THE LAW ON TRADEMARKS, SERVICE
MARKS AND TRADE NAMES Following universal acquiescence and comity, our municipal law
Purpose of the Trademark Law
Case: Philip Morris vs. Fortune Tobacco
This is a petition for review under Rule 45 of the Rules of
Court, to seek the reversal and setting aside of the following
issuances of the Court of Appeals (CA).
Petitioner Philip Morris, Inc., a corporation organized under
the laws of the State of Virginia, United States of America, is,
per Certificate of Registration No. 18723 issued on April 26,
1973 by the Philippine Patents Office (PPO), the registered
owner of the trademark MARK VII for cigarettes. Similarly,
petitioner Benson & Hedges (Canada), Inc., a subsidiary of
Philip Morris, Inc., is the registered owner of the
trademark MARK TEN for cigarettes as evidenced by PPO
Certificate of Registration No. 11147. And as can be seen in
Trademark Certificate of Registration No. 19053, another
subsidiary of Philip Morris, Inc., the Swiss company Fabriques
de Tabac Reunies, S.A., is the assignee of the
trademark LARK, which was originally registered in 1964 by
Ligget and Myers Tobacco Company. On the other hand,
respondent Fortune Tobacco Corporation, a company
organized in the Philippines, manufactures and sells cigarettes
using the trademark MARK.
Philip Morris, Inc. and two other petitioners are ascribing
whimsical exercise of the faculty conferred upon magistrates
by Section 6, Rule 58 of the Revised Rules of Court when
respondent Court of Appeals lifted the writ of preliminary
injunction it earlier had issued against Fortune Tobacco
Corporation, from manufacturing and selling “MARK”
cigarettes in the local market. Banking on the thesis that
petitioners’ respective symbols “MARK VII”, ‘MARK TEN”,
and “MARK”, also for cigarettes, must be protected against
unauthorized appropriation.
All petitioners are not doing business in the Philippines but are
suing on an isolated transaction, They Invoked provisions of
the Paris Convention for the Protection of Industrial and
Intellectual Property. As corporate nationals of member-
countries of the Paris Union, they can sue before Philippine
courts for infringement of trademarks, or for unfair
competition, without need of obtaining registration or a license
to do business in the Philippines, and without necessity of
actually doing business in the Philippines.
Philip Morris and its subsidiaries filed the complaint for
infringement and damages against Fortune Tobacco before the
Pasig Regional Trial Court (RTC) for manufacturing and
selling cigarettes bearing the trademark “Mark” which is
identical and confusingly similar to Philip Morris trademarks.
The said act was dismissed. Hence, this petition at bar.
Issue/s: Whether or not there has been an invasion of
plaintiffs’ right of property to such trademark or trade name.
Discussions:
on trademarks regarding the requirement of actual use in the
Philippines must subordinate an international agreement
inasmuch as the apparent clash is being decided by a municipal
tribunal. Withal, the fact that international law has been made
part of the law of the land does not by any means imply the
primacy of international law over national law in the municipal
sphere. Under the doctrine of incorporation as applied in most
countries, rules of international law are given a standing equal,
not superior, to national legislative enactments
The protection of trademarks is the laws recognition of the
psychological function of symbols. If it is true that we live by
symbols, it is no less true that we purchase goods by them. A
trade-mark is a merchandising short-cut which induces a
purchaser to select what he wants, or what he has been led to
believe what he wants. The owner of a mark exploits this human
propensity by making every effort to impregnate the atmosphere
of the market with the drawing power of a congenial
symbol. Whatever the means employed the aim is the same - to
convey through the mark, in the minds of potential customers, the
desirability of the commodity upon which it appears. Once this is
attained, the trade-mark owner has something of value. If another
poaches upon the commercial magnetism of the symbol he has
created, the owner can obtain legal redress.
Definitions of marks, collective marks, trade
names (Memorize)
Section 121. Definitions. - As used in Part III, the
following terms have the following meanings:
121.1. "Mark" means any visible sign capable of
distinguishing the goods (trademark) or services (service
mark) of an enterprise and shall include a stamped or
marked container of goods; (Sec. 38, R.A. No. 166a)
121.2. "Collective mark" means any visible sign
designated as such in the application for registration and
capable of distinguishing the origin or any other common
characteristic, including the quality of goods or services of
different enterprises which use the sign under the control
of the registered owner of the collective mark; (Sec. 40,
R.A. No.166a)
121.3. "Trade name" means the name or designation
identifying or distinguishing an enterprise; (Sec. 38, R.A.
No. 166a)
121.4. "Bureau" means the Bureau of Trademarks;
121.5. "Director" means the Director of Trademarks;
121.6. "Regulations" means the Rules of Practice in
Trademarks and Service Marks formulated by the Director
of Trademarks and approved by the Director General; and
121.7. "Examiner" means the trademark examiner. (Sec.
38, R.A. No. 166a)
Case: Mirpuri vs CA
In 1970, Escobar filed an application with the Bureau of Patents
for the registration of the trademark “Barbizon” for use in
horsiers and ladies undergarments (IPC No. 686). Private
respondent reported Barbizon Corporation, a corporation
organized and doing business under the laws of New York,
USA, opposed the application. It was alleged that its trademark
is confusingly similar with that of Escobar and that the
registration of the said trademark will cause damage to its
business reputation and goodwill.
In 1974, the Director of Patents gave due course to
the application. Escobar later assigned all his rights and interest
over the trademark to petitioner. In 1979, Escobar failed
to file with the Bureau the affidavit of use of the trademark
required under the Philippine Trademark Law.
Due to this failure, the Bureau cancelled Escobar’s certificate of
registration. In 1981, Escobar and petitioner separately filed
this application for registration of the same trademark. (IPC
2049). Private respondent opposed again. This time it alleged (1)
that the said trademark was registered with the US Patent Office;
(2) that it is entitled to protection as well-known mark under
Article 6 bis of the Paris Convention, EO 913 and the two
Memoranda of the Minister of Trade and Industry and (3) that
its use on the same class of goods amounts to a violation of the
Trademark Law and Art. 189 of the RPC. Petitioner raised the
defense of Res Judicata.
Issue: One of the requisites of res judicata is identical causes of
action. Do IPC No. 686 and IPC No. 2049 involve the same
cause of action?
Held: No. The issue of ownership of the trademark was not
raised in IPC 686. IPC 2049 raised the issue of ownership, the
first registration and use of the trademark in the US and other
countries, and the international recognition of the trademark
established by extensive use and advertisement of respondents
products for over 40 years here and abroad. These are different
from the issues of confessing similarity and damage in IPC 686.
The issue of prior use may have been raised in IPC 686 but this
claim was limited to prior use in the Philippines only.
Prior use in IPC 2049 stems from the respondents claims
originator of the word and symbol “Barbizon”, as the first
and registered user of the mark attached to its products which
have been sold and advertised would arise for a considerable
number of years prior to petitioner’s first application. Indeed,
these are substantial allegations that raised new issues and
necessarily gave respondents a new cause of action.
Moreover, the cancellation of petitioner’s certificate registration
for failure to file the affidavit of use arose after IPC 686. This
gave respondent another cause to oppose the second application.
It is also to be noted that the oppositions in the first and second
cases are based on different laws. Causes of action which are
distinct and independent from each other, although out of the
same contract, transaction, or state of facts, may be sued on
separately, recovery on one being no bar to subsequent actions
on others. The mere fact that the same relief is sought in the
subsequent action will not render the judgment in the prior
action operating as res judicata, such as where the actions are
based on different statutes.
Issue: Whether or not the treaty (Paris Convention) affords
protection to a foreign corporation against a Philippine applicant
for the registration of a similar trademark.
Held:
The Court held in the affirmative. RA 8293 defines trademark as
any visible sign capable of distinguishing goods. The Paris
Convention is a multilateral treaty that seeks to protect industrial
property consisting of patents, utility models, industrial designs,
trademarks, service marks, trade names and indications of source
or appellations of origin, and at the same time aims to repress
unfair competition. In short, foreign nationals are to be given the
same treatment in each of the member countries as that country
makes available to its own citizens. Nationals of the various
member nations are thus assured of a certain minimum of
international protection of their industrial property.
Case: Berris Agricultural vs. Norby Abyadang
Abyadang filed a trademark application with the IPO for the
mark "NS D-10 PLUS" for use in connection with Fungicide.
Berris Agricultural Co., Inc. filed an opposition against the
trademark citing that it is confusingly similar with their
trademark, "D-10 80 WP" which is also used for Fungicide also
with the same active ingredient.
The IPO ruled in favor of Berries but on appeal with the CA, the
CA ruled in favor of Abyadang.
Issue: Whether there is confusing similarity between the
trademarks.
Held:
Yes. The SC found that both products have the component D-10
as their ingredient and that it is the dominant feature in both their
marks. Applying the Dominancy Test, Abyadang's product is
similar to Berris' and that confusion may likely to occur
especially that both in the same type of goods. Also using the
Holistic Test, it was more obvious that there is likelihood of
confusion in their packaging and color schemes of the marks.
The SC states that buyers would think that Abyadang's product is
an upgrade of Berris'.
R.A. No. 8293 defines a mark as any visible sign capable of
distinguishing the goods (trademark) or services (service mark)
of an enterprise and shall include a stamped or marked container
of goods. It also defines a collective mark as any visible sign
designated as such in the application for registration and capable
of distinguishing the origin or any other common characteristic,
including the quality of goods or services of different enterprises
which use the sign under the control of the registered owner of
the collective mark.
According to Section 123.1(d) of R.A. No. 8293, 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: (1) the same goods or services; (2) closely related
goods or services; or (3) near resemblance of such mark as to
likely deceive or cause confusion.
In determining similarity and likelihood of confusion,
jurisprudence has developed tests: the Dominancy Test and the
Holistic or Totality Test.
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.
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.
Case: Canon Kabushiki vs. CA
On January 15, 1985, private respondent NSR Rubber
Corporation filed an application for registration of the mark
CANON for sandals in the Bureau of Patents, Trademarks, and
Technology Transfer (BPTTT). Canon Kabushiki Kaisha filed a
Verified Notice of Opposition alleging that it will be damaged by
the registration of the trademark CANON in the name of private
respondent since they were using the same trademark for their
footwear line of products. The private respondent will also use
the name Canon for its footwear products.
Based on the records, the evidence presented by petitioner
consisted of its certificates of registration for the mark CANON
in various countries covering goods belonging to class 2, paints,
chemical products, toner, and dye stuff. Petitioner also submitted
in evidence its Philippine Trademark Registration No. 39398,
showing its ownership over the trademark CANON.
The BPTTT, on November 10, 1992, issued its decision
dismissing the opposition of petitioner and giving due course to
NSR's application for the registration of the trademark CANON.
Canon Kabushiki Kaisha filed an appeal with the Court of
Appeals that eventually affirmed the decision of the BPTTT.
The BPTTT and the Court of Appeals share the opinion that the
trademark "CANON" as used by petitioner for its paints,
chemical products, toner, and dyestuff, can be used by private
respondent for its sandals because the products of these two
parties are dissimilar. Petitioner protests the appropriation of the
mark CANON by private respondent on the ground that
petitioner has used and continues to use the trademark CANON
on its wide range of goods worldwide.
Allegedly, the corporate name or trade name of petitioner is also
used as its trademark on diverse goods including footwear and
other related products like shoe polisher and polishing agents. To
lend credence to its claim, petitioner points out that it has
branched out in its business based on the various goods carrying
its trademark CANON, including footwear which petitioner
contends covers sandals, the goods for which private respondent
sought to register the mark CANON. For petitioner, the fact
alone that its trademark CANON is carried by its other products
like footwear, shoe polisher and polishing agents should have
precluded the BPTTT from giving due course to the application
of private respondent.
Issue: Is the use of trademark, CANON, by the private
respondent affects the business of Canon Kabushiki Kaisha who
has an existing ownership of a trademark also known as
CANON?
Held:
The Supreme Court says that ordinarily, the ownership of a
trademark or trade name is a property right that the owner is
entitled to protect as mandated by the Trademark Law. However,
when a trademark is used by a party for a product in which the
other party does not deal, the use of the same trademark on the
latter's product cannot be validly objected to.
The BPTTT correctly ruled that since the certificate of
registration of petitioner for the trademark CANON covers class
2 (paints, chemical products, toner, dyestuff), private respondent
can use the trademark CANON for its goods classified as class
25 (sandals). Clearly, there is a world of difference between the
paints, chemical products, toner, and dyestuff of petitioner and
the sandals of private respondent.
Undoubtedly, the paints, chemical products, toner and dyestuff
of petitioner that carry the trademark CANON are unrelated to
sandals, the product of private respondent. We agree with the
BPTTT, following the Esso doctrine, when it noted that the two
classes of products in this case flow through different trade
channels. The products of petitioner are sold through special
chemical stores or distributors while the products of private
respondent are sold in grocery stores, sari-sari stores and
department stores.
Guidelines in the implementation of Article 6bis (sic) of the
Treaty of Paris. These conditions are:
a) the mark must be internationally known;
b) the subject of the right must be a trademark, not a patent or
copyright or anything else;
c ) the mark must be for use in the same or similar kinds of
goods; and
d) the person claiming must be the owner of the mark (The
Parties Convention Commentary on the Paris Convention.
Article by Dr. Bogsch, Director General of the World Intellectual
Property Organization, Geneva, Switzerland, 1985)
Case: Societe des Produits vs. CA
In 1984, CFC Corporation filed with the Bureau of Patents,
Trademarks, and Technology Transfers an application for the
registration of its trademark “Flavor Master” – an instant coffee.
Nestle opposed the application as it alleged that “Flavor Master”
is confusingly similar to Nestle coffee products like Master
Blend and Master Roast. Nestle alleged that in promoting their
products, the word Master has been used so frequently so much
so that when one hears the word Master it connotes to a Nestle
product. They provided as examples the fact that they’ve been
using Robert Jaworski and Ric Puno Jr. as their commercial
advertisers; and that in those commercials Jaworski is a master
of basketball and that Puno is a master of talk shows; that the
brand of coffee equitable or fit to them is Master Blend and
Master Roast. CFC Corporation on the other hand alleged that
the word “Master” is a generic and a descriptive term, hence not
subject to trademark. The Director of Patents ruled in favor of
Nestle but the Court of Appeals, using the Holistic Test, reversed
the said decision.
Issue: Whether or not the Court of Appeals is correct.
Held:
No. The proper test that should have been used is the Dominancy
Test. The application of the totality or holistic test is improper
since the ordinary purchaser would not be inclined to notice the
specific features, similarities or dissimilarities, considering that
the product is an inexpensive and common household item. The
use of the word Master by Nestle in its products and
commercials has made Nestle acquire a connotation that if it’s a
Master product it is a Nestle product. As such, the use by CFC of
the term “MASTER” in the trademark for its coffee product
FLAVOR MASTER is likely to cause confusion or mistake or
even to deceive the ordinary purchasers.
In addition, the word “MASTER” is neither a generic nor a
descriptive term. As such, said term cannot be invalidated as a
trademark and, therefore, may be legally protected.
Generic terms are those which constitute “the common
descriptive name of an article or substance,” or comprise the
“genus of which the particular product is a species,” or are
“commonly used as the name or description of a kind of goods,”
or “imply reference to every member of a genus and the
exclusion of individuating characters,” or “refer to the basic
nature of the wares or services provided rather than to the more
idiosyncratic characteristics of a particular product,” and are not
legally protectable.
On the other hand, a term is descriptive and therefore invalid as a
trademark if, as understood in its normal and natural sense, it
“forthwith conveys the characteristics, functions, qualities or
ingredients of a product to one who has never seen it and does
not know what it is,” or “if it forthwith conveys an immediate
idea of the ingredients, qualities or characteristics of the goods,”
or if it clearly denotes what goods or services are provided in
such a way that the consumer does not have to exercise powers
of perception or imagination.
Rather, the term “MASTER” is a suggestive term brought about
by the advertising scheme of Nestle. Suggestive terms are those
which, in the phraseology of one court, require “imagination,
thought and perception to reach a conclusion as to the nature of
the goods.” Such terms, “which subtly connote something about
the product,” are eligible for protection in the absence of
secondary meaning. While suggestive marks are capable of
shedding “some light” upon certain characteristics of the goods
or services in dispute, they nevertheless involve “an element of
incongruity,” “figurativeness,” or ” imaginative effort on the part
of the observer.”
Section 122. How Marks are Acquired. - The rights in a
mark shall be acquired through registration made validly
in accordance with the provisions of this law. (Sec. 2-A, R
A. No. 166a)
Case: Coffee Partners Inc. vs San Francisco Coffee
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.
Held:
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.
Prior IPO Registration is Not Required for Trade Name
Infringement
In this case, the Supreme Court reiterated its 2009 ruling that the
local prior registration of a trade name is not a requisite for its
owner to hold an unauthorized user liable for infringement. The
Court emphasized that, unlike in the case of trademark
infringement which requires the prior registration with the
Intellectual Property Office (IPO) of the trademark or service
mark being enforced, all that is required in a case of trade name
infringement is that the trade name being enforced was
previously used in trade or commerce in the Philippines.
The foregoing doctrine finds basis under Section 165.2 of the IP
Code, which provides that, notwithstanding any laws or
regulations providing for any obligation to register trade names,
such names shall be protected, even prior to or without
registration, against any unlawful act committed by third parties;
and that any subsequent use of a trade name by a third party,
whether as a trade name or a mark or collective mark, or any
such use of a similar trade name or mark, that is likely to mislead
the public, is deemed unlawful.
Under the old trademark law, Republic Act No. 166 the
registration of a trade name was required as a condition for the
institution of an infringement suit. In Prosource International,
Inc. vs. Horphag Research Management SA (G.R. No. 180073),
which was promulgated late last year, the Court laid down the
elements of infringement of an unregistered trade name: (1) the
trade name is reproduced, counterfeited, copied, or colorably
imitated by the infringer; (2) 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 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; (3) the use or application of the infringing
mark or trade name is likely to cause confusion or mistake or to
In this regard, the Court also clarified that it is the likelihood of confusion
that is the gravamen of trade name infringement.
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 (4) the use of the mark or
trade name is without the consent of the trade name owner or the
assignee thereof.
In this regard, the Court also clarified that it is the likelihood of
confusion that is the gravamen of trade name infringement.
Section 123. Registrability. - 123.1. A mark cannot be
registered if it:
(a) Consists of immoral, deceptive or scandalous matter,
or matter which may disparage or falsely suggest a
connection with persons, living or dead, institutions,
beliefs, or national symbols, or bring them into contempt
or disrepute;
(b) Consists of the flag or coat of arms or other insignia of
the Philippines or any of its political subdivisions, or of
any foreign nation, or any simulation thereof;
(c) Consists of a name, portrait or signature identifying a
particular living individual except by his written consent,
or the name, signature, or portrait of a deceased President
of the Philippines, during the life of his widow, if any,
except by written consent of the widow;
(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; (Well Known-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; (Well Known-Mark)
Case: 246 Corporation vs. Reynaldo Daway
Montres Rolex S.A. and Rolex Centre Phil., Limited,
owners/proprietors of Rolex and Crown Device, filed against
petitioner 246 Corporation the instant suit for trademark
infringement and damages with prayer for the issuance of a
restraining order or writ of preliminary injunction.
Respondents alleged that sometime in July 1996, petitioner
adopted and, since then, has been using without authority the
mark "Rolex" in its business name "Rolex Music Lounge" as
well as in its newspaper advertisements as – "Rolex Music
Lounge, KTV, Disco & Party Club."
Petitioner argued that respondents have no cause of action
because no trademark infringement exist; that no confusion
would arise from the use by petitioner of the mark "Rolex"
considering that its entertainment business is totally unrelated to
the items catered by respondents such as watches, clocks,
bracelets and parts thereof. It also contended that the complaint
was not properly verified and certified against forum shopping
considering that Atty. Alonzo Ancheta, the counsel of record of
respondents who signed the verification and certification, was
not authorized to represent respondents.
In 2000, 246 Corp. filed a motion for preliminary hearing on its
affirmative defense; which the court thereafter issued a subpoena
ad testificandum to Atty. Atienza. Montres Rolex opposed, and
the trial court quashed the subpoena.
246 corp. filed a petition for certiorari before the Court of
Appeals, which was dismissed. Hence, the petition for review on
certiorari.
Issue: Whether or not likelihood of confusion would arise from
the use of identical marks over unrelated goods/business?
Held:
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.
(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;
(i) Consists exclusively of signs or of indications that have
become customary or usual to designate the goods or
services in everyday language or in bona fide and
established trade practice;
(j) Consists exclusively of signs or of indications that may
serve in trade to designate the kind, quality, quantity,
intended purpose, value, geographical origin, time or
production of the goods or rendering of the services, or
other characteristics of the goods or services;
(k) Consists of shapes that may be necessitated by
technical factors or by the nature of the goods themselves
or factors that affect their intrinsic value;
(l) Consists of color alone, unless defined by a given form;
or
(m) Is contrary to public order or morality.
123.2. As regards signs or devices mentioned in
paragraphs (j), (k), and (l), nothing shall prevent the
registration of any such sign or device which has become
distinctive in relation to the goods for which registration is
requested as a result of the use that have been made of it in
commerce in the Philippines. The Office may accept as
prima facie evidence that the mark has become distinctive,
as used in connection with the applicant's goods or
services in commerce, proof of substantially exclusive and
continuous use thereof by the applicant in commerce in the
Philippines for five (5) years before the date on which the
claim of distinctiveness is made.
123.3. The nature of the goods to which the mark is
applied will not constitute an obstacle to registration. (Sec.
4,R.A. No. 166a)
Case: Mcdonald’s Corporation vs. L.C. BigMak
Petitioner McDonald's Corporation ("McDonald's") is a US
corporation that operates a global chain of fast-food restaurants,
with Petitioner McGeorge Food Industries ("McGeorge"), as the
Philippine franchisee.
McDonald's owns the "Big Mac" mark for its "double-decker
hamburger sandwich." with the US Trademark Registry on 16
October 1979.
Based on this Home Registration, McDonald's applied for the
registration of the same mark in the Principal Register of the then
Philippine Bureau of Patents, Trademarks and Technology
("PBPTT") (now IPO). On 18 July 1985, the PBPTT allowed
registration of the "Big Mac."
Respondent L.C. Big Mak Burger, Inc. is a domestic corporation
which operates fast-food outlets and snack vans in Metro Manila
and nearby provinces. Respondent corporation's menu includes
hamburger sandwiches and other food items.
On 21 October 1988, respondent corporation applied with the
PBPTT for the registration of the "Big Mak" mark for its
hamburger sandwiches, which was opposed by McDonald's.
McDonald's also informed LC Big Mak chairman of its exclusive
right to the "Big Mac" mark and requested him to desist from
using the "Big Mac" mark or any similar mark.
Having received no reply, petitioners sued L.C. Big Mak Burger,
Inc. and its directors before Makati RTC Branch 137 ("RTC"),
for trademark infringement and unfair competition.
RTC rendered a Decision finding respondent corporation liable
for trademark infringement and unfair competition. CA reversed
RTC's decision on appeal.
First Issue: Whether or not respondent corporation is liable for
trademark infringement and unfair competition?
Ruling:
Yes. Section 22 of Republic Act No. 166, as amended, defines
trademark infringement as follows:
Infringement, what constitutes. - Any person who [1] shall use,
without the consent of the registrant, any reproduction,
counterfeit, copy or colorable imitation of any registered mark or
trade-name in connection with the sale, offering for sale, or
advertising of any goods, business or services on or in connection
with which such use is likely to cause confusion or mistake or to
deceive purchasers or others as to the source or origin of such
goods or services, or identity of such business; or [2] reproduce,
counterfeit, copy, or colorably imitate any such mark or trade-
name and apply such reproduction, counterfeit, copy, or colorable
imitation to labels, signs, prints, packages, wrappers, receptacles
or advertisements intended to be used upon or in connection with
such goods, business or services, shall be liable to a civil action
by the registrant for any or all of the remedies herein provided.
To establish trademark infringement, the following elements
must be shown: (1) the validity of plaintiff's mark; (2) the
plaintiff's ownership of the mark; and (3) the use of the mark or
its colorable imitation by the alleged infringer results in
"likelihood of confusion." Of these, it is the element of likelihood
of confusion that is the gravamen of trademark infringement.
1st element:
A mark is valid if it is distinctive and not merely generic and
descriptive.
The "Big Mac" mark, which should be treated in its entirety and
not dissected word for word, is neither generic nor descriptive.
Generic marks are commonly used as the name or description of
a kind of goods, such as "Lite" for beer. Descriptive marks, on
the other hand, convey the characteristics, functions, qualities or
ingredients of a product to one who has never seen it or does not
know it exists, such as "Arthriticare" for arthritis medication. On
the contrary, "Big Mac" falls under the class of fanciful or
arbitrary marks as it bears no logical relation to the actual
characteristics of the product it represents. As such, it is highly
distinctive and thus valid.
2nd element:
Petitioners have duly established McDonald's exclusive
ownership of the "Big Mac" mark. Prior valid registrants of the
said mark had already assigned his rights to McDonald's.
3rd element:
Section 22 covers two types of confusion arising from the use of
similar or colorable imitation marks, namely, confusion of goods
(confusion in which the ordinarily prudent purchaser would be
induced to purchase one product in the belief that he was
purchasing the other) and confusion of business (though the
goods of the parties are different, the defendant's product is such
as might reasonably be assumed to originate with the plaintiff,
and the public would then be deceived either into that belief or
into the belief that there is some connection between the plaintiff
and defendant which, in fact, does not exist).
There is confusion of goods in this case since respondents used
the "Big Mak" mark on the same goods, i.e. hamburger
sandwiches, that petitioners' "Big Mac" mark is used.
There is also confusion of business due to Respondents' use of
the "Big Mak" mark in the sale of hamburgers, the same business
that petitioners are engaged in, also results in confusion of
business. The registered trademark owner may use his mark on
the same or similar products, in different segments of the market,
and at different price levels depending on variations of the
products for specific segments of the market. The registered
trademark owner enjoys protection in product and market areas
that are the normal potential expansion of his business.
Furthermore, in determining likelihood of confusion, the SC has
relied on the dominancy test (similarity of the prevalent features
of the competing trademarks that might cause confusion) over the
holistic test (consideration of the entirety of the marks as applied
to the products, including the labels and packaging).
Applying the dominancy test, Respondents' use of the "Big
Mak" mark results in likelihood of confusion. Aurally the two
marks are the same, with the first word of both marks
phonetically the same, and the second word of both marks also
phonetically the same. Visually, the two marks have both two
words and six letters, with the first word of both marks having
the same letters and the second word having the same first two
letters.
Lastly, since Section 22 only requires the less stringent standard
of "likelihood of confusion," Petitioners' failure to present proof
of actual confusion does not negate their claim of trademark
infringement.
Second Issue: Whether or not Respondents committed Unfair
Competition?
Ruling:
Yes. Section 29 ("Section 29")73 of RA 166 defines unfair
competition, thus:
Any person who will employ deception or any other means
contrary to good faith by which he shall pass off the goods
manufactured by him or in which he deals, or his business, or
services for those of the one having established such goodwill,
or who shall commit any acts calculated to produce said result,
shall be guilty of unfair competition, and shall be subject to an
action therefor.
The essential elements of an action for unfair competition
are (1) confusing similarity in the general appearance of the
goods, and (2) intent to deceive the public and defraud a
competitor.
In the case at bar, Respondents have applied on their plastic
wrappers and bags almost the same words that petitioners use
on their styrofoam box. Further, Respondents' goods are
hamburgers which are also the goods of petitioners. Moreover,
there is actually no notice to the public that the "Big Mak"
hamburgers are products of "L.C. Big Mak Burger, Inc." This
clearly shows respondents' intent to deceive the public.
Case: McDonald’S Corporation vs. MacJoy Fastfood
Since 1987, MacJoy Devices had been operating in Cebu.
MacJoy is a fast food restaurant which sells fried chicken,
chicken barbeque, burgers, fries, spaghetti, palabok, tacos,
sandwiches, halo-halo and steaks.
In 1991, MacJoy filed its application for trademark before the
Intellectual Property Office (IPO). McDonald’s opposed the
application as it alleged that MacJoy closely resembles
McDonald’s corporate logo such that when used on identical
or related goods, the trademark applied for would confuse or
deceive purchasers into believing that the goods originate from
the same source or origin that the use and adoption in bad faith
of the “MacJoy and Device” mark would falsely tend to
suggest a connection or affiliation with McDonald’s restaurant
services and food products, thus, constituting a fraud upon the
general public and further cause the dilution of the
distinctiveness of McDonald’s registered and internationally
recognized McDonald’S marks to its prejudice and irreparable
damage.
The IPO ruled in favor of McDonald’s. MacJoy appealed
before the Court of Appeals and the latter ruled in favor of
MacJoy. The Court of Appeals, in ruling over the case,
actually used the holistic test (which is a test commonly used
in infringement cases).
The holistic test looks upon the visual comparisons between
the two trademarks. In this case, the Court of Appeals ruled
that other than the letters “M” and “C” in the words MacJoy
and McDonald’s, there are no real similarities between the two
trademarks. “MacJoy” is written in round script while
“McDonald’s” is written in thin gothic. “MacJoy” is
accompanied by a picture of a (cartoonish) chicken while
“McDonald’s” is accompanied by the arches “M”. The color
schemes between the two are also different. “MacJoy” is in
deep pink while “McDonald’s” is in gold color.
Issue: Whether or not MacJoy infringed upon the trademark of
McDonald’s?
HELD:
Yes. The Supreme Court ruled that the proper test to be used is
the dominancy test. The dominancy test not only looks at the
visual comparisons between two trademarks but also the aural
impressions created by the marks in the public mind as well as
connotative comparisons, giving little weight to factors like
prices, quality, sales outlets and market segments. In the case at
bar, the Supreme Court ruled that “McDonald’s” and “MacJoy”
marks are confusingly similar with each other such that an
ordinary purchaser can conclude an association or relation
between the marks. To begin with, both marks use the corporate
“M” design logo and the prefixes “Mc” and/or “Mac” as
dominant features. The first letter “M” in both marks puts
emphasis on the prefixes “Mc” and/or “Mac” by the similar way
in which they are depicted i.e. in an arch-like, capitalized and
stylized manner. For sure, it is the prefix “Mc,” an abbreviation
of “Mac,” which visually and aurally catches the attention of
the consuming public. Verily, the word “MACJOY” attracts
attention the same way as did “McDonalds,” “MacFries,”
“McSpaghetti,” “McDo,” “Big Mac” and the rest of the
MCDONALD’S marks which all use the prefixes Mc and/or
Mac. Besides and most importantly, both trademarks are used in
the sale of fastfood products.
Further, the owner of MacJoy provided little explanation why in
all the available names for a restaurant he chose the prefix
“Mac” to be the dominant feature of the trademark. The prefix
“Mac” and “Macjoy” has no relation or similarity whatsoever to
the name Scarlett Yu Carcel, which is the name of the niece of
MacJoy’s president whom he said was the basis of the
trademark MacJoy. By reason of the MacJoy’s implausible and
insufficient explanation as to how and why out of the many
choices of words it could have used for its trade-name and/or
trademark, it chose the word “Macjoy,” the only logical
conclusion deducible therefrom is that the MacJoy would want
to ride high on the established reputation and goodwill of the
McDonald’s marks, which, as applied to its restaurant business
and food products, is undoubtedly beyond question.
Case: Lyceum of the Phils. Vs. CA
Lyceum of the Philippines Inc. had sometime before
commenced in the SEC a proceeding (SEC-Case No. 1241)
against the Lyceum of Baguio, Inc. to require it to change its
corporate name and to adopt another name not "similar [to] or
identical" with that of petitioner.
In an Order dated 20 April 1977, Associate Commissioner Julio
Sulit held that the corporate name of petitioner and that of the
Lyceum of Baguio, Inc. were substantially identical because of
the presence of a "dominant" word, i.e., "Lyceum," the name of
the geographical location of the campus being the only word
which distinguished one from the other corporate name.
The SEC also noted that Lyceum of the Philippines Inc. had
registered as a corporation ahead of the Lyceum of Baguio, Inc.
in point of time, and ordered the latter to change its name to
another name "not similar or identical [with]" the names of
previously registered entities. The Lyceum of Baguio, Inc.
assailed the Order of the SEC before the Supreme Court (GR L-
46595). In a Minute Resolution dated 14 September 1977, the
Court denied the Petition for Review for lack of merit. Entry of
judgment in that case was made on 21 October 1977.
Armed with the Resolution of the Supreme Court, the Lyceum
of the Philippines then wrote all the educational institutions it
could find using the word "Lyceum" as part of their corporate
name, and advised them to discontinue such use of "Lyceum."
When, with the passage of time, it became clear that this
recourse had failed, and on 24 February 1984, Lyceum of the
Philippines instituted before the SEC SEC-Case 2579 to enforce
what Lyceum of the Philippines claims as its proprietary right to
the word "Lyceum."
The SEC hearing officer rendered a decision sustaining
petitioner's claim to an exclusive right to use the word
"Lyceum." The hearing officer relied upon the SEC ruling in
the Lyceum of Baguio, Inc. case (SEC-Case 1241) and held that
the word "Lyceum" was capable of appropriation and that
petitioner had acquired an enforceable exclusive right to the use
of that word.
On appeal, however, by Lyceum Of Aparri, Lyceum Of
Cabagan, Lyceum Of Camalaniugan, Inc., Lyceum Of Lallo,
Inc., Lyceum Of Tuao, Inc., Buhi Lyceum, Central Lyceum Of
Catanduanes, Lyceum Of Southern Philippines, Lyceum Of
Eastern Mindanao, Inc. and Western Pangasinan Lyceum, Inc.,
which are also educational institutions, to the SEC En Banc, the
decision of the hearing officer was reversed and set aside.
The SEC En Banc did not consider the word "Lyceum" to have
become so identified with Lyceum of the Philippines as to
render use thereof by other institutions as productive of
confusion about the identity of the schools concerned in the
mind of the general public. Unlike its hearing officer, the SEC
En Banc held that the attaching of geographical names to the
word "Lyceum" served sufficiently to distinguish the schools
from one another, especially in view of the fact that the
campuses of Lyceum of the Philippines and those of the other
Lyceums were physically quite remote from each other.
Lyceum of the Philippines then went on appeal to the Court of
Appeals. In its Decision dated 28 June 1991, however, the
Court of Appeals affirmed the questioned Orders of the SEC En
Banc. Lyceum of the Philippines filed a motion for
reconsideration, without success. Lyceum of the Philippines
filed the petition for review.
ISSUE:
1. Whether the names of the contending Lyceum schools
are confusingly similar.
2. Whether the use by the Lyceum of the Philippines of
"Lyceum" in its corporate name has been for such
length of time and with such exclusivity as to have
become associated or identified with the petitioner
institution in the mind of the general public (or at least
that portion of the general public which has to do with
schools).
Held:
The Articles of Incorporation of a corporation must, among
other things, set out the name of the corporation. Section 18 of
the Corporation Code establishes a restrictive rule insofar as
corporate names are concerned. It provides that "No corporate
name may be allowed by the Securities an Exchange
Commission if the proposed name is identical or deceptively or
confusingly similar to that of any existing corporation or to any
other name already protected by law or is patently deceptive,
confusing or contrary to existing laws.
When a change in the corporate name is approved, the
Commission shall issue an amended certificate of incorporation
under the amended name." The policy underlying the
prohibition in Section 18 against the registration of a corporate
name which is "identical or deceptively or confusingly similar"
to that of any existing corporation or which is "patently
deceptive" or "patently confusing" or "contrary to existing
laws," is the avoidance of fraud upon the public which would
have occasion to deal with the entity concerned, the evasion of
legal obligations and duties, and the reduction of difficulties of
administration and supervision over corporations.
Herein, the Court does not consider that the corporate names of
the academic institutions are "identical with, or deceptively or
confusingly similar" to that of Lyceum of the Philippines Inc.
True enough, the corporate names of the other schools
(defendant institutions) entities all carry the word "Lyceum" but
confusion and deception are effectively precluded by the
appending of geographic names to the word "Lyceum." Thus,
the "Lyceum of Aparri" cannot be mistaken by the general
public for the Lyceum of the Philippines, or that the "Lyceum
of Camalaniugan" would be confused with the Lyceum of the
Philippines. Further, etymologically, the word "Lyceum" is the
Latin word for the Greek lykeion which in turn referred to a
locality on the river Ilissius in ancient Athens "comprising an
enclosure dedicated to Apollo and adorned with fountains and
buildings erected by Pisistratus, Pericles and Lycurgus
frequented by the youth for exercise and by the philosopher
Aristotle and his followers for teaching." In time, the word
"Lyceum" became associated with schools and other institutions
providing public lectures and concerts and public discussions.
Thus today, the word "Lyceum" generally refers to a school or
an institution of learning.
Since "Lyceum" or "Liceo" denotes a school or institution of
learning, it is not unnatural to use this word to designate an
entity which is organized and operating as an educational
institution. To determine whether a given corporate name is
"identical" or "confusingly or deceptively similar" with another
entity's corporate name, it is not enough to ascertain the
presence of "Lyceum" or "Liceo" in both names.
One must evaluate corporate names in their entirety and when
the name of Lyceum of the Philippines is juxtaposed with the
names of private respondents, they are not reasonably regarded
as "identical" or "confusingly or deceptively similar" with each
other.
2. The number alone of the private respondents in the present
case suggests strongly that the Lyceum of the Philippines' use
of the word "Lyceum" has not been attended with the
exclusivity essential for applicability of the doctrine of
secondary meaning.
It may be noted also that at least one of the private respondents,
i.e., the Western Pangasinan Lyceum, Inc., used the term
"Lyceum" 17 years before Lyceum of the Philippines registered
its own corporate name with the SEC and began using the word
"Lyceum." It follows that if any institution had acquired an
exclusive right to the word "Lyceum," that institution would
have been the Western Pangasinan Lyceum, Inc. rather than
Lyceum of the Philippines.
Hence, Lyceum of the Philippines is not entitled to a legally
enforceable exclusive right to use the word "Lyceum" in its
corporate name and that other institutions may use "Lyceum" as
part of their corporate names.
Case: Fredco Mfg. Corp. vs. President& Fellows of Harvard
Petitioner Fredco Manufacturing Corporation filed a Petition for
Cancellation of Registration No. 56561 against respondent
President and Fellows of Harvard College (Harvard University).
Fredco alleged that Registration No. 56561 was issued to
Harvard University on 25 November 1993 for the mark
"Harvard Veritas Shield Symbol" under Classes 16, 18, 21, 25
and 28.
Fredco also alleged that the mark "Harvard" was first issued by
its predecessor-in-interest New York Garments on 2 January
1982 and was granted a Certificate of Registration on 12
December 1988 for a period of 20 years registration under Class
25.
It is also alleged that the registration was cancelled on 30 July
1988 when New York Garment inadvertently failed to file an
Affidavit of Use/Non-Use on the fifth anniversary of the
registration but the right to the mark remained with its
predecessor and now with Fredco.
Harvard University, on the other hand, alleged that it is the
lawful owner of the name and mark "Harvard" in numerous
countries worldwide, including the Philippines. The BLA, IPO
cancelled the registration of the mark "Harvard" under Class 25
but was reversed by the Director General, IPO rationing that
more than the use of the trademark, the application must be the
owner of the mark sought to be registered. The CA affirmed the
Director General.
Issue: Whether or not Registration No. 56561 Class 25 must be
cancelled?
Held:
No. While Harvard University had actual prior use of its
marks abroad for a long time, it did not have actual prior use in
the Philippines. However, Harvard University's registration of
the name "Harvard" is based on home registration which is
allowed under Section 37 of RA 166. Also, under Section 239.2
of RA 8293, "marks registered under RA 166 shall remain in
force but shall be deemed to have been granted under this
Actxxx" which does not require actual prior use of the mark in
the Philippines.
In addition, Article 8 of the Paris Convention, to which both the
Philippines and the US are signatories, has been incorporated in
Section 37 of RA 166; thus, under Philippine laws, a trade name
of 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.
Be it noted that Fredco's registration was already cancelled
when it failed to file the required Affidavit of Use/Non-Use for
the fifth anniversary of the mark's registration. Hence, at the
time of the filing of the Petition for Cancellation, Fredco was no
longer the registrant or presumptive owner of the mark
"Harvard."
Issue: Whether or not respondent’s trade name is infringed.
Held:
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.
Case: Esso Standard Eastern Inc vs. CA
The petitioner Esso Standard is a foreign corporation duly
licensed to do business in the philippines. it is engaged in the
sale of petroleum products which are identified by the
trademark 'Esso'.
Esso is a successor of Standard Vacuum Oil Co, it registered as
a business name with the Bureau of Commerce in 1962. United
Cigarette is a domestic corporation engaged in the manufacture
and sale of cigarettes. it acquired the business from La Oriental
Tobacco Corp including patent rights, once of which is the use
of 'Esso' on its cigarettes.
The petitioner filed a trademark infringement case alleging that
it acquired goodwill to such an extent that the buying public
would be deceived as ti the quality and origin of the said
products to the detriment and disadvantage of its own products.
The lower court found United Cigarette guilty of infringement.
Upon appeal, the Court of Appeals ruled that there was no
infringment in this case.
Issue: Is there infringement committed?
Held:
NONE. Infringement is defined by law as the use without the
consent of the trademark owner of any reproduction,
counterfeit, copy or colorable imitation of any registered mark
or tradename which would likely cause confusion or mistake or
deceive purchasers or others as to the source or origin of such
goods.
The products of both parties (Petroleum and cigarettes) are non-
competing. But as to whether trademark infringement exists
depend on whether or not the goods are so related that the
public may be or is actually deceived and misled that they come
from the same maker. Under the Related Goods Theory, goods
are related when they belong to the same class or have the same
descriptive properties or when they have same physical
attributes.

In these case, the goods are absolutely different and are so
foreign from each other it would be unlikely for purchasers to
think that they came from the same source. Moreover, the goods
flow from different channels of trade and are evidently different
in kind and nature.
Case: Asia Brewery vs. CA
In September 1988, San Miguel Corporation (SMC) sued Asia
Brewery Inc. for allegedly infringing upon their trademark on
their beer product popularly known as “San Miguel Pale
Pilsen”; that Asia Brewery’s “Beer na Beer” product, by
infringing upon SMC’s trademark has committed unfair
competition as “Beer na Beer” creates confusion between the
two products. The RTC ruled in favor of Asia Brewery but the
Court of Appeals reversed the RTC.
Issue: Whether or not Asia Brewery infringed upon the
trademark of SMC?
Held:
No. Both products are manufactured using amber colored
steinie bottles of 320 ml. Both were labeled in a rectangular
fashion using white color paint. But other than these
similarities, there are salient differences between the two. As
found by the Supreme Court, among others they are the
following:
1. The dominant feature of SMC’s trademark are the
words “San Miguel Pale Pilsen” while that of Asia
Brewery’s trademark is the word “Beer”. Nowhere in
SMC’s product can be seen the word “Beer” nor in
Asia Brewery’s product can be seen the words “San
Miguel Pale Pilsen”. Surely, someone buying “Beer na
Beer” cannot mistake it as “San Miguel Pale Pilsen”
beer.
2. The bottle designs are different. SMC’s bottles have
slender tapered neck while that of “Beer na Beer” are
fat. Though both beer products use steinie bottles,
SMC cannot claim that Asia Brewery copied the idea
from SMC. SMC did not invent but merely borrowed
the steinie bottle from abroad and SMC does not have
any patent or trademark to protect the steinie bottle
shape and design.
3. In SMC bottles, the words “pale pilsen” are written
diagonally while in “Beer na Beer”, the words “pale
pilsen” are written horizontally. Further, the words
“pale pilsen” cannot be said to be copied from SMC
for “pale pilsen” are generic words which originated
from Pilsen, Czechoslovakia. “Pilsen” is a
geographically descriptive word and is non-
registrable.
4. SMC bottles have no slogans written on them while
Asia Brewery’s bottles have a copyrighted slogan
written on them that is “Beer na Beer”.
5. In SMC bottles, it is expressly labeled as
manufactured by SMC. In Asia Brewery beer
products, it is likewise expressly labeled as
manufactured by Asia Brewery. Surely, there is no
intention on the part of Asia Brewery to confuse the
public and make it appear that “Beer na Beer” is a
product of SMC, a long-established and more popular
brand.
Justice Cruz Dissenting:
A number of courts have held that to determine whether a
trademark has been infringed, we must consider the mark as a
whole and not as dissected. If the buyer is deceived, it is
attributable to the marks as a totality, not usually to any part of
it. The court therefore should be guided by its first impression,
for a buyer acts quickly and is governed by a casual glance, the
value of which may be dissipated as soon as the court assumes
to analyze carefully the respective features of the mark. (Del
Monte vs CA & Sunshine Sauce)
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General Rule: The findings of the Court of Appeals upon
factual questions are conclusive.
Exceptions:
1. When the conclusion is grounded entirely on
speculation, surmises and conjectures;
2. When the inference of the Court of Appeals from its
findings of fact is manifestly mistaken, absurd and
impossible;
3. Where there is grave abuse of discretion;
4. When the judgment is based on a misapprehension of
facts;
5. When the appellate court, in making its findings, went
beyond the issues of the case, and the same are
contrary to the admissions of both the appellant and
the appellee;
6. When the findings of said court are contrary to those
of the trial court;
7. When the findings are without citation of specific
evidence on which they are based;
8. When the facts set forth in the petition as well as in
the petitioner's main and reply briefs are not disputed
by the respondents; and
9. When the findings of facts of the Court of Appeals are
premised on the absence of evidence and are
contradicted on record.
Infringement is determined by the "test of dominancy" rather
than by differences or variations in the details of one
trademark and of another.
It has been consistently held that the question of infringement of
a trademark is to be determined by the test of dominancy.
Similarity in size, form and color, while relevant, is not
conclusive. If the competing trademark contains the main or
essential or dominant features of another, and confusion and
deception is likely to result, infringement takes place.
Duplication or imitation is not necessary; nor is it necessary
that the infringing label should suggest an effort to imitate.
The universal test question is whether the public is likely to be
deceived. Nothing less than conduct tending to pass off one
man's goods or business as that of another will constitute unfair
competition. Actual or probable deception and confusion on the
part of the customers by reason of defendant's practices must
always appear.
Our ruling in Del Monte would not apply to beer which is not
usually picked from a store shelf but ordered by brand by the
beer drinker himself from the storekeeper or waiter in a pub or
restaurant.

Moreover, SMC's brand or trademark: "SAN MIGUEL PALE
PILSEN" is not infringed by ABI's mark: "BEER NA BEER"
or "BEER PALE PILSEN." ABI makes its own bottle with a
bulging neck to differentiate it from SMC's bottle, and prints
ABI's name in three (3) places on said bottle (front, back and
bottle cap) to prove that it has no intention to pass of its
"BEER" as "SAN MIGUEL."
There is no confusing similarity between the competing beers
for the name of one is "SAN MIGUEL" while the competitor is
plain "BEER" and the points of dissimilarity between the two
outnumber their points of similarity.
Section 124. Requirements of Application. - 124.1. The
application for the registration of the mark shall be in
Filipino or in English and shall contain the following:
(a) A request for registration;
(b) The name and address of the applicant;
(c) The name of a State of which the applicant is a national
or where he has domicile; and the name of a State in
which the applicant has a real and effective industrial or
commercial establishment, if any;
(d) Where the applicant is a juridical entity, the law under
which it is organized and existing;
(e) The appointment of an agent or representative, if the
applicant is not domiciled in the Philippines;
(f) Where the applicant claims the priority of an earlier
application, an indication of:
(i) The name of the State with whose national
office the earlier application was filed or if filed with an
office other than a national office, the name of that office,
ii) The date on which the earlier application was
filed, and
iii) Where available, the application number of
the earlier application;
(g) Where the applicant claims color as a distinctive
feature of the mark, a statement to that effect as well as the
name or names of the color or colors claimed and an
indication, in respect of each color, of the principal parts
of the mark which are in that color;
(h) Where the mark is a three-dimensional mark, a
statement to that effect;
(i) One or more reproductions of the mark, as prescribed in
the Regulations;
(j) A transliteration or translation of the mark or of some
parts of the mark, as prescribed in the Regulations;
(k) The names of the goods or services for which the
registration is sought, grouped according to the classes of
the Nice Classification, together with the number of the
class of the said Classification to which each group of
goods or services belongs; and
(l) A signature by, or other self-identification of, the
applicant or his representative.
124.2. The applicant or the registrant shall file a
declaration of actual use of the mark with evidence to that
effect, as prescribed by the Regulations within three (3)
years from the filing date of the application. Otherwise,
the application shall be refused or the mark shall be
removed from the Register by the Director.
124.3. One (1) application may relate to several goods
and/or services, whether they belong to one (1) class or to
several classes of the Nice Classification.
124.4. If during the examination of the application, the
Office finds factual basis to reasonably doubt the veracity
of any indication or element in the application, it may
require the applicant to submit sufficient evidence to
remove the doubt. (Sec. 5, R.A. No. 166a)
Section 125. Representation; Address for Service. - If the
applicant is not domiciled or has no real and effective
commercial establishment in the Philippines, he shall
designate by a written document filed in the Office, the
name and address of a Philippine resident who may be
served notices or process in proceedings affecting the
mark. Such notices or services may be served upon the
person so designated by leaving a copy thereof at the
address specified in the last designation filed. If the person
so designated cannot be found at the address given in the
last designation, such notice or process may be served
upon the Director. (Sec. 3, R.A. No. 166a)
Section 126. Disclaimers. - The Office may allow or
require the applicant to disclaim an unregistrable
component of an otherwise registrable mark but such
disclaimer shall not prejudice or affect the applicant's or
owner's rights then existing or thereafter arising in the
disclaimed matter, nor such shall disclaimer prejudice or
affect the applicant's or owner's right on another
application of later date if the disclaimed matter became
distinctive of the applicant's or owner's goods, business or
services. (Sec. 13, R.A. No. 166a)
Section 127. Filing Date. - 127.1. Requirements. - The
filing date of an application shall be the date on which the
Office received the following indications and elements in
English or Filipino:
(a) An express or implicit indication that the registration of
a mark is sought;
(b) The identity of the applicant;
(c) Indications sufficient to contact the applicant or his
representative, if any;
(d) A reproduction of the mark whose registration is
sought; and
(e) The list of the goods or services for which the
registration is sought.
127.2. No filing date shall be accorded until the required
fee is paid. (n)
Section 128. Single Registration for Goods and/or
Services. - Where goods and/or services belonging to
several classes of the Nice Classification have been
included in one (1) application, such an application shall
result in one registration. (n)
Section 129. Division of Application. - Any application
referring to several goods or services, hereafter referred to
as the "initial application," may be divided by the
applicant into two (2) or more applications, hereafter
referred to as the "divisional applications," by distributing
among the latter the goods or services referred to in the
initial application.
The divisional applications shall preserve the filing date of
the initial application or the benefit of the right of
priority.(n)
Section 130. Signature and Other Means of Self-
Identification. - 130.1. Where a signature is required, the
Office shall accept:
(a) A hand-written signature; or
(b) The use of other forms of signature, such as a printed
or stamped signature, or the use of a seal instead of a
hand-written signature: Provided, that where a seal is used,
it should be accompanied by an indication in letters of the
name of the signatory.
130.2. The Office shall accept communications to it by
telecopier, or by electronic means subject to the conditions
or requirements that will be prescribed by the Regulations.
When communications are made by telefacsimile, the
reproduction of the signature, or the reproduction of the
seal together with, where required, the indication in letters
of the name of the natural person whose seal is used,
appears. The original communications must be received by
the Office within thirty (30) days from date of receipt of
the telefacsimile.
130.3. No attestation, notarization, authentication,
legalization or other certification of any signature or other
means of self-identification referred to in the preceding
paragraphs, will be required, except, where the signature
concerns the surrender of a registration. (n)
Section 131. Priority Right. - 131.1. An application for
registration of a mark filed in the Philippines by a person
referred to in Section 3, and who previously duly filed an
application for registration of the same mark in one of
those countries, shall be considered as filed as of the day
the application was first filed in the foreign country.
131.2. No registration of a mark in the Philippines by a
person described in this section shall be granted until such
mark has been registered in the country of origin of the
applicant.
131.3. Nothing in this section shall entitle the owner of a
registration granted under this section to sue for acts
committed prior to the date on which his mark was
registered in this country: Provided, That, notwithstanding
the foregoing, the owner of a well-known mark as defined
in Section 123.1(e) of this Act, that is not registered in the
Philippines, may, against an identical or confusingly
similar mark, oppose its registration, or petition the
cancellation of its registration or sue for unfair
competition, without prejudice to availing himself of other
remedies provided for under the law.
131.4. In like manner and subject to the same conditions
and requirements, the right provided in this section may be
based upon a subsequent regularly filed application in the
same foreign country: Provided, That any foreign
application filed prior to such subsequent application has
been withdrawn, abandoned, or otherwise disposed of,
without having been laid open to public inspection and
without leaving any rights outstanding, and has not served,
nor thereafter shall serve, as a basis for claiming a right of
priority. (Sec. 37, R.A. No. 166a)
Section 132. Application Number and Filing Date. -
132.1. The Office shall examine whether the application
satisfies the requirements for the grant of a filing date as
provided in Section 127 and Regulations relating thereto.
If the application does not satisfy the filing requirements,
the Office shall notify the applicant who shall within a
period fixed by the Regulations complete or correct the
application as required, otherwise, the application shall be
considered withdrawn.
132.2 Once an application meets the filing requirements of
Section 127, it shall be numbered in the sequential order,
and the applicant shall be informed of the application
number and the filing date of the application will be
deemed to have been abandoned. (n)
Section 133. Examination and Publication. - 133.1. Once
the application meets the filing requirements of Section
127, the Office shall examine whether the application
meets the requirements of Section 124 and the mark as
defined in Section 121 is registrable under Section 123.
133.2. Where the Office finds that the conditions referred
to in Subsection 133.1 are fulfilled, it shall upon payment
of the prescribed fee, forthwith cause the application, as
filed, to be published in the prescribed manner.
133.3. If after the examination, the applicant is not entitled
to registration for any reason, the Office shall advise the
applicant thereof and the reasons therefor. The applicant
shall have a period of four (4) months in which to reply or
amend his application, which shall then be re-examined.
The Regulations shall determine the procedure for the
reexamination or revival of an application as well as the
appeal to the Director of Trademarks from any final action
by the Examiner.
133.4. An abandoned application may be revived as a
pending application within three (3) months from the date
of abandonment, upon good cause shown and the payment
of the required fee.
133.5. The final decision of refusal of the Director of
Trademarks shall be appealable to the Director General in
accordance with the procedure fixed by the Regulations.
(Sec. 7, R.A. No. 166a)
Section 134. Opposition. - Any person who believes that
he would be damaged by the registration of a mark may,
upon payment of the required fee and within thirty (30)
days after the publication referred to in Subsection 133.2,
file with the Office an opposition to the application. Such
opposition shall be in writing and verified by the oppositor
or by any person on his behalf who knows the facts, and
shall specify the grounds on which it is based and include
a statement of the facts relied upon. Copies of certificates
of registration of marks registered in other countries or
other supporting documents mentioned in the opposition
shall be filed therewith, together with the translation in
English, if not in the English language. For good cause
shown and upon payment of the required surcharge, the
time for filing an opposition may be extended by the
Director of Legal Affairs, who shall notify the applicant of
such extension. The Regulations shall fix the maximum
period of time within which to file the opposition. (Sec. 8,
R.A. No. 165a)
Section 135. Notice and Hearing. - Upon the filing of an
opposition, the Office shall serve notice of the filing on the
applicant, and of the date of the hearing thereof upon the
applicant and the oppositor and all other persons having
any right, title or interest in the mark covered by the
application, as appear of record in the Office. (Sec. 9, R.A.
No. 165)
Section 136. Issuance and Publication of Certificate. -
When the period for filing the opposition has expired, or
when the Director of Legal Affairs shall have denied the
opposition, the Office upon payment of the required fee,
shall issue the certificate of registration. Upon issuance of
a certificate of registration, notice thereof making
reference to the publication of the application shall be
published in the IPO Gazette. (Sec. 10, R.A. No. 165)
Section 137. Registration of Mark and Issuance of a
Certificate to the Owner or his Assignee. - 137.1. The
Office shall maintain a Register in which shall be
registered marks, numbered in the order of their
registration, and all transactions in respect of each mark,
required to be recorded by virtue of this law.
137.2. The registration of a mark shall include a
reproduction of the mark and shall mention: its number;
the name and address of the registered owner and, if the
registered owner's address is outside the country, his
address for service within the country; the dates of
application and egistration; if priority is claimed, an
indication of this fact, and the number, date and country of
the application, basis of the priority claims; the list of
goods or services in respect of which registration has been
granted, with the indication of the corresponding class or
classes; and such other data as the Regulations may
prescribe from time to time.
137.3. A certificate of registration of a mark may be issued
to the assignee of the applicant: Provided, That the
assignment is recorded in the Office. In case of a change
of ownership, the Office shall at the written request signed
by the owner, or his representative, or by the new owner,
or his representative and upon a proper showing and the
payment of the prescribed fee, issue to such assignee a
new certificate of registration of the said mark in the name
of such assignee, and for the unexpired part of the original
period.
137.4. The Office shall record any change of address, or
address for service, which shall be notified to it by the
registered owner.
137.5. In the absence of any provision to the contrary in
this Act, communications to be made to the registered
owner by virtue of this Act shall be sent to him at his last
recorded address and, at the same, at his last recorded
address for service. (Sec. 19, R.A. No. 166a)
Section 138. Certificates of Registration. - A certificate of
registration of a mark shall be prima facie evidence of the
validity of the registration, the registrant's ownership of
the mark, and of 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. (Sec. 20,
R.A. No. 165)
Case: Canon Kabushiki vs. CA
On January 15, 1985, private respondent NSR Rubber
Corporation filed an application for registration of the mark
CANON for sandals in the Bureau of Patents, Trademarks, and
Technology Transfer (BPTTT). Canon Kabushiki Kaisha filed a
Verified Notice of Opposition alleging that it will be damaged by
the registration of the trademark CANON in the name of private
respondent since they were using the same trademark for their
footwear line of products. The private respondent will also use
the name Canon for its footwear products.
Based on the records, the evidence presented by petitioner
consisted of its certificates of registration for the mark CANON
in various countries covering goods belonging to class 2, paints,
chemical products, toner, and dye stuff. Petitioner also submitted
in evidence its Philippine Trademark Registration No. 39398,
showing its ownership over the trademark CANON.
The BPTTT, on November 10, 1992, issued its decision
dismissing the opposition of petitioner and giving due course to
NSR's application for the registration of the trademark CANON.
Canon Kabushiki Kaisha filed an appeal with the Court of
Appeals that eventually affirmed the decision of the BPTTT.
The BPTTT and the Court of Appeals share the opinion that the
trademark "CANON" as used by petitioner for its paints,
chemical products, toner, and dyestuff, can be used by private
respondent for its sandals because the products of these two
parties are dissimilar. Petitioner protests the appropriation of the
mark CANON by private respondent on the ground that
petitioner has used and continues to use the trademark CANON
on its wide range of goods worldwide.
Allegedly, the corporate name or trade name of petitioner is also
used as its trademark on diverse goods including footwear and
other related products like shoe polisher and polishing agents. To
lend credence to its claim, petitioner points out that it has
branched out in its business based on the various goods carrying
its trademark CANON, including footwear which petitioner
contends covers sandals, the goods for which private respondent
sought to register the mark CANON. For petitioner, the fact
alone that its trademark CANON is carried by its other products
like footwear, shoe polisher and polishing agents should have
precluded the BPTTT from giving due course to the application
of private respondent.
Issue: Is the use of trademark, CANON, by the private
respondent affects the business of Canon Kabushiki Kaisha who
has an existing ownership of a trademark also known as
CANON?
Held:
The Supreme Court says that ordinarily, the ownership of a
trademark or trade name is a property right that the owner is
entitled to protect as mandated by the Trademark Law. However,
when a trademark is used by a party for a product in which the
other party does not deal, the use of the same trademark on the
latter's product cannot be validly objected to.
The BPTTT correctly ruled that since the certificate of
registration of petitioner for the trademark CANON covers class
2 (paints, chemical products, toner, dyestuff), private respondent
can use the trademark CANON for its goods classified as class
25 (sandals). Clearly, there is a world of difference between the
paints, chemical products, toner, and dyestuff of petitioner and
the sandals of private respondent.
Undoubtedly, the paints, chemical products, toner and dyestuff
of petitioner that carry the trademark CANON are unrelated to
sandals, the product of private respondent. We agree with the
BPTTT, following the Esso doctrine, when it noted that the two
classes of products in this case flow through different trade
channels. The products of petitioner are sold through special
chemical stores or distributors while the products of private
respondent are sold in grocery stores, sari-sari stores and
department stores.
Guidelines in the implementation of Article 6bis (sic) of the
Treaty of Paris. These conditions are:
a) the mark must be internationally known;
b) the subject of the right must be a trademark, not a patent or
copyright or anything else;
c) the mark must be for use in the same or similar kinds of
goods; and
d) the person claiming must be the owner of the mark (The
Parties Convention Commentary on the Paris Convention.
Article by Dr. Bogsch, Director General of the World Intellectual
Property Organization, Geneva, Switzerland, 1985)
The principle that the certificate of registration confers upon
the trademark owner the exclusive right to use its own
symbol only to those goods specified in the certificate, subject
to the conditions and limitations stated therein. Thus, the
exclusive right of petitioner in this case to use the trademark
CANON is limited to the products covered by its certificate of
registration.
Ordinarily, the ownership of a trademark or tradename is a
property right that the owner is entitled to protect as mandated by
the Trademark Law. However, when a trademark is used by a
party for a product in which the other party does not deal, the use
of the same trademark on the latter’s product cannot be validly
objected to.
Case: Faberge Inc. vs. IAC
Co Beng Kay applied for the registration of the trademark
'BRUTE' to be used to its underwear (briefs) products. The
petitioner opposed on the ground that there is similarity with
their own symbol (BRUT, Brut33 & Device) used on its
aftershave, deodorant, cream shave, hairspray and hair
shampoo/soaps and that it would cause injury to their business
reputation. It must be noted that the petitioner never applied for
registration of said trademark for its brief products. The Patent
Office allowed Co Beng Kay the registration and this was further
affirmed by the Court of Appeals.
Issue: Is there confusing similarity between the challenged
marks and that its use would likely cause confusion on the part
of the purchasers?
Held: NONE. Co Beng Kay may rightly appropriate the mark.
In this case Sec. 20 (Philippine Intellectual Property Law) is
controlling. The certificate of registration issued confers the
exclusive right to use its own symbol only to those goods
specified by the first user in the certificate, subject to any
conditions or limitations stated therein. Moreover, the two
products are so dissimilar that a purchaser of one (a brief) would
not be misled or mistaken into buying the other (such as an
aftershave).
The Director of patents allowed the junior user to use the
trademark of the senior user on the ground that the briefs
manufactured by the junior user, the product for which the
trademark BRUTE was sought to be registered, was unrelated
and non-competing with the products of the senior user
consisting of after shave lotion, shaving cream, deodorant,
talcum powder, and toilet soap. The senior user vehemently
objected and claimed that it was expanding its trademark to
briefs and argued that permitting the junior user to register the

same trademark would allow the latter to invade the senior user’s
exclusive domain. In sustaining the Director of Patents, this
Court said that since "(the senior user) has not ventured in the
production of briefs, an item which is not listed in its certificate
of registration, (the senior user), cannot and should not be
allowed to feign that (the junior user) had invaded (the senior
user’s) exclusive domain.
Goods are related when they belong to the same class or have the
same descriptive properties; when they possess the same
physical attributes or essential characteristics with reference to
their form, composition, texture or quality. They may also be
related because they serve the same purpose or are sold in
grocery stores.
Section 139. Publication of Registered Marks; Inspection
of Register. - 139.1. The Office shall publish, in the form
and within the period fixed by the Regulations, the marks
registered, in the order of their registration, reproducing all
the particulars referred to in Subsection 137.2.
139.2. Marks registered at the Office may be inspected
free of charge and any person may obtain copies thereof at
his own expense. This provision shall also be applicable to
transactions recorded in respect of any registered mark. (n)
Section 140. Cancellation upon Application by
Registrant; Amendment or Disclaimer of Registration. –
Upon application of the registrant, the Office may permit
any registration to be surrendered for cancellation, and
upon cancellation the appropriate entry shall be made in
the records of the Office. Upon application of the
registrant and payment of the prescribed fee, the Office for
good cause may permit any registration to be amended or
to be disclaimed in part: Provided, That the amendment or
disclaimer does not alter materially the character of the
mark.
Appropriate entry shall be made in the records of the
Office upon the certificate of registration or, if said
certificate is lost or destroyed, upon a certified copy
thereof (Sec. 14, R.A. No. 166)
Section 141. Sealed and Certified Copies as Evidence. -
Copies of any records, books, papers, or drawings
belonging to the Office relating to marks, and copies of
registrations, when authenticated by the seal of the Office
and certified by the Director of the Administrative,
Financial and Human Resource Development Service
Bureau or in his name by an employee of the Office duly
authorized by said Director, shall be evidence in all cases
wherein the originals would be evidence; and any person
who applies and pays the prescribed fee shall secure such
copies. (n)
Section 142. Correction of Mistakes Made by the Office.
- Whenever a material mistake in a registration incurred
through the fault of the Office is clearly disclosed by the
records of the Office, a certificate stating the fact and
nature of such mistake shall be issued without charge,
recorded and a printed copy thereof shall be attached to
each printed copy of the registration. Such corrected
registration shall thereafter have the same effect as the
original certificate; or in the discretion of the Director of
the Administrative, Financial and Human Resource
Development Service Bureau a new certificate of
registration may be issued without charge. All certificates
of correction heretofore issued in accordance with the
Regulations and the registration to which they are attached
shall have the same force and effect as if such certificates
and their issuance had been authorized by this Act. (n)
Section 143. Correction of Mistakes Made by Applicant.
- Whenever a mistake is made in a registration and such
mistake occurred in good faith through the fault of the
applicant, the Office may issue a certificate upon the
payment of the prescribed fee: Provided, That the
correction does not involve any change in the registration
that requires republication of the mark. (n)
Section 144. Classification of Goods and Services. -
144.1. Each registration, and any publication of the Office
which concerns an application or registration effected by
the Office shall indicate the goods or services by their
names, grouped according to the classes of the Nice
Classification, and each group shall be preceded by the
number of the class of that Classification to which that
group of goods or services belongs, presented in the order
of the classes of the said Classification.
144.2. 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. (Sec. 6, R.A.
No. 166a)
Section 145. Duration. - A certificate of registration shall
remain in force for ten (10) years: Provided, That the
registrant shall file a declaration of actual use and
evidence to that effect, or shall show valid reasons based
on the existence of obstacles to such use, as prescribed by
the Regulations, within one (1) year from the fifth
anniversary of the date of the registration of the mark.
Otherwise, the mark shall be removed from the Register
by the Office. (Sec. 12, R.A. No. 166a)
Section 146. Renewal. - 146.1. A certificate of registration
may be renewed for periods of ten (10) years at its
expiration upon payment of the prescribed fee and upon
filing of a request. The request shall contain the following
indications:
(a) An indication that renewal is sought;
(b) The name and address of the registrant or his
successor-in-interest, hereafter referred to as the "right
holder";
(c) The registration number of the registration concerned;
(d) The filing date of the application which resulted in the
registration concerned to be renewed;
(e) Where the right holder has a representative, the name
and address of that representative;
(f) The names of the recorded goods or services for which
the renewal is requested or the names of the recorded
goods or services for which the renewal is not requested,
grouped according to the classes of the Nice Classification
to which that group of goods or services belongs and
presented in the order of the classes of the said
Classification; and
(g) A signature by the right holder or his representative.
146.2. Such request shall be in Filipino or English and
may be made at any time within six (6) months before the
expiration of the period for which the registration was
issued or renewed, or it may be made within six (6)
months after such expiration on payment of the additional
fee herein prescribed.
146.3. If the Office refuses to renew the registration, it
shall notify the registrant of his refusal and the reasons
therefor.
146.4. An applicant for renewal not domiciled in the
Philippines shall be subject to and comply with the
requirements of this Act. (Sec. 15, R.A. No. 166a)
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.
147.2. The exclusive right of the owner of a well-known
mark defined in Subsection 123.1(e) which is registered in
the Philippines, shall extend to goods and services which
are not similar to those in respect of which the mark is
registered: Provided, That use of that 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. (n)
Section 148. Use of Indications by Third Parties for
Purposes Other than those for which the Mark is Used. -
Registration of the mark shall not confer on the registered
owner the right to preclude third parties from using bona
fide their names, addresses, pseudonyms, a geographical
name, or exact indications concerning the kind, quality,
quantity, destination, value, place of origin, or time of
production or of supply, of their goods or services:
Provided, That such use is confined to the purposes of
mere identification or information and cannot mislead the
public as to the source of the goods or services. (n)
Section 149. Assignment and Transfer of Application
and Registration. - 149.1. An application for registration
of a mark, or its registration, may be assigned or
transferred with or without the transfer of the business
using the mark. (n)
149.2. Such assignment or transfer shall, however, be null
and void if it is liable to mislead the public, particularly as
regards the nature, source, manufacturing process,
characteristics, or suitability for their purpose, of the
goods or services to which the mark is applied.
149.3. The assignment of the application for registration of
a mark, or of its registration, shall be in writing and
require the signatures of the contracting parties. Transfers
by mergers or other forms of succession may be made by
any document supporting such transfer.
149.4. Assignments and transfers of registrations of marks
shall be recorded at the Office on payment of the
prescribed fee; assignment and transfers of applications for
registration shall, on payment of the same fee, be
provisionally recorded, and the mark, when registered,
shall be in the name of the assignee or transferee.
149.5. Assignments and transfers shall have no effect
against third parties until they are recorded at the Office.
(Sec. 31, R.A. No. 166a)
Section 150. License Contracts. - 150.1. Any license
contract concerning the registration of a mark, or an
application therefor, shall provide for effective control by
the licensor of the quality of the goods or services of the
licensee in connection with which the mark is used. If the
license contract does not provide for such quality control,
or if such quality control is not effectively carried out, the
license contract shall not be valid.
150.2. A license contract shall be submitted to the Office
which shall keep its contents confidential but shall record
it and publish a reference thereto. A license contract shall
have no effect against third parties until such recording is
effected. The Regulations shall fix the procedure for the
recording of the license contract. (n)
Section 151. Cancellation. - 151.1. A petition to cancel a
registration of a mark under this Act may be filed with the
Bureau of Legal Affairs by any person who believes that
he is or will be damaged by the registration of a mark
under this Act as follows:
(a) Within five (5) years from the date of the registration
of the mark under this Act.
(b) At any time, if the registered mark becomes the generic
name for the goods or services, or a portion thereof, for
which it is registered, or has been abandoned, or its
registration was obtained fraudulently or contrary to the
provisions of this Act, or if the registered mark is being
used by, or with the permission of, the registrant so as to
misrepresent the source of the goods or services on or in
connection with which the mark is used. If the registered
mark becomes the generic name for less than all of the
goods or services for which it is registered, a petition to
cancel the registration for only those goods or services
may be filed. A registered mark shall not be deemed to be
the generic name of goods or services solely because such
mark is also used as a name of or to identify a unique
product or service. The primary significance of the
registered mark to the relevant public rather than
purchaser motivation shall be the test for determining
whether the registered mark has become the generic name
of goods or services on or in connection with which it has
been used. (n)
(c) At any time, if the registered owner of the mark
without legitimate reason fails to use the mark within the
Philippines, or to cause it to be used in the Philippines by
virtue of a license during an uninterrupted period of three
(3) years or longer.
151.2. Notwithstanding the foregoing provisions, the court
or the administrative agency vested with jurisdiction to
hear and adjudicate any action to enforce the rights to a
registered mark shall likewise exercise jurisdiction to
determine whether the registration of said mark may be
cancelled in accordance with this Act. The filing of a suit
to enforce the registered mark with the proper court or
agency shall exclude any other court or agency from
assuming jurisdiction over a subsequently filed petition to
cancel the same mark. On the other hand, the earlier filing
of petition to cancel the mark with the Bureau of Legal
Affairs shall not constitute a prejudicial question that must
be resolved before an action to enforce the rights to same
registered mark may be decided. (Sec. 17, R.A. No. 166a)
Case: Emerald Garment vs. CA
In 1981, H.D Lee Co., Inc., a foreign company, filed an
opposition against the trademark application of Emerald
Garment. Allegedly, the trademark “Stylistic Mr. Lee”
sought to be applied for by Emerald Garment is too
confusingly similar with the brand “Lee” which has for its
variations “Lee Riders”, “Lee Sures”, and “Lee Leens”.
The Director of Patents as well as the Court of Appeals
ruled in favor of H.D. Lee Co.
On 19 July 1988, the Director of Patents rendered a
decision granting private respondent's petition for
cancellation and opposition to registration. The Director of
Patents, using the test of dominancy, declared that
petitioner's trademark was confusingly similar to private
respondent's mark because "it is the word 'Lee' which
draws the attention of the buyer and leads him to conclude
that the goods originated from the same manufacturer. It is
undeniably the dominant feature of the mark.
Issue: Whether or not a trademark causes confusion and is
likely to deceive the public is a question of fact which is to be
resolved by applying the "test of dominancy", meaning, if the
competing trademark contains the main or essential or
dominant features of another by reason of which confusion
and deception are likely to result?
Held:
The Supreme Court considered that the trademarks involved
as a whole and ruled that Emerald Garment’s “STYLISTIC
MR. LEE” is not confusingly similar to H.D. Lee’s “LEE”
trademark. The trademark “Stylistic Mr. Lee”, although on its
label the word “LEE” is prominent, the trademark should be
considered as a whole and not piecemeal. The dissimilarities
between the two marks become conspicuous, noticeable and
substantial enough to matter especially in the light of the
following variables that must be factored in.
First, the products involved in the case at bar are, in the main,
various kinds of jeans. These are not your ordinary household
items like catsup, soysauce or soap which are of minimal
cost. Maong pants or jeans are not inexpensive. 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.
Second, like his beer, the average Filipino consumer
generally buys his jeans by brand. He does not ask the sales
clerk for generic jeans but for, say, a Levis, Guess, Wrangler
or even an Armani. He is, therefore, more or less
knowledgeable and familiar with his preference and will not
easily be distracted.
Finally, in line with the foregoing discussions, more credit
should be given to the “ordinary purchaser.” Cast in this
particular controversy, the ordinary purchaser is not the
“completely unwary consumer” but is the “ordinarily
intelligent buyer” considering the type of product involved.
There is no cause for the Court of Appeal’s apprehension that
Emerald Garment’s products might be mistaken as “another
variation or line of garments under H.D. Lee’s ‘LEE’
trademark”.
As one would readily observe, H.D. Lee’s variation follows a
standard format “LEERIDERS,” “LEESURES” and
“LEELEENS.” It is, therefore, improbable that the public
would immediately and naturally conclude that petitioner’s
“STYLISTIC MR. LEE” is but another variation under H.D.
Lee’s “LEE” mark.
The issue of confusing similarity between trademarks is
resolved by considering the distinct characteristics of each
case. In the present controversy, taking into account these
unique factors, we conclude that the similarities in the
trademarks in question are not sufficient as to likely cause
deception and confusion tantamount to infringement.

Further, H.D. Lee failed to prove in court that it had prior
actual commercial use of its “LEE” trademark in the
Philippines. H.D. Lee did show certificates of registrations
for its brand but registration is not sufficient. Actual use in
commerce in the Philippines is an essential prerequisite for
the acquisition of ownership over a trademark pursuant to
Sec. 2 and 2-A of the Philippine Trademark Law (R.A. No.
166).
A rule widely accepted and firmly entrenched because it
has come down through the years is that actual use in
commerce or business is a prerequisite in the acquisition of
the right of ownership over a trademark.
It would seem quite clear that adoption alone of a
trademark would not give exclusive right thereto. Such
right “grows out of their actual use.” Adoption is not use.
One may make advertisements, issue circulars, give out
price lists on certain goods; but these alone would not give
exclusive right of use. For trademark is a creation of use.
The underlying reason for all these is that purchasers have
come to understand the mark as indicating the origin of the
wares. Flowing from this is the trader’s right to protection
in the trade he has built up and the goodwill he has
accumulated from use of the trademark. Registration of a
trademark, of course, has value: it is an administrative act
declaratory of a pre-existing right. Registration does not,
however, perfect a trademark right.
Section 152. Non-use of a Mark When Excused. - 152.1.
Non-use of a mark may be excused if caused by
circumstances arising independently of the will of the
trademark owner. Lack of funds shall not excuse non-use
of a mark.
152.2. The use of the mark in a form different from the
form in which it is registered, which does not alter its
distinctive character, shall not be ground for cancellation
or removal of the mark and shall not diminish the
protection granted to the mark.
152.3. The use of a mark in connection with one or more
of the goods or services belonging to the class in respect of
which the mark is registered shall prevent its cancellation
or removal in respect of all other goods or services of the
same class.
152.4. The use of a mark by a company related with the
registrant or applicant shall inure to the latter's benefit, and
such use shall not affect the validity of such mark or of its
registration: Provided, That such mark is not used in such
manner as to deceive the public. If use of a mark by a
person is controlled by the registrant or applicant with
respect to the nature and quality of the goods or services,
such use shall inure to the benefit of the registrant or
applicant. (n)
Section 153. Requirements of Petition; Notice and
Hearing. - Insofar as applicable, the petition for
cancellation shall be in the same form as that provided in
Section 134 hereof, and notice and hearing shall be as
provided in Section 135 hereof.
Section 154. Cancellation of Registration. - If the Bureau
of Legal Affairs finds that a case for cancellation has been
made out, it shall order the cancellation of the registration.
When the order or judgment becomes final, any right
conferred by such registration upon the registrant or any
person in interest of record shall terminate. Notice of
cancellation shall be published in the IPO Gazette. (Sec.
19, R.A. No. 166a)
Section 155. Remedies; Infringement. - Any person who
shall, without the consent of the owner of the registered
mark:
155.1. Use in commerce any reproduction, counterfeit,
copy, or colorable imitation of a registered mark or the
same container or a dominant feature thereof in connection
with the sale, offering for sale, distribution, advertising of
any goods or services including other preparatory steps
necessary to carry out the sale of any goods or services on
or in connection with which such use is likely to cause
confusion, or to cause mistake, or to deceive; or
155.2. Reproduce, counterfeit, copy or colorably imitate a
registered mark or a dominant feature thereof and apply
such reproduction, counterfeit, copy or colorable imitation
to labels, signs, prints, packages, wrappers, receptacles or
advertisements intended to be used in commerce upon or
in connection with the sale, offering for sale, distribution,
or advertising of goods or services on or in connection
with which such use is likely to cause confusion, or to
cause mistake, or to deceive, shall be liable in a civil
action for infringement by the registrant for the remedies
hereinafter set forth: Provided, That the infringement takes
place at the moment any of the acts stated in Subsection
155.1 or this subsection are committed regardless of
whether there is actual sale of goods or services using the
infringing material. (Sec. 22, R.A. No 166a)
Section 156. Actions, and Damages and Injunction for
Infringement. - 156.1. The owner of a registered mark
may recover damages from any person who infringes his
rights, and the measure of the damages suffered shall be
either the reasonable profit which the complaining party
would have made, had the defendant not infringed his
rights, or the profit which the defendant actually made out
of the infringement, or in the event such measure of
damages cannot be readily ascertained with reasonable
certainty, then the court may award as damages a
reasonable percentage based upon the amount of gross
sales of the defendant or the value of the services in
connection with which the mark or trade name was used in
the infringement of the rights of the complaining party.
(Sec. 23, first par. R.A. No. 166a)
156.2. On application of the complainant, the court may
impound during the pendency of the action, sales invoices
and other documents evidencing sales. (n)
156.3. In cases where actual intent to mislead the public or
to defraud the complainant is shown, in the discretion of
the court, the damages may be doubled. (Sec. 23, first par.,
R.A. No. 166)
156.4. The complainant, upon proper showing, may also
be granted injunction. (Sec. 23, second par., R.A. No.
166a)
Section 157. Power of Court to Order Infringing
Material Destroyed. - 157.1 In any action arising under
this Act, in which a violation of any right of the owner of
the registered mark is established, the court may order that
goods found to be infringing be, without compensation of
any sort, disposed of outside the channels of commerce in
such a manner as to avoid any harm caused to the right
holder, or destroyed; and all labels, signs, prints, packages,
wrappers, receptacles and advertisements in the possession
of the defendant, bearing the registered mark or trade
name or any reproduction, counterfeit, copy or colorable
imitation thereof, all plates, molds, matrices and other
means of making the same, shall be delivered up and
destroyed.
157.2. In regard to counterfeit goods, the simple removal
of the trademark affixed shall not be sufficient other than
in exceptional cases which shall be determined by the
Regulations, to permit the release of the goods into the
channels of commerce. (Sec. 24, R.A. No. 166a)
Section 158. Damages; Requirement of Notice. - In any
suit for infringement, the owner of the registered mark
shall not be entitled to recover profits or damages unless
the acts have been committed with knowledge that such
imitation is likely to cause confusion, or to cause mistake,
or to deceive. Such knowledge is presumed if the
registrant gives notice that his mark is registered by
displaying with the mark the words '"Registered Mark" or
the letter R within a circle or if the defendant had
otherwise actual notice of the registration. (Sec. 21, R.A.
No. 166a)
Section 159. Limitations to Actions for Infringement. -
Notwithstanding any other provision of this Act, the
remedies given to the owner of a right infringed under this
Act shall be limited as follows:
159.1. Notwithstanding the provisions of Section 155
hereof, a registered mark shall have no effect against any
person who, in good faith, before the filing date or the
priority date, was using the mark for the purposes of his
business or enterprise: Provided, That his right may only
be transferred or assigned together with his enterprise or
business or with that part of his enterprise or business in
which the mark is used.
159.2. Where an infringer who is engaged solely in the
business of printing the mark or other infringing materials
for others is an innocent infringer, the owner of the right
infringed shall be entitled as against such infringer only to
an injunction against future printing.
159.3. Where the infringement complained of is contained
in or is part of paid advertisement in a newspaper,
magazine, or other similar periodical or in an electronic
communication, the remedies of the owner of the right
infringed as against the publisher or distributor of such
newspaper, magazine, or other similar periodical or
electronic communication shall be limited to an injunction
against the presentation of such advertising matter in
future issues of such newspapers, magazines, or other
similar periodicals or in future transmissions of such
electronic communications. The limitations of this
subparagraph shall apply only to innocent infringers:
Provided, That such injunctive relief shall not be available
to the owner of the right infringed with respect to an issue
of a newspaper, magazine, or other similar periodical or an
electronic communication containing infringing matter
where restraining the dissemination of such infringing
matter in any particular issue of such periodical or in an
electronic communication would delay the delivery of
such issue or transmission of such electronic
communication is customarily conducted in accordance
with the sound business practice, and not due to any
method or device adopted to evade this section or to
prevent or delay the issuance of an injunction or
restraining order with respect to such infringing matter. (n)
Case: Skechers USA vs. Inter Pacific et.al.
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.
RTC applying the Holistic Test ordered the quashing of the
warrant which was affirmed by the CA. RTC noted the
following differences: 1) the mark "S" is not enclosed in
an oval design; 2) the hang tags and labels bear the word
"Strong" for respondent and "Skechers USA" for petitioner;
3) Strong shoes are modestly priced compared to Skechers
shoes.
On certiorari, the Court of Appeals (CA) affirmed the RTC
ruling.
The matter was elevated to the Supreme Court (SC).
Issue: Whether or not respondents
are guilty of 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. (emphasis supplied)
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 theSkechers 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 theHolistic
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 (Converse Rubber
Corporation v. Jacinto Rubber & Plastic Co., 186 Phil. 85
[1980]). Also, the difference in price cannot be a defense in
a case for trademark infringement (McDonald’s
Corporation v. L.C. Big Mak Burger, Inc., 480 Phil. 402,
434 [2004]).
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: Societe des Produits vs. CA
In 1984, CFC Corporation filed with the Bureau of Patents,
Trademarks, and Technology Transfers an application for the
registration of its trademark “Flavor Master” – an instant
coffee. Nestle opposed the application as it alleged that
“Flavor Master” is confusingly similar to Nestle coffee
products like Master Blend and Master Roast. Nestle alleged
that in promoting their products, the word Master has been
used so frequently so much so that when one hears the word
Master it connotes to a Nestle product. They provided as
examples the fact that they’ve been using Robert Jaworski
and Ric Puno Jr. as their commercial advertisers; and that in
those commercials Jaworski is a master of basketball and that
Puno is a master of talk shows; that the brand of coffee
equitable or fit to them is Master Blend and Master Roast.
CFC Corporation on the other hand alleged that the word
“Master” is a generic and a descriptive term, hence not
subject to trademark. The Director of Patents ruled in favor
of Nestle but the Court of Appeals, using the Holistic Test,
reversed the said decision.
Issue: Whether or not the Court of Appeals is correct.
Held:
No. The proper test that should have been used is the
Dominancy Test. The application of the totality or holistic
test is improper since the ordinary purchaser would not be
inclined to notice the specific features, similarities or
dissimilarities, considering that the product is an inexpensive
and common household item. The use of the word Master by
Nestle in its products and commercials has made Nestle
acquire a connotation that if it’s a Master product it is a
Nestle product. As such, the use by CFC of the term
“MASTER” in the trademark for its coffee product
FLAVOR MASTER is likely to cause confusion or mistake
or even to deceive the ordinary purchasers.
In addition, the word “MASTER” is neither a generic nor a
descriptive term. As such, said term cannot be invalidated as
a trademark and, therefore, may be legally protected.
Generic terms are those which constitute “the common
descriptive name of an article or substance,” or comprise the
“genus of which the particular product is a species,” or are
“commonly used as the name or description of a kind of
goods,” or “imply reference to every member of a genus and
the exclusion of individuating characters,” or “refer to the
basic nature of the wares or services provided rather than to
the more idiosyncratic characteristics of a particular
product,” and are not legally protectable.
On the other hand, a term is descriptive and therefore invalid
as a trademark if, as understood in its normal and natural
sense, it “forthwith conveys the characteristics, functions,
qualities or ingredients of a product to one who has never
seen it and does not know what it is,” or “if it forthwith
conveys an immediate idea of the ingredients, qualities or
characteristics of the goods,” or if it clearly denotes what goods
or services are provided in such a way that the consumer does
not have to exercise powers of perception or imagination.
Rather, the term “MASTER” is a suggestive term brought
about by the advertising scheme of Nestle. Suggestive terms are
those which, in the phraseology of one court, require
“imagination, thought and perception to reach a conclusion as
to the nature of the goods.” Such terms, “which subtly connote
something about the product,” are eligible for protection in the
absence of secondary meaning. While suggestive marks are
capable of shedding “some light” upon certain characteristics of
the goods or services in dispute, they nevertheless involve “an
element of incongruity,” “figurativeness,” or ” imaginative
effort on the part of the observer.”
Case: Shangri-la International vs. CA
On June 21, 1988, the Shangri-La International Hotel
Management filed with the Bureau of Patents, Trademarks
and Technology Transfer (BPTTT) a petition praying for the
cancellation of the registration of the "Shangri-La" mark and
"S" device/logo issued to the Developers Group of
Companies, Inc., on the ground that the same was illegally
and fraudulently obtained and appropriated for the latter's
restaurant business. The Shangri-La Group alleged that it is
the legal and beneficial owners of the subject mark and
logo; that it has been using the said mark and logo for its
corporate affairs and business since March 1962 and caused
the same to be specially designed for their international
hotels in 1975, much earlier than the alleged first use thereof
by the Developers Group in 1982. It also filed with the
BPTTT its own application for registration of the subject
mark and logo. The Developers Group filed an opposition to
he application, which was docketed as Inter Partes Case No.
3529. Almost 3 years later, or on April 15, 1991, the
Developers Group instituted with the RTC of Quezon City a
complaint for infringement and damages with prayer for
injunction. On January 8, 1992, the Shangri-La Group
moved for the suspension of the proceedings in the
infringement case on account of the pendency of the
administrative proceedings before the BPTTT.
This was denied by the trial court in a Resolution issued on
January 16, 1992.
Issue:
Whether, despite the institution of an Inter Partes case for
cancellation of a mark with the BPTTT (now the Bureau of
Legal Affairs, Intellectual Property Office) by one party, the
adverse party can file a subsequent action for infringement
with the regular courts of justice in connection with the
same registered mark?
Held:
NO.
Section 151.2 of Republic Act No. 8293, otherwise known
as the Intellectual Property Code, provides, as follows –
Section 151.2. Notwithstanding the foregoing provisions,
the court or the administrative agency vested with
jurisdiction to hear and adjudicate any action to enforce the
rights to a registered mark shall likewise
exercise jurisdiction to determine whether the registration of
said mark may becancelled in accordance with this Act. The
filing of a suit to enforce the registered mark with the proper
court or agency shall exclude any other court or agency
from assuming jurisdiction over a subsequently filed
petition to cancel the same mark.
On the other hand, the earlier filing of petition to cancel the
mark with the Bureau of Legal Affairs shall not constitute
a prejudicial question that must be resolved before an action
to enforce the rights to same registered mark may be
decided.(Emphasis provided)
Similarly, Rule 8, Section 7, of the Regulations on Inter
Partes Proceedings, provides to wit –
Section 7. Effect of filing of a suit before the Bureau or with
the proper court. - The filing of a suit to enforce the
registered mark with the proper court or Bureau shall
exclude any other court or agency from assuming
jurisdiction over a subsequently filed petition to cancel the
same mark. On the other hand, the earlier filing of petition
to cancel the mark with the Bureau shall not constitute a
prejudicial question that must be resolved before an action
to enforce the rights to same registered mark may be
decided. (Emphasis provided)
Hence, as applied in the case at bar, the earlier institution of
an Inter Partes case by the Shangri-La Group for the
cancellation of the "Shangri-La" mark and "S" device/logo
with the BPTTT cannot effectively bar the subsequent filing
of an infringement case by registrant Developers Group. The
law and the rules are explicit.
The rationale is plain: Certificate of Registration No. 31904,
upon which the infringement case is based, remains valid
and subsisting for as long as it has not been cancelled by the
Bureau or by an infringement court. As such, Developers
Group's Certificate of Registration in the principal register
continues as "prima facie evidence of the validity of the
registration, the registrant's ownership of the mark or trade-
name, and of the registrant's exclusive right to use the same
in connection with the goods, business or services specified
in the certificate." Since the certificate still subsists,
Developers Group may thus file a corresponding
infringement suit and recover damages from any person who
infringes upon the former's rights.
Issue: Whether or not Shangri-La is liable for infringement?
Shangri-la Hotel did not infringe on the logo of DGCI. The
applicable law at the time is RA 166, which requires that
there must be at least 2 months actual use prior to
registration. The registration by DGCI is invalid for want of
the actual use requirement. Based on the facts & testimonies
of the chairman of DGCI, the logo was designed in
December 1982; yet, the application was filed as early as
October 1982. There could be no actual use considering the
foregoing facts; thus, invalidating DGCI’s registration.
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.
Even if registration was valid, it is not enough to confer
ownership of the trademark. As already held, registration
merely creates a prima facie presumption ①of the validity
of the registration, ② of the registrant's ownership of the
trademark and ③of the exclusive right to the use thereof.
This presumption is rebuttable & must give way to evidence
on the contrary.
Under RA 166, any person may appropriate to his exclusive
use a trademark, trade name, or a service mark not so
appropriated by another. The exclusion did not require that
the prior appropriation of another must be in the Philippines;
hence, it was interpreted to cover also appropriation outside
the country. Shangri-la Hotel has been continuously using
their mark & logo since 1975, while DGCI began using
theirs towards the end of 1982.
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 2month 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.
A person or entity who is not the owner of a trademark
could not bring an action of infringement. Decision of the
CA was set aside, complaint of DGCI was dismissed.
NEW LAW: The new Intellectual Property Code (IPC),
Republic Act No. 8293, undoubtedly shows the firm resolve
of the Philippines to observe and follow the Paris
Convention by incorporating the relevant portions of the
Convention such that persons who may question a mark
(that is, oppose registration, petition for the cancellation
thereof, sue for unfair competition) include persons whose
internationally well-known mark, whether or not
registered, is identical with or confusingly similar to or
constitutes a translation of a mark that is sought to be
registered or is actually registered
Section 160. Right of Foreign Corporation to Sue in
Trademark or Service Mark Enforcement Action. - Any
foreign national or juridical person who meets the
requirements of Section 3 of this Act and does not engage
in business in the Philippines may bring a civil or
administrative action hereunder for opposition,
cancellation, infringement, unfair competition, or false
designation of origin and false description, whether or not
it is licensed to do business in the Philippines under
existing laws. (Sec. 21-A, R.A. No. 166a)
Section 161. Authority to Determine Right to
Registration. - In any action involving a registered mark,
the court may determine the right to registration, order the
cancellation of a registration, in whole or in part, and
otherwise rectify the register with respect to the
registration of any party to the action in the exercise of
this. Judgment and orders shall be certified by the court to
the Director, who shall make appropriate entry upon the
records of the Bureau, and shall be controlled thereby.
(Sec. 25, R.A. No. 166a)
Section 162. Action for False or Fraudulent Declaration.
- Any person who shall procure registration in the Office
of a mark by a false or fraudulent declaration or
representation, whether oral or in writing, or by any false
means, shall be liable in a civil action by any person
injured thereby for any damages sustained in consequence
thereof (Sec. 26, R.A. No. 166)
Section 163. Jurisdiction of Court. - All actions under
Sections 150, 155, 164, and 166 to 169 shall be brought
before the proper courts with appropriate jurisdiction
under existing laws. (Sec. 27, R.A. No. 166)
Section 164. Notice of Filing Suit Given to the Director. -
It shall be the duty of the clerks of such courts within one
(1) month after the filing of any action, suit, or proceeding
involving a mark registered under the provisions of this
Act, to notify the Director in writing setting forth: the
names and addresses of the litigants and designating the
number of the registration or registrations and within one
(1) month after the judgment is entered or an appeal is
taken, the clerk of court shall give notice thereof to the
Office, and the latter shall endorse the same upon the
filewrapper of the said registration or registrations and
incorporate the same as a part of the contents of said
filewrapper. (n)
Section 165. Trade Names or Business Names. - 165.1. A
name or designation may not be used as a trade name if by
its nature or the use to which such name or designation
may be put, it is contrary to public order or morals and if,
in particular, it is liable to deceive trade circles or the
public as to the nature of the enterprise identified by that
name.
165.2.(a) Notwithstanding any laws or regulations
providing for any obligation to register trade names, such
names shall be protected, even prior to or without
registration, against any unlawful act committed by third
parties.
(b) In particular, any subsequent use of the trade name by
a third party, whether as a trade name or a mark or
collective mark, or any such use of a similar trade name or
mark, likely to mislead the public, shall be deemed
unlawful.
165.3. The remedies provided for in Sections 153 to 156
and Sections 166 and 167 shall apply mutatis mutandis.
165.4. Any change in the ownership of a trade name shall
be made with the transfer of the enterprise or part thereof
identified by that name. The provisions of Subsections
149.2 to 149.4 shall apply mutatis mutandis.
Case: Converse Rubber vs. Universal Rubber
Converse Rubber Corporation is an American corporation
while Universal Rubber Products, Inc. is a corporation
licensed to do business in the country. Converse has been
operating since 1946. Universal Rubber has been operating
since 1963. Later, Universal Rubber filed an application for
the trademark “Universal Converse and Device” before the
Philippine Patent Office. Converse Rubber opposed as it
averred that the word “Converse” which is part of its
corporate name cannot be granted as part of Universal
Rubber’s trademark or trade name because it will likely
deceive purchasers of Universal Rubber’s products as it may
be mistaken by unwary customers to be manufactured by
Converse Rubber. The Director of Patents did not grant the
opposition by Converse Rubber. With its motion for
reconsideration denied, it filed a petition for review with the
Supreme Court.
Issue: Whether Universal Rubber can appropriate
“Converse”?
Held: No. Converse Rubber has earned a business reputation
and goodwill in the Philippines. The word “converse” has
been associated with its products, “converse chuck Taylor,”
“Converse all Star,” “All Star Converse Chuck Taylor,” or
“Converse Shoes Chuck and Taylor.” “Converse” has grown
to be identified with Converse rubber products and has
acquired a second meaning within the context of trademark
and tradename laws.
There is confusing similarity between “Universal converse
and Device” and “Converse chuck Taylor” and “All Star
Device” which would confuse the public to the prejudice of
Converse Rubber’ inasmuch as “Universal Converse and
Device” is imprinted in a circular manner on the side of its
rubber shoes, similar to that of “Converse Chuck Taylor.”
From a cursory appreciation of the Converse Rubber’s
corporate name “CONVERSE RUBBER
CORPORATION”, it is evident that the word
“CONVERSE” is the dominant word which identifies
Converse Rubber from other corporations engaged in
similar business. Universal Rubber, in the stipulation of
facts, admitted Converse Rubber’s existence since 1946 as
a duly organized foreign corporation engaged in the
manufacture of rubber shoes. This admission necessarily
betrays its knowledge of the reputation and business of
petitioner even before it applied for registration of the
trademark in question. Knowing, therefore, that the word
“CONVERSE” belongs to and is being used by Converse
Rubber, and is in fact the dominant word in its corporate
name, Universal Rubber has no right to appropriate the
same for use on its products which are similar to those
being produced by Converse Rubber.
Case: Coffee Partners vs. San Francisco Coffee
The petitioner holds a business in maintaining coffee shops
in the Philippines. It is registered with the Securities and
Exchange Commission in January 2001. In its franchise
agreement with Coffee Partners Ltd, it carries the
trademark “San Francisco Coffee.” Respondent is engaged
in the wholesale and retail sale of coffee that was
registered in SEC in May 1995 under a registered business
name of “San Francisco Coffee & Roastery, Inc.” It entered
into a joint venture with Boyd Coffee USA to study coffee
carts in malls.
When respondent learned that petitioner will open a coffee
shop in Libis, Q.C. they sent a letter to the petitioner
demanding them to stop using the name “San Francisco
Coffee” as it causes confusion to the minds of the public. A
complaint was also filed by respondents before the Bureau
of Legal Affairs of the Intellectual Property Office for
infringement and unfair competition with claims for
damages. Petitioners contend that there are distinct
differences in the appearance of their trademark and that
respondent abandoned the use of their trademark when it
joined venture with Boyd Coffee USA. The Bureau of
Legal Affairs of the IPO held that petitioner’s trademark
infringed on the respondent’s trade name as it registered its
business name first with the DTI in 1995 while petitioner
only registered its trademark in 2001.
Furthermore, it ruled that the respondent did not
abandon the use of its trade name upon its joint venture
with Boyd Coffee USA since in order for abandonment to
exist it must be permanent, intentional and voluntary.
It also held that petitioner’s use of the trademark "SAN
FRANCISCO COFFEE" will likely cause confusion because
of the exact similarity in sound, spelling, pronunciation, and
commercial impression of the words "SAN FRANCISCO"
which is the dominant portion of respondent’s trade name
and petitioner’s trademark. Upon appeal before the office of
the Director General of the IPO, the decision of its legal
affairs was reversed declaring there was no infringement.
The Court of Appeals however set aside its decision and
reinstated the IPO legal affairs’ decision. Petitioner contends
that the respondent’s trade name is not registered therefore a
suit for infringement is not available.
Issue:
Whether or not the petitioner’s use of the trademark "SAN
FRANCISCO COFFEE" constitutes infringement
of respondent’s trade name "SAN FRANCISCO COFFEE &
ROASTERY, INC.," even if the trade name is not registered
with the Intellectual Property Office (IPO)?
Held:
Registration of a trademark before the IPO is no longer a
requirement to file an action for infringement as provided in
Section 165.2 of RA 8293. All that is required is that the
trade name is previously used in trade or commerce in
the Philippines. There is no showing that respondent
abandoned the use of its trade name as it continues to embark
to conduct research on retailing coffee, import and sell
coffee machines as among the services for which the use of
the business name has been registered.
The court also laid down two tests to determine similarity
and likelihood of confusion. The dominancy test focuses
on similarity of the prevalent features of the trademarks that
could cause deception and confusion that constitutes
infringement. Exact duplication or imitation is not required.
The question is whether the use of the marks involved is
likely to cause confusion or mistake in the mind of the public
or to deceive consumers. the holistic test entails a
consideration of the entirety of the marks as applied to the
products, including the labels and packaging, in determining
confusing similarity.1 The discerning eye of the observer
must focus not only on the predominant words but also on
the other features appearing on both marks in order that the
observer may draw his conclusion whether one is
confusingly similar to the other.
Applying either 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. And
because both are involved in coffee business there is always
the high chance that the public will get confused of the
source of the coffee sold by the petitioner.
Respondent has acquired an exclusive right to the use of the
trade name "SAN FRANCISCO COFFEE & ROASTERY,
INC." since the registration of the business name with the
DTI in 1995.
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.
Section 166. Goods Bearing Infringing Marks or Trade
Names. - No article of imported merchandise which shall
copy or simulate the name of any domestic product, or
manufacturer, or dealer, or which shall copy or simulate a
mark registered in accordance with the provisions of this
Act, or shall bear a mark or trade name calculated to
induce the public to believe that the article is
manufactured in the Philippines, or that it is manufactured
in any foreign country or locality other than the country or
locality where it is in fact manufactured, shall be admitted
to entry at any customhouse of the Philippines. In order to
aid the officers of the customs service in enforcing this
prohibition, any person who is entitled to the benefits of
this Act, may require that his name and residence, and the
name of the locality in which his goods are manufactured,
a copy of the certificate of registration of his mark or trade
name, to be recorded in books which shall be kept for this
purpose in the Bureau of Customs, under such regulations
as the Collector of Customs with the approval of the
Secretary of Finance shall prescribe, and may furnish to
the said Bureau facsimiles of his name, the name of the
locality in which his goods are manufactured, or his
registered mark or trade name, and thereupon the Collector
of Customs shall cause one (1) or more copies of the same
to be transmitted to each collector or to other proper
officer of the Bureau of Customs. (Sec. 35, R.A. No. 166)
Section 167. Collective Marks. - 167.1. Subject to
Subsections 167.2 and 167.3, Sections 122 to 164 and 166
shall apply to collective marks, except that references
therein to "mark" shall be read as "collective mark".
167.2.(a) An application for registration of a collective
mark shall designate the mark as a collective mark and
shall be accompanied by a copy of the agreement, if any,
governing the use of the collective mark.
(b) The registered owner of a collective mark shall notify
the Director of any changes made in respect of the
agreement referred to in paragraph (a).
167.3. In addition to the grounds provided in Section 149,
the Court shall cancel the registration of a collective mark
if the person requesting the cancellation proves that only
the registered owner uses the mark, or that he uses or
permits its use in contravention of the agreements referred
to in Subsection 166.2 or that he uses or permits its use in
a manner liable to deceive trade circles or the public as to
the origin or any other common characteristics of the
goods or services concerned.
167.4. The registration of a collective mark, or an
application therefor shall not be the subject of a license
contract. (Sec. 40, R.A. No. 166a)
Section 168. Unfair Competition, Rights, Regulation and
Remedies. - 168.1. A person who has identified in the
mind of the public the goods he manufactures or deals in,
his business or services from those of others, whether or
not a registered mark is employed, has a property right in
the goodwill of the said goods, business or services so
identified, which will be protected in the same manner as
other property rights.
168.2. Any person who shall employ deception or any
other means contrary to good faith by which he shall pass
off the goods manufactured by him or in which he deals,
or his business, or services for those of the one having
established such goodwill, or who shall commit any acts
calculated to produce said result, shall be guilty of unfair
competition, and shall be subject to an action therefor.
168.3. In particular, and without in any way limiting the
scope of protection against unfair competition, the
following shall be deemed guilty of unfair competition:
(a) Any person, who is selling his goods and gives them
the general appearance of goods of another manufacturer
or dealer, either as to the goods themselves or in the
wrapping of the packages in which they are contained, or
the devices or words thereon, or in any other feature of
their appearance, which would be likely to influence
purchasers to believe that the goods offered are those of a
manufacturer or dealer, other than the actual manufacturer
or dealer, or who otherwise clothes the goods with such
appearance as shall deceive the public and defraud another
of his legitimate trade, or any subsequent vendor of such
goods or any agent of any vendor engaged in selling such
goods with a like purpose;
(b) Any person who by any artifice, or device, or who
employs any other means calculated to induce the false
belief that such person is offering the services of another
who has identified such services in the mind of the public;
or
(c) Any person who shall make any false statement in the
course of trade or who shall commit any other act contrary
to good faith of a nature calculated to discredit the goods,
business or services of another.
168.4. The remedies provided by Sections 156, 157 and
161 shall apply mutatis mutandis. (Sec. 29, R.A. No. 166a)
Case: In-N-Out Burger vs. Sehwan
Petitioner IN-N-OUT BURGER, INC., is a business entity
incorporated under the laws of California. It is a signatory
to the Convention of Paris on Protection of Industrial
Property and the TRIPS Agreement. It is engaged mainly
in the restaurant business, but it has never engaged in
business in the Philippines.
Respondents Sehwani, Incorporated and Benita Frites, Inc.
are corporations organized in the Philippines. Sometime in
1991, Sehwani filed with the BPTTT an application for the
registration of the mark “IN N OUT (the inside of the letter
“O” formed like a star).
Its application was approved and a certificate of
registration was issued in its name on 1993. In 2000,
Sehwani, Incorporated and Benita Frites, Inc. entered into a
Licensing Agreement, wherein the former entitled the latter
to use its registered mark, “IN N OUT.”
Sometime in 1997, In-N-Out Burger filed trademark and
service mark applications with the Bureau of Trademarks
for the “IN-N-OUT” and “IN-N-OUT Burger & Arrow
Design. In 2000, In-N-Out Burger found out that Sehwani,
Incorporated had already obtained Trademark Registration
for the mark “IN N OUT (the inside of the letter “O”
formed like a star).” Also in 2000, In-N-Out Burger sent a
demand letter directing Sehwani, Inc. to cease and desist
from claiming ownership of the mark “IN-N-OUT” and to
voluntarily cancel its trademark registration. Sehwani Inc.
did not accede to In-N-Out Burger’s demand but it
expressed its willingness to surrender its registration for a
consideration.
In 2001 In-N-Out Burger filed before the Bureau of Legal
Affairs an administrative complaint against the Sehwani,
Inc. and Benita Frites, Inc. for unfair competition and
cancellation of trademark registration.
Issues:
1. Whether or not the Intellectual Property Office
(an administrative body) have jurisdiction of cases
involving provisions of the IPC (e.g. unfair
competition)?
2. Whether or not there was unfair competition?
Held: (first issue)
Yes, the IPO (an administrative body) has jurisdiction in
cases involving provisions of the IPC (e.g. unfair
competition) due to the following reasons:
 Section 10 of the Intellectual Property Code
specifically identifies the functions of the Bureau
of Legal Affairs, thus:
Section 10. The Bureau of Legal Affairs.“The Bureau of
Legal Affairs shall have the following functions:
10.1 Hear and decide opposition to the application for
registration of marks; cancellation of trademarks; subject to
the provisions of Section 64, cancellation of patents and
utility models, and industrial designs; and petitions for
compulsory licensing of patents;
10.2 (a) Exercise original jurisdiction in administrative
complaints for violations of laws involving intellectual
property rights; Provided, That its jurisdiction is limited to
complaints where the total damages claimed are not less
than Two hundred thousand pesos
(P200,000): Provided, futher, That availment of the
provisional remedies may be granted in accordance with
the Rules of Court. Xxx
Xxx
(vi) The cancellation of any permit, license, authority, or
registration which may have been granted by the Office, or
the suspension of the validity thereof for such period of
time as the Director of Legal Affairs may deem reasonable
which shall not exceed one (1) year;
Xxx
(viii) The assessment of damages;
Unquestionably, petitioner’s complaint, which seeks the
cancellation of the disputed mark in the name of
respondent Sehwani, Incorporated, and damages for
violation of petitioner’s intellectual property rights, falls
within the jurisdiction of the IPO Director of Legal Affairs.
 While Section 163 thereof vests in civil courts
jurisdiction over cases of unfair competition,
nothing in the said section states that the regular
courts have sole jurisdiction over unfair
competition cases, to the exclusion of
administrative bodies.
 Sections 160 and 170, which are also found under
Part III of the Intellectual Property Code,
recognize the concurrent jurisdiction of civil
courts and the IPO over unfair competition cases.
These two provisions read:
Section 160. Right of Foreign Corporation to Sue in
Trademark or Service Mark Enforcement Action. Any
foreign national or juridical person who meets the
requirements of Section 3 of this Act and does not engage
in business in the Philippines may bring a civil
or administrative action hereunder for opposition,
cancellation, infringement, unfair competition, or false
designation of origin and false description, whether or not
it is licensed to do business in the Philippines under
existing laws.
Section 170. Penalties. Independent of the civil
and administrative sanctions imposed by law, 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 on any person who is found guilty of
committing any of the acts mentioned in Section 155,
Section168, and Subsection169.1.
Based on the foregoing discussion, the IPO Director of
Legal Affairs had jurisdiction to decide the petitioner’s
administrative case against respondents and the IPO
Director General had exclusive jurisdiction over the appeal
of the judgment of the IPO Director of Legal Affairs.
Held: (second issue)
Yes. The evidence on record shows that Sehwani Inc. and
Benita Frites were not using their registered trademark but
that of In-n-Out Burger. Sehwani and Benita Frites are also
giving their products the general appearance that would
likely influence the purchasers to believe that their
products are that of In-N-Out Burger. The intention to
deceive may be inferred from the similarity of the goods as
packed and offered for sale, and, thus, an action will lie to
restrain unfair competition. The respondents’ fraudulent
intention to deceive purchasers is also apparent in their use
of the In-N-Out Burger in business signages.
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.
IPO – Director of Legal Affairs decision
 In-N-Out Burger has legal capacity to sue in the
Philippines because the latter is a signatory of the
Convention of Paris on Protection of Industrial
Property.
 IN-N-OUT Burger, Inc. – right to use its
tradename and mark to the exclusion of the others
 Respondents’ use of the petitioner’s mark was
made in good faith and therefore they are not
guilty of unfair competition.
IPO – Director General’s Decision
 Respondents are guilty of unfair competition.
 The following are ordered to be paid to In-N-Out
Burger, inc.
 Damages in the amount of PHP 212, 574.28
 Exemplary damages in the amount of PHP
500,000
 Attorney’s fees and expenses of litigation in the
amount of PHP 500,000
CA Decision
 Regular courts, and not the BLA-IPO, have sole
jurisdiction to hear and decide cases involving
provisions of the IPC.
Case: Pro Line Sports Center vs CA
By virtue of its merger with A.G. Spalding Bros., Inc., on
31 December 1971, petitioner QUESTOR, a US-based
corporation, became the owner of the trademark "Spalding"
appearing in sporting goods, implements and apparatuses.
Co-petitioner PRO LINE, a domestic corporation, is the
exclusive distributor of "Spalding" sports products in the
Philippines. Respondent UNIVERSAL, on the other had, is
a domestic corporation engaged in the sale and
manufacture of sporting goods while co-respondent
Monico Sehwani is impleaded in his,capacity as president
of the corporation.
Edwin Dy Buncio, General Manager of PRO LINE, sent a
letter complaint to the National Bureau of Investigation
(NBI) regarding the alleged manufacture of fake
"Spalding" balls by UNIVERSAL.
On 23 February 1981 the NBI applied for a search warrant
with the then Court of First Instance, Br. 23, Pasig, Rizal,
then presided over by Judge Rizalina Bonifacio Vera.
On that same day Judge Vera issued Search Warrant No. 2-
81 authorizing the search of the premises of UNIVERSAL
in Pasig. In the course of the search, some 1,200
basketballs and volleyballs marked "Spalding" were seized
and confiscated by the NBI.
Three (3) days later, on motion of the NBI, Judge Vera
issued another order, this time to seal and padlock the
molds, rubber mixer, boiler and other instruments at
UNIVERSAL's factory. All these were used to
manufacture the fake "Spalding" products, but were simply
too heavy to be removed from the premises and brought
under the actual physical custody of the court.
However, on 28 April 1981, on motion of UNIVERSAL,
Judge Vera ordered the lifting of the seal and padlock on
the machineries, prompting the People of the Philippines,
the NBI together with PRO LINE and QUESTOR, to file
with the Court of Appeals a joint petition for certiorari and
prohibition with preliminary injunction (CA G.R. No.
12413) seeking the annulment of the order of 28 April
1981. On 18 May 1981, the appellate court issued a
temporary restraining order enjoining Judge Vera from
implementing her latest order.
A criminal case for unfair competition was filed by Pro
Line Sports Center, Inc. (PRO LINE) and Questor
Corporation (QUESTOR) against Monico Sehwani,
president of Universal Athletics and Industrial Products,
Inc. (UNIVERSAL). In that case Sehwani was exonerated.
As a retaliatory move, Sehwani and UNIVERSAL filed a
civil case for damages against PRO LINE and QUESTOR
for what they perceived as the wrongful and malicious
filing of the criminal action for unfair competition against
them.
On 20 April 1983 the petition in G.R. No. 63055 was
dismissed finding that the dismissal by the trial court of
Crim. Case No. 45284 was based on the merits of the case
which amounted to an acquittal of Sehwani.
Considering that the issue raised in G.R. No. 58714 had
already been rendered moot and academic by the dismissal
of Crim. Case No. 45284 and the fact that the petition in
G.R. No. 63055 seeking a review of such dismissal had
also been denied, the Court likewise dismissed the petition
in G.R. No. 58714. The dismissal became final and
executory with the entry of judgment made on 10 August
1983.
On the issue of the complaint for damages, RTC ruled in
favor of Universal which was affirmed by the CA. Hence,
this petition.
Issues:
Whether or not private respondents Sehwani and
UNIVERSAL are entitled to recover damages for the
alleged wrongful recourse to court proceedings by
petitioners PRO LINE and QUESTOR?
Held:
PRO LINE and QUESTOR cannot be adjudged liable for
damages for the alleged unfounded suit. The complainants
were unable to prove two (2) essential element of the crime
of malicious prosecution, namely, absence of probable
cause and legal malice on the part of petitioners.
The existence of probable cause for unfair competition by
UNIVERSAL is derivable from the facts and
circumstances of the case. The affidavit of Graciano
Lacanaria, a former employee of UNIVERSAL, attesting
to the illegal sale and manufacture of "Spalding " balls and
seized "Spalding" products and instruments from
UNIVERSAL's factory was sufficient prima facie evidence
to warrant the prosecution of private respondents. That a
corporation other than the certified owner of the trademark
is engaged in the unauthorized manufacture of products
bearing the same trademark engenders a reasonable belief
that a criminal offense for unfair competition is being
committed.
Petitioners PRO LINE and QUESTOR could not have been
moved by legal malice in instituting the criminal complaint
for unfair competition which led to the filing of the
Information against Sehwani. Malice is an inexcusable
intent to injure, oppress, vex, annoy or humiliate. We
cannot conclude that petitioners were impelled solely by a
desire to inflict needless and unjustified vexation and
injury on UNIVERSAL's business interests. A resort to
judicial processes is not per se evidence of ill will upon
which a claim for damages may be based. A contrary rule
would discourage peaceful recourse to the courts of justice
and induce resort to methods less than legal, and perhaps
even violent.
We are more disposed, under the circumstances, to hold
that PRO LINE as the authorized agent of QUESTOR
exercised sound judgment in taking the necessary legal
steps to safeguard the interest of its principal with respect
to the trademark in question. If the process resulted in the
closure and padlocking of UNIVERSAL's factory and the
cessation of its business operations, these were unavoidable
consequences of petitioners' valid and lawful exercise of
their right. One who makes use of his own legal right does
no injury. Qui jure suo utitur nullum damnum facit. If
damage results from a person's exercising his legal rights,
it is damnum absque injuria.
Admittedly, UNIVERSAL incurred expenses and other
costs in defending itself from the accusation. But, as Chief
Justice Fernando would put it, "the expenses and
annoyance of litigation form part of the social burden of
living in a society which seeks to attain social control
through law." Thus we see no cogent reason for the award
of damages, exorbitant as it may seem, in favor of
UNIVERSAL. To do so would be to arbitrarily impose a
penalty on petitioners' right to litigate.
The criminal complaint for unfair competition, including
all other legal remedies incidental thereto, was initiated by
petitioners in their honest belief that the charge was
meritorious. For indeed it was. The law brands business
practices which are unfair, unjust or deceitful not only as
contrary to public policy but also as inimical to private
interests. In the instant case, we find quite aberrant
Sehwani's reason for the manufacture of 1,200 "Spalding"
balls, i.e., the pending application for trademark
registration UNIVERSAL with the Patent Office, when
viewed in the light of his admission that the application for
registration with the Patent Office was filed on 20 February
1981, a good nine (9) days after the goods were
confiscated by the NBI. This apparently was an
afterthought but nonetheless too late a remedy. Be that as it
may, what is essential for registrability is proof of actual
use in commerce for at least sixty (60) days and not the
capability to manufacture and distribute samples of the
product to clients.
Counterclaim for damages cannot be sustained. Petitioners'
counterclaim for damages based on the illegal and
unauthorized manufacture of "Spalding" balls certainly
constitutes an independent cause of action which can be the
subject of a separate complaint for damages against
UNIVERSAL. However, this separate civil action cannot
anymore be pursued as it is already barred by res judicata,
the judgment in the criminal case (against Sehwani)
involving both the criminal and civil aspects of the case for
unfair competition.
Case: Caterpillar vs Samson
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), 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).
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, 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 party - 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.
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 2000-1364
and LS. Nos. 2001-042 to 2001-067.
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.
Caterpillar’s MR denied.
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 information filed
against Samson in court. Correspondingly, Presiding Judge
Lerma of the RTC ordered the withdrawal of Criminal
Cases Nos. 02-240 to 02- 243 on February 4, 2003.
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, and the CA
ultimately granted the petition for certiorari, setting aside
the assailed January 13, 2003 resolution of the Acting
Justice Secretary and directing the re-filing of the
withdrawn information against Samson. The Court
ultimately affirmed the CA's decision 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.
In the assailed January 21, 2004 decision, the CA
dismissed Caterpillar's petition for certiorari in CA-G.R.
SP No. 75526. Caterpillar sought the reconsideration of the
dismissal, but the CA denied the motion on June 30, 2004.
Hence, Caterpillar appealed the CA's decision in C.A.-G.R.
SP No. 75526.
G .R. No. 205972
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
(RIIDNCRPO) 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, 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.
Caterpillar moved for the reconsideration of the dismissal,
but State Prosecutor Abad denied the motion on June 18,
2004.
The Secretary of Justice affirmed the dismissal of the
complaint through the resolution issued on September 19,
2005, 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).
On May 8, 2012, however, the CA denied due course the
Caterpillar's petition for review. Caterpillar filed a motion
for reconsideration, but the CA denied the motion for its
lack of merit on February 12,2013.
Hence, Caterpillar commenced G.R. No. 205972.
Issue:
G.R. No. 164352
Whether or not a criminal complaint for unfair competition can
proceed independently of, and simultaneous with, the civil case
for the same?
Held:
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.
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.
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. 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.
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. 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;" it is independent of
registration. As fittingly put in R.F. & Alexander & Co. v.
Ang, "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.
Issue:
Whether or not the CA is correct?
G.R. No. 205972
Held:
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, and the egregious
errorwarranted 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.
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.
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. The 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. 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.
Neither can he be precluded from filing an information if
he is convinced of the merits of the case.
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.
Case: Shang Properties vs St. Francis
St. Francis Development Corporation (SFDC), a domestic
corporation engaged in the real estate business and the
developer of St. Francis Square Commercial Center in
Ortigas Center, filed complaint for unfair competition
against Shang Properties Realty Corporation (Shang)
before the IPO - Bureau of Legal Affairs due to Shang’s
use and filing of applications for the registration of the
marks “THE ST. FRANCIS TOWER” and “THE ST.
FRANCIS SHANGRILA PLACE” for use relative to
Shang’s business, particularly the construction of
permanent buildings or structures for residential and office
purposes.
SFDC alleged that (1) it used “ST. FRANCIS: to identify
numerous property development projects in Ortigas Center
and (2) as a use of its continuous projects in Ortigas Center
and real estate business, it has gained substantial goodwill
with the public that consumers and traders closely identify
the mark with its property development projects.
On the other hand, Shang contended that the mark with its
property cannot be exclusively owned by SFDC since the
marks is geographically descriptive of the goods or
services for which it is intended to be used.
ISSUES:
(1) Whether the Shang Properties is guilty of unfair
competition.
(2) Whether the mark “ST. FRANCIS” acquires a
secondary meaning warranting SFDC’s right to its
exclusive use.
HELD: (1) NO. Shang is not guilty of unfair competition.
Unfair competition is the passing off (of palming off) or
attempting to pass off upon the public of the goods or
business of one person as the goods or business of another
with the end and probable effect of deceiving the public.
In other words, it is when he gives his goods the general
appearance of the goods of his competitors with the
intention of deceiving the public, that the goods are those
of his competitor.
In this case, the elements of fraud is wanting, hence, there
can be no unfair competition.
There is no evidence that (1) Shang gave their
goods/services the general appearance that it was SFDC
which offering the same to the public (2) Shang employed
any means to induce SFDC’s goods/services; and (3)
Shang made any false statement or commit acts tending to
discredit the goods/services offered by SFDC.
The mark “ST. FRANCIS” is geographically descriptive in
nature, thus, it cannot be exclusively appropriated unless a
secondary meaning is acquired. Therefore, Shang is not
guilty of unfair competition.
(2) NO. The mark ‘ST. FRANCIS” did not acquire
secondary meaning. Descriptive geographical terms are in
the public domain in the sense that every seller should have
the right to inform customers of the geographical origin of
his goods.
A geographical descriptive term is any noun or adjective
that designates geographical location and would tend to be
regarded by buyers as descriptive of geographic location of
origin of the goods or services. A geographically
descriptive term can indicate any geographic location on
earth, such as continents, nations, regions, states, cities,
streets and addresses.
Under Section 123.2 of the IP Code, specific requirements
have to be met in order to conclude that geographically
descriptive mark has acquired secondary meaning, to wit:
(a) the secondary meaning must have arisen as a result of
substantial commercial use of a mark in the Philippines; (b)
such use must result in the distinctiveness of the mark
insofar as the goods or the products are concerned; and (c)
proof of substantially exclusive and continuous commercial
use in the Philippines for five (5) years before the date on
which the claim of distinctiveness is made. Unless
secondary meaning has been established, a geographically
descriptive mark, due to its general public domain
classification, is perceptibly disqualified from trademark
registration.
In this case, SFDC was not able to prove its compliance
with the above-mentioned requirements. While it is true
that SFDC had been using the mark since 1992, its use
thereof has been merely confined to its realty projects
within the Ortigas Center. As its use thereof has been
merely confined to a certain locality.
Section 169. False Designations of Origin; False
Description or Representation. - 169.1. Any person who,
on or in connection with any goods or services, or any
container for goods, uses in commerce any word, term,
name, symbol, or device, or any combination thereof, or
any false designation of origin, false or misleading
description of fact, or false or misleading representation of
fact, which:
(a) Is likely to cause confusion, or to cause mistake, or to
deceive as to the affiliation, connection, or association of
such person with another person, or as to the origin,
sponsorship, or approval of his or her goods, services, or
commercial activities by another person; or
(b) In commercial advertising or promotion, misrepresents
the nature, characteristics, qualities, or geographic origin
of his or her or another person's goods, services, or
commercial activities, shall be liable to a civil action for
damages and injunction provided in Sections 156 and 157
of this Act by any person who believes that he or she is or
is likely to be damaged by such act.

169.2. Any goods marked or labelled in contravention of

the provisions of this Section shall not be imported into
the Philippines or admitted entry at any customhouse of
the Philippines. The owner, importer, or consignee of
goods refused entry at any customhouse under this section
may have any recourse under the customs revenue laws or
may have the remedy given by this Act in cases involving
goods refused entry or seized. (Sec. 30, R.A. No. 166a)

Section 170. Penalties. - Independent of the civil and

administrative sanctions imposed by law, 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 on any person who is found guilty of
committing any of the acts mentioned in Section 155,
Section 168 and Subsection 169.1. (Arts. 188 and 189,
Revised Penal Code)
 TEST TO DETERMINE CONFUSING SIMILARITY
BETWEEN MARK (Dominancy Test and Holistic
Test)
Case: Del Monte Corp. vs. CA
Del Monte Corporation is an American corporation which is not
engaged in business in the Philippines. Though not engaging
business here, it has given authority to Philippine Packing
Corporation (Philpack) the right to manufacture, distribute and
sell in the Philippines various agricultural products, including
catsup, under the Del Monte trademark and logo. In 1965, Del
Monte also authorized Philpack to register with the Patent Office
the Del Monte catsup bottle configuration. Philpack was issued a
certificate of trademark registration under the Supplemental
Register.
Later, Del Monte and Philpack learned that Sunshine Sauce
Manufacturing was using Del Monte bottles in selling its
products and that Sunshine Sauce’s logo is similar to that of Del
Monte. The RTC of Makati as well as the Court of Appeals ruled
that there was no infringement because the trademarks used
between the two are different in designs and that the use of Del
Monte bottles by Sunshine Sauce does not constitute unfair
competition because as ruled in Shell Company vs Insular
Petroleum: “selling oil in containers of another with markings
erased, without intent to deceive, was not unfair competition.”
Issue: Whether or not there is unfair competition and
infringement in the case at bar?
HELD:
Yes. The Supreme Court recognizes that there really are
distinctions between the designs of the logos or trademarks of
Del Monte and Sunshine Sauce. However, it has been that side
by side comparison is not the final test of similarity. Sunshine
Sauce’s logo is a colorable imitation of Del Monte’s trademark.
The word “catsup” in both bottles is printed in white and the
style of the print/letter is the same. Although the logo of
Sunshine is not a tomato, the figure nevertheless approximates
that of a tomato.
The person who infringes a trade mark does not normally copy
out but only makes colorable changes, employing enough points
of similarity to confuse the public with enough points of
differences to confuse the courts. What is undeniable is the fact
that when a manufacturer prepares to package his product, he has
before him a boundless choice of words, phrases, colors and
symbols sufficient to distinguish his product from the others.
When as in this case, Sunshine chose, without a reasonable
explanation, to use the same colors and letters as those used by
Del Monte though the field of its selection was so broad, the
inevitable conclusion is that it was done deliberately to deceive.
The Supreme Court also ruled that Del Monte does not have the
exclusive right to use Del Monte bottles in the Philippines
because Philpack’s patent was only registered under the
Supplemental Register and not with the Principal Register.
Under the law, registration under the Supplemental Register is
not a basis for a case of infringement because unlike registration
under the Principal Register, it does not grant exclusive use of
the patent.
However, the bottles of Del Monte do say in embossed letters:
“Del Monte Corporation, Not to be Re-filled”. And yet Sunshine
Sauce refilled these bottles with its catsup products. This clearly
shows the Sunshine Sauce’s bad faith and its intention to
capitalize on the Del Monte’s reputation and goodwill and pass
off its own product as that of Del Monte.
Issue: Whether or not there is confusing similarity between the
two trademarks?
Held:
YES. At that, even if the labels were analyzed together it is not
difficult to see that the Sunshine label is a colorable imitation of
the Del Monte trademark. The predominant colors used in the
Del Monte label are green and red-orange, the same with
Sunshine. The word “catsup” in both bottles is printed in white
and the style of the print/letter is the same. Although the logo of
Sunshine is not a tomato, the figure nevertheless approximates
that of a tomato.
As previously stated, the person who infringes a trade mark does
not normally copy out but only makes colorable changes,
employing enough points of similarity to confuse the public with
enough points of differences to confuse the courts. What is
undeniable is the fact that when a manufacturer prepares to
package his product, he has before him a boundless choice of
words, phrases, colors and symbols sufficient to distinguish his
product from the others. When as in this case, Sunshine chose,
without a reasonable explanation, to use the same colors and
letters as those used by Del Monte though the field of its
selection was so broad, the inevitable conclusion is that it was
done deliberately to deceive.
Case: Prosource International Inc. vs. Horphag Research
Management SA
Respondent is a corporation and owner of trademark
PYCNOGENOL, a food. Respondent later discovered that
petitioner was also distributing a similar food supplement using
the mark PCO-GENOLS since 1996. This prompted respondent
to demand that petitioner cease and desist from using the
aforesaid mark.
Respondent filed a Complaint for Infringement of Trademark
with Prayer for Preliminary Injunction against petitioner, in using
the name PCO-GENOLS for being confusingly similar.
Petitioner appealed otherwise.
The RTC decided in favor of respondent. It observed that
PYCNOGENOL and PCO-GENOLS have the same suffix
"GENOL" which appears to be merely descriptive and thus open
for trademark registration by combining it with other words and
concluded that the marks, when read, sound similar, and thus
confusingly similar especially since they both refer to food
supplements.
On appeal to the CA, petitioner failed to obtain a favorable
decision. The appellate court explained that under the
Dominancy or the Holistic Test, PCO-GENOLS is deceptively
similar to PYCNOGENOL.

Issue: Whether the names are confusingly similar?
Held:
Yes. There is confusing similarity and the petition is denied.
Jurisprudence developed two test to prove such.
The Dominancy Test focuses on the similarity of the prevalent
features of the competing trademarks that might cause confusion
and deception, thus constituting infringement. If the competing
trademark contains the main, essential and dominant features of
another, and confusion or deception is likely to result,
infringement takes place. Duplication or imitation is not
necessary; nor is it necessary that the infringing label should
suggest an effort to imitate. The question is whether the use of
the marks involved is likely to cause confusion or mistake in the
mind of the public or to deceive purchasers. Courts will consider
more the aural and visual impressions created by the marks in the
public mind, giving little weight to factors like prices, quality,
sales outlets, and market segments.
The Holistic Test entails a consideration of the entirety of the
marks as applied to the products, including the labels and
packaging, in determining confusing similarity. Not only on the
predominant words should be the focus but also on the other
features appearing on both labels in order that the observer may
draw his conclusion whether one is confusingly similar to the
other.
SC applied the Dominancy Test.Both the words have the same
suffix "GENOL" which on evidence, appears to be merely
descriptive and furnish no indication of the origin of the article
and hence, open for trademark registration by the plaintiff
through combination with another word or phrase. When the two
words are pronounced, the sound effects are confusingly similar
not to mention that they are both described by their
manufacturers as a food supplement and thus, identified as such
by their public consumers. And although there were
dissimilarities in the trademark due to the type of letters used as
well as the size, color and design employed on their individual
packages/bottles, still the close relationship of the competing
products’ name in sounds as they were pronounced, clearly
indicates that purchasers could be misled into believing that they
are the same and/or originates from a common source and
manufacturer.
ADDITIONAL CASES
Case: EY Industrial vs Shen Dar
EYIS is a domestic corporation engaged in the production,
distribution and sale of air compressors and other industrial tools
and equipment. Petitioner Engracio Yap is the Chairman of the
Board of Directors of EYIS.
Respondent Shen Dar is a Taiwan-based foreign corporation
engaged in the manufacture of air compressors.
Both companies claimed to have the right to register the
trademark "VESPA" for air compressors.
From 1997 to 2004, EYIS imported air compressors from Shen
Dar through sales contracts. In the Sales Contract dated April 20,
2002, for example, Shen Dar would supply EYIS in one (1) year
with 24 to 30 units of 40-ft. containers worth of air compressors
identified in the Packing/Weight Lists simply as SD-23, SD-29,
SD-31, SD-32, SD-39, SD-67 and SD-68. In the corresponding
Bill of Ladings, the items were described merely as air
compressors. There is no documentary evidence to show that
such air compressors were marked "VESPA."
On June 9, 1997, Shen Dar filed Trademark Application Serial
No. 4-1997-121492 with the IPO for the mark "VESPA, Chinese
Characters and Device" for use on air compressors and welding
machines.
On July 28, 1999, EYIS filed Trademark Application Serial No.
4-1999-005393, also for the mark "VESPA," for use on air
compressors. On January 18, 2004, the IPO issued COR No. 4-
1999-005393 in favor of EYIS. Thereafter, on February 8, 2007,
Shen Dar was also issued COR No. 4-1997-121492.
In the meantime, on June 21, 2004, Shen Dar filed a Petition for
Cancellation of EYIS’ COR with the BLA. In the Petition, Shen
Dar primarily argued that the issuance of the COR in favor of
EYIS violated Section 123.1 paragraphs (d), (e) and (f) of
Republic Act No. (RA) 8293, otherwise known as the Intellectual
Property Code (IP Code), having first filed an application for the
mark. Shen Dar further alleged that EYIS was a mere distributor
of air compressors bearing the mark "VESPA" which it imported
from Shen Dar. Shen Dar also argued that it had prior and
exclusive right to the use and registration of the mark "VESPA"
in the Philippines under the provisions of the Paris Convention.
In its Answer, EYIS and Yap denied the claim of Shen Dar to be
the true owners of the mark "VESPA" being the sole assembler
and fabricator of air compressors since the early 1990s. They
further alleged that the air compressors that Shen Dar allegedly
supplied them bore the mark "SD" for Shen Dar and not
"VESPA." Moreover, EYIS argued that Shen Dar, not being the
owner of the mark, could not seek protection from the provisions
of the Paris Convention or the IP Code.
Thereafter, the Director of the BLA issued its Decision dated
May 29, 2006 in favor of EYIS and against Shen Dar, the
dispositive portion of which reads:
WHEREFORE, premises considered, the Petition for
Cancellation is, as it is hereby, DENIED. Consequently,
Certificate of Registration No. 4-1999-[005393] for the mark
"VESPA" granted in the name of E.Y. Industrial Sales, Inc. on 9
January 2007 is hereby upheld.
Let the file wrapper of VESPA subject matter of this case be
forwarded to the Administrative, Financial and Human Resource
Development Services Bureau for issuance and appropriate
action in accordance with this DECISION and a copy thereof
furnished to the Bureau of Trademarks for information and
update of its records. SO ORDERED.
The Ruling of the Court
The appeal is meritorious.
Fifth Issue:
Whether EYIS is the true owner of the mark "VESPA"
In any event, given the length of time already invested by the
parties in the instant case, this Court must write finis to the
instant controversy by determining, once and for all, the true
owner of the mark "VESPA" based on the evidence presented.
RA 8293 espouses the "first-to-file" rule as stated under Sec.
123.1(d) which states:
Section 123. Registrability. - 123.1. A mark 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. (Emphasis supplied.)
Under this 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 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.
Sec. 134 of the IP Code provides that "any person who believes
that he would be damaged by the registration of a mark x x x"
may file an opposition to the application. The term "any person"
encompasses the true owner of the mark¾the prior and
continuous user.
Notably, the Court has ruled that the prior and continuous use of
a mark may even overcome the presumptive ownership of the
registrant and be held as the owner of the mark. As aptly stated
by the Court in Shangri-la International Hotel Management, Ltd.
v. Developers Group of Companies, Inc.
Registration, without more, does not confer upon the registrant
an absolute right to the registered mark. The certificate of
registration is merely a prima facie proof that the registrant is the
owner of the registered mark or trade name. Evidence of prior
and continuous use of the mark or trade name by another can
overcome the presumptive ownership of the registrant and may
very well entitle the former to be declared owner in an
appropriate case.
xxxx
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.
xxxx
By itself, registration is not a mode of acquiring ownership.
When the applicant is not the owner of the trademark being
applied for, he has no right to apply for registration of the same.
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.
Here, the incontrovertible truth, as established by the evidence
submitted by the parties, is that EYIS is the prior user of the
mark. The exhaustive discussion on the matter made by the BLA
sufficiently addresses the issue:
Based on the evidence, Respondent E.Y. Industrial is a legitimate
corporation engaged in buying, importing, selling, industrial
machineries and tools, manufacturing, among others since its
incorporation in 1988. (Exhibit "1"). Indeed private respondents
have submitted photographs (Exhibit "376", "377", "378", "379")
showing an assembly line of its manufacturing or assembly
process.
More importantly, the private respondent’s prior adoption and
continuous use of the mark "VESPA" on air compressors is
bolstered by numerous documentary evidence consisting of sales
invoices issued in the name of respondent EY Industrial and Bills
of Lading. (Exhibits "4" to "375"). Sales Invoice No. 12075
dated March 27, 1995 antedates petitioner’s date of first use in
January 1, 1997 indicated in its trademark application filed in
June 9, 1997 as well as the date of first use in June of 1996 as
indicated in the Declaration of Actual Use submitted on
December 3, 2001 (Exhibit "385"). The use by respondent-
registrant in the concept of owner is shown by commercial
documents, sales invoices unambiguously describing the goods
as "VESPA" air compressors. Private respondents have sold the
air compressors bearing the "VESPA" to various locations in the
Philippines, as far as Mindanao and the Visayas since the early
1990’s. We carefully inspected the evidence consisting of three
hundred seventy one (371) invoices and shipment documents
which show that "VESPA" air compressors were sold not only in
Manila, but to locations such as Iloilo City, Cebu City,
Dumaguete City, Zamboanga City, Cagayan de Oro City, Davao
City to name a few. There is no doubt that it is through private
respondents’ efforts that the mark "VESPA" used on air
compressors has gained business goodwill and reputation in the
Philippines for which it has validly acquired trademark rights.
Respondent EY Industrial’s right has been preserved until the
passage of RA 8293 which entitles it to register the same. x x x
On the other hand, Shen Dar failed to refute the evidence cited
by the BLA in its decision. More importantly, Shen Dar failed to
present sufficient evidence to prove its own prior use of the mark
"VESPA." We cite with approval the ruling of the BLA:
[Shen Dar] avers that it is the true and rightful owner of the
trademark "VESPA" used on air compressors. The thrust of
[Shen Dar’s] argument is that respondent E.Y. Industrial Sales,
Inc. is a mere distributor of the "VESPA" air compressors. We
disagree.
This conclusion is belied by the evidence. We have gone over
each and every document attached as Annexes "A", "A" 1-48
which consist of Bill of Lading and Packing Weight List. Not
one of these documents referred to a "VESPA" air compressor.
Instead, it simply describes the goods plainly as air compressors
which is type "SD" and not "VESPA". More importantly, the
earliest date reflected on the Bill of Lading was on May 5, 1997.
(Annex – "A"-1).
[Shen Dar] also attached as Annex "B" a purported Sales
Contract with respondent EY Industrial Sales dated April 20,
2002. Surprisingly, nowhere in the document does it state that
respondent EY Industrial agreed to sell "VESPA" air
compressors. The document only mentions air compressors
which if genuine merely bolsters respondent Engracio Yap’s
contention that [Shen Dar] approached them if it could sell the
"Shen Dar" or "SD" air compressor. (Exhibit "386") In its
position paper, [Shen Dar] merely mentions of Bill of Lading
constituting respondent as consignee in 1993 but never submitted
the same for consideration of this Bureau. The document is also
not signed by [Shen Dar]. The agreement was not even drafted in
the letterhead of either [Shen Dar] nor [sic] respondent –
registrant. Our only conclusion is that [Shen Dar] was not able to
prove to be the owner of the VESPA mark by appropriation.
Neither was it able to prove actual commercial use in the
Philippines of the mark VESPA prior to its filing of a trademark
application in 9 June 1997.
As such, EYIS must be considered as the prior and continuous
user of the mark "VESPA" and its true owner. Hence, EYIS is
entitled to the registration of the mark in its name.
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: Dermaline vs Myra Pharmaceuticals
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: Wether or not the IPO should allow the registration of the
trademark “Dermaline.”
Held:
NO. As Myra correctly posits, it 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 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. 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. Relative to the
question on confusion of marks and trade names, jurisprudence
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.
Using this test, the IPO declared that both confusion of goods
and service and confusion of business or of origin were apparent
in both trademarks. While it is true that the two marks are
presented differently, 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. 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.
Further, 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.
Issue: Whether or not petitioner’s use of “Dermaline Inc” can
result in confusion, mistake or deception on the part of the
purchasing public?
Held:
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: Taiwan Kolin Corp. vs. Kolin Electronics
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 the
trademark “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: Whether or not 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 equipment, 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: Seri Soomboonsakdikul vs Orlane
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.5
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 for the following goods:
x x x 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. 12996.7 and (3) on September 5, 2003, it filed
another application for use of the trademark on its additional
products:
x x x toilet waters; revitalizing waters, perfumes, deodorants and
body deodorants, anti-perspiration toiletries; men and women
perfume products for face care and body care; face, eye, lips,
nail, hand make-up products and make-up removal products,
towels impregnated with cosmetic lotions; tanning and instant
tanning sun products, sun protection products, (not for medical
use), after-sun cosmetic products; cosmetic products; slimming
cosmetic aids; toiletries; lotions, shampoos and hair care
products; shave and after shave products, shaving and hair
removing products; essential oils; toothpastes; toiletry, cosmetic
and shaving kits for travel, filled or fitted vanity-cases.
Respondent adds that by promotion, worldwide registration,
widespread and high standard use, the mark had acquired
distinction, goodwill, superior quality image and reputation and
was now well-known. Imputing bad faith on the petitioner,
respondent claimed that LOLANE' s first usage was only on
August 19, 2003.
Petitioner maintained that the marks were distinct and not
confusingly similar either under the dominancy test or the
holistic test. The mark ORLANE was in plain block upper case
letters while the mark LOLANE was printed in stylized word
with the second letter L and the letter A co-joined. Furthermore,
the similarity in one syllable would not automatically result in
confusion even if used in the same class of goods since his
products always appear with Thai characters while those of
ORLANE always had the name Paris on it. The two marks are
also pronounced differently. Also, even if the two marks
contained the word LANE it would not make them confusingly
similar since the IPO had previously allowed the co-existence of
trademarks containing the syllable "joy" or "book" and that he
also had existing registrations and pending applications for
registration in other countries.
The Bureau of Legal Affairs (BLA) rejected petitioner's
application. 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. MR denied.
On appeal, the Director General of the IPO affirmed the Decision
of the BLA Director. Despite the difference in the first syllable,
there was a strong visual and aural resemblance since the marks
had the same last four letters, i.e., LANE, and such word is
pronounced in this jurisdiction as in "pedestrian lane." Also, the
mark ORLANE is a fanciful mark invented by the owner for the
sole purpose of functioning as a trademark and is highly
distinctive. Thus, the fact that two or more entities would
accidentally adopt an identical or similar fanciful mark was too
good to be true especially when they dealt with the same goods
or services. The Director General also noted that foreign
judgments invoked by petitioner for the grant of its application
are not judicial precedents.
CA RULING: (Petition for Review)
The CA denied the petition and held that there exists colorable
imitation of respondent's mark by LOLANE.
Applying the dominancy test, the CA ruled that LOLANE' s
mark is confusingly or deceptively similar to ORLANE. There
are predominantly striking similarities in the two marks
including LANE, with only a slight difference in the first letters,
thus the two marks would likely cause confusion to the eyes of
the public. The similarity is highlighted when the two marks are
pronounced considering that both are one word consisting of two
syllables. The CA ruled that when pronounced, the two marks
produce similar sounds. The CA did not heed petitioner's
contention that since the mark ORLANE is of French origin, the
same is pronounced as "ORLAN." Filipinos would invariably
pronounce it as "OR-LEYN." The CA also noted that the
trademark ORLANE is a fanciful name and petitioner was not
able to explain why he chose the word LOLANE as trademark
for his personal care products. Thus, the only logical conclusion
is that he would want to benefit from the established reputation
and goodwill of the ORLANE mark.
The CA rejected petitioner's assertion that his products' cheaper
price and low-income market eliminates the likelihood of
confusion. Low-income groups, and even those who usually
purchased ORLANE products despite the higher cost, may be led
to believe that LOLANE products are low-end personal care
products also marketed by respondent. Hence, this petition.
Issue: Whether there is confusing similarity between ORLANE
and LOLANE which would bar the registration of LOLANE
before the IPO?
Held:
NO. 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. Registrability. -
123 .1. A mark cannot be registered if it: x x x
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;
The requirements for a finding of likelihood of confusion,
thus:
There are two types of confusion in trademark infringement. The
first is "confusion of goods" when an otherwise prudent
purchaser is induced to purchase one product in the belief that he
is purchasing another, in which case defendant's goods are then
bought as the plaintiffs and its poor quality reflects badly on the
plaintiffs reputation. The other is "confusion of business"
wherein the goods of the parties are different but the defendant's
product can reasonably (though mistakenly) be assumed to
originate from the plaintiff, thus deceiving the public into
believing that there is some connection between the plaintiff and
defendant which, in fact, does not exist.
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.
(Citations omitted, emphasis supplied.)
Whether a trademark causes confusion and is likely to deceive
the public hinges on "colorable imitation" which has been
defined as "such similarity in form, content, words, sound,
meaning, special arrangement or general appearance of the
trademark or trade name in their overall presentation or in their
essential and substantive and distinctive parts as would likely
mislead or confuse persons in the ordinary course of purchasing
the genuine article." (Citations omitted.)
The essential element of infringement is colorable imitation.
This term has been defined as "such a close or ingenious
imitation as to be calculated to deceive ordinary purchasers, or
such resemblance of the infringing mark to the original as to
deceive an ordinary purchaser giving such attention as a
purchaser usually gives, and to cause him to purchase the one
supposing it to be the other."
Colorable imitation does not mean such similitude as amounts to
identity. Nor does it require that all the details be literally copied.
In determining colorable imitation, we have used either the
dominancy test or the holistic or totality test. The dominancy
test considers 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.
More consideration is given on the aural and visual impressions
created by the marks on the buyers of goods, giving little weight
to factors like process, quality, sales outlets, and market
segments. On the other hand, the holistic test considers the
entirety of the marks as applied to the products, including the
labels and packaging, in determining confusing similarity. The
focus is not only on the predominant words but also on the other
features appearing on the labels.
However, while we agree with the CA's use of the dominancy
test, we arrive at a different conclusion. Based on the distinct
visual and aural differences between LOLANE and ORLANE,
we find that there is no confusing similarity between the two
marks.
The suffix LANE is not the dominant feature of petitioner's
mark. Neither can it be considered as the dominant feature of
ORLANE which would make the two marks confusingly similar.
First, an examination of the appearance of the marks would show
that there are noticeable differences in the way they are written
or printed.
As correctly argued by petitioner in his answer before the BLA,
there are visual differences between LOLANE and ORLANE
since the mark ORLANE is in plain block upper case letters
while the mark LOLANE was rendered in stylized word with the
second letter L and the letter A co-joined.
Second, as to the aural aspect of the marks, LOLANE and
ORLANE do not sound alike.
Finding that LOLANE is not a colorable imitation of ORLANE
due to distinct visual and aural differences using the dominancy
test, we no longer find it 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. We rule that the mark LOLANE is entitled to
registration.
TRADEMARK DILUTION
Case: Prosource International vs Horphag
Respondent is a corporation and owner of trademark
PYCNOGENOL, a food. Respondent later discovered that
petitioner was also distributing a similar food supplement using
the mark PCO-GENOLS since 1996. This prompted respondent
to demand that petitioner cease and desist from using the
aforesaid mark.
Respondent filed a Complaint for Infringement of Trademark
with Prayer for Preliminary Injunction against petitioner, in using
the name PCO-GENOLS for being confusingly similar.
Petitioner appealed otherwise.
The RTC decided in favor of respondent. It observed that
PYCNOGENOL and PCO-GENOLS have the same suffix
"GENOL" which appears to be merely descriptive and thus open
for trademark registration by combining it with other words and
concluded that the marks, when read, sound similar, and thus
confusingly similar especially since they both refer to food
supplements.
On appeal to the CA, petitioner failed to obtain a favorable
decision. The appellate court explained that under the
Dominancy or the Holistic Test, PCO-GENOLS is deceptively
similar to PYCNOGENOL.
Issue: Whether the names are confusingly similar?
Held:
Yes. There is confusing similarity and the petition is denied.
Jurisprudence developed two test to prove such.
The Dominancy Test focuses on the similarity of the prevalent
features of the competing trademarks that might cause confusion
and deception, thus constituting infringement. If the competing
trademark contains the main, essential and dominant features of
another, and confusion or deception is likely to result,
infringement takes place. Duplication or imitation is not
necessary; nor is it necessary that the infringing label should
suggest an effort to imitate. The question is whether the use of
the marks involved is likely to cause confusion or mistake in the
mind of the public or to deceive purchasers. Courts will consider
more the aural and visual impressions created by the marks in the
public mind, giving little weight to factors like prices, quality,
sales outlets, and market segments
The Holistic Test entails a consideration of the entirety of the
marks as applied to the products, including the labels and
packaging, in determining confusing similarity.
Not only on the predominant words should be the focus but also
on the other features appearing on both labels in order that the
observer may draw his conclusion whether one is confusingly
similar to the other.
SC applied the Dominancy Test.Both the words have the same
suffix "GENOL" which on evidence, appears to be merely
descriptive and furnish no indication of the origin of the article
and hence, open for trademark registration by the plaintiff
through combination with another word or phrase. When the two
words are pronounced, the sound effects are confusingly similar
not to mention that they are both described by their
manufacturers as a food supplement and thus, identified as such
by their public consumers. And although there were
dissimilarities in the trademark due to the type of letters used as
well as the size, color and design employed on their individual
packages/bottles, still the close relationship of the competing
products’ name in sounds as they were pronounced, clearly
indicates that purchasers could be misled into believing that they
are the same and/or originates from a common source and
manufacturer.
Case: Levi Strauss vs. Clinton Aparelle
DOCTRINE:
According to Section 138 of Republic Act No. 8293, [the
Certificate of Registration] is prima facie evidence of the validity
of the registration, the registrant’s ownership of the mark and of
the exclusive right to use the same in connection with the goods
or services and those that are related thereto specified in the
certificate. Section 147.1 of said law likewise grants the owner of
the registered mark the exclusive right to prevent all third parties
not having the owner’s consent from using in the course of trade
identical or similar signs for goods or services which are
identical or similar to those in respect of which the trademark is
registered if such use results in a likelihood of confusion.
Trademark dilution is the lessening of the capacity of a famous
mark to identify and distinguish good or services; To be eligible
for the protection from dilution, there has to be a finding that: (1)
the trademark sought to be protected is famous and distinctive;
(2) the use by another began after the owner’s mark became
famous; and (3) such subsequent use defames the owner’s mark.
Petitioners LS & Co. and LSPI filed a Complaint for Trademark
Infringement, Injunction and Damages against respondent
Clinton Apparelle, Inc. together with an alternative defendant,
Olympian Garments, Inc. before the RTC. The complaint alleged
that LS & Co., a foreign corporation duly organized and existing
under the laws of the State of Delaware, U.S.A., and engaged in
the apparel business, is the owner by prior adoption and use since
1986 of the internationally famous Dockers and Design
trademark. This ownership is evidenced by its valid and existing
registrations in various member countries of the Paris
Convention. In the Philippines, it has a Certificate of Registration
No. 46619 in the Principal Register for use of said trademark on
pants, shirts, blouses, skirts, shorts, sweatshirts and jackets under
Class 25.

The Dockers and Design trademark was first used in the
Philippines in or about May 1988, by LSPI, a domestic
corporation engaged in the manufacture, sale and distribution of
various products bearing trademarks owned by LS & Co. LS &
Co. and LSPI further alleged that they discovered the presence in
the local market of jeans under the brand name Paddocks using a
device which is substantially, if not exactly, similar to the
Dockers and Design trademark owned by and registered in the
name of LS & Co., without its consent. Based on their
information and belief, Clinton Apparelle manufactured and
continues to manufacture such Paddocks jeans and other apparel.
The petitioners prayed for the issuance of a TRO. On the date of
the hearing for the issuance of the TRO, respondents Clinton
Apparelle and Olympian Garments failed to appear despite
notice. Clinton Apparelle claimed that it was not notified of such
hearing. Only Olympian Garments allegedly had been issued
with summons. Despite the absence of the defendants, the
hearing on the application for the issuance of a TRO continued.
The RTC then issued a TRO and a writ of preliminary injuction.
The evidence considered by the trial court in granting injunctive
relief were as follows:
(1) a certified true copy of the certificate of trademark
registration for Dockers and Design; (2) a pair of DOCKERS
pants bearing the Dockers and Design trademark; (3) a pair of
Paddocks pants bearing respondents assailed logo; (4) the Trends
MBL Survey Report purportedly proving that there was
confusing similarity between two marks; (5) the affidavit of one
Bernabe Alajar which recounted petitioners prior adoption, use
and registration of the Dockers and Design trademark; and (6)
the affidavit of one Mercedes Abad of Trends MBL, Inc. which
detailed the methodology and procedure used in their survey and
the results thereof.
On appeal, the CA held that the trial court did not follow the
procedure required by law for the issuance of a TRO as Clinton
Apparelle was not duly notified of the date of the summary
hearing for its issuance. Thus, the CA ruled that the TRO had
been improperly issued. The CA also held that the issuance of
the writ of preliminary injunction is questionable. According to
the CA, petitioners LS & Co. and LSPI failed to sufficiently
establish its material and substantial right to have the writ issued.
Issue: Whether the issuance of the writ of preliminary injunction
by the trial court was proper and whether the Court of Appeals
erred in setting aside the orders of the trial court?
Held:
No. After a careful consideration of the facts and arguments of
the parties, the Court finds that petitioners did not adequately
prove their entitlement to the injunctive writ. In the absence of
proof of a legal right and the injury sustained by the applicant, an
order of the trial court granting the issuance of an injunctive writ
will be set aside for having been issued with grave abuse of
discretion. Conformably, the Court of Appeals was correct in
setting aside the assailed orders of the trial court
Section 1, Rule 58 of the Rules of Court defines a preliminary
injunction as an order granted at any stage of an action 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. An extraordinary
remedy, injunction is designed to preserve or maintain the status
quo of things and is generally availed of to prevent actual or
threatened acts until the merits of the case can be heard. It is
resorted to only when there is a pressing necessity to avoid
injurious consequences, which cannot be remedied under any
standard compensation. The resolution of an application for a
writ of preliminary injunction rests upon the existence of an
emergency or of a special recourse before the main case can be
heard in due course of proceedings. Section 3, Rule 58, of the
Rules of Court enumerates the grounds for the issuance of a
preliminary injunction:
(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.
Under the cited provision, a clear and positive right especially
calling for judicial protection must be shown. Injunction is not a
remedy to protect or enforce contingent, abstract, or future rights.
There must exist an actual right. There must be a patent showing
by the complaint that there exists a right to be protected and that
the acts against which the writ is to be directed are violative of
said right.
The Court of Appeals did not err in reviewing proof adduced by
petitioners to support its application for the issuance of the writ.
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.
In the present case, we find that there was scant justification
for the issuance of the writ of preliminary injunction.
Petitioners anchor their legal right to Dockers and Design
trademark on the Certificate of Registration issued in their favor
by the Bureau of Patents, Trademarks and Technology Transfer.*
According to Section 138 of Republic Act No. 8293, this
Certificate of Registration is prima facie evidence of the validity
of the registration, the registrants ownership of the mark and of
the exclusive right to use the same in connection with the goods
or services and those that are related thereto specified in the
certificate. Section 147.1 of said law likewise grants the owner of
the registered mark the exclusive right to prevent all third parties
not having the owners consent from using in the course of trade
identical or similar signs for goods or services which are
identical or similar to those in respect of which the trademark is
registered if such use results in a likelihood of confusion.
However, attention should be given to the fact that petitioners
registered trademark consists of two elements: (1) the word mark
Dockers and (2) the wing-shaped design or logo. Notably, there
is only one registration for both features of the trademark giving
the impression that the two should be considered as a single unit.
Clinton Apparelle’s trademark, on the other hand, uses the
Paddocks word mark on top of a logo which according to
petitioners is a slavish imitation of the Dockers design. The two
trademarks apparently differ in their word marks (Dockers and
Paddocks), but again according to petitioners, they employ
similar or identical logos. It could thus be said that respondent
only appropriates petitioners logo and not the word mark
Dockers; it uses only a portion of the registered trademark and
not the whole.
Given the single registration of the trademark Dockers and
Design and considering that respondent only uses the assailed
device but a different word mark, the right to prevent the latter
from using the challenged Paddocks device is far from clear.
Stated otherwise, it is not evident whether the single registration
of the trademark Dockers and Design confers on the owner the
right to prevent the use of a fraction thereof in the course of
trade. It is also unclear whether the use without the owner’s
consent of a portion of a trademark registered in its entirety
constitutes material or substantial invasion of the owner’s right.
Based on the foregoing, to be eligible for protection from
dilution, there has to be a finding that: (1) the trademark sought
to be protected is famous and distinctive; (2) the use by
respondent of Paddocks and Design began after the petitioners
mark became famous; and (3) such subsequent use defames
petitioners mark. In the case at bar, petitioners have yet to
establish whether Dockers and Design has acquired a strong
degree of distinctiveness and whether the other two elements are
present for their cause to fall within the ambit of the invoked
protection. The Trends MBL Survey Report which petitioners
presented in a bid to establish that there was confusing similarity
between two marks is not sufficient proof of any dilution that the
trial court must enjoin.
The Court also finds that the trial court’s order granting the writ
did not adequately detail the reasons for the grant. The trial court
in granting the injunctive relief tersely ratiocinated that the
plaintiffs appear to be entitled to the relief prayed for and this
Court is of the considered belief and humble view that, without
necessarily delving on the merits, the paramount interest of
justice will be better served if the status quo shall be maintained.
Clearly, this statement falls short of the requirement laid down.
In addition, we agree with the Court of Appeals in its holding
that the damages the petitioners had suffered or continue to
suffer may be compensated in terms of monetary consideration.

It is likewise not settled whether the wing-shaped logo, as
opposed to the word mark, is the dominant or central feature of
petitioners trademark the feature that prevails or is retained in the
minds of the publican imitation of which creates the likelihood of
deceiving the public and constitutes trademark infringement. In
sum, there are vital matters which have yet and may only be
established through a full-blown trial.
From the above discussion, we find that petitioners right to
injunctive relief has not been clearly and unmistakably
demonstrated. The right has yet to be determined. Petitioners also
failed to show proof that there is material and substantial
invasion of their right to warrant the issuance of an injunctive
writ. Neither were petitioners able to show any urgent and
permanent necessity for the writ to prevent serious damage.
We also believe that the issued injunctive writ, if allowed, would
dispose of the case on the merits as it would effectively enjoin
the use of the Paddocks device without proof that there is basis
for such action. The prevailing rule is that courts should avoid
issuing a writ of preliminary injunction that would in effect
dispose of the main case without trial. There would be a
prejudgment of the main case and a reversal of the rule on the
burden of proof since it would assume the proposition which
petitioners are inceptively bound to prove.
See also: Dermaline vs Myra Pharmaceuticals Case

Petitioners wish to impress upon the Court the urgent necessity

for injunctive relief, urging that the erosion or dilution of their
trademark is protectable. They assert that a trademark owner
does not have to wait until the mark loses its distinctiveness to
obtain injunctive relief, and that the mere use by an infringer of a
registered mark is already actionable even if he has not yet
profited thereby or has damaged the trademark owner.

Trademark dilution is the lessening of the capacity of a famous

mark to identify and distinguish goods or services, regardless of
the presence or absence of: (1) competition between the owner of
the famous mark and other parties; or (2) likelihood of confusion,
mistake or deception. Subject to the principles of equity, the
owner of a famous mark is entitled to an injunction against
another persons commercial use in commerce of a mark or trade
name, if such use begins after the mark has become famous and
causes dilution of the distinctive quality of the mark. This is
intended to protect famous marks from subsequent uses that blur
distinctiveness of the mark or tarnish or disparage it.