MIGHTY CORPORATION and LA CAMPANA FABRICA DE TABACO, INC. vs. E.J.

GALLO WINERY and THE ANDRESONS GROUP, INC. FACTS: On March 12, 1993, respondents sued petitioners in the RTC-Makati for trademark and trade name infringement and unfair competition, with a prayer for damages and preliminary injunction. They claimed that petitioners adopted the Gallo trademark to ride on Gallo Winerys and Gallo and Ernest & Julio Gallo trademarks established reputation and popularity, thus causing confusion, deception and mistake on the part of the purchasing public who had always associated Gallo and Ernest and Julio & Gallo trademarks with Gallo Winerys wines. In their answer, petitioners alleged, among other affirmative defenses that: petitioners Gallo cigarettes and Gallo Winerys wine were totally unrelated products. To wit: Gallo Winerys GALLO trademark registration certificates covered wines only, and not cigarettes; GALLO cigarettes and GALLO wines were sold through different channels of trade; the target market of Gallo Winerys wines was the middle or high-income bracket while Gallo cigarette buyers were farmers, fishermen, laborers and other low-income workers; the dominant feature of the Gallo cigarette was the rooster device with the manufacturers name clearly indicated as MIGHTY CORPORATION, while in the case of Gallo Winerys wines, it was the full names of the founders-owners ERNEST & JULIO GALLO or just their surname GALLO; On April 21, 1993, the Makati RTC denied, for lack of merit, respondents prayer for the issuance of a writ of preliminary injunction. On August 19, 1993, respondents motion for reconsideration was denied. On February 20, 1995, the CA likewise dismissed respondents petition for review on certiorari. After the trial on the merits, however, the Makati RTC, on November 26, 1998, held petitioners liable for, permanently enjoined from committing trademark infringement and unfair competition with respect to the GALLO trademark. On appeal, the CA affirmed the Makati RTCs decision and subsequently denied petitioners motion for reconsideration.

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ISSUE: Whether GALLO cigarettes and GALLO wines were identical, similar or related goods for the reason alone that they were purportedly forms of vice. HELD: Wines and cigarettes are not identical, similar, competing or related goods. In resolving whether goods are related, several factors come into play: the business (and its location) to which the goods belong the class of product to which the good belong the products quality, quantity, or size, including the nature of the package, wrapper or container the nature and cost of the articles the descriptive properties, physical attributes or essential characteristics with reference to their form, composition, texture or quality the purpose of the goods whether the article is bought for immediate consumption, that is, day-to-day household items the field of manufacture the conditions under which the article is usually purchased and the articles of the trade through which the goods flow, how they are distributed, marketed, displayed and sold. The test of fraudulent simulation is to the likelihood of the deception of some persons in some measure acquainted with an established design and desirous of purchasing the commodity with which that design has been associated. The simulation, in order to be objectionable, must be as appears likely to mislead the ordinary intelligent buyer who has a need to supply and is familiar with the article that he seeks to purchase. The petitioners are not liable for trademark infringement, unfair competition or damages. WHEREFORE, petition is granted.