PAMELA FLORENTINA P. JUMUAD, Petitioner, vs. HI-FLYER FOOD, INC.

and/or JESUS R. MONTEMAYOR, Respondents.

GR 187887, September 7, 2011

FACTS:
Pamela Jumuad > Petitioner
Hi Flyer Food> Respondent
1. Pamela Florentina P. Jumuad(Jumuad) began her employment with respondent
Hi-Flyer Food, Inc. (Hi-Flyer), as management trainee
2. Jumuad received several promotions until she became the area manager for
the entire Visayas-Mindanao
3.

Aside from being responsible in monitoring her subordinates, Jumuad was

tasked to: 1) be highly visible in the restaurants under her jurisdiction; 2)
monitor and support day-to-day operations; and 3) ensure that all the
facilities and equipment at the restaurant were properly maintained and
serviced.

4. Among the branches under her supervision were the KFC branches in Gaisano
Mall, Cebu City (KFC-Gaisano); in Cocomall, Cebu City (KFC-Cocomall); and in
Island City Mall, Bohol (KFC-Bohol).
5. Hi-Flyer conducted series a food safety, service and sanitation audit atKFCGaisano and KFC-Cocomall and Hi-Flyer audited the accounts of KFC-Bohol
amid reports that certain employees were covering up cash shortages.
6.

Seeking to hold Jumuad accountable for the irregularities uncovered in the

branches under her supervision, Hi-Flyer sent Jumuad an Irregularities
Reportand Notice of Charges. Jumuad submitted her written explanation. HiFlyer held an administrative hearing where Jumuad appeared with counsel.
Apparently not satisfied with her explanations, Hi-Flyer served her a Notice of
Dismissal.

7. Jumuad to file a complaint against Hi-Flyer for illegal dismissal before the
NLRC. praying for reinstatement and payment of separation pay, 13th month
pay, service incentive leave, moral and exemplary damages, and attorneys
fees. Jumuad also sought the reimbursement of the amount equivalent to her
forty percent (40%) contribution to Hi-Flyers subsidized car loan program.
8. Labor Arbiters Ruling (Labor Court): the employers prerogative to dismiss or
layoff an employee must be exercised without abuse of discretion and
should be tempered with compassion and understanding. Thus, the
dismissal was too harsh considering the circumstances. After finding that no

serious cause for termination existed, the LA ruled that Jumuad was illegally
dismissed.
9.

Both Jumuad and Hi-Flyer appealed to the NLRC. Jumuad faulted the LA for
not awarding backwages and damages despite its finding that she was
illegally dismissed. Hi-Flyer and Montemayor, on the other hand, assailed the
finding that Jumuad was illegally dismissed and that they were solidarily
liable therefor. They also questioned the orders of the LA that they pay
separation pay and reimburse the forty percent (40%) of the loan Jumuad
paid pursuant to Hi-Flyers car entitlement program.

10.NLRC affirmed in toto the LA decision the NLRC noted that even before the
Irregularities Report and Notice of Charges were given to Jumuad two (2)
electronic mails (e-mails) between Montemayor and officers of Hi-Flyer
showed that Hi-Flyer was already determined to terminate Jumuad. According
to the NLRC, these e-mails were proof that Jumuad was denied due process
considering that no matter how she would refute the charges hurled against
her, the decision of Hi-Flyer to terminate her would not change.
11.CA rendered the subject decision reversing the decision of the labor
tribunalthe CA was of the opinion that the requirements of substantive and
procedural due process were complied with affording Jumuad an opportunity
to be heard first, when she submitted her written explanation and then, when
she was informed of the decision and the basis of her termination.28 As for
the e-mail exchanges between Montemayor and the officers of Hi-Flyer, the
CA opined that they did not equate to a predetermination of Jumuads
termination. It was of the view that the e-mail exchanges were mere
discussions between Montemayor and other officers of Hi-Flyer on whether
grounds for disciplinary action or termination existed. To the mind of the CA,
the e-mails just showed that Hi-Flyer extensively deliberated the nature and
cause of the charges against Jumuad.29

ISSUE/Probelm: Whether Jumuad was illegally dismissed

RULING/Courts Decision:
It was raised on the earlier cases that Jumuad must be terminated for neglect of
duty and breach of trust and confidence.
It has been said that a single or an isolated act of negligence cannot constitute for
the dismissal of an employee. To be validly dismiss the employee, the neglect
of duty must be both gross and habitual.
On the other hand, breach of trust and confidence, as a just cause for termination of
employment, is premised on the fact that the employee concerned holds a position
of trust and confidence, where greater trust is placed by management and from
whom greater fidelity to duty is correspondingly expected. The betrayal of this trust
is the essence of the offense for which an employee is penalized.

It should be noted, however, that the finding of guilt or innocence in a charge of

gross and habitual neglect of duty does not preclude the finding of guilty or
innocence in a charge of breach of trust and confidence. Each of the charges must
be treated separately, as the law itself has treated them separately.
Decision: The Court is convinced that Jumuad cannot be dismissed on the ground
of gross and habitual neglect of duty. The Court notes the apparent neglect of
Jumuad of her duty in ensuring that her subordinates were properly monitored and
that she had dutifully done all that was expected of her to ensure the safety of the
consuming public who continue to patronize the KFC branches under her
jurisdiction.
It cannot be denied that Jumuad willfully breached her duties as to be unworthy of
the trust and confidence of Hi-Flyer. First, there is no denying that Jumuad was a
managerial employee. Pertinent is Article 212 (m) of the Labor Code defining a
managerial employee as one who is vested with powers or prerogatives to lay down
and execute management policies and/or hire, transfer, suspend, lay off, recall,
discharge, assign or discipline employees.
However, based on established facts, the mere existence of the grounds
for the loss of trust and confidence justifies petitioners dismissal.
Also, Pursuant to the Courts ruling/decision in the case of Lima Land, Inc. v.
Cuevas, as long as there is some basis for such loss of confidence, such as when the
employer has reasonable ground to believe that the employee concerned is
responsible for the purported misconduct, and the nature of his participation therein
renders him unworthy of the trust and confidence demanded of his position, a
managerial employee may be dismissed.
Legal Basis: In the present case, the CERs reports of Hi-Flyer show that there were
anomalies committed in the branches managed by Jumuad. On the principle of
respondent superior or command responsibility alone, Jumuad may be held
liable for negligence in the performance of her managerial duties. She may not have
been directly involved in causing the cash shortages in KFC-Bohol, but her
involvement in not performing her duty monitoring and supporting the day to day
operations of the branches and ensure that all the facilities and equipment at the
restaurant were properly maintained and serviced, could have truly prevented the
whole debacle from ever occurring.
Thus, there is reasonable basis for Hi-Flyer to withdraw its trust in her and
dismissing her from its service. There is a valid basis for the dismissal of
the petitioner

Coffee Partners, Inc. vs. San Francisco Coffee and Roastery, Inc.
G.R. No. 169504, March 3, 2010
Facts:

1. Coffee Partners, Inc. > petitioner

2. San Francisco Coffee and Roastery, Inc. > respondent
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 argued 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 petitioners trademark infringed on
the respondents trade name as it registered its business name first with the DTI in
1995 while petitioner only registered its trademark in 2001.
Furthermore, the Bureau 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 petitioners 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 respondents trade name and petitioners 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 respondents trade name is not
registered therefore a suit for infringement is not available.
Issue/ Problem:
Whether the petitioners (Coffee Partners) use of the name San Francisco Coffee
is valid even though the respondent may have used the name before it but did not
register with the Intellectual Property Office (IPO).

Ruling/Courts Decision:

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.
Legal Basis: The court also laid down two tests to determine similarity and likelihood
of confusion.
1. 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.
2. 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. 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, petitioners "SAN FRANCISCO
COFFEE" trademark is a clear infringement of respondents "SAN FRANCISCO
COFFEE & ROASTERY, INC." trade name. The descriptive words "SAN FRANCISCO
COFFEE" are precisely the dominant features of respondents 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. Therefore, Petitioner should not use
the said tradename.

MCDONALD'S CORPORATION and MCGEORGE FOOD INDUSTRIES, INC.,

petitioners, vs. L.C. BIG MAK BURGER, INC., FRANCIS B. DY, EDNA A. DY,
RENE B. DY, WILLIAM B. DY, JESUS AYCARDO, ARACELI AYCARDO, and
GRACE HUERTO, respondents.
G.R. No. 143993, August 18, 2004.
CARPIO, J.:

Facts:

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 fastfood 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.
1ST ISSUE/Problem: Whether the respondent corporation is liable for trademark
infringement and unfair competition; Whether the respondent corporation may
validly use the trademark Big Mak

Ruling/ Courts Decision: Yes

Legal Basis: 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/requirements 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.

2ND ISSUE: Whether Respondents committed Unfair Competition

Ruling: Yes.
Legal Basis: 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, 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.