respondents petition and reversed and set aside petitioners disapproval of her appointment.

The appellate court held that petitioners challenged Resolutions had been rendered moot
and academic by respondents retirement from the government service on August 31,
2003. Further, it held that respondents optional retirement prior to the finality of [petitioners]
assailed Resolutions is sufficient grounds to accord her the same consideration granted to Rojas
and Quevedo; and that in line with its (the appellate courts) equity jurisdiction, the ends of
substantial justice will be better served if herein respondent be allowed to retire from the service
upholding that her permanent appointment be considered valid and subsisting at the time of her
retirement.

Petitioners motion for reconsideration having been denied by Resolution of November 9, 2007,
the present petition was filed.

Petitioner contends that its ruling in Quevedos and Rojas cases cannot be applied to respondents
case, because the attendant circumstances are not analogous, it pointing out that in the formers
cases, while the NCR disapproved their appointments as IPRS II and IPRS I, respectively, the
disapproval was not yet final and executory at the time of their retirement, whereas in respondents
case, she availed of optional retirement only on August 31, 2003 or after its Resolution No. 03-
0814 of July 30, 2003 had become final and executory, pursuant to Item 6 of CSC Memorandum
Circular No. 15, s. 2002, which states:

6. The denial of the Commission proper of the Motion for Reconsideration shall be
final and executory.
Petitioner further contends that while respondent appealed its Resolutions to the appellate court,
the appeal did not stay the execution thereof; hence, at the time she retired, the disapproval of
her appointment had been affirmed.

Petitioner also maintains that upholding respondents appointment to the IPO as IPRS I despite
its disapproval thereof having become final and executory would establish a bad precedent in
government reorganization, as it relaxes the requirements of the law on
appointments/reappointments. Moreover, it contends that a permanent appointment can be
issued only to a person who meets all the requirements for the position to which he or she is being
appointed; and if respondent did not qualify as IPRS I due to lack of a college degree, the
disapproval of her appointment is justified.

Petitioner goes on to debunk respondents claim that as a permanent employee of BPTTT

she is entitled, as a matter of right, to a permanent position in the IPO, it ratiocinating that the
circumstance arose out of a valid reorganization plan and, therefore, her security of tenure was
not violated. It adds that with the abolition of BPTTT under Republic Act No. 8293, the plantilla
positions thereunder ceased to exist and, therefore, there is in law no occupant thereof and no
security of tenure to speak of.

Citing De La Llana v. Alba,[6] petitioner furthermore avers that the abolition of an office
within the competence of a legitimate body, if done in good faith, suffers from no infirmity; and a
valid abolition of office results in neither removal nor separation of the incumbents.

Finally, petitioner asserts that, contrary to respondents position, there is no vested

property right to be re-employed in a reorganized office, following National Land Titles and Deeds
Registration Administration v. Civil Service Commission.[7]

Respondent, in her Comment,[8] insists that her retirement rendered moot and academic the
present petition. Invoking humane considerations and illnesses, she begs for the Courts
indulgence in order that the retirement benefits that she is presently enjoying be not disturbed.
The Court notes that neither the assailed Decision of the appellate court nor respondents
Comment touched on the validity of Republic Act No 8293. Neither was the propriety of petitioners
disapproval of respondents appointment passed upon.

The only issue thus presented for resolution is whether respondents optional retirement
mooted the disapproval of her appointment.
 The Court holds in the affirmative.

When respondent retired from the service on August 31, 2003, petitioners Resolution No.
03-0237 of July 30, 2003 had not attained finality, as it was pending appeal before the appellate
court.

Section 80 of petitioners Resolution No. 99-1936, The Uniform Rules on Administrative

Cases in the Civil Service, provides that a decision of the CSC or its Regional Office shall be
immediately executory after fifteen (15) days from receipt thereof, unless a motion for
reconsideration is seasonably filed, thus:

Section 80. Execution of Decision. The decisions of the Commission Proper or

its Regional Offices shall be immediately executory after fifteen (15) days from
receipt thereof, unless a motion for reconsideration is seasonably filed, in which
case the execution of the decision shall be held in abeyance. (Emphasis and
underscoring supplied)

In respondents case, she received petitioners Resolution of July 30, 2003 on August 18,
2003l; hence, she had until September 2, 2003 to file with the Court of Appeals her appeal
or motion for extension of time to file it, in accordance with Section 12, Rule 43 of the Revised
Rules of Civil Procedure; otherwise, the said Resolution would become final and
executory. Records show that respondent timely filed the petition for review on September 1,
2003. Thus, when she optionally retired from the service on August 31, 2003, petitioners July 30,
2003 Resolution invalidating her appointment had not attained finality. Petitioners ruling in the
cases of Rojas and Quevedo thus applies.

Petitioner contends, however, that under Item 6 of CSC Memorandum Circular No. 15, s.
2002, its denial of the Motion for Reconsideration shall be final and executory.The Circular must,
however, be read in conjunction with the above-stated rule on the disposition of cases before
the CSC, as well as Rule 43 of the Revised Rules of Procedure providing appeal from decisions
and final orders of quasi-judicial agencies of which it is one. To rule that respondent was
effectively terminated from office as of July 30, 2003, the date of promulgation of petitioners
Resolution affirming the disapproval of her appointment would render nugatory and inutile the
relief provided for under Rule 43, wherein one can even ask for a stay of the execution of the
questioned Resolution.
 When respondent was then allowed to avail herself of optional retirement under the law
after having served the government for more than 40 years, within the 15-day period to appeal
under Rule 43, petitioners July 30, 2003 Resolution had become moot and academic.
Courts have generally refrained from even expressing an opinion on cases where the issues have
become moot and academic, there being no more justiciable controversy to speak of, so that a
determination thereof would be of no practical use or value.[9] In the present case, when her
appointment was disapproved by petitioner, respondent would still have been able to retire under
the applicable law, R.A. 8291, as said law only requires that the employee concerned must have
rendered at least 15 years of service and must not have been receiving disability benefits at the
time of retirement. Petitioner, having retired on August 31, 2003, the position of IPRS I is
presumed to have been already filled up and to be now occupied by one bearing the requisite
qualifications. Hence, passing on the disapproval of respondents appointment no longer has any
practical value.

This leaves it unnecessary to pass on petitioners apprehension that upholding as valid the
appointment of one who has not qualified for the position would set a bad precedent.Suffice it to
state that petitioner failed to show that according respondent the same treatment granted to Rojas
and Quevedo would result in prejudice to the government or to any individual.

WHEREFORE, the petition is DENIED.

SO ORDERED.

23. G.R. No. 173463

Present:
GLOBAL BUSINESS HOLDINGS, VELASCO, JR., J.,*
INC. (formerly Global Business Bank, Inc.), NACHURA,**
Petitioner, Acting Chairperson,
LEONARDO-DE CASTRO,***
BRION,**** and
MENDOZA, JJ.
- versus -
Promulgated:

October 13, 2010

SURECOMP SOFTWARE, B.V.,

Respondent.
x----------------------------------------------------------------------------------x

DECISION

NACHURA, J.:

Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court, assailing
the Decision[1] dated May 5, 2006 and the Resolution[2] dated July 10, 2006 of the Court of
Appeals (CA) in CA-G.R. SP No. 75524.

The facts of the case are as follows:

On March 29, 1999, respondent Surecomp Software, B.V. (Surecomp), a foreign corporation duly
organized and existing under the laws of the Netherlands, entered into a software license
agreement with Asian Bank Corporation (ABC), a domestic corporation, for the use of its IMEX
Software System (System) in the banks computer system for a period of twenty (20) years.[3]

In July 2000, ABC merged with petitioner Global Business Holdings, Inc. (Global), [4] with Global
as the surviving corporation. When Global took over the operations of ABC, it found the System
unworkable for its operations, and informed Surecomp of its decision to discontinue with the
agreement and to stop further payments thereon. Consequently, for failure of Global to pay its
obligations under the agreement despite demands, Surecomp filed a complaint for breach of
contract with damages before the Regional Trial Court (RTC) of Makati. The case was docketed
as Civil Case No. 01-1278.[5]

In its complaint, Surecomp alleged that it is a foreign corporation not doing business in
the Philippines and is suing on an isolated transaction. Pursuant to the agreement, it installed the
System in ABCs computers for a consideration of US$298,000.00 as license fee. ABC also
undertook to pay Surecomp professional services, which included on-site support and
development of interfaces, and annual maintenance fees for five (5) subsequent anniversaries,
and committed to purchase one (1) or two (2) Remote Access solutions at discounted prices. In
a separate transaction, ABC requested Surecomp to purchase on its behalf a software called MF
Cobol Runtime with a promise to reimburse its cost. Notwithstanding the delivery of the product
and the services provided, Global failed to pay and comply with its obligations under the
agreement. Thus, Surecomp demanded payment of actual damages amounting to
US$319,955.00 and an additional amount of US$227,610.00 for Globals unilateral pretermination
of the agreement, exemplary damages, attorneys fees and costs of suit.[6]
Instead of filing an answer, Global filed a motion to dismiss based on two grounds: (1) that
Surecomp had no capacity to sue because it was doing business in the Philippineswithout a
license; and (2) that the claim on which the action was founded was unenforceable under the
Intellectual Property Code of the Philippines.[7]

On the first ground, Global argued that the contract entered into was not an isolated transaction
since the contract was for a period of 20 years. Furthermore, Global stressed that it could not be
held accountable for any breach as the agreement was entered into between Surecomp and ABC.
It had not, in any manner, taken part in the negotiation and execution of the agreement but merely
took over the operations of ABC as a result of the merger. On the second ground, Global averred
that the agreement, being a technology transfer arrangement, failed to comply with Sections 87
and 88 of the Intellectual Property Code of the Philippines.[8]

In the interim, Global filed a motion for leave to serve written interrogatories to Surecomp in
preparation for the hearing on the motion to dismiss, attaching thereto its written interrogatories.

After an exchange of pleadings on the motions filed by Global, on June 18, 2002, the RTC issued
an Order,[9] the pertinent portions of which read:

After a thorough and careful deliberation of the respective arguments advanced by

the parties in support of their positions in these two (2) incidents, and since it
cannot be denied that there is indeed a contract entered into between the plaintiff
[Surecomp] and the defendant [Global], the latter as a successor in interest of the
merging corporation Asian Bank, defendant [Global] is estopped from denying
plaintiffs [Surecomps] capacity to sue it for alleged breach of that contract with
damages. Its argument that it was not the one who actually contracted with the
plaintiff [Surecomp] as it was the merging Asian Bank which did, is of no moment
as it does not relieve defendant Global Bank of its contractual obligation under the
Agreement on account of its undertaking under it:

x x x shall be responsible for all the liabilities and obligations of

ASIANBANK in the same manner as if the Merged Bank had itself
incurred such liabilities or obligations, and any pending claim, action
or proceeding brought by or against ASIANBANK may be
prosecuted by or against the Merged Bank. The right of creditors or
liens upon the property of ASIANBANK shall not be impaired by the
merger; provided that the Merged Bank shall have the right to
exercise all defenses, rights, privileges, set-offs and counter-claims
of every kind and nature which ASIANBANK may have, or with the
Merged Bank may invoke under existing laws.
 It appearing however that the second ground relied upon by the defendant
[Global], i.e., that the cause of action of the plaintiff is anchored on an
unenforceable contract under the provision of the Intellectual Property Code, will
require a hearing before the motion to dismiss can be resolved and considering
the established jurisprudence in this jurisdiction, that availment of mode of
discovery by any of the parties to a litigation, shall be liberally construed to the end
that the truth of the controversy on hand, shall be ascertained at a less expense
with the concomitant facility and expeditiousness, the motion to serve written
interrogatories upon the plaintiff [Surecomp] filed by the defendant [Global] is
GRANTED insofar as the alleged unenforceability of the subject contract is
concerned. Accordingly, the latter is directed to serve the written interrogatories
upon the plaintiff [Surecomp], which is required to act on it in accordance with the
pertinent rule on the matter.

Necessarily, the resolution of the motion to dismiss is held in abeyance until after
a hearing on it is property conducted, relative to the second ground
aforementioned.

SO ORDERED.[10]

Surecomp moved for partial reconsideration, praying for an outright denial of the motion to
dismiss, while Global filed a motion for reconsideration.[11]

On November 27, 2002, the RTC issued an Order,[12] the fallo of which reads:

WHEREFORE, the Order of this Court dated 18 June 2002 is modified. Defendants
[Globals] Motion to Dismiss dated 17 October 2001 is denied on the two grounds
therein alleged. Defendant [Global] is given five (5) days from receipt of this Order
within which to file its Answer.

The resolution of defendants [Globals] Motion to Serve Written Interrogatories is

held in abeyance pending the filing of the Answer.

SO ORDERED.[13]

In partially modifying the first assailed Order, the RTC ratiocinated, viz.:

This court sees no reason to further belabor the issue on plaintiffs capacity to sue
since there is a prima facie showing that defendant entered into a contract with
defendant and having done so, willingly, it cannot now be made to raise the issue
of capacity to sue [Merrill Lynch Futures, Inc. v. CA, 211 SCRA 824]. That
defendant was not aware of plaintiffs lack of capacity to sue or that defendant did
not benefit from the transaction are arguments that are hardly supported by the
evidence already presented for the resolution of the Motion to Dismiss.
 As to the issue of unenforceability of the subject contract under the Intellectual
Property Code, this court finds justification in modifying the earlier Order allowing
the further presentation of evidence. It appearing that the subject contract between
the parties is an executed, rather than an executory, contract the statute of frauds
therefore finds no application here.

xxxx

As to defendants Motion to Serve Written Interrogatories, this court finds that resort
to such a discovery mechanism while laudable is premature as defendant has yet
to file its Answer. As the case now stands, the issues are not yet joined and the
disputed facts are not clear.[14]

Undaunted, Global filed a petition for certiorari with prayer for the issuance of a temporary
restraining order and/or writ of preliminary injunction under Rule 65 of the Rules of Court before
the CA, contending that the RTC abused its discretion and acted in excess of its jurisdiction.[15]

On May 5, 2006, the CA rendered a Decision,[16] the dispositive portion of which reads:

WHEREFORE, premises considered, the instant petition is DENIED. The assailed

Orders dated June 18, 2002 and November 27, 2002 of
the Regional Trial Court of Makati City, Branch 146, in Civil Case No. 01-1278 are
hereby AFFIRMED.

SO ORDERED.[17]

24. G.R. No. 169882

September 12, 2007

MANOLO P. SAMSON, petitioners,

vs.
CATERPILLAR, INC., respondent.

DECISION

AUSTRIA-MARTINEZ, J.:

This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, assailing the
Amended Decision1dated 8 August 2005, rendered by the Court of Appeals in CA-G.R. SP No.
80532, (1) reversing its Decision,2 dated 13 December 2004, in which it set aside the Order dated
31 January 2003 of Branch 211 of the Mandaluyong Regional Trial Court (RTC), dismissing
Criminal Case No. MC02-5019 filed against petitioner Manolo P. Samson (Samson) for violation
of Republic Act No. 8293, otherwise known as the Intellectual Property Code of the Philippines,
specifically Section 168.3(a) on Unfair Competition, Section 123.1 (e) and Section 131.3 on
registration of trademarks, in relation to Section 170 thereof; and (2) directing the Mandaluyong
RTC to conduct an independent assessment of whether the Motion to Withdraw Information filed
by the state prosecutor is warranted.

Samson is the owner of retail outlets within the Philippines, which sell, among other things,
footwear, clothing, bags and other similar items, bearing the mark "Caterpillar" and "Cat." Samson
registered the aforementioned marks for shoes, slippers, sandals and boots with the Bureau of
Patents, Trademarks & Technology Transfer (whose functions are presently exercised by
Intellectual Property Office) in 1997.3

Caterpillar is a foreign corporation, primarily in the business of manufacturing equipment used in

construction, mining, road building and agricultural industries. Since the 1960’s, however, it had
expanded its product line to clothing and, since 1988, to footwear. Caterpillar alleges that it is a
widely known brand name and that its products are being internationally distributed.4

As early as 26 July 2000, Branch 56 of the Makati RTC, issued Search Warrants No. 00-022 to
No. 00-032 against establishments owned by Samson. This led to the seizure of various retail
items such as footwear, clothing, accessories, and leatherware for Unfair Competition under the
Intellectual Property Code. Caterpillar filed criminal complaints before the Department of Justice
(DOJ). In addition, Caterpillar filed a civil action on 31 July 2000, heard before Branch 90 of the
Quezon City RTC for Unfair Competition, Damages and Cancellation of Trademark with an
Application for a Temporary Restraining Order and/or Writ of Preliminary Injunction docketed as
Civil Case No. Q-00-41445.5

Since Samson allegedly continued to sell and distribute merchandise which bore the disputed
"Caterpillar" marks, Caterpillar sought the issuance of another set of search warrants against
Samson. On 18 December 2000, Branch 172 of the Valenzuela RTC in Search Warrants No. 12-
V-00 to No. 37-V-00 issued 26 writs of search warrants under which various clothing items were
seized by National Bureau of Investigation (NBI) agents as evidence of violations of the law on
unfair competition.

On 23 January 2001, Caterpillar, through its legal counsel, filed 26 criminal complaints against
Samson before the DOJ, for alleged violations of Section 168.3(a) on Unfair Competition, Section
123.1(e) and Section 131.3 on registration of trademarks, in relation to Section 170 of the
Intellectual Property Code.6

The complaints were docketed as I.S. Nos. 2001-42 to 2001-67 and assigned to State Prosecutor
Zenaida Lim of the Task Force on Anti-Intellectual Property Piracy. But before the determination
by the DOJ on whether Samson should be criminally charged with Unfair Competition, the
Valenzuela RTC already issued an Order, dated 26 June 2001, quashing the search warrants
issued in Search Warrants No. 12-V-00 to No. 37-V-00.7

The DOJ, through State Prosecutor Lim, subsequently issued a Joint Resolution, dated 28
September 2001, recommending that Samson be criminally charged with unfair competition under
Section 168.3(a), in relation to Section 131.1, 123.1 and 170 of the Intellectual Property Code.
Resulting from the said Resolution, Criminal Case No. MC02-5019 was filed with the
Mandaluyong RTC.8
Samson filed a Petition for Review of the foregoing Joint Resolution, with the Secretary of Justice.
His petition was granted. In a Resolution dated 13 January 2003, the Acting Secretary of Justice,
Merceditas Gutierrez, recommended the withdrawal of the criminal informations filed against
Samson before various courts on the ground that there was lack of probable cause. Caterpillar
filed a Motion for Reconsideration, which was denied by Acting Secretary of Justice Gutierrez on
25 September 2003. An appeal questioning the DOJ Resolution dated 13 January 2003 of Acting
Secretary of Justice Gutierrez was filed by Caterpillar before the Court of Appeals docketed as
CA-G.R. No. 79937.9

Meanwhile, pursuant to the Resolution dated 13 January 2003 of Acting Secretary of Justice
Gutierrez, State Prosecutor Lim filed an Ex Parte Motion to Withdraw Information in Criminal Case
No. MC02-5019 before the Mandaluyong RTC. On 31 January 2003, the Mandaluyong RTC
issued an Order granting the withdrawal of the Information against Samson. 10 The entire text of
the said Decision reads:

This refers to the Ex-Parte Motion to Withdraw Information filed on January 31, 2003 by
State Prosecution Zenaida M. Lim of the Department of Justice in connection with
Resolution No. 011, Series of 2003, dated January 13, 2003 of the Acting Secretary of
Justice Ma. Merceditas N. Gutierrez reversing and setting aside the resolution of said state
prosecutor and directed the Chief State Prosecutor Jovencito R. Zuño to withdraw the
informations filed in this court against Manolo Samson.

WHEREFORE, finding the said motion to be in order and it appearing that accused has
not yet been arraigned and therefore the court has not yet acquired jurisdiction over the
subject accused, the court hereby grants the withdrawal of the information in the above-
entitled case as it is hereby ordered withdrawn form the record files of the court. 11

Caterpillar filed a Motion for Reconsideration, which was denied by the Mandaluyong RTC in an
Order dated 27 August 2003:

For resolution is a Motion for Reconsideration of the order of the court dated January 31,
2003 granting the withdrawal of the information from the record files of the court, filed on
February 21, 2003, by the plaintiff in the above-entitled case.

Hearing on the motion together with the opposition thereto was held after which, the same
was submitted for resolution.

After the court examined with great care the bases advanced by both parties in the
aforesaid motion, the court was unable to find any cogent justification to overturn or set
aside its previous order, there being no new issues raised and the same are rehash of its
previous pleadings.

WHEREFORE, premises considered, plaintiff’s Motion for Reconsideration is hereby

DENIED.12

Caterpillar filed with the Court of Appeals a Petition for Certiorari under Rule 65 of the Rules of
Court, assailing the Order dated 31 January 2003 of the Mandaluyong RTC, docketed as CA-
G.R. SP No. 80532. The Court of Appeals, in a Decision dated 13 December 2004, dismissed the
Petition on the ground that Caterpillar lacked the legal standing to question the proceedings
involving the criminal aspect of the case, and that its participation is limited only to the recovery
of civil liability. The appellate court also took into account the denial by the Acting Secretary of
Justice Gutierrez of Caterpillar’s Motion for Reconsideration of her order to withdraw the
Informations against Samson and, thus, ruled that this rendered the case moot and academic. 13

Caterpillar filed a Motion for Reconsideration of the aforementioned Decision rendered by the
Court of Appeals. In its Amended Decision dated 8 August 2005, the Court of Appeals reversed
its earlier ruling and declared that the Mandaluyong RTC gravely abused its discretion when it
merely relied on the Resolution, dated 13 January 2003 of Acting Secretary of Justice Gutierrez
in ordering the withdrawal of the information filed before it without making an independent
assessment of the case.14 In the dispositive portion of its Amended Decision, the Court of Appeals
ruled that:

WHEREFORE, in view [of] the foregoing rationications, the petitioner’s Motion for
Reconsideration is hereby GRANTED. The decision of this Court dated 13 December
2004, as well as the assailed orders of the respondent court dated 31 January 2003 and
27 August 2003 are hereby REVERSED and SET ASIDE.

The respondent court is hereby ordered to CONDUCT an independent assessment of

whether the motion to withdraw information filed by the state prosecutor is warranted
under the circumstances obtaining in the case. 15

Samson filed with the Court of Appeals a Motion for Reconsideration of the Amended Decision,
dated 8 August 2005, which was denied on 27 September 2005. Hence, the present Petition,
where he is raising the following issues:

THE COURT OF APPEALS GROSSLY ERRED IN RULING THAT THE RESPONDENT

JUDGE IN CA-G.R. NO. SP 80532 FAILED IN HER BOUNDEN DUTY TO DETERMINE
THE MERITS OF THE PROSECUTION’S EX-PARTE MOTION TO WITHDRAW; and

II

THE COURT OF APPEALS LIKEWISE ERRED IN IGNORING ITS OWN DECISION

FINDING RESPONDENT CATERPILLAR, INC., AS PRIVATE COMPLAINANT, BEREFT
OF AUTHORITY TO ASSAIL THE STATE PROSECUTOR’S EX-PARTE MOTION TO
WITHDRAW THE INFORMATION BECAUSE THE CRIMINAL ASPECT OF A CRIMINAL
CASE IS UNDER THE DIRECTION AND CONTROL OF THE PROSECUTION AND,
CONSEQUENTLY, PRIVATE COMPLAINANT HAS NO BUSINESS WHATSEOEVER IN
THE PROCEEDINGS. 16

Before discussing the merits of the Petition at bar, this Court notes that on 15 February 2005, the
Court of Appeals rendered a Decision in CA-G.R. SP No. 79937 in favor of Caterpillar. To recall,
this was the petition filed by Caterpillar to assail the Resolution of Acting Secretary of Justice
Gutierrez dated 13 January 2003, directing the Chief State Prosecutor to cause the withdrawal of
Informations against Samson. The appellate court reversed said Resolution and pronounced that
sufficient probable cause existed to justify the filing of Informations against Samson. Thus, it
ordered the re-filing of the Informations before the proper trial courts.17
In its Decision in CA-G.R. SP No. 79937, the Court of Appeals held that the withdrawal of the
Informations against Samson, predicated on the quashal of the search warrants, was a manifest
error. Consistent with the doctrine laid out in Solid Triangle Sales Corporation v. The Sheriff of
RTC, Quezon City, Branch 93,18 the appellate court ruled that the earlier finding of probable cause
against Samson was not affected by the quashal of the warrants since independent evidence
gathered by the NBI from the 24 test-buy operations it conducted in 1999 is sufficient to support
such finding. It reiterated the findings of State Prosecutor Lim:

Respondent’s use of depictions of heavy machinery and equipment, such as tractors, to

market his products, would verily show that he is passing off his products as those of
Caterpillar’s xxx. Meanwhile, the similarity in the appearance of the goods manufactured
or sold by respondent with those of Caterpillar’s footwear products would demonstrate
that he is passing off his product as those of genuine Caterpillar footwear products.
Accordingly, "where the similarity in the appearance of the goods as packed and offered
for sale is so striking, this fact shows intent on the part of defendant to deceive the public
and defraud plaintiff out of his trade. The intent to deceive may be inferred from the
similarity of the goods as packed and offered for sale, and an action will lie to restrain such
unfair competition and for damages." x x x19.

On appeal docketed as G.R. No. 169199, this Court ruled that the Court of Appeals did not commit
any reversible error.

By sustaining the Decision of the Court of Appeals in said case, this Court, in a Resolution dated
17 October 2005, had already ruled that probable cause exists for the re-filing of a criminal case
against Samson for unfair competition under the Intellectual Property Code. Samson filed a
Motion for Reconsideration of this Court’s Resolution, which was denied with finality on 20 March
2006. Entry of judgment was already made in said case on 18 April 2006; hence, rendering said
judgment final and executory. The repeated confirmation of the finding of probable cause against
Samson, which this Court cannot now overturn, effectively and decisively determines the issues
in this petition.

The findings of the Court of Appeals in CA-G.R. SP No. 79937, affirmed by this Court in G.R. No.
169199, have rendered the present petition moot and academic. It is a rule that is unanimously
observed that courts of justice will take cognizance only of justiciable controversies wherein actual
and not merely hypothetical issues are involved.20A case becomes moot and academic when
there is no more actual controversy between the parties and no useful purpose can be served in
passing upon the merits.21 Since this Court, in affirming the said Decision of the Court of Appeals,
already found it imperative for the Chief State Prosecutor to re-file the Informations against
Samson for unfair competition, Criminal Case No. MC02-5019 should be re-opened and heard
by the Mandaluyong RTC. The rendering of a decision on the merits of this case would be of no
practical value. Hence, this case is dismissible.22

IN VIEW OF THE FOREGOING, the instant Petition is DENIED and the assailed Amended
Decision of the Court of Appeals in CA-G.R. SP No. 80532, promulgated on 8 August 2005,
is AFFIRMED WITH MODIFICATION. The Order of the Court of Appeals in C.A.-G.R. SP No.
80532 directing Branch 211 of the Mandaluyong Regional Trial Court to conduct an independent
assessment is REVERSED. This Court ORDERS Branch 211 of the Mandaluyong Regional Trial
Court to re-open and hear Criminal Case No. MC02-5019. Costs against the petitioner.

SO ORDERED.
A motion for reconsideration was filed by Global. On July 10, 2006, the CA issued a
Resolution[18] denying the motion for reconsideration for lack of merit.

Hence, this petition.

Global presents the following issues for resolution: (1) whether a special civil action for certiorari is
the proper remedy for a denial of a motion to dismiss; and (2) whether Global is estopped from
questioning Surecomps capacity to sue.[19]

The petition is bereft of merit.

An order denying a motion to dismiss is an interlocutory order which neither terminates nor finally
disposes of a case as it leaves something to be done by the court before the case is finally decided
on the merits. As such, the general rule is that the denial of a motion to dismiss cannot be
questioned in a special civil action for certiorari which is a remedy designed to correct errors of
jurisdiction and not errors of judgment.[20]

To justify the grant of the extraordinary remedy of certiorari, the denial of the motion to dismiss
must have been tainted with grave abuse of discretion. By "grave abuse of discretion" is meant
such capricious and whimsical exercise of judgment that is equivalent to lack of jurisdiction. The
abuse of discretion must be grave as where the power is exercised in an arbitrary or despotic
manner by reason of passion or personal hostility, and 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 by or to act all in
contemplation of law.[21]

In the instant case, Global did not properly substantiate its claim of arbitrariness on the part of the
trial court judge that issued the assailed orders denying the motion to dismiss. In a petition
for certiorari, absent such showing of arbitrariness, capriciousness, or ill motive in the disposition
of the trial judge in the case, we are constrained to uphold the courts ruling, especially because
its decision was upheld by the CA.
II

The determination of a corporations capacity is a factual question that requires the elicitation of a
preponderant set of facts.[22] As a rule, unlicensed foreign non-resident corporations doing
business in the Philippines cannot file suits in the Philippines.[23] This is mandated under Section
133 of the Corporation Code, which reads:

Sec. 133. Doing business without a license. - No foreign corporation transacting

business in the Philippines without a license, or its successors or assigns, shall be
permitted to maintain or intervene in any action, suit or proceeding in any court or
administrative agency of the Philippines, but such corporation may be sued or
proceeded against before Philippine courts or administrative tribunals on any valid
cause of action recognized under Philippine laws.

A corporation has a legal status only within the state or territory in which it was organized. For
this reason, a corporation organized in another country has no personality to file suits in
the Philippines. In order to subject a foreign corporation doing business in the country to the
jurisdiction of our courts, it must acquire a license from the Securities and Exchange Commission
and appoint an agent for service of process. Without such license, it cannot institute a suit in
the Philippines.[24]

The exception to this rule is the doctrine of estoppel. Global is estopped from challenging
Surecomps capacity to sue.

A foreign corporation doing business in the Philippines without license may sue in Philippine
courts a Filipino citizen or a Philippine entity that had contracted with and benefited from it. [25] A
party is estopped from challenging the personality of a corporation after having acknowledged the
same by entering into a contract with it.[26] The principle is applied to prevent a person contracting
with a foreign corporation from later taking advantage of its noncompliance with the statutes,
chiefly in cases where such person has received the benefits of the contract. [27]

Due to Globals merger with ABC and because it is the surviving corporation, it is as if it was the
one which entered into contract with Surecomp. In the merger of two existing corporations, one
of the corporations survives and continues the business, while the other is dissolved, and all its
rights, properties, and liabilities are acquired by the surviving corporation. [28] This is particularly
true in this case. Based on the findings of fact of the RTC, as affirmed by the CA, under the terms
of the merger or consolidation, Global assumed all the liabilities and obligations of ABC as if it
had incurred such liabilities or obligations itself. In the same way, Global also has the right to
exercise all defenses, rights, privileges, and counter-claims of every kind and nature which ABC
may have or invoke under the law. These findings of fact were never contested by Global in any
of its pleadings filed before this Court.

WHEREFORE, in view of the foregoing, the Decision dated May 5, 2006 and the
Resolution dated July 10, 2006 of the Court of Appeals in CA-G.R. SP No. 75524 are
hereby AFFIRMED. Costs against petitioner.

SO ORDERED.

Case number 25
SKECHERS v. INTER PACIFIC INDUSTRIAL TRADING CORP., GR No. 164321,
2011-03-23
Facts:
The present controversy arose when petitioner filed with Branch 24 of the Regional Trial Court
(RTC) of Manila an application for the issuance of search warrants against an outlet and
warehouse operated by respondents for infringement of trademark under Section 155, in
relation... to Section 170 of Republic Act No. 8293, otherwise known as the Intellectual Property
Code of the Philippines.[2] In the course of its business, petitioner has registered the trademark
"SKECHERS"[3] and the trademark "S" (within... an oval design)[4] with the Intellectual Property
Office (IPO).
As a result of the raid, more than 6,000 pairs of shoes bearing the "S" logo were seized.
Later, respondents moved to quash the search warrants, arguing that there was no confusing
similarity between petitioner's "Skechers" rubber shoes and its "Strong" rubber shoes.
he RTC issued an Order[6] quashing the search warrants and directing the NBI to return the
seized goods. The RTC agreed with respondent's view that Skechers rubber shoes and Strong
rubber shoes have glaring differences such that an... ordinary prudent purchaser would not likely
be misled or confused in purchasing the wrong article.
with the Court of Appeals (CA) assailing the RTC Order. On November 17, 2003, the CA issued
a Decision[8] affirming the ruling of the RTC.
Issues:
whether or not respondent is guilty of trademark infringement.
Ruling:
The basic law on trademark, infringement, and unfair competition is Republic Act (R.A.) No. 8293.
Specifically, Section 155 of R.A. No. 8293 states:
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.[15]
The essential element of infringement under R.A. No. 8293 is that the infringing mark is likely to
cause confusion.
Applying the Dominancy Test to the case at bar, this Court finds that the use of the stylized "S"
by respondent in its Strong rubber shoes infringes on the mark already registered by petitioner
with the IPO. While it is undisputed that petitioner's stylized "S" is within an oval... design, to this
Court's mind, the dominant feature of the trademark is the stylized "S," as it is precisely the stylized
"S" which catches the eye of the purchaser. Thus, even if respondent did not use an oval design,
the mere fact that it used the same stylized "S", the... same being the dominant feature of
petitioner's trademark, already constitutes infringement under the Dominancy Test.
Furthermore, respondent did not simply use the letter "S," but it appears to this Court that based
on the font and the size of the lettering, the stylized "S" utilized by respondent is the very same
stylized "S" used by petitioner; a stylized "S" which is unique and... distinguishes petitioner's
trademark. Indubitably, the likelihood of confusion is present as purchasers will associate the
respondent's use of the stylized "S" as having been authorized by petitioner or that respondent's
product is connected with petitioner's business.
While there may be dissimilarities between the appearances of the shoes, to this Court's mind
such dissimilarities do not outweigh the stark and blatant similarities in their general features.
WHEREFORE, premises considered, the Motion for Reconsideration is GRANTED. The
Decision dated November 30, 2006 is RECONSIDERED and SET ASIDE.
SO ORDERED.

Carpio, (Chairperson), Nachura, Abad, and Mendoza, JJ., concur.

[1]Rollo, pp. 1046-1071 & 1078-1118.
[2]An Act Prescribing the Intellectual Property Code and Establishing the Intellectual Property
Office, Providing for Its Powers and Functions, and for Other Purposes. Took effect on January
1, 1998.
[3]Under Registration No. 63364; see rollo, p. 107.
[4]Under Registration No. 4-1996-110182; see rollo, p. 109.
[5]Search Warrant Nos. 02-2827 and 02-2828; see rollo, pp. 144-146, 147-148.
[6]Rollo, pp. 173-176.
[7]Id. at 195-220.
[8]Id. at 72-83.
[9]Id. at 11-59.
[10] Id. at 26-27.
[11] Id. at 557-603.
[12] Penned by Associate Justice Minita V. Chico-Nazario, with Chief Justice Artemio V.
Panganiban and Associate Justices Consuelo Ynares-Santiago, Ma. Alicia Austria-Martinez and
Romeo J. Callejo, Sr. concurring; id. at 1032-1045.
[13] Rollo, p. 1079.
[14] Id. at 1047-1048.
[15] Emphasis supplied.
[16] Prosource International, Inc. v. Horphag Research Management SA, G.R. No. 180073,
November 25, 2009, 605 SCRA 523, 531; McDonald's Corporation v. MacJoy Fastfood
Corporation, G.R. No. 166115, February 2, 2007, 514 SCRA 95, 106;
McDonald's Corporation v. L.C. Big Mak Burger, Inc., 480 Phil. 402, 434 (2004).
[17] Philip Morris, Inc. v. Fortune Tobacco Corporation, G.R. No. 158589, June 27, 2006, 493
SCRA 333, 357.
[18] McDonald's Corporation v. L.C. Big Mak Burger, Inc., supra note 16, at 428, citing Sterling
Products International, Incorporated v. Farbenfabriken Bayer Aktiengesellschaft, et al., 137 Phil.
838, 852 (1969).
[19] Rollo, p. 174.
[20] See rollo, pp. 498-500, 572-574.
[21] Id.
[22] 186 Phil. 85 (1980).
[23] Id. at 94-95.
[24] Supra note 16.
[25] Id. at 432.
[26] Dermaline, Inc v. Myra Pharmaceuticals, Inc., G.R. No. 190065, August 16, 2010.
[27] Berris Agricultural Co., Inc., v. Norvy Abyadang, G.R. No. 183404, October 13, 2010.
[28] Del Monte Corporation v. Court of Appeals, 260 Phil. 435, 443 (1990).
[29] Id.
tags
Principles:
The b... he basic law on trademark, infringement, and unfair competition is Republic Act (R.A.)
No. 8293. Specifically, Section 155 of R.A. No. 8293 states:
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.[15]
The Dominancy Test... focuses on the similarity of the prevalent or dominant features of the
competing trademarks that might cause confusion, mistake, and deception in the mind of the
purchasing public. Duplication or imitation is not necessary; neither is it required that the mark
sought to be... registered suggests an effort to imitate. Given more consideration are the aural
and visual impressions created by the marks on the buyers of goods, giving little weight to factors
like prices, quality, sales outlets, and market segments.[16]... the Holistic or Totality Test
necessitates a consideration of the entirety of the marks as applied to the products, including the
labels and packaging, in determining confusing similarity. The discerning eye of the observer must
focus not only on the predominant... words, but also on the other features appearing on both
labels so that the observer may draw conclusion on whether one is confusingly similar to the
other.[17]
Relative to the question on confusion of marks and trade names, jurisprudence has noted two (2)
types of confusion, viz.: (1) confusion of goods (product confusion), where the ordinarily prudent
purchaser would be induced to purchase one product in the belief that he was... purchasing the
other; and (2) confusion of business (source or origin confusion), where, although the goods of
the parties are different, the product, the mark of which registration is applied for by one party, is
such as might reasonably be assumed to originate with the... registrant of an earlier product, and
the public would then be deceived either into that belief or into the belief that there is some
connection between the two parties, though inexistent.[18]
Neither can the difference in price be a complete defense in trademark infringement. In
McDonald's Corporation v. L.C. Big Mak Burger. Inc.,[24] this Court held:
Modern law recognizes that the protection to which the owner of a trademark is entitled is not
limited to guarding his goods or business from actual market competition with identical or similar
products of the parties, but extends to all cases in which the use by a... junior appropriator of a
trade-mark or trade-name is likely to lead to a confusion of source, as where prospective
purchasers would be misled into thinking that the complaining party has extended his business
into the field (see 148 ALR 56 et seq; 53 Am. Jur. 576) or is in any... way connected with the
activities of the infringer; or when it forestalls the normal potential expansion of his business (v.
148 ALR 77, 84; 52 Am. Jur. 576, 577). x x x[25]
Withal, the protection of trademarks as intellectual property is intended not only to preserve the
goodwill and reputation of the business established on the goods bearing the mark through actual
use over a period of time, but also to safeguard the public as consumers against... confusion on
these goods.[27] While respondent's shoes contain some dissimilarities with petitioner's shoes,
this Court cannot close its eye to the fact that for all intents and purpose, respondent had
deliberately attempted to copy petitioner's mark and... overall design and features of the shoes.
Let it be remembered, that defendants in cases of infringement do not normally copy but only
make colorable changes.[28] 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.[29]
Case number 26
ABS-CBN Corp., petitioner vs. GMA Pres. and CEO Atty. Felipe Gozon, GMA Vice President
and COO Gilberto Duavit Jr., Marissa L. Flores, Jessica A. Soho, GMA Head of News
Operations Grace Dela Peña-Reyes, GMA News Program Manager
John Oliver Manalastas, et. al., respondents.
G.R. No. 195956, 1 March 2015
Ponente: Justice Marvic F. Leonen
FACTS
On August 13, 2004, petitioner ABS-CBN filed a criminal complaint against respondent GMA for
(alleged) act of copyright infringement under Sections 177 and
211 of the Intellectual Property Code (RA 8293, as amended), because the respondent aired
footage of the arrival and homecoming of OFW Angelo dela Cruz
at NAIA from Iraq without the petitioner's consent. ABS-CBN stated that it has an agreement with
Reuter's that the petition will contribute news and content that it owns and makes to Reuters in
exchange of the latter's news and video material, and Reuters will ensure that ABS-CBN's
materials cannot be aired in the country.
The respondent was a subscriber of Reuter's and CNN live feeds. After it received the live feed
of Angelo Dela Cruz's arrival and homecoming from Reuter's, it immediately aired the video from
that news feed. The respondent alleged that its news staff was not aware that there was (a news
embargo) agreement between ABS- CBN and Reuters. Respondent alleged that it was not also
aware that it aired petitioner's footage.
Assistant City Prosecutor Dindo Venturanza issued resolution on 3 December 2004 which found
probable cause to indict Dela Pena ̃ -Reyes and Manalastas. The respondents appealed the
Prosccutor's resolution before DOJ. DOJ Secretary Raul M. Gonzalez ruled in favor of
respondents in his resolution dated 1 August 2005 and held that good faith may be raised as a
defense in the case.
Meanwhile, DOJ Acting Secretary Alberto C. Agra issued a resolution on 29 June 2010 which
reversed Sec. Gonzalez's resolution and found probable cause to charge Dela Peña-Reyes,
Manalastas, as well as to indict Gozon, Duavit, Jr., Flores, and Soho for violation of the Intellectual
Property Code (due to copyright infringement).
The Court of Appeals rendered a decision on 9 November 2010, which granted the Petition for
Certiorari to reverse and set aside DOJ Sec. Alberto Agra's resolution and a prayer for issuance
of a temporary restraining order and/or Writ of Preliminary Injunction.

The appellate court stated that the petitioner has copyright of its news coverage, but respondents’
act of airing five (5) seconds of the homecoming footage without notice of the “No Access
Philippines” restriction of the live Reuter's video feed, was undeniably attended by good faith and
thus, serves to exculpate from criminal liability under the Intellectual Property Code.
ISSUES
W/N there is probable cause to find respondents to be held liable criminally for the case of
copyright infringement under the Intellectual Property Law (RA 8293, as amended)?
HELD
The Supreme Court PARTIALLY GRANTED ABS-CBN’s petition and ordered RTC Q.C. Branch
̃ -
93 to continue with the criminal proceedings against Grace Dela Pena
Reyes and John Oliver Manalastas due to copyright infringement.
The other respondents, Atty. Felipe Gozon, Gilberto Duavit Jr., Marissa L. Flores, and Jessica A.
Soho were held not liable for the (criminal) act of copyright infringement. The Court held that their
mere membership in GMA7's Board of Directors does not mean that they have knowledge,
approval, or participation in the criminal act of copyright infringement., as there is a need for their
direct/active participation in such act. Also, there was lack of proof that they actively participated
or exercised moral ascendancy over Manalastas and Dela Cruz-Pena.
Contrary to GMA’s contention, the Supreme Court deemed GMA's mere act of rebroadcast of
ABS-CBN’s news footage (arrival and homecoming of OFW Angelo dela Cruz at NAIA from Iraq
last 22 July 2004) for 2 mins and 40 secs.without the latter's authority creates probable cause to
find GMA's news personnel Manalastas and Dela Peña-Reyes criminally liable for violating
provisions of Intellectual Property Code (Section 216-217 of RA 8293, as amended
) that imposes strict liability for copyright infringement, since they have not been diligent in their
functions to prevent that footage from being aired on television. They knew that there would be
consequences in carrying ABS-CBN’s footage in their broadcast – which is why they allegedly cut
the feed from Reuters upon seeing ABS-CBN’s logo
and reporter.
The difference of an act mala in se and mala prohibita was stated in the present case. Acts mala
in se requires presence of criminal intent and the person's knowledge of the nature of his/her act,
while in acts mala prohibita, presence of criminal intent and the person's knowledge is not
necessary. The Court also stated that Philippine laws on copyright infringement does not require
criminal intent (mens rea) and does not support good faith as a defense. Thus, the act of
infringement and not the intent is the one that causes the damage.
It held that ABS-CBN's video footage is copyrightable because it is under “audiovisual works and
cinematographic works and works produced by a process
Case number 27

246 Corporation v. Daway (G.R. No. 157216)

Date: June 9, 2016Author: jaicdn0 Comments

Facts:

Respondents Montres Rolex and Rolex Centre Phil., owners/proprietors of Rolex and Crown

Device, filed a complaint for trademark infringement alleging petitioner adopted and used without

authority the mark ‘Rolex’ in its business name ‘Rolex Music Lounge.’ Petitioner argued that there

is no trademark infringement since no confusion would arise by the use of ‘Rolex’ considering that

its entertainment business is totally unrelated to respondent’s business or products such as

watches, clocks, etc.

Issue:

Whether or not likelihood of confusion would arise from the use of identical marks over unrelated

goods/business.

Ruling: YES.

Under the old Trademark Law 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. This ruling, however,

has been to some extent, modified by Section 123.1(f) of the Intellectual Property Code.

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.

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.

*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.

Case number 28
ROMA DRUG v. RTC OF GUAGUA, GR No. 149907, 2009-04-16
Facts:
It appears that Roma Drug is one of six drug stores which were raided on or around the same
time upon the request... of SmithKline Beecham Research Limited (SmithKline), a duly registered
corporation which is the local distributor of pharmaceutical products manufactured by its parent
London-based corporation.
The seized medicines, which were manufactured by SmithKline, were imported directly from
abroad and not purchased through the local SmithKline, the authorized Philippine distributor of
these products.
The NBI subsequently filed a complaint against Rodriguez for violation of Section 4 (in relation to
Sections 3 and 5) of Republic Act No. 8203, also known as the Special Law on Counterfeit Drugs
(SLCD), with the Office of the Provincial Prosecutor in San Fernando, Pampanga.
The... section prohibits the sale of counterfeit drugs, which under Section 3(b)(3), includes "an
unregistered imported drug product.
The term "unregistered" signifies the lack of registration with the Bureau of Patent, Trademark
and Technology Transfer
Their classification as "counterfeit" is based solely on the fact... that they were imported from
abroad and not purchased from the Philippine-registered owner of the patent or trademark of the
drugs.
Issues:
Rodriguez challenged the constitutionality of the SLCD
Ruling:
The constitutional aspect of this petition raises obviously interesting questions. However, such
questions have in fact been mooted with the passage in 2008 of Republic Act No. 9502, also
known as the "Universally Accessible Cheaper and Quality Medicines Act of 2008
Provided,further, That the right to import the... drugs and medicines contemplated in this section
shall be available to any government agency or any private third party;
Had the Court proceeded to directly confront the constitutionality of the assailed provisions of the
SLCD, it is apparent that it would have at least placed in doubt the validity of the provisions.
It discriminates, at the expense of health, against poor Filipinos without means to... travel abroad
to purchase less expensive medicines in favor of their wealthier brethren able to do so.
Even worse is the fact that the law is not content with simply banning, at civil costs, the importation
of unregistered drugs. It equates the importers of such drugs, many of whom motivated to do so
out of altruism or basic human love, with the malevolents who would alter or... counterfeit
pharmaceutical drugs for reasons of profit at the expense of public safety.
Note that the SLCD is a special law, and the traditional treatment of penal provisions of special
laws is that of malum prohibitum-or punishable regardless of motive or criminal... intent. For a law
that is intended to help save lives, the SLCD has revealed itself as a heartless, soulless legislative
piece.
Principles:
The challenged provisions of the SLCD apparently proscribe a range of constitutionally
permissible behavior. It is laudable that with the passage of Rep. Act No. 9502, the State has
reversed course and allowed for a sensible and compassionate approach with respect to the...
importation of pharmaceutical drugs urgently necessary for the people's constitutionally-
recognized right to health.

Case number 28

ROMA DRUG vs. RTC

G.R. No. 149907, April 16, 2009

Facts:

Roma Drug was raided by the NBI and BFAD and seized several important medicines. It appears
that Roma Drug is one of six drug stores which were raided on or around the same time upon the
request of SmithKline which was the duly registered corporation to distribute such medicines. The
medicines of Roma Drug were purchased directly from abroad and not through SmithKline.

During preliminary investigation, Rodriguez challenged the constitutionality of the law on Special
Law on Counterfeit Drugs (SLCD) regarding the distribution of their medicine that were considered
counterfeit although they only bought it directly and not from SmithKline.

Issue:

Whether the contention of Roma Drug is correct.

Ruling:

Yes. Section 7 of Rep. Act No. 9502 unequivocally grants third persons the right to import drugs
or medicines whose patent were registered in the Philippines by the owner of the product. The
unqualified right of private third parties such as petitioner to import or possess “unregistered
imported drugs” in the Philippines is further confirmed by the “Implementing Rules to Republic Act
No. 9502” promulgated on November 4, 2008.

It may be that Rep. Act No. 9502 did not expressly repeal any provision of the SLCD. However, it
is clear that the SLCO’s classification of “unregistered imported drugs” as “counterfeit drugs,” and
of corresponding criminal penalties therefore are irreconcilably in the imposition conflict with Rep.
Act No. 9502 since the latter indubitably grants private third persons the unqualified right to import
or otherwise use such drugs. Where a statute of later date, such as Rep. Act No. 9502, clearly
reveals an intention on the part of the legislature to abrogate a prior act on the subject that
intention must be given effect.
Case number 29

SERI SOMBOONSAKDIKUL vs. ORLANE S.A.

G.R. No. 188996, February 1, 2017

Facts:

On September 23, 2003, petitioner Seri Somboonsakdikul (petitioner) filed an application for
registration of the mark LOLANE with the IPO for goods classified under Class 3 (personal care
products) of the International Classification of Goods and Services for the Purposes of the
Registration of Marks (International Classification of Goods). Orlane S.A. (respondent) filed an
opposition to petitioner's application, on the ground that the mark LOLANE was similar to
ORLANE in presentation, general appearance and pronunciation, and thus would amount to an
infringement of its mark. Respondent alleged that: (1) it was the rightful owner of the ORLANE
mark which was first used in 1948; (2) the mark was earlier registered in the Philippines on July
26, 1967 under Registration No. 129961 with the following goods: perfumes, toilet water, face
powders, lotions, essential oils, cosmetics, lotions for the hair, dentrifices, eyebrow pencils, make-
up creams, cosmetics & toilet preparations under Registration No. 12996 and (3) on September
5, 2003, it filed another application for use of the trademark on its additional products.

Petitioner denied that the LOLANE mark was confusingly similar to the mark ORLANE. He averred
that he was the lawful owner of the mark LOLANE which he has used for various personal care
products sold worldwide. He alleged that the first worldwide use of the mark was in Vietnam on
July 4, 1995. Petitioner also alleged that he had continuously marketed and advertised Class 3
products bearing LOLANE mark in the Philippines and in different parts of the world and that as
a result, the public had come to associate the mark with him as provider of quality personal care
products.

Petitioner maintained that the marks were distinct and not confusingly similar either under the
dominancy test or the holistic test.

The Bureau of Legal Affairs (BLA) rejected petitioner's application in a Decision dated February
27, 2007, finding that respondent's application was filed, and its mark registered, much earlier.
The BLA ruled that there was likelihood of confusion based on the following observations: (1)
ORLANE and LOLANE both consisted of six letters with the same last four letters - LANE; (2)
both were used as label for similar products; (3) both marks were in two syllables and that there
was only a slight difference in the first syllable; and (4) both marks had the same last syllable so
that if these marks were read aloud, a sound of strong similarity would be produced and such
would likely deceive or cause confusion to the public as to the two trademarks.
Petitioner filed a motion for reconsideration but this was denied by the Director of the BLA on May
7, 2007. On appeal, the Director General of the IPO affirmed the Decision of the BLA Director.
Thus, petitioner filed a petition for review before the CA arguing that there is no confusing similarity
between the two marks. The Court of Appeals denied the petition and held that there exists
colorable imitation of respondent's mark by LOLANE. The CA accorded due respect to the
Decision of the Director General and ruled that there was substantial evidence to support the
IPO's findings of fact. Applying the dominancy test, the CA ruled that LOLANE' s mark is
confusingly or deceptively similar to ORLANE.

Issue:

Whether or not there is confusing similarity between ORLANE and LOLANE which would bar the
registration of LOLANE before the IPO.

Ruling:

No, there is no confusing similarity between ORLANE and LOLANE which would bar the
registration of LOLANE before the IPO. The Court ruled that the CA erred when it affirmed the
Decision of the IPO.

There is no colorable imitation between the marks LOLANE and ORLANE which would lead to
any likelihood of confusion to the ordinary purchasers. A trademark is defined under Section 121.1
of RA 8293 as any visible sign capable of distinguishing the goods. It is susceptible to registration
if it is crafted fancifully or arbitrarily and is capable of identifying and distinguishing the goods of
one manufacturer or seller from those of another. Thus, the mark must be distinctive. The
registrability of a trademark is governed by Section 123 of RA 8293. Section 123.1 provides:
Section 123. 1. A mark cannot be registered if it: … 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: 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; 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.
In determining the likelihood of confusion, the Court must consider: [a] the resemblance between
the trademarks; [b] the similarity of the goods to which the trademarks are attached; [c] the likely
effect on the purchaser and [d] the registrant's express or implied consent and other fair and
equitable considerations. Likewise, the Court finding that LOLANE is not a colorable imitation of
ORLANE due to distinct visual and aural differences using the dominancy test, it no longer finds
necessary to discuss the contentions of the petitioner as to the appearance of the marks together
with the packaging, nature of the goods represented by the marks and the price difference, as
well as the applicability of foreign judgments. The Court ruled that the mark LOLANE is entitled
to registration. Hence, the petition is GRANTED and the Decision of the Court of Appeals dated
July 14, 2009 is REVERSED and SET ASIDE.
Case number 30

Skechers, USA, Inc. vs. Inter Pacific Industrial Trading Corp.

G.R. No. 164321 (2011)

Facts:

Skechers, USA Inc. is the owner of the registered trademarks “Skechers” and “S within an oval
logo”.

Skechers filed a criminal case for trademark infringement against several store-owners that were
selling shoes branded as “Strong” and bearing a similar “S” logo. The Regional Trial Court
(RTC) issued search warrants, allowing the National Bureau of Investigation (NBI) to raid the
stores and confiscate 6,000 pairs of shoes.

The accused moved to quash the warrants, saying that there was no confusing similarity between
the “Skechers” and the “Strong” brands.

The RTC granted the motion to quash and ordered the NBI to return the seized goods. The court
said that the two brands had glaring differences and that an ordinary prudent consumer would not
mistake one for the other.

On certiorari, the Court of Appeals (CA) affirmed the RTC ruling.

The matter was elevated to the Supreme Court (SC).

Issue:

Did the accused commit trademark infringement?

Held:

Yes, the accused is guilty of trademark infringement.

Under the IP Code (RA No. 8293), trademark infringement is committed when:

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 whichsuch 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.

There is trademark infringement when the second mark used is likely to cause confusion. There
are two tests to determine this:

1. Dominancy Test – the court focuses on the similarity of the dominant features of the marks
that might cause confusion in the mind of the consumer. Duplication or imitation is not
necessary. Even accidental confusion may be cause for trademark infringement. More
consideration is given to the aural and visual impressions created by the marks on the buyers
and less weight is given to factors like price, quality, sales outlets and market segments.

Applied to this case: The SC found that the use of the “S” symbol by Strong rubber shoes
infringes on the registered Skechers trademark. It is the most dominant feature of the mark -- one
that catches the buyer’s eye first. Even if the accused claims that there was a difference because
the “S” used by Skechers is found inside an oval, the fact that the accused used the dominant “S”
symbol already constitutes trademark infringement.

The SC disagreed with the CA reasoning that the “S” symbol is already used for many things,
including the Superman symbol. Even if this is true, the fact that Strong used same stylized “S”
symbol as that of the Skechers brand makes this a case of trademark infringement. The same
font and style was used in this case. The Superman “S” symbol is clearly different from the “S” in
this case.
2. Holistic or Totality Test – the court looks at the entirety of the marks as applied to the
products, including the labels and packaging. You must not only look at the dominant features
but all other features appearing on both marks.

Applied to this case: Both RTC and CA used the Holistic Test to rule that there was no
infringement. Both courts argued the following differences:
 The mark “S” found in Strong Shoes is not enclosed in an “oval design.”
 The word “Strong” is conspicuously placed at the backside and insoles.
 The hang tags and labels attached to the shoes bears the word “Strong” for respondent
and “Skechers U.S.A.” for private complainant;
 Strong shoes are modestly priced compared to the costs of Skechers Shoes.

Also using the Holistic Test, the SC corrected the lower courts and ruled that the striking
similarities between the products outweigh the differences argued by the respondents:
 Same color scheme of blue, white and gray;
 Same wave-like pattern on the midsole and the outer sole;
 Same elongated designs at the side of the midsole near the heel;
 Same number of ridges on the outer soles (five at the back and six in front);
 Same location of the stylized “S” symbol;
 The words "Skechers Sport Trail" at the back of the Skechers shoes and "Strong Sport
Trail" at the back of the Strong shoes, using the same font, color, size, direction and
orientation;
 Same two grayish-white semi-transparent circles on top of the heel collars.

The features and overall design of the two products are so similar that there is a high likelihood
of confusion.
Two products do not need to be identical, they just need to be similar enough to confuse the
ordinary buyer in order to constitute trademark infringement. Also, the difference in price cannot
be a defense in a case for trademark infringement.

There are two types of confusion:

1. Product Confusion – where the ordinary prudent purchaser would be induced to
purchase on product in the belief that he was buying another.
2. Source or Origin Confusion – although the goods are different, the use of the mark
causes the consumer to assume that both products originate from the same source.

Trademark law protects the owner not only from product confusion but also from source confusion.
Protection is not limited to the same or similar products but extends to all cases where:
 The consumer is misled into thinking that the trademark owner extended his business into
a new field;
 The consumer is misled into thinking that the trademark owner is in any way connected to
the infringer’s activities; or
  The infringement forestalls the normal potential expansion of the trademark owner’s
business.

Trademark law does not only protect the owner’s reputation and goodwill, it also protects the
consumers from fraud and confusion.

In this case, it is clear that there was an attempt to copy the trademark owner’s mark and product
design. In trademark infringement cases, you do not need to copy another's mark or product
exactly. Colorable imitation is enough.
Case number 31

BIRKENSTOCK ORTHOPAEDIE GMBH vs. PHILIPPINE SHOE EXPO MARKETING

CORPORATION
GR No. 194307, November 20, 2013

Facts:

Petitioner, a corporation duly organized and existing under the laws of Germany, applied for
various trademark registrations before the IPO, namely: (a) "BIRKENSTOCK" under Trademark
Application Serial No. (TASN) 4-1994-091508 for goods falling under Class 25 of the International
Classification of Goods and Services (Nice Classification) with filing date of March 11, 1994; (b)
"BIRKENSTOCK BAD HONNEF-RHEIN & DEVICE COMPRISING OF ROUND COMPANY
SEAL AND REPRESENTATION OF A FOOT, CROSS AND SUNBEAM" under TASN 4-1994-
091509 for goods... falling under Class 25 of the Nice Classification with filing date of March 11,
1994; and (c) "BIRKENSTOCK BAD HONNEF-RHEIN & DEVICE COMPRISING OF ROUND
COMPANY SEAL AND REPRESENTATION OF A FOOT, CROSS AND SUNBEAM" under TASN
4-1994-095043 for goods falling under Class 10 of the Nice Classification with filing date of
September 5, 1994 (subject applications).

However, registration proceedings of the subject applications were suspended in view of an

existing registration of the mark "BIRKENSTOCK AND DEVICE" under Registration No. 56334
dated October 21, 1993 (Registration No. 56334) in the name of Shoe Town International and
Industrial Corporation, the predecessor-in-interest of respondent Philippine Shoe Expo Marketing
Corporation. In this regard, on May 27, 1997 petitioner filed a petition for cancellation of
Registration No. 56334 on the ground that it is the lawful and... rightful owner of the Birkenstock
marks (Cancellation Case). During its pendency, however, respondent and/or its predecessor-in-
interest failed to file the required 10th Year Declaration of Actual Use (10 th Year DAU) for
Registration No. 56334 on or before October 21, 2004, thereby resulting in the cancellation of
such mark. Accordingly, the cancellation case was dismissed for being moot and academic.

The aforesaid cancellation of Registration No. 56334 paved the way for the publication of the
subject applications in the IPO e-Gazette on February 2, 2007. In response, respondent filed three
(3) separate verified notices of oppositions to the subject... applications docketed as Inter Partes
Case Nos. 14-2007-00108, 14-2007-00115, and 14-2007-00116, claiming, inter alia, that: (a) it,
together with its predecessor-in-interest, has been using Birkenstock marks in the Philippines
for... more than 16 years through the mark "BIRKENSTOCK AND DEVICE"; (b) the marks
covered by the subject applications are identical to the one covered by Registration No. 56334
and thus, petitioner has no right to the registration of such marks; (c) on November 15, 1991,...
respondent's predecessor-in-interest likewise obtained a Certificate of Copyright Registration No.
0-11193 for the word "BIRKENSTOCK"; (d) while respondent and its predecessor-in-interest
failed to file the 10th Year DAU, it continued the use of "BIRKENSTOCK AND DEVICE" in lawful
commerce; and (e) to record its continued ownership and exclusive right to use the
"BIRKENSTOCK" marks, it has filed TASN 4-2006-010273 as a "re-application" of its old
registration, Registration No. 56334. On November 13, 2007, the Bureau of Legal Affairs (BLA)
of the IPO issued Order No. 2007-2051 consolidating the aforesaid inter partes cases
(Consolidated Opposition Cases).

In its Decision15 dated May 28, 2008, the BLA of the IPO sustained respondent's opposition,
thus, ordering the rejection of the subject applications. It ruled that the competing marks of the
parties are confusingly similar since they contained the word "BIRKENSTOCK" and are used...
on the same and related goods. It found respondent and its predecessor-in- interest as the prior
user and adopter of "BIRKENSTOCK" in the Philippines, while on the other hand, petitioner failed
to present evidence of actual use in the trade and business in this country.

The IPO Director General reversed and set aside the ruling of the BLA, thus allowing the
registration of the subject applications. He held that with the cancellation of Registration No.
56334 for respondent's... failure to file the 10th Year DAU, there is no more reason to reject the
subject applications on the ground of prior registration by another proprietor.

In its Decision dated June 25, 2010, the CA reversed and set aside the ruling of the IPO Director
General and reinstated that of the BLA. It disallowed the registration of the subject applications
on the ground that the marks covered by such... applications "are confusingly similar, if not
outright identical" with respondent's mark. It equally held that respondent's failure to file the 10th
Year DAU for Registration No. 56334 "did not deprive petitioner of its ownership... of the
'BIRKENSTOCK' mark since it has submitted substantial evidence showing its continued use,
promotion and advertisement thereof up to the present."

Issue:

Whether or not the subject marks should be allowed registration in the name of petitioner

Ruling:

A. Admissibility of Petitioner's Documentary Evidence.

In the case at bar, while petitioner submitted mere photocopies as documentary evidence in the
Consolidated Opposition Cases, it should be noted that the IPO had already obtained the originals
of such documentary evidence in the related Cancellation Case earlier filed before it.
Under this circumstance and the merits of the instant case as will be subsequently discussed, the
Court holds that the IPO Director General's relaxation of procedure was a valid exercise of his
discretion in the interest of substantial justice.

B. Registration and ownership of "BIRKENSTOCK."

Republic Act No. (RA) 166, the governing law for Registration No. 56334, requires the filing of a
DAU on specified periods, to wit:

Section 12. Duration. Each certificate of registration shall remain in force for twenty years:
Provided, That registrations under the provisions of this Act shall be cancelled by the Director,
unless within one year following the fifth, tenth and... fifteenth anniversaries of the date of issue
of the certificate of registration, the registrant shall file in the Patent Office an affidavit showing
that the mark or trade-name is still in use or showing that its non-use is due to special
circumstance which excuse such... non-use and is not due to any intention to abandon the same,
and pay the required fee.

The Director shall notify the registrant who files the above- prescribed affidavits of his acceptance
or refusal thereof and, if a refusal, the reasons therefor.

The aforementioned provision clearly reveals that failure to file the DAU within the requisite period
results in the automatic cancellation of registration of a trademark. In turn, such failure is
tantamount to the abandonment or withdrawal of any right or interest the... registrant has over his
trademark.

In this case, respondent admitted that it failed to file the 10th Year DAU for Registration No. 56334
within the requisite period, or on or before October 21, 2004. As a consequence, it was deemed
to have abandoned or withdrawn any right or interest over... the mark "BIRKENSTOCK." Neither
can it invoke Section 236 of the IP Code which pertains to intellectual property rights obtained
under previous intellectual property laws, e.g., RA 166, precisely because it already lost any right
or interest over... the said mark.

Besides, petitioner has duly established its true and lawful ownership of the mark
"BIRKENSTOCK."
Under Section 2[38] of RA 166, which is also the law governing the subject applications, in order
to register a trademark, one must be the owner thereof and must have actually used the mark in
commerce in the Philippines for two (2) months prior to the... application for registration. Section
2-A[39] of the same law sets out to define how one goes about acquiring ownership thereof. Under
the same section, it is clear that actual use in commerce is also the test of ownership but the
provision went further by... saying that the mark must not have been so appropriated by another.
Significantly, to be an owner, Section 2-A does not require that the actual use of a trademark must
be within the Philippines. Thus, under RA 166, one may be an owner of a mark due to its actual
use but may not... yet have the right to register such ownership here due to the owner's failure to
use the same in the Philippines for two (2) months prior to registration.

It must be emphasized that registration of a trademark, by itself, is not a mode of acquiring

ownership. If the applicant is not the owner of the trademark, he has no right to apply for its
registration. Registration merely creates a prima facie presumption of the... validity of the
registration, of the registrant's ownership of the trademark, and of the exclusive right to the use
thereof. Such presumption, just like the presumptive regularity in the performance of official
functions, is rebuttable and must give way to evidence to the... contrary.

Clearly, it is not the application or registration of a trademark that vests ownership thereof, but it
is the ownership of a trademark that confers the right to register the same. A trademark is an
industrial property over which its owner is entitled to property rights which... cannot be
appropriated by unscrupulous entities that, in one way or another, happen to register such
trademark ahead of its true and lawful owner. The presumption of ownership accorded to a
registrant must then necessarily yield to superior evidence of actual and real ownership... of a
trademark.

In the instant case, petitioner was able to establish that it is the owner of the mark
"BIRKENSTOCK." It submitted evidence relating to the origin and history of "BIRKENSTOCK"
and its use in commerce long before respondent was able to register the same here in the
Philippines.

It has sufficiently proven that "BIRKENSTOCK" was first adopted in Europe in 1774 by its inventor,
Johann Birkenstock, a shoemaker, on his line of quality footwear and thereafter, numerous
generations of his kin continuously engaged in the manufacture and sale of shoes and... sandals
bearing the mark "BIRKENSTOCK" until it became the entity now known as the petitioner.
Petitioner also submitted various certificates of registration of the mark "BIRKENSTOCK" in
various countries and that it has used such mark in different countries worldwide, including... the
Philippines.

On the other hand, aside from Registration No. 56334 which had been cancelled, respondent only
presented copies of sales invoices and advertisements, which are not conclusive evidence of its
claim of ownership of the mark "BIRKENSTOCK" as these merely show the transactions made...
by respondent involving the same.

In view of the foregoing circumstances, the Court finds the petitioner to be the true and lawful
owner of the mark "BIRKENSTOCK" and entitled to its registration, and that respondent was in
bad faith in having it registered in its name.

Case number 32
Pest Management Association of the Philippines vs. Fertilizer and Pesticide Authority G.R.
No. 156041

Facts :
The case commenced upon PMAP’s filing of a Petition For Declaratory Relief With Prayer For
Issuance Of A Writ Of Preliminary Injunction And/Or Temporary Restraining Order with the RTC
on January 4, 2002. Petitioner, a non-stock corporation duly organized and existing under the
laws of the Philippines, is an association of pesticide handlers duly licensed by respondent
Fertilizer and Pesticide Authority (FPA). It questioned the validity of Section 3.12 of the 1987
Pesticide Regulatory Policies and Implementing Guidelines, which provides thus: 3.12
Protection of Proprietary Data Data submitted to support the first full or conditional registration of
a pesticide active ingredient in the Philippines will be granted proprietary protection for a period
of seven years from the date of such registration. During this period subsequent registrants may
rely on these data only with third party authorization or otherwise must submit their own data.
After this period, all data may be freely cited in support of registration by any applicant, provided
convincing proof is submitted that the product being registered is identical or substantially similar
to any current registered pesticide, or differs only in ways that would not significantly increase the
risk of unreasonable adverse effects.
Issue:
Whether or not FPA encroach upon the jurisdiction of the Intellectual Property Office?
Ruling:
There is no encroachment upon the powers of the IPO granted under R.A. No. 8293, otherwise
known as the Intellectual Property Code of the Philippines. Section 5 thereof enumerates the
functions of the IPO. Nowhere in said provision does it state nor can it be inferred that the law
intended the IPO to have the exclusive authority to protect or promote intellectual property rights
in the Philippines. On the contrary, paragraph (g) of said Section even provides that the IPO shall
"[c]oordinate with other government agencies and the private sector efforts to formulate and
implement plans and policies to strengthen the protection of intellectual property rights in the
country." Clearly, R.A. No. 8293 recognizes that efforts to fully protect intellectual property rights
cannot be undertaken by the IPO alone. Other agencies dealing with intellectual property rights
are, therefore, not precluded from issuing policies, guidelines and regulations to give protection
to such rights. Lastly, FPA emphasize that the provision on protection of proprietary data does
not usurp the functions of the Intellectual Property Office (IPO) since a patent and data protection
are two different matters. A patent prohibits all unlicensed making, using and selling of a particular
product, while data protection accorded by the FPA merely prevents copying or unauthorized use
of an applicant's data, but any other party may independently generate and use his own data. It
is further argued that under Republic Act No. 8293 (R.A. No. 8293), the grant of power to the IPO
to administer and implement State policies on intellectual property is not exclusionary as the IPO
is even allowed to coordinate with other government agencies to formulate and implement plans
and policies to strengthen the protection of intellectual property rights.

Case number 33

Coffee Partners v. San Francisco Coffee & Roastery (G.R. No. 169504)

Facts:
Petitioner Coffee Partners entered into a franchise agreement with Coffee Partners Ltd. to operate
coffee shops in the country using the trademark ‘San Francisco Coffee.’ Respondent on the other
hand, is a local corporation engaged in the wholesale and retail sale of coffee and uses the
business name ‘San Francisco Coffee & Roastery’ registered with the DTI. Later, respondent filed
an infringement and/or unfair competition complaint against petitioner alleging that the latter was
about to open a coffee shop under the name ‘San Francisco Coffee’ causing confusion in the
minds of the public as it bore a similar name and is engaged also in selling of coffee. Petitioner
contended no infringement would arise because respondent’s tradename was not registered.
Issue:
Whether or not petitioner’s trademark would infringe respondent’s tradename.
Ruling: YES.

In Prosource International, Inc. v. Horphag Research Management SA, this Court laid down what
constitutes infringement of an unregistered trade name, thus:

(1) The trademark being infringed is registered in the Intellectual Property Office; however, in
infringement of trade name, the same need not be registered;

(2) The trademark or trade name is reproduced, counterfeited, copied, or colorably imitated by
the infringer;

(3) The infringing mark or trade name is used in connection with the sale, offering for sale, or
advertising of any goods, business or services; or the infringing mark or trade name is applied to
labels, signs, prints, packages, wrappers, receptacles, or advertisements intended to be used
upon or in connection with such goods, business, or services;

(4) The use or application of the infringing mark or trade name is likely to cause confusion or
mistake or to deceive purchasers or others as to the goods or services themselves or as to the
source or origin of such goods or services or the identity of such business; and

(5) It is without the consent of the trademark or trade name owner or the assignee thereof.

RA 8293, which took effect on 1 January 1998, has dispensed with the registration requirement.
Section 165.2 of RA 8293 categorically states that trade names shall be protected, even prior to
or without registration with the IPO, against any unlawful act including any subsequent use of the
trade name by a third party, whether as a trade name or a trademark likely to mislead the public.

It is the likelihood of confusion that is the gravamen of infringement. Applying the dominancy test
or the holistic test, petitioner’s “SAN FRANCISCO COFFEE” trademark is a clear infringement of
respondent’s “SAN FRANCISCO COFFEE & ROASTERY, INC.” trade name. The descriptive
words “SAN FRANCISCO COFFEE” are precisely the dominant features of respondent’s trade
name. Petitioner and respondent are engaged in the same business of selling coffee, whether
wholesale or retail. The likelihood of confusion is higher in cases where the business of one
corporation is the same or substantially the same as that of another corporation. In this case, the
consuming public will likely be confused as to the source of the coffee being sold at petitioner’s
coffee shops.

Case number 34
Shirly F. Torres vs Imelda and Rodrigo Perez G.R. no. 169504
Facts:
Respondents spouses Perez own RGP Footwear Manufacturing (RGP), which supplies ladies'
shoes to Shoe Mart (SM). Petitioner and Sunshine formed Sasay's Closet Co. (SCC), a
partnership registered with the SEC. SCC was engaged in the supply, trading, retailing of
garments such as underwear, children's wear, women's and men's wear, and other incidental
activities related thereto. For its products, SCC used the trademark "Naturals with Design," which
it filed with the Intellectual Property Office and registered. These products were primarily supplied
to SM, which assigned to them the vendor code "190501". SCC used the facilities and equipment
owned by RGP, as well as the latter's business address (No. 72 Victoria Subdivision, Barangay
Dela Paz, Biñan, Laguna), which was also the residential address of respondents. Sunshine
pulled out of the partnership and respondent Imelda took over Sunshine's responsibilities in the
partnership. Despite the objections of petitioner to the dissolution of SCC, various amounts were
paid to her by respondents for her share in the partnership assets. Petitioner established Tezares
Enterprise, a sole proprietorship engaged in supplying and trading of clothing and accessories
except footwear. Also in March 2006, she discovered that underwear products bearing the brand
"Naturals" were being sold in SM with vendor code "180195." This code was registered to RGP,
a fact confirmed by test buys conducted by her lawyers on 13 and 14 May 2006. The trial court
ruled that respondents did not pass off "Naturals" as the brand of another manufacturer. On the
contrary, they used the brand in the honest belief that they owned SCC, the owner of the brand.
Issue:
Whether or not there exists probable cause to indict respondents for unfair competition.
Ruling:
Here, we find that there was no probable cause to indict respondents, because the crime of unfair
competition was not committed. In positing that respondents were guilty of unfair competition,
petitioner makes a lot of the fact that they used the vendor code of RGP in marketing the
"Naturals" products. She argues that they passed off the "Naturals" products, which they
marketed under RGP, as those of SCC; thus, the allegedly prejudiced the rights of SCC as owner
of the trademark. She also claims that she has the personality to prosecute respondents for unfair
competition on behalf of SCC. When Judge Untalan denied the Motion to Dismiss and/or
Withdraw Information filed by the prosecution and thereby sustained the position of petitioner,
his error lay in the fact that his focus on the crime of unfair competition was unwarranted. In this
case, much more important than the issue of protection of intellectual property is the change of
ownership of SCC. The arguments of petitioner have no basis, because respondents are the
exclusive owners of SCC, of which she is no longer a partner. Based on the findings of fact of the
CA and the DOJ, respondents have completed the payments of the share of petitioner in the
partnership affairs. Having bought her out of SCC, respondents were already its exclusive owners
who, as such, had the right to use the "Naturals" brand. The use of the vendor code of RGP was
resorted to only for the practical purpose of ensuring that SM's payments for the "Naturals"
products would go to respondents, who were the actual suppliers. Furthermore, even if we were
to assume that the issue of protection of intellectual property is paramount in this case, the
criminal complaint for unfair competition against respondents cannot prosper, for the elements
of the crime were not present. We have enunciated in CCBPI v. Gomez that the key elements of
unfair competition are "deception, passing off and fraud upon the public." No deception can be
imagined to have been foisted on the public through different vendor codes, which are used by
SM only for the identification of suppliers' products.

Case number 35

Sony Computer Entertainment Inc. v. Supergreen Inc. G.R. no. 161823

Facts:
Petitioner Sony Computer Entertainment, Inc., filed a case against respondent Supergreen,
Incorporated in violation of Republic Act No. 8293. According to Sony, Respondent imitated the
general appearance of petitioner’s goods and that respondent sold the goods allegedly in
Mandaluyong City, Metro Manila. Furthermore, the NBI found that respondent engaged in the
reproduction and distribution of counterfeit "PlayStation" game software, consoles and
accessories in violation of Sony Computer’s intellectual property rights.
Thus, NBI applied with the Regional Trial Court (RTC) of Manila, Branch 1 for warrants
to search respondent’s premises in Parañaque City and Cavite and simultaneously served the
search warrants on the subject premises and seized a replicating machine and several units of
counterfeit "PlayStation" consoles, joy pads, housing, labels and game software. Respondent
assails the validity of the warrant due to wrong venue and counters that the applications should
be filed and provided the territorial limitations on search warrants. Even granting that petitioner
has compelling reasons, respondent maintains that petitioner cannot file the application with the
RTC of Manila because Cavite belongs to another judicial region. Respondent also argues that
the doctrine on continuing crime is applicable only to the institution of a criminal action, not to
search warrant applications which is governed by Rule 126, and in this case Section.
Issue:
Whether or not the offenses involved in the subject search warrants are "continuing crimes" .
Ruling:
We agree with petitioner that this case involves a transitory or continuing offense of unfair
competition under Section 168 of Republic Act No. 8293, which provides, SEC. 168. Unfair
Competition, Rights, Regulation and Remedies.
–
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 (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. Pertinent too is Article 189 (1) of the Revised Penal
Code that enumerates the elements of unfair competition, to wit: (a) That the offender gives his
goods the general appearance of the goods of another manufacturer or dealer; (b) That the
general appearance is shown in the (1) goods themselves, or in the (2) wrapping of their
packages, or in the (3) device or words therein, or in (4) any other feature of their appearance; (c)
That the offender offers to sell or sells those goods or gives other persons a chance or opportunity
to do the same with a like purpose; and (d) That there is actual intent to deceive the public or
defraud a competitor.
Respondent’s imitation of the general appearance of petitioner’s goods was done
allegedly in Cavite. It sold the goods allegedly in Mandaluyong City, Metro Manila. The alleged
acts would constitute a transitory or continuing offense. Thus, clearly, under Section 2 (b) of Rule
126, Section 168 of Rep. Act No. 8293 and Article 189 (1) of the Revised Penal Code, petitioner
may apply for a search warrant in any court where any element of the alleged offense was
committed, including any of the courts within the National Capital Region (Metro Manila).

Case number 36

SANRIO COMPANY LIMITED vs. EDGAR LIM .”Orignamura Trading “

GR 168662 February 19, 2008

Facts:

Petitioner Sanrio Company, a Japanese corporation, is the copyright owner of various animated
characters sold locally by its exclusive distributor, Gift Gate Incorporated (GGI), which allowed
local entities to manufacture petitioner’s products. A search warrant was issued against
respondent Lim alleged to be selling imitations of petitioner’s products. Thereafter, petitioner filed
a complaint for copyright infringement with the Task-Force on Anti-Intellectual Property Piracy
(TAPP) to the DOJ. Respondent asserted that he obtained his merchandise from petitioner’s
authorized manufacturers. The complaint was dismissed. CA affirmed and further held that the
offense had already prescribed.

Issues:

(1) Whether or not the action had prescribed.

(2) Whether or not there is copyright infringement.

Ruling:

(1) NO. Section 2 of Act 3326 provides that the prescriptive period for violation of special laws
starts on the day such offense was committed and is interrupted by the institution of proceedings
against respondent (i.e., the accused). Petitioner in this instance filed its complaint-affidavit 1
year, 10 months and 4 days after the NBI searched respondent’s premises and seized Sanrio
merchandise therefrom. Although no information was immediately filed in court, respondent’s
alleged violation had not yet prescribed. In the recent case of Brillantes v. Court of Appeals, we
affirmed that the filing of the complaint for purposes of preliminary investigation interrupts the
period of prescription of criminal responsibility. Thus, the prescriptive period for the prosecution
of the alleged violation of the IPC was tolled by petitioner’s timely filing of the complaint-affidavit
before the TAPP.
(2) NO. To be criminally liable for violation of Section 217.3 of the IPC, the following requisites
must be present:

1. possession of the infringing copy and

2. knowledge or suspicion that the copy is an infringement of the genuine article.

The prosecutors in this case consistently found that no probable cause existed against
respondent for violation of the IPC. The TAPP found that: Evidence on record would show that
respondent bought his merchandise from legitimate sources. While it appears that some of the
items seized during the search are not among those products which [GGI] authorized these
establishments to produce, the fact remains that respondent bought these from the abovecited
legitimate sources. At this juncture, it bears stressing that respondent relied on the
representations of these manufacturers and distributors that the items they sold were genuine.
As such, it is not incumbent upon respondent to verify from these sources what items [GGI] only
authorized them to produce. Thus, as far as respondent is concerned, the items in his possession
are not infringing copies of the original [petitioner’s] products.

Case number 37
Sasot vs. People GR No. 143193 (June 29,2005)
FACTS:
The National Bureau of Investigation conducted an investigation pursuant to a complaint
filed by the NBA Properties, Inc. against petitioners for possible violation of Article 189 of the
Revised Penal Code on unfair competition. Based on the report from the NBI, they have
conducted two investigations due to the petitioners’ alleged participation in the manufacture,
printing, sale and distribution of counterfeit “NBA” garment products, which led to the search and
seizure of several items from petitioner’s establishment.
Before arraignment, petitioners filed a Motion to Quash on the ground that, the facts
charged do not constitute an offense and that the court did not have jurisdiction over the offense
charged or the person of the accused. Petitioners contend that since the complainant is a foreign
corporation not doing business in the Philippines, and cannot be protected by Philippine patent
laws since it is not a registered patentee. Petitioners aver that they have been using the business
name ALLANDALE SPORTSLINE, INC. since 1972, and their designs are original and do not
appear to be similar to complainants, and they do not use complainants logo or design.
In the Comment/Opposition filed by the trial prosecutor of Manila RTC Branch 1, it stated
that the State is entitled to prosecute the offense even without the participation of the private
offended party, as the crime charged is a public crime, as provided for in the Revised Penal Code.
The trial court sustained the prosecution’s arguments and denied petitioners’ motion to
quash which lead to the filing of a special civil action for Certiorari with the CA. According to the
CA, the petition is not the proper remedy in assailing the denial of the quashal motion, and that
the grounds raised therein should be raised during the trial of the case on the merits.
Petitioners sought for the reconsideration of the Decision, but was denied by the CA, hence
this petition.
ISSUE: Whether or not a foreign corporation not doing business in the Philippines and not
licensed to do business in the Philippines have the right to sue for unfair competition.

HELD: The petition must be denied.

While petitioners raise in their motion to quash the grounds that the facts charged do not
constitute an offense and that the trial court has no jurisdiction over the offense charged or the
person of the accused, their arguments focused on an alleged defect in the complaint filed before
the fiscal, complainants capacity to sue and petitioners exculpatory defenses against the crime of
unfair competition.
More importantly, the crime of Unfair Competition punishable under Article 189 of the
Revised Penal Code is a public crime. It is essentially an act against the State and it is the latter
which principally stands as the injured party. The complainant’s capacity to sue in such case
becomes immaterial.

Case number 38
Yao, Sr. vs. People
G.R. No. 168306 June 19, 2007
FACTS:
Petitioners William Yao, Sr. and several others were incorporators and officers of Masagana Gas
Corporation.
In 2003, the NBI, acting on reports that petitioners unlawfully and in violation of intellectual
property rights of Petron Corporation and Pilipinas Shell, produce, sell, distribute LPG products
using LPG cylinders owned by Petron and Shell and by virtue of search warrants, raided the
premises of Masagana and confiscated, among other things, the motor compressor and refilling
machine owned by Masagana.
Masagana Corporation intervened in the case and asked for the return of said pieces of
equipment. It argued that even if the same was being used by petitioners in their unlawful activity,
the equipment cannot be confiscated because having a personality separate and distinct from
that of its incorporators, directors and officers, said properties are owned by the corporation and
not by the petitioners.
The court denied Masagana’s motion.
ISSUE:
Whether or not the doctrine of piercing the veil of corporate entity is applicable in the case.
RULING:
The Supreme Court reiterated that it is a fundamental principle of corporation law that a
corporation is an entity separate and distinct from its stockholders, directors or officers.
However, when the notion of legal entity is used to defeat public convenience, justify wrong,
protect fraud or defend crime, the law will regard the corporation as an association of persons or
in the case of two corporations merge them into one. Hence, in this case, liability will attach
personally or directly to the officers and stockholders.
The findings of the Court show that petitioners, as director/officers of Masagana were
utilizing the corporation in violating the intellectual property rights of Petron and Pilipinas Shell.
As such, the doctrine of piercing the veil of corporate entity applies.

Case number 39

Ecole De Cuisine Manille v. Cointreau

(G.R. No. 185830)

Facts:

Respondent Cointreau, a partnership registered under the laws of France, applied for the
registration of the mark ‘Le Cordon Bleu & Device.’ Petitioner Ecole De Cuisine opposed on the
ground that it is the owner of the mark ‘Le Cordon Bleu, Ecole De Cuisine Manille’ used in its
culinary activities and restaurant business and that the registration will create confusion to the
public. Respondent Cointreau answered claiming it is the true and lawful owner of the mark and
had long been using it worldwide. The IPO Bureau of Legal Affairs sustained petitioner’s
opposition stating that Cointreau had no prior use of the mark in the Philippines to be entitled to
a proprietary right over it. The IPO Director General reversed the decision and allowed the mark’s
registration holding that under RA No. 166, actual use in the Philippines is not necessary to
acquire ownership of the mark.

Issue:

Whether or not respondent’s prior use of the mark is a requirement for its registration.

Ruling: YES.

Under Section 2 of R.A. No. 166, in order to register a trademark, one must be the owner thereof
and must have actually used the mark in commerce in the Philippines for 2 months prior to the
application for registration. Section 2-A of the same law sets out to define how one goes about
acquiring ownership thereof. Under Section 2-A, it is clear that actual use in commerce is also the
test of ownership but the provision went further by saying that the mark must not have been so
appropriated by another. Additionally, it is significant to note that Section 2-A does not require
that the actual use of a trademark must be within the Philippines. Thus, as correctly mentioned
by the CA, under R.A. No. 166, one may be an owner of a mark due to its actual use but may not
yet have the right to register such ownership here due to the owner’s failure to use the same in
the Philippines for 2 months prior to registration. In the instant case, it is undisputed that Cointreau
has been using the subject mark in France, prior to Ecole’s averred first use of the same in the
Philippines, of which the latter was fully aware thereof. On the other hand, Ecole has no certificate
of registration over the subject mark but only a pending application. Under the foregoing
circumstances, even if Ecole was the first to use the mark in the Philippines, it cannot be said to
have validly appropriated the same.

In any case, the present law on trademarks, Republic Act No. 8293, otherwise known as the
Intellectual Property Code of the Philippines, as amended, has already dispensed with the
requirement of prior actual use at the time of registration. Thus, there is more reason to allow the
registration of the subject mark under the name of Cointreau as its true and lawful owner.

Case number 40

40. ANDREA TAN Vs. BAUSCH & LOMB, INC

G.R. No.148420 December 15, 2005

Facts:

Assailed in this petition for review are the decision of the CA which set aside RTC decision
denying the transfer of the Criminal Case to Branch 9 RTC cebu city. This case is an information
for violation of par 1, Article 189 of RPC against petitioners Tan and others.

BAUSCH (repsondent) -want to transfer the IP Case to RTC branch 9 pursuant to an admin order
designating the branch to try and hear IP cases.

TAN (accused)- filed a motion to quash assailing the admin orders and cited BP 129 arguing that
according to the said law MTCC has jurisdiction over the subject matter.

Information states that Tan and others conspired and are mutually liable for distributing RAY BAN
sunglasses to the damage and prejudice of BAUSCH AND LOMB, INC., the exclusive owner and
user of trademark RAY BAN on sunglasses.On January 21, 1998, respondent filed a motion to
transfer the case to Branch 9, RTC, Cebu City. Administrative Order No. 113-95 (A.O. No. 113-
95) designated the said branch as the special court in Region VII to handle violations of intellectual
property rights.On March 2, 1998, petitioners TAN and others filed a motion to quash the
information on the ground that the RTC had no jurisdiction over the offense charged against them
bcos (MTCC) has jurisdiction.On March 6, 1998, respondent filed an opposition to the motion to
quash explaining that RTC had jurisdiction by virtue of BP 129 and admin order. On December
22, 1998, the court a quo denied respondent’s motion to transfer the case and granted petitioners’
motion to quash. It ruled:

Accused [wa]s charged for violation of Art. 189 of Revised Penal Code the penalty for which is
prision correccional in its minimum period or a fine ranging from P500.00 to P2,000.00, or both.
Hence, within the jurisdiction of the metropolitan and municipal trial courts (Sec. 32(2), B.P. Blg.
129, as amended).

Administrative Orders Nos. 113-95 and 104-96, cited by plaintiff (BAUSH & LOMB, INC), cannot
prevail over the express provisions of Batas Pambansa Blg. 129, as amended, jurisdiction of
courts being a matter of substantive law.
If this Court has no jurisdiction over the case, the same is true with Branch 9 of the same court,
Therefore, the motion to transfer the case to the latter should fail.

1. RTC granted the motion to quash and motion to transfer is denied.

WHEREFORE, premises considered, the motion to transfer is denied, while the motion to quash
is granted. The case is thus dismissed.

2. CA- Gave due to course to the petition and SET ASIDE RTC RULING and ordered the transfer
of criminal case to RTC branch 9

ISSUE

Whether or not the jurisdiction over the crime allegedly committed by petitioners is vested on the
RTC. - YES

RULING:

Section 5 (5) of the 1987 Constitution empowers the Supreme Court to promulgate rules
concerning pleading, practice and procedure in all courts.

The limitations to this rule-making power are the following: the rules must (a) provide a simplified
and inexpensive procedure for the speedy disposition of cases; (b) be uniform for all courts of the
same grade and (c) not diminish, increase or modify substantive rights. As long as these limits
are met, the argument used by petitioners that the Supreme Court, through A.O. Nos. 113-95 and
104-96, transgressed on Congress’ sole power to legislate, cannot be sustained.

A.O. No. 113-95 designated special intellectual property courts to promote the efficient
administration of justice and to ensure the speedy disposition of intellectual property cases.

A.O. No. 104-96, on the other hand, was issued pursuant to Section 23 of BP 129 which
transferred the jurisdiction over such crimes from the MTC and MTCC to the RTC and which
furthermore gave the Supreme Court the authority to designate certain branches of the RTC to
exclusively handle special cases in the interest of the speedy and efficient administration of
justice. Accordingly, the RTC was vested with the exclusive and original jurisdiction to try and
decide intellectual property cases.

The transfer of jurisdiction from the MTC and MTCC to the RTC did not in any way affect the
substantive rights of petitioners.

The administrative orders did not change the definition or scope of the crime of unfair competition
with which petitioners were charged.

Thus, the appellate court correctly found that the court a quo committed grave abuse of discretion.

Furthermore, the order of the trial court was a patent nullity. In resolving the pending incidents of
the motion to transfer and motion to quash, the trial court should not have allowed petitioners to
collaterally attack the validity of A.O. Nos. 113-95 and 104-96. We have ruled time and again that
the constitutionality or validity of laws, orders, or such other rules with the force of law cannot be
attacked collaterally.
There is a legal presumption of validity of these laws and rules. Unless a law or rule is annulled
in a direct proceeding, the legal presumption of its validity stands. The trial court’s order was
consequently null and void.

The transfer of this case to Branch 9, RTC, Cebu City, however, is no longer possible. A.M. No.
03-03-03-SC consolidated the intellectual property courts and commercial SEC courts in one RTC
branch in a particular locality to streamline the court structure and to promote expediency. The
RTC branch so designated will try and decide cases involving violations of intellectual property
rights, and cases formerly cognizable by the Securities and Exchange Commission. It is now
called a special commercial court. In Region VII, the designated special commercial court is
Branch 11, RTC, Cebu City. The transfer of this case to that court is therefore warranted.

WHEREFORE, the Court of Appeals decision dated October 20, 2000 is hereby AFFIRMED with
the MODIFICATION that Criminal Case No. CBU-45890 shall be transferred to Branch 11, RTC,
Cebu City. Let the records of the case be transmitted thereto and the case tried and decided with
dispatch.

Case number 41
MANUEL C. ESPIRITU, JR., AUDIE G.R. No. 170891 LLONA, FREIDA F. ESPIRITU, CARLO
F. ESPIRITU, RAFAEL F. ESPIRITU, ROLANDO M. MIRABUNA, HERMILYN A.
MIRABUNA, KIM ROLAND A. MIRABUNA, KAYE ANN A. MIRABUNA, KEN RYAN A.
MIRABUNA, JUANITO P. DE CASTRO, GERONIMA A. ALMONITE
and MANUEL C. DEE, who are the officers and directors of BICOL GAS REFILLING
PLANT CORPORATION,
Petitioners, v. PETRON CORPORATION and CARMEN J. DOLOIRAS, doing business
under the name KRISTINA PATRICIA ENTERPRISES, Respondents.
G.R. No. 170891, 24 November 2009, 625 SCRA 245

Topic: Criminal liability; civil liability for tort

Facts:
1. Petron Corporation (PETRON) sold and distributed liquefied petroleum gas (LPG) in
cylinder tanks that carried its trademark Gasul.
2. Carmen J. Doloiras owned and operated Kristina Patricia Enterprises (KPE), the exclusive
distributor of Gasul LPGs in the whole of Sorsogon, managed by Jose Nelson Doloiras
(JOSE).
3. Bicol Gas Refilling Plant Corporation (BICOL GAS), also in the business of selling and
distributing LPGs in Sorsogon, their tanks carry the trademark Bicol Savers Gas, managed
by Audie Llona (LLONA).
4. Due to trade and competition, any distributor of LPGs at times acquired possession of
LPG cylinder tanks belonging to other distributors operating in the same area (a.k.a.
captured cylinders).
 5. JOSE: April 2001 Bicol Gas agreed with KPE for the swapping of captured cylinders (one
distributor could not refill captured cylinders with its own brand of LPG).
6. In the course of implementing this arrangement, JOSE visited the BICOL GAS refilling
plant --- he noticed several Gasul tanks in Bicol Gas’ possession.
7. They agreed to have a swap (after LLONA was given permission for the swap) involving
around 30 Gasul tanks held by Bicol Gas in exchange for assorted tanks held by KPE.
8. JOSE noticed that Bicol Gas still had a number of Gasul tanks in its yard --- offered to
make a swap for these but LLONA declined --- Bicol Gas owners wanted to send those
tanks to Batangas.
9. JOSE observed on almost a daily basis that Bicol Gas trucks carried a load of Gasul tanks
(he noted that KPEs volume of sales dropped significantly from June to July 2001).
10. August 4, 2001 - JOSE saw a Bicol Gas truck on the Maharlika Highway --- it had on it
one unsealed 50-kg Gasul tank and one 50-kg Shellane tank.
11. JOSE followed the truck and when it stopped at a store, he asked the driver, Jun Leorena,
and the Bicol Gas sales representative, Jerome Misal, about the Gasul tank in their truck
(JOSE found that it wasn’t empty) --- Misal and Leorena then admitted that the Gasul and
Shellane tanks on their truck belonged to a customer who had them filled up by Bicol Gas.
12. Because of the incident, KPE filed a complaint for violations of R.A. 623 (illegally filling up
registered cylinder tanks), as amended, and Sections 155 (infringement of trade marks)
and 169.1 (unfair competition) of the Intellectual Property Code (R.A. 8293).

Provincial Prosecutor – Probable Cause only for violation of R.A. 623, only Mirabena, Misal,
Leorena, and petitioner Llona, could be charged.
Office of the Regional State Prosecutor, Region V (Pet. For Review) - ordered the filing of
additional informations against the four employees of Bicol Gas for unfair competition, no case
for trademark infringement was present.
Secretary of Justice - denied appeal of Petron and KPE and their motion for reconsideration.
CA (certiorari) - reversed the Secretary of Justices ruling.

ISSUE: WON the corporation can be sued due to its owner’s/employee’s/stockholder’s criminal
act/violation

RATIO:

 Bicol Gas is a corporation. As such, it is an entity separate and distinct from the persons
of its officers, directors, and stockholders. It has been held, however, that corporate
officers or employees, through whose act, default or omission the corporation commits a
crime, may themselves be individually held answerable for the crime.
 The owners of a corporate organization are its stockholders and they are to be
distinguished from its directors and officers. The petitioners here, with the exception of
Audie Llona, are being charged in their capacities as stockholders of Bicol Gas. But the
Court of Appeals forgets that in a corporation, the management of its business is
generally vested in its board of directors, not its stockholders. Stockholders are
basically investors in a corporation. They do not have a hand in running the day-to-
day business operations of the corporation unless they are at the same time
directors or officers of the corporation. Before a stockholder may be held criminally
liable for acts committed by the corporation, therefore, it must be shown that he
had knowledge of the criminal act committed in the name of the corporation and
that he took part in the same or gave his consent to its commission, whether by
action or inaction.
  The finding of the Court of Appeals that the employees could not have committed the
crimes without the consent, [abetment], permission, or participation of the owners of Bicol
Gas is a sweeping speculation especially since, as demonstrated above, what was
involved was just one Petron Gasul tank found in a truck filled with Bicol Gas tanks.
Although the KPE manager heard petitioner LLONA say that he was going to consult the
owners of Bicol Gas regarding the offer to swap additional captured cylinders, no
indication was given as to which Bicol Gas stockholders LLONA consulted. It would be
unfair to charge all the stockholders involved, some of whom were proved to be
minors. No evidence was presented establishing the names of the stockholders who were
charged with running the operations of Bicol Gas. The complaint even failed to allege who
among the stockholders sat in the board of directors of the company or served as its
officers.

Case number 42
AIR PHILIPPINES CORPORATION VS PENNSWELL
G.R. NO. 172835
DATE December 13, 2007

FACTS:

Petitioner is a domestic corporation engaged in the business of air transportation services.

Respondent Pennswell Inc was organized to engage in the business of manufacturing and selling
industrial chemicals, solvents and special lubricants.
Respondent delivered and sold to petitioner sundry goods in trade. Under the contracts,
petitioner’s obligation amounted to P 449,864.98 until the amount would be fully paid. For failure
to pay comply with its obligations unders said contract.

Respondent then filed a complaint against the petitioner. Petitioner then filed an ANSWER
alleging that the respondent defrauded the former for its previous sale of four items. Said items
were misrepresented by respondent as belonging to a new line, but were in truth and in fact,
identical with products petitioner had previously purchased from respondent.

During the pendency of the trial, petitioner filed a Motion to Compel respondent to give a detailed
list of the ingredients and chemical components of the following products, to wit: (a) Contact
Grease and Connector Grease; (b) Thixohtropic Grease and Di-Electric Strength Protective
Coating; and (c) Dry Lubricant and Anti-Seize Compound.

RTC: Granted the motion then reversed its prior decision. Ruled infavor of the respondent
CA: Affirmed

ISSUE:

WON the court of appeals ruled was correct when it upheld the ruling of the trial court that the
chemical components or ingredients of respondent’s products are trade secrets or industrial
secret that are not subject to compulsory disclosure.

RULING:

Yes. A trade secret is defined as a plan or process, tool, mechanism or compound known only to
its owner and those of his employees to whom it is necessary to confide it.

The chemical composition, formulation, and ingredients of respondent’s special lubricants are
trade secrets within the contemplation of the law. Jurisprudence has consistently acknowledged
that the private character of trade secrets-there is a privilege not to disclose one’s trade secret.

Note: Case no. 43 has the same GR no. with case no. 42
Case number 44

Dermaline, Inc. vs. Myra Pharmaceuticals, Inc.

G.R. No. 190065, August 16, 2010

FACTS

Petitioner Dermaline filed before the Intellectual Property Office (IPO) an application for
registration of the trademark “DERMALINE DERMALINE, INC.”Respondent Myra filed a Verified
Opposition alleging that the trademark sought to be registered by Dermaline so resembles its
trademark “DERMALIN” and will likely cause confusion, mistake and deception to the purchasing
public. It further alleged that Dermaline’s use and registration of its applied trademark will diminish
the distinctiveness and dilute the goodwill of Myra’s “DERMALIN,” which Myra has been
extensively commercially since October 31, 1977, and said mark is still valid and subsisting.

Myra contends that despite Dermaline’s attempt to differentiate its applied mark, the dominant
feature is the term “DERMALINE,” which is practically identical with its own “DERMALIN,” more
particularly that the first eight (8) letters of the marks are identical, and that notwithstanding the
additional letter “E” by Dermaline, the pronunciation for both marks are identical. Further, both
marks have three (3) syllables each, with each syllable identical in sound and appearance, even
if the last syllable of “DERMALINE” consisted of four (4) letters while “DERMALIN” consisted only
of three (3). Myra asserted that the mark “DERMALINE DERMALINE, INC.” is aurally similar to
its own mark such that the registration and use of Dermaline’s applied mark will enable it to obtain
benefit from Myra’s reputation, goodwill and advertising and will lead the public into believing that
Dermaline is, in any way, connected to Myra. Myra added that even if the subject application was
under Classification 44 for various skin treatments, it could still be connected to the “DERMALIN”
mark under Classification 5 for pharmaceutical products, since ultimately these goods are very
closely related. The IPO Bureau of Legal Affairs ruled in favor of respondent; said decision was
sustained by the IPO Director General and the Court of Appeals.

ISSUE

Whether or not petitioner’s use of“Dermaline Dermaline Inc”can result in confusion,

mistake or deception on the part of the purchasing public

RULING
 Yes.

A trademark is any distinctive word, name, symbol, emblem, sign, or device, or any
combination thereof, adopted and used by a manufacturer or merchant on his goods to identify
and distinguish them from those manufactured, sold, or dealt by others. As a registered trademark
owner, Myra has the right under Section 147 of R.A. No. 8293 to prevent third parties from using
a trademark, or similar signs or containers for goods or services, without its consent, identical or
similar to its registered trademark, where such use would result in a likelihood of confusion.

In determining likelihood of confusion, case law has developed two (2) tests, the
Dominancy Test and the Holistic or Totality Test. The Dominancy Test focuses on the similarity
of the prevalent features of the competing trademarks that might cause confusion or deception. It
is applied when the trademark sought to be registered contains the main, essential and dominant
features of the earlier registered trademark, and confusion or deception is likely to result.
Duplication or imitation is not even required; neither is it necessary that the label of the applied
mark for registration should suggest an effort to imitate. The important issue is whether the use
of the marks involved would likely cause confusion or mistake in the mind of or deceive the
ordinary purchaser, or one who is accustomed to buy, and therefore to some extent familiar with,
the goods in question. Given greater consideration are 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 test of dominancy is now explicitly incorporated into law in Section 155.1
of R.A. No. 8293 which provides—

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; (emphasis supplied)

On the other hand, the Holistic Test entails a consideration of the entirety of the marks as
applied to the products, including labels and packaging, in determining confusing similarity. The
scrutinizing eye of the observer must focus not only on the predominant words but also on the
other features appearing in both labels so that a conclusion may be drawn as to whether one is
confusingly similar to the other.

Relative to the question on confusion of marks and trade names, jurisprudence has noted
two (2) types of confusion, viz: (1) confusion of goods (product confusion), where the ordinarily
prudent purchaser would be induced to purchase one product in the belief that he was purchasing
the other; and (2) confusion of business (source or origin confusion), where, although the goods
of the parties are different, the product, the mark of which registration is applied for by one party,
is such as might reasonably be assumed to originate with the registrant of an earlier product, and
the public would then be deceived either into that belief or into the belief that there is some
connection between the two parties, though inexistent.

Both confusion of goods and service and confusion of business or of origin were apparent
in both trademarks. While there are no set rules that can be deduced as what constitutes a
dominant feature with respect to trademarks applied for registration; usually, what are taken into
account are signs, color, design, peculiar shape or name, or some special, easily remembered
earmarks of the brand that readily attracts and catches the attention of the ordinary consumer.

While it is true that the two marks are presented differently – Dermaline’s mark is written
with the first “DERMALINE” in script going diagonally upwards from left to right, with an upper
case “D” followed by the rest of the letters in lower case, and the portion “DERMALINE, INC.” is
written in upper case letters, below and smaller than the long-hand portion; while Myra’s mark
“DERMALIN” is written in an upright font, with a capital “D” and followed by lower case letters –
the likelihood of confusion is still apparent. This is because they are almost spelled in the same
way, except for Dermaline’s mark which ends with the letter “E,” and they are pronounced
practically in the same manner in three (3) syllables, with the ending letter “E” in Dermaline’s mark
pronounced silently. Thus, when an ordinary purchaser, for example, hears an advertisement of
Dermaline’s applied trademark over the radio, chances are he will associate it with Myra’s
registered mark.

Dermaline’s stance that its product belongs to a separate and different classification from
Myra’s products with the registered trademark does not eradicate the possibility of mistake on the
part of the purchasing public to associate the former with the latter, especially considering that
both classifications pertain to treatments for the skin.

Indeed, the registered trademark owner may use its 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 is cognizant that the registered trademark
owner enjoys protection in product and market areas that are the normal potential expansion of
his business.

Thus, the public may mistakenly think that Dermaline is connected to or associated with
Myra, such that, considering the current proliferation of health and beauty products in the market,
the purchasers would likely be misled that Myra has already expanded its business through
Dermaline from merely carrying pharmaceutical topical applications for the skin to health and
beauty services.
 Verily, when one applies for the registration of a trademark or label which is almost the
same or that very closely resembles one already used and registered by another, the application
should be rejected and dismissed outright, even without any opposition on the part of the owner
and user of a previously registered label or trademark. This is intended not only to avoid confusion
on the part of the public, but also to protect an already used and registered trademark and an
established goodwill.

Case number 45
ABS-CBN Broadcasting Corporation v Philippine Multi-Media System, Inc.
G.R. Nos. 175769-70, January 19, 2009

Facts:

Philippine Multi-Media System, Inc. (PMSI), operator of Dream Broadcsating System, delivers a
digital direct-to-home (DTH) television satellite to its subscribers all over the Philippines, was
granted a legislative franchise under Republic Act 8630 and was given a Provisional Authority by
the National Telecommunications Commission (NTC) to install, operate and maintain a
nationwide DTH satellite service. When it commenced operations, it offered as part of its program
line-up, together with other paid premium program channels, ABS-CBN Channels 2 and 23, NBN,
Channel 4, ABC, Channel 5, GMA, Channel 7, RPN, Channel 9, and IBC, Channel 13, pursuant
to Memorandum Circular 4-08-88 which mandated all cable television system operators,
operating within the Grade “A” and “B” CONTOURS to carry out the television signals of the
authorized television broadcast stations.

ABS-CBN Broadcasting Corporation (ABS-CBN), a licensed television and radio broadcasting

network, demanded PMSI to cease and desist from “rebroadcasting” Channels 2 and 23. In its
reply, PMSI contended that the “rebroadcasting” was in accordance with the authority granted by
NTC under its obligations under NTC MC 4-08-88.

Negotiations were ensued between the parties in an effort to reach a settlement; however, the
same was terminated by ABS-CBN allegedly due to PMSI’s inability to ensure the prevention of
illegal “retransmission” and further “rebroadcast” of its signals, as well as the adverse effect of the
rebroadcasts on the business operations of its regional television stations.

ABS-CBN filed with the Intellectual Property Rights Office (IPO) a complaint for “Violation of Laws
Involving Property Rights, with Prayer for the Issuance of a Temporary Restraining Order and/or
Writ of Preliminary Injunction” alleging that PMSI’s unauthorized rebroadcasting of Channels 2
and 23 infringed on its broadcasting rights and copyright. The TRO was granted by the Bureau of
Legal Affairs (BLA) of IPO. PMSI, pursuant to the TRO, suspended the retransmission of PMSI
of Channels 2 and 23 and likewise filed a petition for certiorari with the Court of Appeals. The
Court of Appeals granted the petition of PMSI and reversed the decision of the BLA. ABS-CBN
filed its appeal however it was dismissed by the Court of Appeals. Furthermore, ABS-CBN’s
motion for reconsideration was denied.
Issue:

1. Whether or not PMSI violated the Laws on Property Rights.

2. Whether or not the issuance MC 4-08-88 by the NTC is a valid exercise of the police power of
the State.

Held:

1. NO. PMSI did not violate the Laws on Property Rights because it is not engaged in
rebroadcasting Channels 2 and 23. Rebroadcasting has been defined as “the simultaneous
broadcasting by one broadcasting organization of the broadcast of another broadcasting
organization.” It is also “the transmission by wireless means for the public reception of sounds or
of images or of representations thereof; such transmission by satellite is also ‘broadcasting’ where
the means for decrypting are provided to the public by the broadcasting organization or with its
consent.” PMSI is only engaged in the carrying of signals of ABS-CBN coming from ABS-CBN
and transmitting signals. PMSI is not the origin nor does it claim to be the origin of the programs
broadcasted by the ABS-CBN. PMSI did not make and transmit on its own but merely carried the
existing signals of the ABS-CBN. When PMSI subscribers view ABS-CBN’s programs in Channels
2 and 23, they know that the origin thereof was the ABS-CBN.

The nature of broadcasting is to scatter the signals in its widest area of coverage as possible. On
this score, it may be said that making public means that accessibility is undiscriminating as long
as it is within the range of the transmitter and equipment of the broadcaster. That the medium
through which the PMSI carries the ABS-CBN’s signal, that is via satellite, does not diminish the
fact that it operates and functions as a cable television. It remains that the PMSI’s transmission
of signals via its DTH satellite television service cannot be considered within the purview of
broadcasting.

Furthermore, there is no rebroadcasting on the part of the PMSI of the ABS-CBM’s programs on
Channels 2 and 23, as defined under the Rome Convention, which defines rebroadcasting as “the
simultaneous broadcasting by one broadcasting organization of the broadcast of another
broadcasting organization.” ABS-CBN creates and transmits its own signals; PMSI merely carries
such signals which the viewers receive in its unaltered form. PMSI does not produce, select, or
determine the programs to be shown in Channels 2 and 23. Likewise, it does not pass itself off
as the origin or author of such programs. Insofar as Channels 2 and 23 are concerned, PMSI
merely retransmits the same in accordance with Memorandum Circular 04-08-88. With regard to
its premium channels, it buys the channels from content providers and transmits on an as-is basis
to its viewers. Clearly, PMSI does not perform the functions of a broadcasting organization; thus,
it cannot be said that it is engaged in rebroadcasting Channels 2 and 23.

Therefore, the retransmission of ABS-CBN’s signals by PMSI – which functions essentially as a

cable television – does not constitute rebroadcasting in violation of the former’s intellectual
property rights under the IP Code.
2.YES. The law on copyright is not absolute. The carriage of ABS-CBN’s signals by virtue of the
must-carry rule in Memorandum Circular No. 04-08-88 is under the direction and control of the
government though the NTC which is vested with exclusive jurisdiction to supervise, regulate and
control telecommunications and broadcast services/facilities in the Philippines. The imposition of
the must-carry rule is within the NTC’s power to promulgate rules and regulations, as public safety
and interest may require, to encourage a larger and more effective use of communications, radio
and television broadcasting facilities, and to maintain effective competition among private entities
in these activities whenever the Commission finds it reasonably feasible.

The “Must-Carry Rule” is in consonance with the principles and objectives underlying Executive
Order No. 436, to wit:

The Filipino people must be given wider access to more sources of news, information, education,
sports event and entertainment programs other than those provided for by mass media and
afforded television programs to attain a well informed, well-versed and culturally refined citizenry
and enhance their socio-economic growth.

Moreover, radio and television waves are mere franchised which may be reasonably burdened
with some form of public service. It is a privilege subject, among other things, to amendment by
Congress in accordance with the constitutional provision that “any such franchise or right granted
. . . shall be subject to amendment, alteration or repeal by the Congress when the common good
so requires.”

The must carry rule is a valid exercise of the police power of the State. It favors both broadcasting
organizations and the public. It prevents cable television companies from excluding broadcasting
organization especially in those places not reached by signal. Also, the rule prevents cable
television companies from depriving viewers in far-flung areas the enjoyment of programs
available to city viewers. In fact, this Office finds the rule more burdensome on the part of the
cable television companies. The latter carries the television signals and shoulders the costs
without any recourse of charging. On the other hand, the signals that are carried by cable
television companies are dispersed and scattered by the television stations and anybody with a
television set is free to pick them up.

Case number 46
FRANCISCO G. JOAQUIN, JR. and BJ PRODUCTIONS, INC. vs. HONORABLE RANKLIN M.
DRILON, GABRIEL ZOSA, WILLIAM ESPOSO, FELIPE MEDINA, JR., and CASEY
FRANCISCO
GR No. 108946, January 28, 1999

FACTS:
 Petitioner BJ Productions, Inc. (BJPI) is the holder / grantee of Certificate of Copyright No.
M922, dated January 28, 1971, of Rhoda and Me, a dating game show aired from 1970 to 1977.

On June 28, 1973, petitioner BJPI submitted to the National Library an addendum to its
certificate of copyright specifying the show’s format and style of presentation.

Upon complaint of petitioners, information for violation of PD No. 49 was filed against
private respondent Zosa together with certain officers of RPN 9 for airing It’s a Date. It was
assigned to Branch 104 of RTC Quezon City.

Zosa sought review of the resolution of the Assistant City Prosecutor before the
Department of Justice.

On August 12, 1992, respondent Secretary of Justice Franklin M. Drilon reversed the
Assistant City Prosecutor’s findings and directed him to move for the dismissal of the case against
private respondents.

Petitioner Joaquin filed motion for reconsideration but such was denied.

ISSUE:

Whether the format or mechanics or petitioner’s television show is entitled to copyright

protection.

HELD:

The Court ruled that the format of the show is not copyrightable. Sec. 2 of PD No. 49,
otherwise known as the Decree on Intellectual Property, enumerates the classes of work entitled
to copyright protection. The provision is substantially the same as Sec. 172 of the Intellectual
Property Code of the Philippines (RA 8293). The format or mechanics of a television show is not
included in the list of protected works in Sec. 2 of PD No. 49. For this reason, the protection
afforded by the law cannot be extended to cover them.
 Copyright, in the strict sense of the term, is purely a statutory right. It is a new independent right
granted by the statute and not simply a pre-existing right regulated by the statute. Being a
statutory grant, the rights are only such as the statute confers, and may be obtained and enjoyed
only with respect to the subjects and by the person and on terms and conditions specified in the
statute.

The Court is of the opinion that petitioner BJPI’s copyright covers audio-visual recordings of each
episode of Rhoda and Me, as falling within the class of works mentioned in PD 49.

The copyright does not extend to the general concept or format of its dating game show.

Mere description by words of the general format of the two dating game shows is insufficient; the
presentation of the master videotape in evidence was indispensable to the determination of the
existence of a probable cause.

A television show includes more than mere words can describe because it involves a whole
spectrum of visuals and effects, video and audio, such that no similarity or dissimilarity may be
found by merely describing the general copyright / format of both dating game shows.

Case number 47
Shangri-la International Hotel Management v. Developers Group of Companies (G.R. No.
159938)

Facts:

Respondent DGCI applied for and was granted registration of the ‘Shangri-La’ mark and ‘S’ logo
in its restaurant business. Petitioner Shangri-La, chain of hotels and establishments owned by the
Kuok family worldwide, moved to cancel the registration of the mark on the ground that it was
illegally and fraudulently obtained and appropriated by respondents. Petitioner also moved to
register the mark and logo in its own name. Later, respondent DGCI filed before the trial court a
complaint for infringement against petitioner alleging that DGCI had been the prior exclusive user
and the registered owner in the Philippines of said mark and logo. Petitioner Shangri-La argued
that respondent had no right to apply for the registration because it did not have prior actual
commercial use thereof. The trial court found for respondent. CA affirmed.
Issue:

Whether or not respondent’s prior use of the mark is a requirement for its registration.

Ruling:

YES.

While the present law on trademarks has dispensed with the requirement of prior actual use at
the time of registration, the law in force at the time of registration must be applied. Under the
provisions of the former trademark law, R.A. No. 166, as amended, hence, the law in force at the
time of respondent’s application for registration of trademark, the root of ownership of a trademark
is actual use in commerce. Section 2 of said law requires that before a trademark can be
registered, it must have been actually used in commerce and service for not less than two months
in the Philippines prior to the filing of an application for its registration. Trademark is a creation of
use and therefore actual use is a pre-requisite to exclusive ownership and its registration with the
Philippine Patent Office is a mere administrative confirmation of the existence of such right.

While the petitioners may not have qualified under Section 2 of R.A. No. 166 as a registrant,
neither did respondent DGCI, since the latter also failed to fulfill the 2-month actual use
requirement. What is worse, DGCI was not even the owner of the mark. For it to have been the
owner, the mark must not have been already appropriated (i.e., used) by someone else. At the
time of respondent DGCI’s registration of the mark, the same was already being used by the
petitioners, albeit abroad, of which DGCI’s president was fully aware.

Case number 48

CHESTER UYCO v. VICENTE LO

GR No. 202423, January 28, 2013

Facts:
The disputed marks in this case are the "HIPOLITO & SEA HORSE & TRIANGULAR DEVICE,"
"FAMA," and other related marks, service marks and trade names of Casa Hipolito S.A. Portugal
appearing in kerosene burners.

Respondent Vicente Lo and Philippine Burners Manufacturing Corporation (PBMC) filed a

complaint against the officers of Wintrade Industrial Sales Corporation (Wintrade), including
petitioners Chester Uyco, Winston Uychiyong and Cherry Uyco-Ong, and of National Hardware,
including Mario Sy Chua, for violation of Section 169.1, in relation to Section 170, of RA 8293.

After the preliminary investigation, the Chief State Prosecutor found probable cause to indict the
petitioners for violation of Section 169.1, in relation with Section 170, of RA 8293.

This law punishes any person who uses in commerce any false designation of origin which is
likely to cause confusion or mistake as to the origin of the product. The law seeks to protect the
public; thus, even if Lo does not have the legal capacity to sue, the State can still prosecute the
petitioners to prevent damage and prejudice to the public.

Issues:

Whether or not there is a probable cause to charge the petitioners with false designation of origin,
in violation of Section 169.1, in relation with Section 170, of Republic Act No. (RA) 8293, otherwise
known as the "Intellectual Property Code of the Philippines.

Ruling:

Thus, the evidence shows that petitioners, who are officers of Wintrade, placed the words "Made
in Portugal" and "Original Portugal" with the disputed marks knowing fully well because of their
previous dealings with the Portuguese company that these were the marks used in the... products
of Casa Hipolito S.A. Portugal.

More importantly, the products that Wintrade sold were admittedly produced in the Philippines,
with no authority from Casa Hipolito S.A. Portugal.
These facts support the consistent findings of the State Prosecutor, the DOJ and the CA that
probable cause exists to charge the petitioners with false designation of origin. The... fact that the
evidence did not come from Lo, but had been given by the petitioners, is of no significance.

The argument that the words "Made in Portugal" and "Original Portugal" refer to the origin of the
design and not to the origin of the goods does not negate the finding of probable cause; at the
same time, it is an argument that the petitioners are not barred by this Resolution from raising as
a defense during the hearing of the case.

CASE # 53

G.R. No. 217194

SOCIETE DES PRODUITS, NESTLE, S.A., Petitioner
vs.
PUREGOLD PRICE CLUB, INC.,, Respondent

NATURE:
Before the Court is a petition for review on certiorari1 assailing the 15 May 2014 Resolution2 and
the 14 October 2014 Resolution3 of the Court of Appeals (CA) in CA-G.R. SP No. 134592.

The Facts
Petitioner Societe des Produits Nestle, S.A. (Nestle) is a corporation organized and existing under
the laws of Switzerland which is engaged in the business of marketing and selling of coffee, ice
cream, chocolates, cereals, sauces, soups, condiment mixes, dairy and non-dairy products,
etc.4 Respondent Puregold Price Club, Inc. (Puregold) is a corporation organized under
Philippine law which is engaged in the business of trading goods such as consumer goods on
wholesale or on retail basis. On 14 June 2007, Puregold filed an application6 for the registration
of the trademark "COFFEE MATCH" with the lqtellectual Property Office (IPO). The registration
was filed by Puregold for use on coffee, tea, cocoa, sugar, artificial coffee, flour and preparations
made from cereals, bread, pastry and confectionery, and honey under Class 30 of the
International Classification of Goods. On 5 December 2008, Nestle filed an opposition8 against
Puregold's application for registration. Nestle alleged that it is the exclusive owner of the
"COFFEE-MATE" trademark and that there is confusing similarity between the "COFFEE-MATE"
trademark and Puregold's "COFFEE MATCH" application.9 Nestle alleged that "COFFEE-MATE"
has been declared an internationally well-known mark and Puregold's use of "COFFEE MATCH"
would indicate a connection with the goods covered in Nestle's "COFFEE-MATE" mark because
of its distinct similarity. Nestle claimed that it would suffer damages if the application were granted
since Puregold's "COFFEE MATCH" would likely mislead the public that the mark originated from
Nestle.

The Decision of the Bureau of Legal Affairs-Intellectual Property Office

In a Decision11 dated 16 April 2012, the Bureau of Legal Affairs Intellectual Property Office (BLA-
IPO) dismissed Nestle's opposition. The BLA-IPO ruled that Nestle's opposition was defective
because the verification and certification against forum shopping attached to Nestle's opposition
did not include a board of directors' resolution or secretary's certificate stating Mr. Dennis Jose R.
Barot's (Barot) authority to act on behalf of Nestle. The BLA-IPO ruled that the defect in Nestle's
opposition was sufficient ground to dismiss.12
The BLA-IPO held that the word "COFFEE" as a mark, or as part of a trademark, which is used
on coffee and similar or closely related goods, is not unique or highly distinctive. Nestle combined
the word "COFFEE" with the word "-MATE," while Puregold combined the word "COFFEE" with
the word "MATCH

Issues:
Nestle presented the following issues in this petition:
1. The Honorable Court of Appeals erred in dismissing petitioner's motion for reconsideration
upon an erroneous appreciation of certain antecedent facts, and similarly erred in dismissing the
petition for review onyrocedural grounds.
2. There is merit to the substantive issues raised by petitioner, which deserves to be given due
course and a final ruling.

The Ruling of this Court

We deny the petition.

Before discussing the substantive issues, we shall first discuss the procedural issues in this case.
Nestle filed its petition for review within the period granted by the Court of Appeals.
The CA dismissed Nestle's petition for review on the ground that Nestle filed its petition for review
after the 15-day reglementary period required by Section 4, Rule 43 of the Rules of Court.

The CA is wrong.

Puregold's mark may be registered.

A trademark is any distinctive word, name~ symbol, emblem, sign, or device, or any combination
thereof, adopted and used by a manufacturer or merchant on his goods to identify and distinguish
them from those manufactured, sold, or dealt by others.45 Section 123 of Republic Act No.
829346 (RA 8293) provides for trademarks which cannot be registered, to wit:

Sec. 123. Registrability. -

123 .1 A mark47 cannot be registered if it:
xxxx
(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:
(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;
(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 wellknown 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;
(g) Is likely to mislead the public, particularly as to the nature, quality, characteristics or
geographical origin of the goods or services;
(h) Consists exclusively of signs that are generic for the goods or services that they seek to
identify; x x x x (Emphasis supplied)

CASE number 54

GR No. 208090, Nov 09, 2016

FERDINAND V. TOMAS v. CRIMINAL INVESTIGATION DECISION

NATURE:
This is to resolve the Petition for Review on Certiorari under Rule 45 of the Rules of Court, dated
August 28, 2013, of petitioner Ferdinand V. Tomas that seeks to reverse and set aside the Court
of Appeals (CA) Decision[1] and Resolution,[2] dated March 25, 2013 and July 5, 2013,
respectively, the latter court affirming the Joint Resolution dated July 24, 2009 of the Secretary of
Justice, through the Chief State Prosecutor, finding probable cause against petitioner for
trademark infringement and unfair competition as defined and penalized under Sections 155 and
168, respectively, in relation to Section 170 of Republic Act (R.A.) No. 8293 otherwise known as
the Intellectual Property Code of the Philippines.

Facts:
Myrna Uy Tomas filed 2 complaints against Ferdinand V. Tomas and 1 complaint each against
Federico Ladines and Ryan T. Valdez for violations of Sections 155 and 168 (Trademark
Infringement and Unfair Competition) in relation to Section 170 of R.A. 8293.
Upon investigation, the Criminal Investigation and Detection Group (CIDG) of the Philippine
National Police procured 4 search warrants to search the premises of FMT Merchandising and
394 Cambayanan, which are both situated in Urdaneta City, Pangasinan.
The search warrants were signed by Police Chief Inspector Helsin B. Walin and approved by
Police Director and CIDG Chief, Edgardo Doromal and issued by Judge Reynaldo Ros from
Branch 33 of the Regional Trial Court in Manila.
The search resulted to the confiscation of the following items: 1 piece of Pedrollo JSWm/8H 0.75
Water Pump from FMT Merchandising, and 342 empty boxes of Pedrollo, 19 pieces of Pedrollo
terminal box covers, 31 pieces of Pedrollo electric water pump, 3 pieces of unserviceable Pedrollo
water pump, and 21 pieces of Pedrollo gauge from 394 Cambayanan.
Ferdinand filed a Motion to Quash the Search Warrant and/or to Suppress the Evidence obtained
by it, contending that all 4 search warrants were procured in violation of Section 12, Chapter V of
Administrative Matter No. 03-8-02 which directed that applications of search warrants in special
criminal cases filed in the Regional Trial Courts (RTC) of Manila and Quezon City should be
personally endorsed by the head of the agency.
In this case, although the search warrants were approved by CIDG Chief Doromal, the signatory
itself was by Chief Inspector Walin.
The RTC partially granted Ferdinand’s motion and quashed only two out of four of the search
warrants. However, upon the filing of a motion for reconsideration from Myrna, the court reversed
itself and set aside the former decision.
Ferdinand filed a Petition for Certiorari in the Court of Appeals (CA) to question the RTC decision.
The CA granted the Motion to Quash for all four search warrants, citing the rule in Section 12,
Chapter V of Administrative Matter No. 03-8-02.
Myrna’s motion for reconsideration was denied by the CA. Her subsequent petition for review on
certiorari in the Supreme Court was also dismissed for lack of sufficiency.
Meanwhile, the Department of Justice (DOJ) issued a joint resolution which found that the
complaint against Ferdinand Tomas for Trademark Infringement and Unfair Competition has
probable cause.
Ferdinand then applied a motion for reconsideration to the DOJ but it was denied. He filed a
petition for review before the CA which was also denied. In that same decision, the CA affirmed
the findings of the DOJ on the presence of probable cause. Upon motion for reconsideration, the
CA still denied his petition.

ISSUES:
(1) Did the decision of the CA violate the fundamental rule on immutability of a final judgment
when it affirmed the finding of probable cause by the DOJ despite approving the Motion to Quash
of the Search Warrants in an earlier decision?
(2) Did Ferdinand violate the rule against Forum Shopping when he filed for a Petition for Certiorari
(for the Motion to Quash Search Warrants) and a Petition for Review (for the DOJ’s finding of
probable cause) in the CA?

RULING:
(1) Yes, there was a violation of the rule on immutability of final judgments in this case. The CA’s
decision to quash the search warrants in question already attained finality before the affirmation
of the DOJ’s finding of probable cause. Therefore, the CA cannot later affirm that same DOJ
finding in its later petition.
However, the Supreme Court in this case clarified that the Search Warrants should not have been
invalidated based on Administrative Matter No. 03-8-02 alone, as this only constitutes a minor
defect that is not sufficient enough to render them nugatory.
Search Warrants can only be quashed on the grounds of (1) lack of specifications as to the place
to be searched and properties to be seized and (2) lack of probable cause.
(2) No, Ferdinand Tomas did not violate the rule against forum shopping because in his certificate
of non-forum shopping, he was able to notify the CA that the DOJ is also conducting a preliminary
investigation.
This decision however does not bar the DOJ from pursuing a case against Ferdinand Tomas
based on their findings for probable cause.
CASE number 55

G.R. No. 167715, 17 November 2010

Phil. Pharmawealth, Inc. v. Pfizer, Inc. & Pfizer (Phil.), Inc.
(Patent Infringement)

Facts:
Pfizer is the registered owner of a patent pertaining to Sulbactam Ampicillin. It is marketed under
the brand name “Unasyn.” Sometime in January and February 2003, Pfizer discovered that
Pharmawealth submitted bids for the supply of Sulbactam Ampicillin to several hospitals without
the Pfizer’s consent. Pfizer then demanded that the hospitals cease and desist from accepting
such bids. Pfizer also demanded that Pharmawealth immediately withdraw its bids to supply
Sulbactam Ampicillin. Pharmawealth and the hospitals ignored the demands.

Pfizer then filed a complaint for patent infringement with a prayer for permanent injunction and
forfeiture of the infringing products. A preliminary injunction effective for 90 days was granted by
the IPO’s Bureau of Legal Affairs (IPO-BLA). Upon expiration, a motion for extension filed by
Pfizer was denied. Pfizer filed a Special Civil Action for Certiorari in the Court of Appeals (CA)
assailing the denial.

While the case was pending in the CA, Pfizer filed with the Regional Trial Court of Makati (RTC)
a complaint for infringement and unfair competition, with a prayer for injunction. The RTC issued
a temporary restraining order, and then a preliminary injunction.

Pharmawealth filed a motion to dismiss the case in the CA, on the ground of forum shopping.
Nevertheless, the CA issued a temporary restraining order. Pharmawealth again filed a motion to
dismiss, alleging that the patent, the main basis of the case, had already lapsed, thus making the
case moot, and that the CA had no jurisdiction to review the order of the IPO-BLA because this
was granted to the Director General. The CA denied all the motions. Pharmawealth filed a petition
for review on Certiorari with the Supreme Court.

Issues:

a) Can an injunctive relief be issued based on an action of patent infringement when the patent
allegedly infringed has already lapsed?
b) What tribunal has jurisdiction to review the decisions of the Director of Legal Affairs of the
Intellectual Property Office?
c) Is there forum shopping when a party files two actions with two seemingly different causes of
action and yet pray for the same relief?

Held:

a) No. The provision of R.A. 165, from which the Pfizer’s patent was based, clearly states that
"[the] patentee shall have the exclusive right to make, use and sell the patented machine, article
or product, and to use the patented process for the purpose of industry or commerce, throughout
the territory of the Philippines for the term of the patent; and such making, using, or selling by any
person without the authorization of the patentee constitutes infringement of the patent."

Clearly, the patentee’s exclusive rights exist only during the term of the patent. Since the patent
was registered on 16 July 1987, it expired, in accordance with the provisions of R.A. 165, after 17
years, or 16 July 2004. Thus, after 16 July 2004, Pfizer no longer possessed the exclusive right
to make, use, and sell the products covered by their patent. The CA was wrong in issuing a
temporary restraining order after the cut-off date.

b) According to IP Code, the Director General of the IPO exercises exclusive jurisdiction over
decisions of the IPO-BLA. The question in the CA concerns an interlocutory order, and not a
decision. Since the IP Code and the Rules and Regulations are bereft of any remedy regarding
interlocutory orders of the IPO-BLA, the only remedy available to Pfizer is to apply the Rules and
Regulations suppletorily. Under the Rules, a petition for certiorari to the CA is the proper remedy.
This is consistent with the Rules of Court. Thus, the CA had jurisdiction.

c) Yes. Forum shopping is defined as the act of a party against whom an adverse judgment has
been rendered in one forum, of seeking another (and possibly favorable) opinion in another forum
(other than by appeal or the special civil action of certiorari), or the institution of two (2) or more
actions or proceedings grounded on the same cause on the supposition that one or the other
court would make a favorable disposition.

The elements of forum shopping are: (a) identity of parties, or at least such parties that represent
the same interests in both actions; (b) identity of rights asserted and reliefs prayed for, the reliefs
being founded on the same facts; (c) identity of the two preceding particulars, such that any
judgment rendered in the other action will, regardless of which party is successful, amount to res
judicata in the action under consideration. This instance meets these elements.

The parties are clearly identical. In both the complaints in the BLA-IPO and RTC, the rights
allegedly violated and the acts allegedly violative of such rights are identical, regardless of
whether the patents on which the complaints were based are different. In both cases, the ultimate
objective of Pfizer was to ask for damages and to permanently prevent Pharmawealth from selling
the contested products. Relevantly, the Supreme Court has decided that the filing of two actions
with the same objective, as in this instance, constitutes forum shopping.

Owing to the substantial identity of parties, reliefs and issues in the IPO and RTC cases, a
decision in one case will necessarily amount to res judicata in the other action.

CASE number 56

G.R. No. 162311 December 4, 2008

LEVI STRAUSS (PHILS.), INC. vs.TONY LIM
Facts:
In 1972, LS & Co. granted petitioner a non-exclusive license to use its registered trademarks and
trade names[6] for the manufacture and sale of various garment products, primarily pants, jackets,
and shirts, in the Philippines.
Sometime in 1995, petitioner lodged a complaint[10] before the Inter-Agency Committee on
Intellectual Property Rights, alleging that a certain establishment in Metro Manila was
manufacturing garments using colorable imitations of the LEVI'S trademarks.
(1) a slavish imitation of petitioner's "arcuate" trademark has been stitched on the backpocket of
"LIVE'S" jeans;
(2) the appearance of the mark "105" on... respondent's product is obviously a play on petitioner's
"501" trademark
(3) the appearance of the word/phrase "LIVE'S" and "LIVE'S ORIGINAL JEANS" is confusingly
similar to petitioner's "LEVI'S" trademark;
(4) a red tab, made of fabric, attached at the left seam of the right... backpocket of petitioner's
standard five-pocket jeans, also appears at the same place on "LIVE'S" jeans;
(5) the patch used on "LIVE'S" jeans (depicting three men on each side attempting to pull apart a
pair of jeans) obviously thrives on petitioner's own patch showing two... horses being whipped by
two men in an attempt to tear apart a pair of jeans;
(6) "LEVI'S" jeans are packaged and sold with carton tickets, which are slavishly copied by
respondent in his own carton ticket bearing the marks "LIVE'S," "105," the horse mark, and basic
features... of petitioner's ticket designs, such as two red arrows curving and pointing outward, the
arcuate stitching pattern, and a rectangular portion with intricate border orientation.[
Issues:
In essence, petitioner asks this Court to determine if probable cause exists to charge respondent
with the crime of unfair competition under Article 189(1) of the Revised Penal Code, prior to its
repeal by Section 239 of RA No. 8293.

Ruling:
Now, even if We brush aside technicalities and consider the petition for review filed with the CA
as one under Rule 65, the petition must fail just the same.
In finding that respondent's goods were not clothed with an appearance which is likely to deceive
the ordinary purchaser exercising ordinary care, the investigating prosecutor exercised the
discretion lodged in him by law.
We are disinclined to find that grave of abuse of discretion was committed when records show
that the finding of no probable cause is supported by the evidence, law, and jurisprudence.
While it is true that there may be unfair competition even if the competing mark is registered in
the Intellectual Property Office, it is equally true that the same may show prima facie good faith.

Principles:
The elements of unfair competition under Article 189(1)[63] of the Revised Penal Code are:
(a)
That the offender gives his goods the general appearance of the goods of another manufacturer
or dealer;
(b)
That the general appearance is shown in the (1) goods themselves, or in the (2) wrapping of their
packages, or in the (3) device or words therein, or in (4) any other feature of their appearance;
(c)
That the offender offers to sell or sells those goods or gives other persons a chance or opportunity
to do the same with a like purpose; and
(d)
That there is actual intent to deceive the public or defraud a competitor.
However, the mark's registration, coupled with the stark differences between the competing
marks, negate the existence... of actual intent to deceive, in this particular case.
Case number 57
And 60 – PDF FORMAT

CASE NUMBER 63

DIVINA PALAO VS. FLORENTINO INTERNATIONAL, INC.

G.R. No.186967

January 18, 2017

FACTS
Florentino International, Inc. filed a Petition for Cancellation of Letters Patent No. UM-
7789, which the Intellectual Property Office had issued in favor of Palao. Letters Patent No. UM-
7789 pertained to "A Ceramic Tile Installation on Non-Concrete Substrate Base Surfaces Adapted
to Form Part of Furniture, Architectural Components and the Like. Florentino claimed that the
utility model covered by Letters Patent No. UM-7789 was not original, new, or patentable, as it
had been publicly known or used in the Philippines and had even been the subject of several
publications. It added that it, as well as many others, had been using the utility model well before
Palao' s application for a patent.
The Bureau of Legal Affairs of the Intellectual Property Office denied Florentino's Petition
for Cancellation. It noted that the testimony and pictures, which Florentino offered in evidence,
failed to establish that the utility model subject of Letters Patent No. UM-7789 was publicly known
or used before Palao' s application for a patent.
Florentino appealed to the Office of the Director General of the Intellectual Property Office.
This appeal's Verification and Certification of Non-Forum Shopping was signed but he failed to
attach to its appeal a secretary's certificate or board resolution authorizing the lawyers to sign the
Verification and Certification of Non-Forum Shopping. Thus, the Office of the Director General
issued the Order requiring Florentino to submit proof that the lawyers representing him was
authorized to sign the Verification and Certification of Non-Forum Shopping.
Florentino filed a Compliance, but Intellectual Property Office Director General dismissed
Florentino's appeal on the ground that the Secretary's Certificate pertained to an August 14, 2008
Resolution issued by Florentino' s Board of Directors, and reasoned that the same Certificate
failed to establish the authority of Florentino's counsel to sign the Verification and Certification of
Non-Forum Shopping as of the date of the filing of Florentino's appeal. Florentino then filed before
the Court of Appeals a Petition for Review under Rule 43 of the 1997 Rules of Civil Procedure.
The Court of Appeals faulted Director General for an overly strict application of procedural rules.
Thus, it reversed Director General’s Order and reinstated Florentino' s appeal.

ISSUE
Whether or not Court of Appeals erred in reversing the Order of Intellectual Property Office
Director General and in reinstating respondent’s appeal.
RULING
The Supreme Court held there is a need for a certification of non-forum shopping to be
attached to respondent's appeal before the Office of the Director General of the Intellectual
Property Office. Section 3 of the Intellectual Property Office's Uniform Rules on Appeal specifies
the form through which appeals may be taken to the Director General: Section 3. Appeal
Memorandum. - The appeal shall be perfected by filing an appeal memorandum in three (3) legible
copies with proof of service to the Bureau Director and the adverse party, if any, and upon
payment of the applicable fee, Reference Code 127 or 128, provided in the IPO Fee Structure.
These requirements notwithstanding, the Intellectual Property Office's own Regulations
on Inter Partes Proceedings specify that the Intellectual Property Office "shall not be bound by
the strict technical rules of procedure and evidence. It was an error for the Director General of the
Intellectual Property Office to have been so rigid in applying a procedural rule and dismissing
respondent's appeal.

CASE NUMBER 64

CHING VS. SALINAS

G.R. No.161295

June 29, 2005

FACTS
Petitioner Ching is a maker and manufacturer of a utility model, Leaf Spring Eye Bushing
for Automobile, for which he holds certificates of copyright registration. Petitioner’s request to the
NBI to apprehend and prosecute illegal manufacturers of his work led to the issuance of search
warrants against respondent Salinas, alleged to be reproducing and distributing said models in
violation of the IP Code. Respondent moved to quash the warrants on the ground that petitioner’s
work is not artistic in nature and is a proper subject of a patent, not copyright. Petitioner insists
that the IP Code protects a work from the moment of its creation regardless of its nature or
purpose. The trial court quashed the warrants. Petitioner argues that the copyright certificates
over the model are prima facie evidence of its validity. CA affirmed the trial court’s decision.
ISSUES
Whether or not petitioner’s model is an artistic work subject to copyright protection.
Whether or not petitioner is entitled to copyright protection on the basis of the certificates of
registration issued to it.
RULING
Petitioner’s model is not an artistic work subject to copyright protection. As gleaned from
the specifications appended to the application for a copyright certificate filed by the petitioner, the
said Leaf Spring Eye Bushing for Automobile and Vehicle Bearing Cushion are merely utility
models. As gleaned from the description of the models and their objectives, these articles are
useful articles which are defined as one having an intrinsic utilitarian function that is not merely to
portray the appearance of the article or to convey information. Plainly, these are not literary or
artistic works. They are not intellectual creations in the literary and artistic domain, or works of
applied art. They are certainly not ornamental designs or one having decorative quality or value.
Indeed, while works of applied art, original intellectual, literary and artistic works are copyrightable,
useful articles and works of industrial design are not. A useful article may be copyrightable only if
and only to the extent that such design incorporates pictorial, graphic, or sculptural features that
can be identified separately from, and are capable of existing independently of the utilitarian
aspects of the article. In this case, the bushing and cushion are not works of art. They are, as the
petitioner himself admitted, utility models which may be the subject of a patent.
Petitioner is not entitled to copyright protection on the basis of the certificates issued to it.
No copyright granted by law can be said to arise in favor of the petitioner despite the issuance of
the certificates of copyright registration and the deposit of the Leaf Spring Eye Bushing and
Vehicle Bearing Cushion. Indeed, in Joaquin, Jr. v. Drilon and Pearl & Dean (Phil.), Incorporated
v. Shoemart, Incorporated, the Court ruled that:

Copyright, in the strict sense of the term, is purely a statutory right. It is a new or
independent right granted by the statute, and not simply a pre-existing right regulated by it. Being
a statutory grant, the rights are only such as the statute confers, and may be obtained and enjoyed
only with respect to the subjects and by the persons, and on terms and conditions specified in the
statute. Accordingly, it can cover only the works falling within the statutory enumeration or
description.
Ownership of copyrighted material is shown by proof of originality and copyrightability. To
discharge his burden, the applicant may present the certificate of registration covering the work
or, in its absence, other evidence. A copyright certificate provides prima facie evidence of
originality which is one element of copyright validity. It constitutes prima facie evidence of both
validity and ownership and the validity of the facts stated in the certificate.

Case number 65
ELIDAD KHO and VIOLETA KHO versus HON. ENRICO LANZANAS,
G.R. No. 150877

Facts:
Shun Yih Chemistry Factory (SYCF), a business existing and operating in Taiwan and engaged
in the manufacture and sale of Chin Chun Su Creams/Cosmetics, appointed Young Factor
Enterprises in the Philippines, owned and operated by Quintin Cheng also known as Kho Seng
Hiok, as its distributor of Chin Chun Su products in the Philippines for a term of two years. Quintin
Cheng registered with the Bureau of Food and Drugs (BFAD) as distributor of Chin Chun Su
products. Quintin Cheng subsequently secured a supplemental registration for Chin Chun Su and
device.[2] This supplemental registration was ordered cancelled by the Bureau of Patents,
Trademarks and Technology Transfer[3] on the ground of failure of the registrant to file the
required affidavit of non-use as required by Section 12 of Republic Act No. 166, as amended
Notwithstanding this cancellation, Quintin Cheng executed on 30 January 1990 an Assignment of
a Registered Trademark and a Supplementary Deed of Assignment dated 25 November 1991
wherein he sold all his right, title, interest and goodwill in the trademark Chin Chun Su and device
to petitioner Elidad Kho.
Animosity arose between SYCF and Quintin Cheng resulting in the termination of their
distributorship agreement on 30 October 1990.
Consequently, on 30 November 1990, SYCF appointed respondent Summerville General
Merchandising, represented by Ang Tiam Chay and Victor Chua, as its exclusive importer, re-
packer and distributor of Chin Chun Su products in the Philippines[8] for a period of five years or
until May 2005.
Elidad Kho/KEC Laboratory filed a Complaint for Injunction and Damages against Ang Tiam Chay
and Summerville General Merchandising before the RTC Plaintiff therein Elidad Kho/KEC
Laboratory sought to enjoin defendants Ang Tiam Chay and Summerville General Merchandising
from using the name Chin Chun Su in their cream products.
On 22 January 1993, a decision in Civil Case No. Q-91-10926 was rendered, the dispositive
portion of which provides:
ACCORDINGLY, judgment is hereby rendered:
1. Declaring that plaintiff is not legally authorized to use the trademark CHIN CHUN SU and
upholding the right of defendant Summerville General Merchandising & Co. to use said trademark
as authorized by Shun Yih Chemistry Factory of Taiwan;
2. Declaring plaintiff to have the right to use the copyright claim on OVAL FACIAL CREAM
CONTAINER/CASE by virtue of Certificate of Copyright Registration No. 3687 issued by the
National Library on May 23, 1991;
Both parties to pay proportionate fees.[10]
Both parties appealed the RTC decision to the Court of Appeals, docketed as CA-G.R. CV NO.
48043 entitled, Elidad C. Kho, doing business under the style of KEC Cosmetic Laboratory v.
Summerville General Merchandising and Co., et al. In a decision[11] dated 22 November 1999,
the appellate court affirmed in toto the decision of the trial court.[12] Elidad Kho elevated the case
to this Court, In a resolution dated 28 August 2000,
Issue:
Who between petitioner Elidad C. Kho and respondent Summerville General Merchandising and
Company has the better right to use the trademark Chin Chun Su on their facial cream product?
Ruling:
we denied the petition. We held that: We agree with both the Court of Appeals and the trial court
that Summerville General Merchandising and Company has the better right to use the trademark
Chin Chun Su on its facial cream product by virtue of the exclusive importation and distribution
rights given to it by Shun Yih Chemistry Factory of Taiwan on November 20, 1990 after the latter
cancelled and terminated on October 30, 1990 its Sole Distributorship Agreement with one Quintin
Cheng, who assigned and transferred his rights under said agreement to petitioner Elidad C. Kho
on January 31, 1990.
As correctly held by the Court of Appeals, petitioner Kho is not the author of the trademark Chin
Chun Su and his only claim to the use of the trademark is based on the Deed of Agreement
executed in his favor by Quintin Cheng. By virtue thereof, he registered the trademark in his name.
The registration was a patent nullity because petitioner is not the creator of the trademark Chin
Chun Su and, therefore, has no right to register the same in his name. Furthermore, the authority
of Quintin Cheng to be the sole distributor of Chin Chun Su in the Philippines had already been
terminated by Shun Yih Chemistry of Taiwan. Withal, he had no right to assign or to transfer the
same to petitioner Kho.
WHEREFORE, the instant petition is hereby denied due course.[13]

Case number 66
Fredco Manufacturing Corporation v. President and Fellows of Harvard College
G.R. No 185917, June 11, 2011
Facts:
Petitioner Fredco Manufacturing filed a petition to cancel the registration of respondent’s mark
‘Harvard Veritas Shield Symbol’ used in products such as bags and t-shirts. Fredco alleges that
the mark ‘Harvard’ was first used and registered by New York Garments, a domestic corporation
and its predecessor-in-interest, used in its clothing articles. Respondent Harvard University on
the other hand, alleges that it is the lawful owner of the name and mark in numerous countries
worldwide including in the Philippines which was used in commerce as early as 1872. Respondent
further contend that it never authorized any person to use its name or mark in connection with
any goods in the Philippines. The IPO Bureau of Legal Affairs cancelled respondent’s registration
of the mark but only over the goods which are confusingly similar with that of petitioner. IPO
reversed the decision. CA affirmed.
Issue:
Whether or not respondent’s trade name is infringed.
Ruling: YES.
Fredco’s use of the mark “Harvard,” coupled with its claimed origin in Cambridge, Massachusetts,
obviously suggests a false connection with Harvard University. On this ground alone, Fredco’s
registration of the mark “Harvard” should have been disallowed. Indisputably, Fredco does not
have any affiliation or connection with Harvard University, or even with Cambridge,
Massachusetts. Fredco or its predecessor New York Garments was not established in 1936, or
in the U.S.A. as indicated by Fredco in its oblong logo.
Under Philippine law, a trade name of a national of a State that is a party to the Paris Convention,
whether or not the trade name forms part of a trademark, is protected “without the obligation of
filing or registration.” “Harvard” is the trade name of the world famous Harvard University, and it
is also a trademark of Harvard University. Under Article 8 of the Paris Convention, as well as
Section 37 of R.A. No. 166, Harvard University is entitled to protection in the Philippines of its
trade name “Harvard” even without registration of such trade name in the Philippines. This means
that no educational entity in the Philippines can use the trade name “Harvard” without the consent
of Harvard University. Likewise, no entity in the Philippines can claim, expressly or impliedly
through the use of the name and mark “Harvard,” that its products or services are authorized,
approved, or licensed by, or sourced from, Harvard University without the latter’s consent.