TRADEMARKS:
to be sold as petitioner's; and
I. Registerable Trademarks
1. ARCE SONS AND COMPANY vs. SELECTA
BISCUIT COMPANY, INC., ET AL.
DOCTRINE:
FACTS:
Respondent Selecta Biscuit Company, Inc.
filed with the Philippine Patent Office a petition for
the registration of the word “SELECTA” as
trademark to be used in its bakery products,
alleging that they have been using it for not less
than 2 months and that "no other persons,
partnership, corporation or association... has the
right to use said trade-mark in the Philippines,
either in the identical form or in any such near
resemblance thereto, as might be calculated to
deceive."
An examiner found that the word sought to
be registered resembles the word “SELECTA” used
by herein petitioner in its milk and ice cream
products and respondent’s use of the word would
cause confusion as to the origin of their respective
goods. The examiner recommended the denial of
respondent’s petition but upon reconsideration the
Patent Office ordered the publication of the
application for purposes of opposition.
Petitioner files its opposition on several
grounds, among which are:
(1) that the mark "SELECTA" had been
continuously used by petitioner in the
manufacture and sale of its products,
including cakes, bakery products, milk and
ice cream from the time of its organization
and even prior thereto by its predecessor-
in-interest, Ramon Arce;
(2) that the mark "SELECTA" has already
become identified with name of the
petitioner and its business;
(3) that petitioner had warned respondent not
to use said mark because it was already
being used by the former, but that the latter
ignored said warning;
(4) that respondent is using the word
"SELECTA" as a trademark as bakery
products in unfair competition with the
products of petitioner thus resulting in
confusion in trade;
(5) that the mark to which the application of
respondent refers has striking resemblance,
both in appearance and meaning, to
petitioner's mark as to be mistaken therefor
by the public and cause respondent's goods
(6) that actually a complaint has been filed by
the petitioner against respondent for unfair
competition in the Court of First Instance of
Manila asking for damages and for the
issuance of a writ of injunction against
respondent enjoining the latter for
continuing with the use of said mark.
The CIF of Manila rendered its decision in the
unfair competition case perpetually enjoining
respondent from using “SELECTA” as a trademark.
The Director of Patents, on the other hand,
dismissed petitioner’s opposition, saying that
respondent’s registration of “SELECTA” as
trademark will not cause confusion or mistake nor
will deceive purchasers as to the cause of damage
to petitioner.
ISSUE:
Whether or not respondent’s use of the
word “SELECTA” as trademark would cause
confusion as to petitioner’s products.
Held:
YES.
Ramon Arce, the predecessor-in-interest of
petitioner, started his milk business as early as
1933. He sold his milk products with “SELECTA
FRESH MILK” inscribed on them as well as the word
“SELECTA” on special containers of his other
products. He expanded his business in Lepanto
Street, Manila and placed in front of his
establishment a signboard with “SELECTA”
inscribed thereon. Then his business was acquired
by petitioner, a co-partnership organized by his
sons, the purposes of which are "to conduct a first
class restaurant business; to engage in the
manufacture and sale of ice cream, milk, cakes and
other products; and to carry on such other
legitimate business as may produce profit.".
It is unmistakably shown that petitioner,
through its predecessor-in-interest, had made use
of “SELECTA” not only as a trade-name indicative
of the location of the restaurant where it
manufactures and sells its products, but as
trademark used. This is not only in accordance
with its general acceptation but with our law on the
matter. "
The word 'SELECTA' has been chosen by
petitioner and has been inscribed on all its
products to serve not only as a sign or symbol that
may indicate that they are manufactured and sold
by it but as a mark of authenticity that may
distinguish them from the products manufactured
and sold by other merchants or businessmen. The
Director of Patents, therefore, erred in holding that
petitioner made use of that word merely as a trade-
name and not as a trade-mark within the meaning
of the law.
The term 'trade-mark' includes any word,
name, symbol, emblem, sign or device or any
combination thereof adopted and used by a
manufacturer or merchant to identify his
goods and distinguish them from those
manufactured, sold or dealt in by others."
(Section 38, Republic Act No. 166).
The word 'SELECTA' may be an ordinary or
common word in the sense that may be used or
employed by any one in promoting his business or
enterprise, but once adopted or coined in
connection with one's business as an emblem, sign
or device to characterize its products, or as a badge
of authenticity, it may acquire a secondary meaning
as to be exclusively associated with its products
and business. In this sense, it’s used by another
may lead to confusion in trade and cause damage
to its business. And this is the situation of
petitioner when it used the word 'SELECTA' as a
trade-mark. In this sense, the law gives its
protection and guarantees its used to the exclusion
of all others
The suggestion that the name 'SELECTA'
was chosen by the organizers of respondent merely
as a translation from a Chinese word "ChingSuan"
meaning "mapili" in the dialect is betrayed by the
very manner of its selection, for if the only purpose
is to make an English translation of that word and
not to compete with the business of petitioner, why
choose the word 'SELECTA', a Spanish word, and
not "Selected", the English equivalent thereof, as
was done by other well-known enterprises? In the
words of petitioner's counsel, "Why with all the
words in the English dictionary and all the words in
the Spanish dictionary and all the phrases that
could be coined, should respondent choose
'SELECTA' if its purpose was not and is not to fool
the people and to damage petitioner?"
In view of the foregoing, we hold that the
Director of Patents committed an error in
dismissing the opposition of petitioner and in
holding that the registration of the trade-mark
'SELECTA' in favor of respondent will not cause
damage to petitioner, and consequently, we hereby
reverse his decision.
2. ROMERO VS. MAIDEN FORM BRASSIERE CO.,
INC.
Facts:
Maiden Form Brassiere Co., Inc. filed with
the Director of Patents an application for
registration of the trademark “Adagio” for the
brassieres manufactured by it. In its application,
Maiden Form alleged that said trademark was first
used by it in the US in 1937, and in the Philippines
in 1946; that it had been continuously used by it in
trade in, or with the Philippines for over 30 years;
and that said trademark is applied or affixed by to
the goods by placing thereon a woven label on
which the trademark is shown.
The Director approved for publication in
the Official Gazette said trademark of Maiden
Form, having found,that said trademark is "a
fanciful and arbitrary use of a foreign word
adopted by appplicant as a trademark for its
product. Thereafter, a certificate of registration was
issued to Maiden Form.
Romero filed with the Director a petition for
cancellation of said trademark, on the grounds that
it is a common descriptive name of an article or
substance on which the patent has expired. Romero
also alleged that said trademark has not become
distinctive of respondent company's goods or
business; that it has been used by respondent
company to classify the goods (the brassieres)
manufactured by it, in the same manner as
petitioner uses the same; that said trademark has
been used by petitioner for almost 6 years; that it
has become a common descriptive name; and that
it is not registered in accordance with the
requirements of Section 37 (a), Chapter XI of
Republic Act No. 166.
Issue:
WON the trademark "Adagio" has become a
common descriptive name of a particular style of
brassiere and is, therefore, unregistrable
Held:
NO.
The evidence shows that the trademark
"Adagio" is a musical term, which means slowly or
in an easy manner, and was used as a trademark by
the owners thereof because they are musically
inclined. Being a musical term, it is used in an
arbitrary (fanciful) sense as a trademark for
brassieres manufactured by Maiden Form. It also
appears that Maiden Form has, likewise, adopted
other musical terms such as "Etude",
"Chansonette", "Pre-lude", "Over-ture”, and
"Concerto", to identify, as a trademark, the
different styles or types of its brassieres.
Maiden Form also objected to the use of
said trademark by Romero and other local
brassiere manufacturers. It warned Valleson
Department Store to desist from the sale of the
"Adagio" Royal Form brassieres manufactured by
Romero, and even placed an advertisement in the
local newspapers warning the public against
unlawful use of said trademark.
Maiden Form’s long and continuous use of
the trademark "Adagio" has not rendered it merely
descriptive of the product. This widespread
dissemination does not justify the defendants in
the use of this trademark. If this argument were
sound, then every time a plaintiff obtained the
result of having the public purchase its article, that
fact act of itself would destroy a trademark.
Arbitrary trademarks cannot become generic in this
way.
Also, the mere fact that appellee uses
"Adagio" for one type or style, does not affect the
validity of such word as a trademark. The mark
serves to indicate origin of applicant's goods; and
the fact that it is used on only one of several types
or grades does not affect its registrability as a
trade mark.
II. Unregisterable Trademarks
1. ANG v TORIBIO
G.R. No. L-48226
December 14, 1942
Facts:
Respondent Toribio Teodoro has
continuously used "AngTibay," both as a trade-
mark and as a trade-name, in the manufacture and
sale of slippers, shoes, and indoor baseballs since
1910. On September 29, 1915, he formally
registered it as trade-mark and as trade-name on
January 3, 1933.
Petitioner Ana Ang registered the same
trade-mark "AngTibay" for pants and shirts on
April 11, 1932, and established a factory for the
manufacture of said articles in the year 1937.
The Court of First Instance of Manila
absolved the defendant (Ms. Ang) on the grounds
that the two trademarks are dissimilar and are
used on different and non-competing goods; that
there had been no exclusive use of the trade-mark
by the plaintiff; and that there had been no fraud in
the use of the said trade-mark by the defendant
because the goods on which it is used are
essentially different from those of the plaintiff.
The Court of Appeals reversed said
judgment, directing the Director of Commerce to
cancel the registration of the trade-mark
"AngTibay" in favor of petitioner, and perpetually
enjoining the latter from using said trade-mark on
goods manufactured and sold by her.
Thus, this case, a petition for certiorari.
Issue:
Whether the goods or articles to which the
two trademarks belong to the same class of
merchandise
Held:
Yes, pants and shirts are goods closely
similar to shoes and slippers. They belong to the
same class of merchandise as shoes and slippers.
They are closely related goods.
The Supreme Court affirmed the judgment
of the Court of Appeals and added that “although
two non-competing articles may be classified under
two different classes by the Patent Office because
they are deemed not to possess the same
descriptive properties, they would, nevertheless, be
held by the courts to belong to the same class if the
simultaneous use on them of identical or closely
similar trademarks would be likely to cause
confusion as to the origin, or personal source, of
the second user’s goods. They would be considered
as not falling under the same class only if they are
so dissimilar or so foreign to each other as to make
it unlikely that the purchaser would think that the
first user made the second user’s goods”.
Although AngTibay is a phrase that may not
be appropriated by law, the Court took note of the
effort Teodoro did to register such name.
The Court agrees that the phrase AngTibay
did point to the origin of the wares applied after
being used for twenty-two years and Teodoro has
used the phrase for so long, it has acquired a
proprietary connotation.
The Court also points out that there can be
unfair competition or unfair trading even if the
goods are non-competing, and that such unfair
trading can cause injury or damage to the first user
of a given trade-mark, first, by prevention of the
natural expansion of his business and, second, by
having his business reputation confused with and
put at the mercy of the second user. So even if, Ang
and Teodoro had different goods, the phrase
cannot still be used by Ang.
2. CANON KABUSHIKI KAISHA, petitioner, vs.
COURT OF APPEALS and NSR RUBBER
CORPORATION, respondents
G.R. No. 120900 July 20, 2000
Topic: Trademarks: Unregistrable Trademarks
FACTS:
NSR Rubber Corporation filed an application for
registration of the mark CANON for sandals in the
Bureau of Patents, Trademarks, and Technology
Transfer (BPTTT). An opposition was filed by
Canon Kabushiki Kaisha (CKK), a foreign
corporation duly organized and existing under the
laws of Japan. CKK alleged that it will be damaged
by the registration of the trademark CANON in the
name of NSR Rubber Corporation. The evidence
presented by CKK 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).CKK also submitted in evidence its Philippine
Trademark Registration No. 39398, showing its
ownership over the trademark CANON also under
class 2. However, the Bureau of Patents,
Trademarks, and Technology Transfer (BPTTT)
dismissed the petition of CKK and gave due course
to NSR’s application for the registration of the
trademark CANON. According to BPTTT, the
trademark “CANON” as used by CKK for its paints,
chemical products, toner, and dyestuff, can be used
by NSR for its sandals because the products of
these two parties are dissimilar. Hence, CKK filed
this case arguing that: a) it is entitled to exclusive
use of the mark canon because it is its trademark
and is used also for footwear .b) to allow NSR to
register canon for footwear is to prevent CKK from
using canon for various kinds of footwear, when in
fact, CKK has earlier used said mark for said goods.
c) it is also entitled to the right to exclusively use
canon to prevent confusion of business.
ISSUE:
Whether or not NSR Rubber Corporation can use
the trademark Canon.
HELD:
YES. 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 certificates of
registration for the trademark CANON in other
countries and in the Philippines as presented by
CKK, clearly showed that said certificates of
registration cover goods belonging to class 2
(paints, chemical products, toner, dyestuff). On this
basis, the BPTTT correctly ruled that since the
certificate of registration of petitioner for the
trademark CANON covers class 2 (paints, chemical
products, toner, dyestuff), NSR 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 CKK and the sandals of NSR. 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 CKK in
this case to use the trademark CANON is limited
only to the products covered by its certificate of
registration.
As to the argument of CKK that there could be
confusion as to the origin of the goods, as well as
confusion of business, if NSR is allowed to register
the mark CANON, the SC ruled that in cases of
confusion of business or origin, the question that
usually arises is whether the respective goods or
services of the senior user and the junior user are
so related as to likely cause confusion of business
ororigin, and thereby render the trademark or
tradenamesconfusinglysimilar.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. The paints, chemical products, toner and
dyestuff of CKK that carry the trademark CANON
are unrelated to sandals, the product of NSR. The
two classes of products in this case flow through
different trade channels. The products of CKK are
sold through special chemical stores or distributors
while the products of NSR are sold in grocery
stores, sari-sari stores and department stores.
The Convention of Paris for the Protection of
Industrial Property, otherwise known as the Paris
Convention, of which both the Philippines and
Japan, the country of petitioner, are signatories, 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. We agree with public
respondents that the controlling doctrine with
respect to the applicability of Article 8 of the Paris
Convention is that established in Kabushi Kaisha
Isetan vs. Intermediate Appellate Court. As pointed
out by the BPTTT:
"Regarding the applicability of Article 8 of the Paris
Convention, this Office believes that there is no
automatic protection afforded an entity whose
tradename is alleged to have been infringed
through the use of that name as a trademark by a
local entity.
In Kabushiki Kaisha Isetan vs. The Intermediate
Appellate Court, et. al., G.R. No. 75420, 15
November 1991, the Honorable Supreme Court held
that:
'The Paris Convention for the Protection of
Industrial Property does not automatically exclude
all countries of the world which have signed it from
using a tradename which happens to be used in
one country. To illustrate – if a taxicab or bus
company in a town in the United Kingdom or India
happens to use the tradename "Rapid
Transportation", it does not necessarily follow that
"Rapid" can no longer be registered in Uganda, Fiji,
or the Philippines.
This office is not unmindful that in the Treaty of
Paris for the Protection of Intellectual Property
regarding well-known marks and possible
application thereof in this case. Petitioner, as this
office sees it, is trying to seek refuge under its
protective mantle, claiming that the subject mark is
well known in this country at the time the then
application of NSR Rubber was filed.
However, the then Minister of Trade and Industry,
the Hon. Roberto V. Ongpin, issued a memorandum
dated 25 October 1983 to the Director of Patents, a
set of 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)'
From the set of facts found in the records, it is
ruled that the Petitioner failed to comply with the
third requirement of the said memorandum that is
the mark must be for use in the same or similar
kinds of goods. The Petitioner is using the mark
"CANON" for products belonging to class 2 (paints,
chemical products) while the Respondent is using
the same mark for sandals (class 25). Hence,
Petitioner's contention that its mark is well-known
at the time the Respondent filed its application for
the same mark should fail.
3. MIGHTY CORPORATION and LA CAMPANA
FABRICA DE TABACO, INC., petitioner, vs.E. & J.
GALLO WINERY and THE ANDRESONS GROUP,
INC., respondents
Doctrine:
Section 22 of the Trademark Law holds a
person liable for infringement when, among others,
he uses without the consent of the registrant, any
reproduction, counterfeit, copy or colorable
imitation of any registered mark or tradename in
connection with the sale, offering for sale, or
advertising of any goods, business or services 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 reproduce,
counterfeit, copy or colorably imitate any such
mark or tradename 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
Facts:
Respondent Gallo Winery is a foreign
corporation not doing business in the Philippines
but organized and existing under the laws of the
State of California, United States of America (U.S.),
where all its wineries are located. Gallo Winery
produces different kinds of wines and brandy
products and sells them in many countries under
different registered trademarks, including the
GALLO and ERNEST & JULIO GALLO wine
trademarks.
Respondent domestic corporation,
Andresons, has been Gallo Winery’s exclusive wine
importer and distributor in the Philippines since
1991, selling these products in its own name and
for its own account.
Gallo Winery’s GALLO wine trademark was
registered in the principal register of the Philippine
Patent Office (now Intellectual Property Office) on
November 16, 1971 under Certificate of
Registration No. 17021 which was renewed on
November 16, 1991 for another 20 years. Gallo
Winery also applied for registration of its ERNEST &
JULIO GALLO wine trademark on October 11, 1990
under Application Serial No. 901011-00073599-PN
but the records do not disclose if it was ever
approved by the Director of Patents.
On the other hand, petitioners Mighty
Corporation and La Campana and their sister
company, Tobacco Industries of the Philippines
(Tobacco Industries), are engaged in the cultivation,
manufacture, distribution and sale of tobacco
products for which they have been using the
GALLO cigarette trademark since 1973.
The Bureau of Internal Revenue (BIR)
approved Tobacco Industries’ use of GALLO 100’s
cigarette mark on September 14, 1973 and GALLO
filter cigarette mark on March 26, 1976, both for
the manufacture and sale of its cigarette products.
In 1976, Tobacco Industries filed its
manufacturer’s sworn statement as basis for BIR’s
collection of specific tax on GALLO cigarettes.
On February 5, 1974, Tobacco Industries
applied for, but eventually did not pursue, the
registration of the GALLO cigarette trademark in
the principal register of the then Philippine Patent
Office.
In May 1984, Tobacco Industries assigned
the GALLO cigarette trademark to La Campana
which, on July 16, 1985, applied for trademark
registration in the Philippine Patent Office. On July
17, 1985, the National Library issued Certificate of
Copyright Registration No. 5834 for La Campana’s
lifetime copyright claim over GALLO cigarette
labels.
Subsequently, La Campana authorized
MightyCorporation to manufacture and sell
cigarettes bearing the GALLO trademark. BIR
approved Mighty Corporation’s use of GALLO 100’s
cigarette brand, under licensing agreement with
Tobacco Industries, on May 18, 1988, and GALLO
SPECIAL MENTHOL 100’s cigarette brand on April
3, 1989.
Petitioners claim that GALLO cigarettes
have been sold in the Philippines since 1973,
initially by Tobacco Industries, then by La Campana
and finally by Mighty Corporation.
On the other hand, although the GALLO wine
trademark was registered in the Philippines in
1971, respondents claim that they first introduced
and sold the GALLO and ERNEST & JULIO GALLO
wines in the Philippines circa 1974 within the then
U.S. military facilities only. By 1979, they had
expanded their Philippine market through
authorized distributors and independent outlets.
Respondents claim that they first learned
about the existence of GALLO cigarettes in the
latter part of 1992 when an Andresons employee
saw such cigarettes on display with GALLO wines in
a Davao supermarket wine cellar section. Forthwith,
respondents sent a demand letter to petitioners
asking them to stop using the GALLO trademark, to
no avail.
On March 12, 1993, respondents sued
petitioners in the Makati RTC for trademark and
tradename infringement and unfair competition,
with a prayer for damages and preliminary
injunction.
Respondents charged petitioners with
violating Article 6 of the Paris Convention for the
Protection of Industrial Property (Paris Convention)
and RA 166 (Trademark Law), specifically, Sections
22 and 23 (for trademark infringement), 29 and 30
(for unfair competition and false designation of
origin) and 37 (for tradename infringement). They
claimed that petitioners adopted the GALLO
trademark to ride on Gallo Winery’s 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 & JULIO GALLO trademarks
with Gallo Winery’s wines. Respondents prayed for
the issuance of a writ of preliminary injunction and
ex parte restraining order, plus P2 million as actual
and compensatory damages, at least P500,000 as
exemplary and moral damages, and at least
P500,000 as attorney’s fees and litigation expenses.
In their answer, petitioners alleged, among
other affirmative defenses, that: petitioner’s GALLO
cigarettes and Gallo Winery’s wines were totally
unrelated products; Gallo Winery’s GALLO
trademark registration certificate covered wines
only, not cigarettes; GALLO cigarettes and GALLO
wines were sold through different channels of
trade; GALLO cigarettes, sold at P4.60 for GALLO
filters and P3 for GALLO menthols, were low-cost
items compared to Gallo Winery’s high-priced
luxury wines which cost between P98 to P242.50;
the target market of Gallo Winery’s wines was the
middle or high-income bracket with at least
P10,000 monthly income while GALLO cigarette
buyers were farmers, fishermen, laborers and other
low-income workers; the dominant feature of the
GALLO cigarette mark was the rooster device with
the manufacturer’s name clearly indicated as
MIGHTY CORPORATION while, in the case of Gallo
Winery’s wines, it was the full names of the
founders-owners ERNEST & JULIO GALLO or just
their surname GALLO; by their inaction and
conduct, respondents were guilty of laches and
estoppel; and petitioners acted with honesty,
justice and good faith in the exercise of their right
to manufacture and sell GALLO cigarettes.
RTC denied, for lack of merit, respondent’s prayer
for the issuance of a writ of preliminary injunction,
holding that respondent’s GALLO trademark
registration certificate covered wines only, that
respondents’ wines and petitioners’ cigarettes were
not related goods and respondents failed to prove
material damage or great irreparable injury as
required by Section 5, Rule 58 of the Rules of
Court.
RTC denied, for lack of merit, respondents’ motion
for reconsideration.
After trial on the merits, however, the Makati RTC,
held petitioners liable for, and permanently
enjoined them from, committing trademark
infringement and unfair competition with respect
to the GALLO trademark.
On appeal, the CA affirmed the Makati RTC
decision and subsequently denied petitioner’s
motion for reconsideration.
Issue:
Whether or not petitioners were liable for
trademark infringement, unfair competition and
damages. (No)
Ruling:
The Trademark Law and The Paris
Convention are the applicable laws, not the
Intellectual Property Code.
We note that respondents sued petitioners
on March 12, 1993 for trademark infringement and
unfair competition committed during the
effectivity of the Paris Convention and the
Trademark Law.

Yet, in the Makati RTC decision of
November 26, 1998, petitioners were held liable not
only under the aforesaid governing laws but also
under the IP Code which took effect only on
January 1, 1998,
The CA apparently did not notice the error
and affirmed the Makati RTC decision.
We therefore hold that the courts a quo erred in
retroactively applying the IP Code in this case.
It is a fundamental principle that the validity and
obligatory force of a law proceed from the fact that
it has first been promulgated. A law that is not yet
effective cannot be considered as conclusively
known by the populace. To make a law binding
even before it takes effect may lead to the arbitrary
exercise of the legislative power.
In Del Monte Corporation vs. Court of Appeals, we
distinguished trademark infringement from unfair
competition:
(1) Infringement of trademark is the
unauthorized use of a trademark, whereas unfair
competition is the passing off of one's goods as
those of another.
(2) In infringement of trademark fraudulent
intent is unnecessary, whereas in unfair
competition fraudulent intent is essential.
(3) In infringement of trademark the prior
registration of the trademark is a prerequisite to
the action, whereas in unfair competition
registration is not necessary.
4. MCDONALD’S CORPORATION vs. L.C. BIG MAK
BURGER, INC., et. al.
G.R. No. 143993, 18 August 2004, Carpio, J.
DOCTRINE:
Unfair competition is broader than
trademark infringement and includes passing off
goods with or without trademark infringement.
Trademark infringement is a form of unfair
competition. Trademark infringement constitutes
unfair competition when there is not merely
likelihood of confusion, but also actual or probable
deception on the public because of the general
appearance of the goods. There can be trademark
infringement without unfair competition as when
the infringer discloses on the labels containing the
mark that he manufactures the goods, thus
preventing the public from being deceived that the
goods originate from the trademark owner.
FACTS:
McDonald's, a global chain of fast-food
restaurants, owns a family of trademarks, including
the "Big Mac" mark for its "double-decker
hamburger sandwich", for which it secured with the
US Trademark Registry in 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”), which was
approved in 1985. In the Philippines, McGeorge
Food Industries (McGeorge) is the Philippine’s
McDonald’s franchisee.
L.C. Big Mak Burger, Inc. (“Big Mak”) is a
domestic corporation which operates fast-food
outlets and snack vans in Metro Manila and nearby
provinces. In 1988, Big Mak applied with the PBPTT
for the registration of the “Big Mak” mark for its
hamburger sandwiches. McDonald’s opposed its
application on the ground that “Big Mak” was a
colorable imitation of its registered “Big Mac” mark
for the same food products.
Subsequently, McDonald’s sued Big Mak for
trademark infringement and unfair competition
before the Regional Trial Court (RTC) of Makati
City. The RTC issued a Temporary Restraining
Order (TRO) and, later on, a preliminary injunction
enjoining Big Mak from using the said mark in the
operation of their business in the NCR.
To counter McDonald’s allegations, Big Mak
rebutted that the former does not have an
exclusive right to the “Big Mac” mark or to any
other similar mark. By way of example, Big Mak
pointed out the Isaiyas Group of Corporatin that
registered the same mark for hamburger
sandwiches with the PBPTT, and several others
companies using similar marks. Alternatively, they
alleged that it is not liable for trademark
infringement or for unfair competition, as the “Big
Mak” mark they sought to register does not
constitute a colorable imitation of the “Big Mac”
mark because they did not fraudulently pass off
their hamburger as that of McDonald’s.
The RTC found that Big Mak was liable for
trademark infringement and unfair competition.
However, the RTC’s decision was reversed by the
Court of Appeals (CA).
ISSUES:
1. Whether Big Mak is liable for trademark
infringement
2. Whether Big Mak is liable for unfair
competition.
HELD.
1. YES, Big Mak is liable for trademark
infringement.
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.
In this case, all the elements for trademark
infringement are present. First, McDonald’s
ownership of the mark “Big Mac” is neither generic
nor descriptive. On the contrary, it falls under the
class of fanciful or arbitrary marks as it bears no
logical relation to the actual characteristics of the
product it represents; that being the case, the mark
is highly distinctive and, therefore, valid. Second,
McDonald’s duly established is ownership of the
aforementioned mark, as may be gleaned from the
registrations it acquired.
Finally, as to the element of likelihood of
confusion, it must be noted that Section 22 covers
two types of confusion arising from the use of
similar or colorable imitation marks, namely,
confusion of goods (product confusion) and
confusion of business (source or origin confusion).
In this case, there is confusion of goods since the
company’s use of the “Big Mak” mark on the same
goods – i.e., hamburger sandwiches. Likewise, there
is a confusion of business due to the company’s
use of the "Big Mak" mark in the sale of
hamburgers, the same business that McDonald’s
are engaged in, also results in confusion of
business.
Furthermore, in determining likelihood of
confusion, the Court 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, the company’s 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. Therefore, it is liable for trademark
infringement.
2. YES, Big Mak is liable for unfair
competition.
The elements of unfair competition under
Section 29 are as follows: (1) confusing similarity
in the general appearance of the goods, and (2)
intent to deceive the public and defraud a
competitor.
In this case, Big Mak applied on their plastic
wrappers and bags almost the exact same words
used by McDonald’s on their Styrofoam box.
Moreover, there is similarity in the goods being
sold by both companies – i.e., hamburger
sandwiches. Lastly, there is no notice to the public
that the “Big Mak” hamburgers are products of
“L.C. Big Mak Burger, Inc.”. This clearly shows the
company’s intent to deceive the public. As such, Big
Mak is liable for unfair competition.
5. Esso Standard Eastern, Inc., vs. Court of
Appeals
Doctrine:
Implicit in this definition is the concept that
the goods must be so related that there is
likelihood either of confusion of goods or
business. But likelihood of confusion is a relative
concept; to be determined only according to the
particular, and sometimes peculiar, circumstances
of each case. But as to whether trademark
infringement exists depends for the most part
upon whether or not the goods are so related that
the public may be, or is actually, deceived and
misled that they came from the same maker or
manufacturer.
Facts:
Esso Standard Eastern, Inc. is a foreign
corporation duly licensed to do business in the
Philippines, engaged in the sale of petroleum
products which are identified with its trademark
ESSO. United Cigarette Corp. on the other hand is a
domestic corporation then engaged in the
manufacture and sale of cigarettes, after it
acquired in November, 1963 the business, factory
and patent rights of its predecessor La Oriental
Tobacco Corporation, one of the rights thus
acquired having been the use of the trademark
ESSO on its cigarettes. Esso Standard commenced a
case for trademark infringement in the CFI of
Manila, stating that they have been engaged in the
sale of petroleum products and its trademark has
acquired a considerable goodwill and the purpose
of United Cigarette is to deceive the public as to its
quality and origin to the detriment and
disadvantage of its own products. United Cigarette
contends that the products are not identical to
those produced and sold by Esso Standard, thus
there is no infringement. CFI ruled in favor of Esso,
which was then reversed by the Court of Appeals.
Issue:
Whether or not United Cigarette committed
trademark infringement
Held:
No.
The law defines infringement as the use
without consent of the trademark owner of any
"reproduction, counterfeit, copy or colorable
limitation of any registered mark or tradename 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 reproduce,
counterfeit, copy or colorably imitate any such
mark or tradename and apply such reproduction,
counterfeit, copy or colorable limitation to labels,
signs, prints, packages, wrappers, receptacles or
advertisements intended to be used upon or in
connection with such goods, business or
services." Implicit in this definition is the concept
that the goods must be so related that there is a
likelihood either of confusion of goods or
business. But likelihood of confusion is a relative
concept; to be determined only according to the
particular, and sometimes peculiar, circumstances
of each case. But as to whether trademark
infringement exists depends on whether or not the
goods are so related that the public may be, or is
actually, deceived and misled that they came from
the same maker or manufacturer. For non-
competing goods may be those which, though they
are not in actual competition, are so related to each
other that it might reasonably be assumed that
they originate from one manufacturer. Non-
competing goods may also be those which, being
entirely unrelated, could not reasonably be
assumed to have a common source.
The goods are obviously different from
each other with "absolutely no iota of similitude".
They are so foreign to each other as to make it
unlikely that purchasers would think that
petitioner is the manufacturer of respondent's
goods. The mere fact that one person has adopted
and used a trademark on his goods does not
prevent the adoption and use of the same
trademark by others on unrelated articles of a
different kind. The public knows too well that
petitioner deals solely with petroleum products
that there is no possibility that cigarettes with
ESSO brand will be associated with whatever good
name petitioner's ESSO trademark may have
generated. Another factor that shows that the
goods involved are non-competitive and non-
related is the appellate court's finding that they
flow through different channels of trade. The
(petitioner's) products are distributed principally
through gasoline service and lubrication stations,
automotive shops and hardware stores. On the
other hand, the (respondent's) cigarettes are sold in
sari-sari stores, grocery stores, and other small
distributor outlets. (Respondent's) cigarettes are
even peddled in the streets while (petitioner's)
'gasul' burners are not.
6. TAIWAN KOLIN CORP LTD. VS. KOLIN
ELECTRONIC COMPANY INC.
Facts:
Taiwan Kolin Corp sought to register the trademark
“KOLIN” in Class 9 on the following combination of
goods: television sets, cassette recorder, VCD
Amplifiers, camcorders and other audio/video
electronic equipment, flat iron, vacuum cleaners,
cordless handsets, videophones, facsimile
machines, teleprinters, cellular phones and
automatic goods vending machine.
Kolin Electronics opposed the application on the
ground that 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 equipments, while
Kolin Electronics’ goods fall under devices for
controlling the distribution and use of electricity.
Thus, it is erroneous to assume that all electronic
products are closely related and that the coverage
of one electronic product necessarily precludes the
registration of a similar mark over another.
Second, the ordinarily intelligent buyer is not likely
to be confused. The distinct visual and aural
differences between the two trademarks “KOLIN”,
although appear to be minimal, are sufficient to
distinguish between one brand or another. The
casual buyer is predisposed to be more cautious,
discriminating, and would prefer to mull over his
purchase because the products involved are
various kind of electronic products which are
relatively luxury items and not considered
affordable. They are not ordinarily consumable
items such as soy sauce, ketsup or soap which are
of minimal cost. Hence, confusion is less likely.
7. Del Monte Corp. vs CA
FACTS: Petitioner Del Monte Corporation (Del
Monte), through its local distributor and
manufacturer, PhilPack filed an infringement of
copyright complaint against respondent Sunshine
Sauce Manufacturing Industries (SSMI), also a
maker of catsup and other kitchen sauces. In its
complaint, Del Monte alleged that SSMI are using
bottles and logos identical to the petitioner, to
which is deceiving and misleading to the public.
In its answer, Sunshine alleged that it had ceased to
use the Del Monte bottle and that its logo was
substantially different from the Del Monte logo and
would not confuse the buying public to the
detriment of the petitioners.
The Regional Trial Court of Makati dismissed the
complaint. It held that there were substantial
differences between the logos or trademarks of the
parties nor on the continued use of Del Monte
bottles. The decision was affirmed in toto by the
Court of Appeals.
ISSUE: Whether or not SSMI committed
infringement against Del Monte in the use of its
logos and bottles.
HELD: Yes. In determining whether two trademarks
are confusingly similar, the two marks in their
entirety as they appear in the respective labels
must be considered in relation to the goods to
which they are attached; the discerning eye of the
observer must focus not only on the precognizant
words but also on the other features appearing on
both labels. It has been correctly held that side-by-
side comparison is not the final test of similarity.
In determining whether a trademark has been
infringed, we must consider the mark as a whole
and not as dissected.
The Court is agreed that are indeed distinctions,
but similarities holds a greater weight in this case.
The Sunshine label is a colorable imitation of the
Del Monte trademark. 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. 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.
With regard to the bottle use, Sunshine despite the
many choices available to it and notwithstanding
that the caution "Del Monte Corporation, Not to be
Refilled" was embossed on the bottle, still opted to
use the petitioners' bottle to market a product
which Philpack also produces. This clearly shows
the private respondent's bad faith and its intention
to capitalize on the latter's reputation and goodwill
and pass off its own product as that of Del Monte.
8. FRUIT OF THE LOOM, INC., vs. COURT OF
APPEALS and GENERAL GARMENTS
CORPORATION
Doctrine: There is infringement of trademark when
the use of the mark involved would be likely to
cause confusion or mistake in the mind of the
public or to deceive purchasers as to the origin or
source of the commodity.
Facts:
Petitioner, FRUIT OF THE LOOM, filed a
complaint for infringement of trademark and
unfair competition against private respondent
FRUIT FOR EVE. Petitioner alleged in the complaint
that private respondent’s trademark FRUIT FOR
EVE is similar to its trademark FRUIT OF THE
LOOM used also on women’s panties and other
textile products. Furthermore, it was also alleged
therein that the color get-up and general
appearance of private respondent's hang tag
consisting of a big red apple is a colorable
imitation to the hang tag of petitioner.
Private respondent on his defense said that its
registered trademark is not confusingly similar to
that of petitioner as the latter alleged. Likewise,
private respondent stated that the trademark
FRUIT FOR EVE is being used on ladies' panties and
pajamas only whereas petitioner's trademark is
used even on men's underwear and pajamas.
The lower court ruled in favor of the petitioner.
The CA rendered its decision reversing the
judgment of the lower court and dismissed the
petitioner’s complaint.
Issue: WON private respondent's trademark FRUIT
FOR EVE and its hang tag are confusingly similar to
petitioner's trademark FRUIT OF THE LOOM and its
hang tag so as to constitute an infringement.
Held:
 NO. The SC agrees with the respondent
court that by mere pronouncing the two marks, it
could hardly be said that it will provoke a
confusion as to mistake one for the other. Standing
by itself, FRUIT OF THE LOOM is wholly different
from FRUIT FOR EVE. The dominant feature of both
trademarks is the word FRUIT for even in the
printing of the trademark in both hang tags, the
word FRUIT is not at all made dominant over the
other words. As to the design and coloring scheme
of the hang tags, the shape of petitioner’s hang tag
is round with a base that looks like a paper rolled a
few inches in both ends; while that of private
respondent is plain rectangle without any base. The
designs differ. Petitioner’s trademark is written in
almost semi-circle while that of private respondent
is written in straight line in bigger letters than
petitioner’s. Private respondent’s tag has only an
apple in its center but that of petitioner has also
clusters of grapes that surround the apple in the
center. The colors of the hang tag are also very
distinct from each other. The trademarks FRUIT OF
THE LOOM and FRUIT FOR EVE do not resemble
each other as to confuse or deceive an ordinary
purchaser.
9. Philippine Nut Industry, Inc. vs Standard
Brands, Inc.
Facts:
Philippine Nut, a domestic corporation,
obtained from the Patent Office a Certificate of
Registration covering the trademark "PHILIPPINE
PLANTERS CORDIAL PEANUTS," the label used on
its product of salted peanuts. In 1962, Standard
Brands (a foreign corporation) filed a case with the
Director of Patents asking for the cancellation of
Philippine Nut's certificate of registration on the
ground that Philippine Nut was not entitled to
register the mark at the time of its application
because Standard Brands is the owner of the
trademark "PLANTERS COCKTAIL PEANUTS".
Philippine Nuts countered that its label is not
confusingly similar to that of Standard Brands as
the latter alleges.
The Director of Patents rendered a decision in
favor of Standard Brands and ordered the
cancellation of Philippine Nut’s registration
certificate. It found that in the labels using the two
trademarks in question, the dominant part is the
word "Planters" was displayed in a very similar
manner so much so that as to appearance and
general impression there was a very confusing
similarity.
Issue:
Is the trademark "PHILIPPINE PLANTERS CORDIAL
PEANUTS" used by Philippine Nut on its label for
salted peanuts confusingly similar to the trademark
"PLANTERS COCKTAIL PEANUTS" used by Standard
Brands on its product so as to constitute an
infringement of the latter's trademark rights and
justify its cancellation?2
Ruling:
Yes.
1. Before the Court, petitioner argued that
PLANTERS cannot be considered as the
dominant feature of the trademarks in
question because it is a mere descriptive
term.
The Court held that there is infringement of
trademark when the use of the mark
involved would be likely to cause confusion
or mistake in the mind of the public or to
deceive purchasers as to the origin or
source of the commodity. 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, then infringement takes pIace
(duplication or imitation is not necessary, a
similarity in the dominant features of the
trademarks would be sufficient).
In this case while it is true that PLANTERS is
an ordinary word, nevertheless it is used in
the labels not to describe the nature of the
product, but to project the source or origin
of the salted peanuts contained in the cans.
The word PLANTERS printed across the
upper portion of the label in bold letters
easily attracts and catches the eye of the
ordinary consumer and it is that word and
none other that sticks in his mind when he
thinks of salted peanuts. (Note: A visual and
graphic presentation of the labels of the
parties was reproduced in this case.)
2. Another argument was that respondent
Director should not have based his decision
simply on the use of the term PLANTERS,
 and that what he should have resolved is
whether there is a confusing similarity in
the trademarks of the parties.
Respondent Director's decision is based not
only on the fact that petitioner herein
adopted the same dominant mark of
Standard Brands (i.e., the word PLANTERS)
but that it also used in its label the same
coloring scheme of gold, blue, and white,
and basically the same lay-out of words
with similar type and size of lettering as
appearing in Standard Brands' own
trademark, all of which result in a confusing
similarity between the two labels.
The Court said that the striking similarity
between the two labels is quite evident not
only in the common use of PLANTERS but
also in the other words employed. when a
competitor adopts a distinctive or dominant
mark or feature of another's trademark and
with it makes use of the same color
ensemble, employs similar words written in
a style, type and size of lettering almost
identical with those found in the other
trademark, the intent to pass to the public
his product as that of the other is quite
obvious.
3. Next submitted by the petitioner was that it
was error for respondent Director to have
enjoined it from using PLANTERS in the
absence of evidence showing that the term
has acquired secondary meaning. Citing
American jurisprudence, petitioner asserted
that the first user of a tradename composed
of common words is given no special
preference unless it is shown that such
words have acquired secondary meaning,
and this, respondent Standard Brands failed
to do when no evidence was presented to
establish that fact.
(Note: Doctrine of Secondary
Meaning
Except as expressly excluded in
paragraphs (a), (b), (c) and (d) of this
section, nothing herein shall prevent
the registration of a mark or trade-
name used by the applicant which
has become distinctive of the
applicant's goods, business or
services. The Director may accept
as prima facie evidence that the
mark or trade-name has become
distinctive, as applied to or used in
connection with the applicant's
goods, business or services, proof of
substantially exclusive and
continuous use thereof as a mark or
trade-name by the applicant in
connection with the sale of goods,
business or services for the five years
next preceding the date of the filing
of the application for its registration.
(As amended by Sec. 3, Rep. Act No.
638.)
The Court held that the doctrine is to the
effect that a word or phrase originally
incapable of exclusive appropriation with
reference to an article on the market,
because geographically or otherwise
descriptive, might nevertheless have been
used so long and so exclusively by one
producer with reference to his article that,
in that trade and to that branch of the
purchasing public, the word or phrase has
come to mean that the article was his
product.
By way of illustration, is the word "Selecta"
which according to this Court is a common
ordinary term in the sense that it may be
used or employed by any one in promoting
his business or enterprise, but which once
adopted or coined in connection with one's
business as an emblem, sign or device to
characterize its products, or as a badge of
authenticity, may acquire a secondary
meaning as to be exclusively associated
with its products and business, so that its
use by another may lead to confusion in
trade and cause damage to its business
Applying the same doctrine in this case, the
Court said that there is oral and
documentary evidence showing that the
word PLANTERS has been used by and
closely associated with Standard Brands for
its canned salted peanuts since 1938 in this
country. There is evidence to show that the
term PLANTERS has become a distinctive
mark or symbol insofar as salted peanuts
 are concerned, and by priority of use dating
as far back as 1938, respondent Standard
Brands has acquired a preferential right to
its adoption as its trademark warranting
protection against its usurpation by
another.
The Decision of the Director of Patents was
Affirmed.
10. EMERALD GARMENT MANUFACTURING
CORPORATION vs. CA
Doctrine:
The trademark should be considered as a
whole and not piecemeal. The simulation, in order
to be objectionable, must be such 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.
Facts:
Private respondent H.D. Lee Co., Inc., a
foreign corporation, filed with the Bureau of
Patents, Trademarks & Technology Transfer
(BPTTT) a petition for cancellation of registration
(Supplemental Register)and notice of opposition to
petitioner's application for registration for the
trademark "STYLISTIC MR. LEE" used on skirts,
jeans, blouses, socks, briefs, jackets, jogging suits,
dresses, shorts, shirts and lingerie under Class 25,
in the name of petitioner Emerald Garment
Manufacturing Corporation.
Private respondent, invoking Sec. 37 of R.A.
No. 166 (Trademark Law) and Art. VIII of the Paris
Convention for the Protection of Industrial
Property, averred that petitioner's trademark "so
closely resembled its own trademark, 'LEE' as
previously registered and used in the Philippines,
and not abandoned, as to be likely, when applied to
or used in connection with petitioner's goods, to
cause confusion, mistake and deception on the part
of the purchasing public as to the origin of the
goods." On the other hand, petitioner contended
that its trademark was entirely and unmistakably
different from that of private respondent and that
its certificate of registration was legally and validly
granted.
The Director of Patents granted private
respondent's petition for cancellation and
opposition to registration. Using the test of
dominancy, the Director of Patents 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. CA affirmed the
decision of the Director of Patents. Hence, petition
for review on certiorari.
Issue:
WON petitioner's trademark "STYLISTIC MR.
LEE" tend to mislead and confuse the public and
thus constitutes an infringement of respondent’s
trademark "LEE or LEE RIDERS, LEE-LEENS and LEE-
SURES”
Held: No.
We considered the trademarks involved as a
whole and rule that petitioner's "STYLISTIC MR.
LEE" is not confusingly similar to private
respondent's "LEE" trademark.
Petitioner's trademark is the whole
"STYLISTIC MR. LEE." Although on its label the
word "LEE" is prominent, the trademark should be
considered as a whole and not piecemeal. There is
no cause for the CA’s apprehension that
petitioner's products might be mistaken as
"another variation or line of garments under
private respondent's 'LEE' trademark".As one would
readily observe, private respondent'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 private respondent's
"LEE" mark.
As we have previously intimated 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.
The test is not found in the deception, or
the possibility of deception, of the person who
knows nothing about the design which has been
counterfeited, and who must be indifferent
between that and the other. The simulation, in
order to be objectionable, must be such 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.
Questioned decision and resolution
REVERSED and SET ASIDE.
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NOTE:
 The essential element of infringement is
colorableimitation. It does not mean such
similitude as amounts to identity. Nor does it
require that all the details be literally copied.
Colorable imitation refers to such similarity in
form, content, words, sound, meaning, special
arrangement, or general appearance of the
trademark or tradename with that of the other
mark or tradename in their over-all presentation or
in their essential, substantive and distinctive parts
as would likely mislead or confuse persons in the
ordinary course of purchasing the genuine article.
In determining whether colorable imitation
exists, jurisprudence has developed two kinds of
tests:
(1) the Dominancy Test and
(2) the Holistic Test.
(1) The test of dominancy focuses on the
similarity of the prevalent features of the
competing trademarks which might cause
confusion or deception and thus
constitutes infringement. 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 it is
necessary that the infringing label should
suggest an effort to imitate. The question
at issue in cases of infringement of
trademarks is whether the use of the marks
involved would be likely to cause
confusion or mistakes in the mind of the
public or deceive purchasers.
(2) The holistic test mandates that the entirety
of the marks in question must be
considered 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 in both labels in order
that he may draw his conclusion whether
one is confusingly similar to the other.
11. Ethepa v Director of Patents
Doctrine:
Trademark ATUSSIN can be registered even
given the fact that PERTUSSIN, another trademark,
had been previously registered in the Patent Office.
Buyer must be one thoroughly familiar with what
he intends to get, else he would not have the
temerity to ask for a medicine specifically needed
to cure a given ailment.
Facts:
On April 23, 1959, respondent Westmont
Pharmaceuticals, Inc., a New York corporation,
sought registration of trademark “Atussin” placed
on its “medicinal preparation of expectorant
antihistaminic, bronchodilator sedative, ascorbic
acid (Vitamin C) used in the treatment of cough”.
The trademark is used exclusively in the
Philippines since January 21, 1959.
Petitioner, Etepha, A.G., a Liechtenstein
(principality) corporation, objected. Petitioner
claims that it will be damaged because Atussin is
so confusedly similar to its Pertussin (Registration
No. 6089, issued on September 25, 1957) used on a
preparation for the treatment of coughs, that the
buying public will be misled into believing that
Westmont’s product is that of petitioner’s which
allegedly enjoys goodwill.
Issue:
May trademark ATUSSIN be registered,
given the fact that PERTUSSIN, another trademark,
had been previously registered in the Patent Office?
Held:
YES.
SC concede the possibility that buyers
might be able to obtain Pertussin or Atussin
without prescription. When this happens, then the
buyer must be one thoroughly familiar with what
he intends to get, else he would not have the
temerity to ask for a medicine specifically needed
to cure a given ailment. In which case, the more
improbable it will be to palm off one for the other.
For a person who purchases with open eyes is
hardly the man to be deceived.
The appealed decision of respondent
Director of Patents, giving due course to the
application for the registration of trademark
ATUSSIN, is hereby affirmed.
12. Bristol Myers Co. vs Director of Patents
13. Great White Shark Entreprises vs. Caralde Jr.
DOCTRINE: A trademark device is susceptible to
registration if it is crafted fancifully or arbitrarily
and is capable of identifying and distinguishing the
goods of one manufacturer or seller from those of
another. A generic figure, if employed and designed
in a specific manner, can be a registerable
trademark device, subject to the provisions of the
IP Code.
FACTS:

On July 31, 2002, Caralde filed before the Bureau of
Legal Affairs (BLA), IPO a trademark application
seeking to register the mark "SHARK & LOGO" for
his manufactured goods under Class 25, such as
slippers, shoes and sandals. Petitioner, a foreign
corporation domiciled in Florida, USA, opposed the
application claiming to be the owner of the mark
consisting of a representation of a shark in color. It
alleged that the mark pending registration is
confusingly similar with theirs which is likely to
confuse the public.
Caralde averred that the subject marks are
distinctively different from one another and easily
distinguishable.
The BLA Director ruled in favor of petitioners citing
that the shark logo was both a dominant feature
and are similar and that both trademarks belong to
the same class. The Director General of the IPO
affirmed this decision. The CA, however, reversed
the decision citing that there were no confusing
similarity.
ISSUE: Whether there is confusing similarity
between the trademarks.
RULING:
No. A trademark device is susceptible to
registration if it is crafted fancifully or arbitrarily
and is capable of identifying and distinguishing the
goods of one manufacturer or seller from those of
another. Apart from its commercial utility, the
benchmark of trademark registrability is
distinctiveness. Thus, a generic figure, as that of a
shark in this case, if employed and designed in a
distinctive manner, can be a registrable trademark
device, subject to the provisions of the IP Code.
Irrespective of the Holistic and Dominancy tests,
the Court finds no confusing similarity between the
subject marks. While both marks use the shape of a
shark, the Court noted distinct visual and aural
differences between them.
As may be gleaned from the foregoing, the visual
dissimilarities between the two (2) marks are
evident and significant, negating the possibility of
confusion in the minds of the ordinary purchaser,
especially considering the distinct aural difference
between the marks.
Finally, there being no confusing similarity between
the subject marks, the matter of whether Great
White Shark’s mark has gained recognition and
acquired becomes unnecessary.
14. MIRPURI vs. CA
Facts:
Lolita Escobar applied for the registration of the
trademark ‘Barbizon’ for her products such as
brassieres and ladies undergarments. Respondent
Barbizon Corporation, an American corporation,
opposed alleging that petitioner’s mark is
confusingly similar to its own trademark
‘Barbizon.’ Escobar’s application was given due
course and her trademark was registered. Later,
Escobar assigned all her rights to petitioner Mirpuri
who failed to file an Affidavit of Use resulting in
the cancellation of the trademark. Petitioner then
applied for registration of the trademark to which
respondent Barbizon again opposed, now invoking
the protection under Article 6bis of the Paris
Convention. The Director of Patents declaring
respondent’s opposition was already barred,
petitioner’s application was given due course. CA
reversed the judgment.
Issue:
Whether or not respondent may invoke the
protection under Article 6bis of the Paris
Convention.
Ruling: YES.
The Convention of Paris for the Protection of
Industrial Property, otherwise known as 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. The
Convention is essentially a compact among various
countries which, as members of the Union, have
pledged to accord to citizens of the other member
countries trademark and other rights comparable
to those accorded their own citizens by their
domestic laws for an effective protection against
unfair competition. Art. 6bis is a self-executing
provision and does not require legislative
enactment to give it effect in the member country.
It may be applied directly by the tribunals and
officials of each member country by the mere
publication or proclamation of the Convention,
after its ratification according to the public law of
each state and the order for its execution.
The Philippines and the United States of America
have acceded to the WTO Agreement. Conformably,
the State must reaffirm its commitment to the
global community and take part in evolving a new
international economic order at the dawn of the
new millennium.
15. FREDCO MANUFACTURING vs. HARVARD
COLLEGE
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.”
Facts:
Petitioner Fredco Manufacturing filed a
petition to cancel the registration of respondent’s
mark ‘Harvard Veritas Shield Symbol’ used in
products such as bags and t-shirts. Fredco alleges
that the mark ‘Harvard’ was first used and
registered by New York Garments, a domestic
corporation and its predecessor-in-interest, used in
its clothing articles. Respondent Harvard University
on the other hand, alleges that it is the lawful
owner of the name and mark in numerous
countries worldwide including in the Philippines
which was used in commerce as early as 1872.
Respondent further contend that it never
authorized any person to use its name or mark in
connection with any goods in the Philippines. The
IPO Bureau of Legal Affairs cancelled respondent’s
registration of the mark but only over the goods
which are confusingly similar with that of
petitioner. IPO reversed the decision. CA affirmed.
Issue:
Whether or not respondent’s trade name is
infringed.
Ruling:
YES.
Fredco’s use of the mark “Harvard,” coupled
with its claimed origin in Cambridge,
Massachusetts, obviously suggests a false
connection with Harvard University. On this ground
alone, Fredco’s registration of the mark “Harvard”
should have been disallowed. Indisputably, Fredco
does not have any affiliation or connection with
Harvard University, or even with Cambridge,
Massachusetts. Fredco or its predecessor New York
Garments was not established in 1936, or in the
U.S.A. as indicated by Fredco in its oblong logo.
Under Philippine law, a trade name of a
national of a State that is a party to the Paris
Convention, whether or not the trade name forms
part of a trademark, is protected “without the
obligation of filing or registration.” “Harvard” is the
trade name of the world famous Harvard
University, and it is also a trademark of Harvard
University. Under Article 8 of the Paris Convention,
as well as Section 37 of R.A. No. 166, Harvard
University is entitled to protection in the
Philippines of its trade name “Harvard” even
without registration of such trade name in the
Philippines. This means that no educational entity
in the Philippines can use the trade name
“Harvard” without the consent of Harvard
University. Likewise, no entity in the Philippines
can claim, expressly or impliedly through the use
of the name and mark “Harvard,” that its products
or services are authorized, approved, or licensed
by, or sourced from, Harvard University without
the latter’s consent.
16. THE EAST PACIFIC MERCHANDISING CORP.
vs. THE DIR. OF PATENTS and LUIS P. PELLICER
DOCTRINE:
The provisions of law (Rep. Act No. 166, sec.
4) require that the trademark applied for must have
"become distinctive of the applicant's goods", and
that a prima facie proof of this fact exists when the
applicant has been in the "substantially exclusive
and continuous use thereof as a mark or trade-
name for five years next preceding the date of the
filing of the application for its registration".
FACTS:
Marcelo Pua filed with the Office of the
Director of Commerce an application for the
registration of a trademark that he allegedly has
been continuously using in commerce since August
15, 1947 on lotion, face powder, hair pomade,
brillantine and other products, with the word
“Verbena” on it and a representation of a Spanish
lady described as:
“Against a blue background is the bust
figure of a Spanish Señorita dressed in a typically
pink dancer's attire with her upper arms partly
covered with a Spanish shawl of green and white.
The figure appears with black well-groomed hair
adorned by red roses. The figure also appears to be
wearing two green earrings. At the left of this figure
is shown a balcony decked with plants and flowers
characteristics of Spanish houses.”
Pua assigned his rights on the trademark
and the pending application thereof to petitioner.
Petitioner renewed the application under a new
trademark law RA 166.
The examiner submitted a report to the
Director, recommending its approval and the latter
approved it for publication in the Official Gazette.
Luis Pellicer filed an opposition. That the
picture of a lady is common in trade and “Verbena”
is generic name of a flower; that he would be
damaged by the registration of the trademark in
question seeing as “Lupel Verbena” was a
trademark registered in his favor which he uses in
commerce to identify his hair pomade.
 Petitioner moved to dismiss the opposition.
The Director of Patents denied petitioner’s
registration.
ISSUE:
WON Director of Patents erred in denying
petitioner’s trademark registration.
RULING:
The result would not change even if the
Director erred in ruling that the figure of a lady, as
previously described, is likewise is not registrable
as a trademark. The figure, it may be granted, was
drawn on arbitrary on whimsical lines and styled in
a peculiarly distinctive manner; but the fact will not
qualify the word "Verbena" for registration, since
the combination of the two marks would still be
inadequate to guard against the misleading effects
that flow from the use of the term by petitioner.
The claim that the petitioner is entitled to
registration because the term "Verbena" has already
acquired a secondary significance is without merit.
The provisions of law (Rep. Act No. 166, sec.
4) require that the trademark applied for must have
"become distinctive of the applicant's goods", and
that a prima facie proof of this fact exists when the
applicant has been in the "substantially exclusive
and continuous use thereof as a mark or trade-
name for five years next preceding the date of the
filing of the application for its registration". Here it
appears not only that applicant and his assignor
(Pua) only began use of the alleged mark in the year
1947, the same year when the application was filed;
but that such trademarks as "Verbena Povil" and
"Lupel Verbena" had long been in use by
respondent Pellicer on his own cosmetic products,
and that, as a matter of fact, he is the holder of the
certificate of registration from the Patents Office
for the trademark "Lupel Verbena". Said facts
preclude us from concluding that the trademark in
question has become distinctive of applicant's
goods within the meaning of the law.
Conformably to the foregoing, unless the
petitioner makes a disclaimer of the word
"Verbena", the application should be held as
properly denied by the Director of Patents. The
orders reinstating respondent Pellicer'sopposition
are affirmed.
17. ETEPHA, A.G., vs. DIRECTOR OF PATENTS
and WESTMONT PHARMACEUTICALS, INC.,
FACTS: Respondent Westmont Pharmaceuticals,
Inc., a New York corporation, sought registration of
trademark "Atussin" placed on its "medicinal
preparation of expectorant antihistaminic,
bronchodilator sedative, ascorbic acid (Vitamin C)
used in the treatment of cough". The trademark is
used exclusively in the Philippines since January
21, 1959.Petitioner, Etepha, A. G., a Liechtenstin
(principality) corporation, objected claiming that it
will be damaged because Atussin is so confusedly
similar to its Pertussin used on a preparation for
the treatment of coughs, that the buying public will
be misled into believing that Westmont's product is
tha of petitioner's which allegedly enjoys goodwill.
The Director of Patents ruled that the trademark
ATUSSIN may be registered even though
PERTUSSIN had been previously registered from the
same office, hence, this appeal.
ISSUE: Whether or not ATUSSIN may be registered?
HELD: We are to be guided by the rule that the
validity of a cause for infringement is predicated
upon colorable imitation. The phrase "colorable
imitation" denotes such a "close or ingenious
imitation as to be calculated to deceive ordinary
persons, or such a resemblance to the original as to
deceive an ordinary purchaser, giving such
attention as a purchaser usually gives, and to cause
him to purchase the one supposing it to be the
other. A practical approach to the problem of
similarity or dissimilarity is to go into the whole of
the two trademarks pictured in their manner of
display. Inspection should be undertaken from the
viewpoint of a prospective buyer. Confusion is
likely between trademarks, however, only if their
over-all presentations in any of the particulars of
sound, appearance, or meaning are such as would
lead the purchasing public into believing that the
products to which the marks are applied emanated
from the same source. We concede the possibility
that buyers might be able to obtain Pertussin or
Attusin without prescription. When this happens,
then the buyer must be one thoroughly familiar
with what he intends to get, else hewould not have
the temerity to ask for a medicine specifically
needed to cure a given ailment. In which case, the
more improbable it will be to palm off one for the
other. For a person who purchases with open eyes
is hardly the man to be deceived. For the reasons
given, the appealed decision of the respondent
Director of Patents giving due course to the
application for the registration of trademark
ATTUSIN is hereby affirmed. Cost against
petitioner. So ordered.
18. Asia Brewery v. Court of Appeals
Facts:
San Miguel Corporation (SMC) filed a complaint
against Asia Brewery Inc. (ABI) for infringement of
trademark and unfair competition on account of
the latter's BEER PALE PILSEN or BEER NA BEER
product which has been competing with SMC's SAN
MIGUEL PALE PILSEN for a share of the local beer
market. A decision was rendered by the trial Court
dismissing SMC's complaint because ABI "has not
committed trademark infringement or unfair
competition against" SMC. SMC appealed to the
Court of Appeals and the Court of Appeals
reversed the trial court. The CA held Asia Brewery
Incorporated GUILTY of infringement of trademark
and unfair competition. Upon a motion for
reconsideration filed by ABI, the decision of the CA
was modified. In due time, ABI appealed to this
Court by a petition for certiorari under Rule 45 of
the Rules of Court.
Issue:
1. Whether or not ABI infringes SMC's
trademark: San Miguel Pale Pilsen with
Rectangular Hops and Malt Design
2. Whether or not ABI's BEER PALE PILSEN label or
"design" infringe upon SMC's SAN MIGUEL PALE
PILSEN WITH RECTANGULAR MALT AND HOPS
DESIGN
3. Whether or not ABI is guilty of unfair
competition
Held:
1. NO, petitioner ABI has neither infringed SMC's
trademark nor committed unfair competition
with the latter's SAN MIGUEL PALE PILSEN
product. While BEER PALE PILSEN admittedly
competes with the latter in the open market,
that competition is neither unfair nor
fraudulent. There is no confusing similarity
3. Also, the fact that BEER PALE PILSEN like SAN
between the competing beers therefore ABI
neither infringed SMC’s trademark nor did it
commit unfair competition. Hence, we must
deny SMC's prayer to suppress it
2. NO. Infringement is determined by the "test of
dominancy" rather than by differences or
variations in the details of one trademark and of
another. “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 it is necessary
that the infringing label should suggest an effort
to imitate. The question at issue in cases of
infringement of trademarks is whether the use
of the marks involved would be likely to cause
confusion or mistakes in the mind of the public or
deceive purchasers. “
There is hardly any dispute that the dominant
feature of SMC's trademark is the name of the
product: SAN MIGUEL PALE PILSEN, written in
white Gothic letters with elaborate serifs at the
beginning and end of the letters "S" and "M" on
an amber background across the upper portion
of the rectangular design. On the other hand, the
dominant feature of ABI's trademark is the
name: BEER PALE PILSEN, with the word "Beer"
written in large amber letters, larger than any of
the letters found in the SMC label. The trial court
perceptively observed that the word "BEER" does
not appear in SMC's trademark, just as the
words "SAN MIGUEL" do not appear in ABI's
trademark. Hence, there is absolutely no
similarity in the dominant features of both
trademarks.
The fact that the words pale pilsen are part of
ABI's trademark does not constitute an
infringement of SMC's trademark: SAN MIGUEL
PALE PILSEN, for "pale pilsen" are generic words
descriptive of the color ("pale"), of a type of beer
("pilsen"), which is a light bohemian beer with a
strong hops flavor that originated in the City of
Pilsen in Czechoslovakia and became famous in
the Middle Ages. "Pilsen" is a "primarily
geographically descriptive word," hence, non-
registerable and not appropriable by any beer
manufacturer.
MIGUEL PALE PILSEN is bottled in amber-colored
steinie bottles of 320 ml. capacity and is also
advertised in print, broadcast, and television
media, does not necessarily constitute unfair
competition. Unfair competition is the employment
of deception or any other means contrary to good
faith by which a person shall pass off the goods
manufactured by him for those of another who has
already established goodwill for his similar goods.
The universal test for this is whether the public is
likely to be deceived. Actual or probable deception
and confusion on the part of the customers by
reason of defendant’s practices must appear.
However, this is unlikely to happen in the case at
bar for consumers generally order beer by brand.
Also, the fact that ABI also uses amber-colored
steinie bottles cannot constitute unfair competition
for ABI did not copy SMC’s bottle. SMC did not
invent but merely borrowed the steinie bottle from
abroad. Likewise, amber is the most effective color
in preventing transmission of light thus providing
maximum protection to beer. 320 ml is likewise the
standard prescribed under Metrication Circular No.
778. The fact that it is the first to use the steinie
bottle does not give SMC a vested right to use it to
the exclusion of everyone else. Nobody can acquire
any exclusive right to market articles supplying the
simple human needs in containers or wrappers of
the general form, size and character commonly and
immediately used in marketing such articles.
19. Pearl and Dean vs. Shoemart, Inc.
FACTS:
Pearl & Dean (Phil), Inc. is a corporation engaged in
the manufacture of advertising display units called
light boxes. In January 1981, Pearl & Dean was able
to acquire copyrights over the designs of the
display units. In 1988, their trademark application
for “Poster Ads” was approved; they used the same
trademark to advertise their light boxes.
In 1985, Pearl & Dean negotiated with Shoemart,
Inc. (SM) so that the former may be contracted to
install light boxes in the ad spaces of SM.
Eventually, SM rejected Pearl & Dean’s proposal.
Two years later, Pearl & Dean received report that
light boxes, exactly the same as theirs, were being
used by SM in their ad spaces. They demanded SM
to stop using the light boxes and at the same time
asked for damages amounting to P20 M. SM refused
to pay damages though they removed the light
boxes. Pearl & Dean eventually sued SM. SM argued
that it did not infringe on Pearl & Dean’s trademark
because Pearl & Dean’s trademark is only
applicable to envelopes and stationeries and not to
the type of ad spaces owned by SM. SM also averred
that “Poster Ads” is a generic term hence it is not
subject to trademark registration. SM also averred
that the actual light boxes are not copyrightable.
The RTC ruled in favor of Pearl & Dean. But the
Court of Appeals ruled in favor of SM.
ISSUE: Whether or not the Court of Appeals is
correct.
HELD: Yes. The light boxes cannot, by any stretch
of the imagination, be considered as either prints,
pictorial illustrations, advertising copies, labels,
tags or box wraps, to be properly classified as a
copyrightable; what was copyrighted were the
technical drawings only, and not the light boxes
themselves. In other cases, it was held that there is
no copyright infringement when one who, without
being authorized, uses a copyrighted architectural
plan to construct a structure. This is because the
copyright does not extend to the structures
themselves.
On the trademark infringement allegation, the
words “Poster Ads” are a simple contraction of the
generic term poster advertising. In the absence of
any convincing proof that “Poster Ads” has
acquired a secondary meaning in this jurisdiction,
Pearl & Dean’s exclusive right to the use of “Poster
Ads” is limited to what is written in its certificate
of registration, namely, stationeries.
20. La Yebana Company, Inc. vs. Alhambra Cigar
and Cigarette Manufacturing Co., Et Al.
FACTS:
On October 6, 1904, a label forming the
wrapper for cigarette packages and containing the
words "Alhambra 25 Chorritos" was registered with
the Government by the Alhambra Fabrica de
Tabacos, Cigarrillos y Picadura of Manila, Philippine
Islands.
On February 23, 1922, another label
forming the wrapper for cigarette packages and
containing the words "20 Chorritos de Gamu" was
registered by Enrique Ga. Caruana. On March 3,
1925, La Yebana Company, Inc., secured the
registration of a trade-mark which, as more
particularly described in the application, was:
"La caracteristica esencial de esta etiqueta es la
palabra `La Yebana Chorritos' como nominacion o
nombre de la clase especial de cigarrillos elaborados
por la fabrica."
[English: "The essential feature of this label is the
word` The Yebana Chorritos' as nomination or
name of the special class of cigarettes produced by
the factory. "]
On August 21, 1928, the Alhambra Cigar
and Cigarette Mfg. Company, the successor of the
Alhambra Fabrica de Tabacos, Cigarrillos y
Picadura, presented to the Bureau of Commerce
and Industry an application to register a trade-
mark consisting of the words "Alhambra Chorritos"
with a design for cigarettes. La Yebana Company
filed an opposition to this application. Thereupon,
the chief of the Bureau of Commerce and Industry
decided to accept the application of the Alhambra
Cigar and Cigarette Mfg. Company and to overrule
the opposition thereto.
The Director of the Bureau of Commerce
and Industry accepted Alhambra Cigar and
Cigarette Mfg.’s application for the registration of
its trademark. The Director also denied La Yebana
Company’s opposition to the Alhambra’s
application and further granted damages worth P
1,176.10 to the latter for the preliminary injunction
issued against it at the onset of the case. La Yebana
Company elevated the case to the Court of First
Instance, but the court sustained the Director of
Commerce and Industry’s order granting the
trademark.
Hence, the case was brought to the Supreme Court
ISSUE:
Whether the appellant, La Yebana Company, by the
registration of a trademark for cigarette wrappers,
acquired the exclusive right to use the word
"Chorritos" as a trade-mark as against all
competitors
HELD:
No. The registration of the trademark of
Alhambra Cigar and Cigarette Mfg. does not
constitute an infringement of La Yebana Company's
trademark.
The word "Chorritos" has come to be a local
name given to a special kind of cigarettes the
tobacco of which is rolled in sweetened black
paper. Like the words "Corona," Especiales,"
"Perfectos," etc., which are used in common by
local cigar manufacturers to designate the different
shapes or forms of cigars manufactured by them,
for cigarettes there could be "La Yebana Chorritos,"
"Alhambra Chorritos," "Chorritos de Gamu," etc.
This is particularly true in so far as La
Yebana is concerned, since it was one of the last to
make use of the word "Chorritos" as a trademark,
and since all that Alhambra Cigar and Cigarette
Mfg. has been endeavoring to do has consisted in
perfecting a trademark originally registered many
years ago. On such facts, Alhambra Cigar and
Cigarette Mfg., rather than La Yebana Company,
could more logically contend that it has acquired
the exclusive right to use the word "Chorritos" as a
trademark for cigarettes. In addition, it need only
be remarked that a superficial examination is
sufficient to show an entire lack of deceitful
similarly between the trademark of the appellant
and the trade-mark of the appellee.
PETITION DENIED
Fundamentally the decisions of the Director of the
Bureau of Commerce and Industry and of Judge
Concepcion, sitting in First Instance, are sound and
should be maintained.
21. COMPAÑIA GENERAL DE TABACOS DE
FILIPINAS, plaintiff-appellee, vs.
ALHAMBRA CIGAR & CIGARETTE
MANUFACTURING COMPANY, defendant-
appellant.
Facts:
The plaintiff claims to have appropriated and to
own the exclusive right to use the word "Isabela" on
cigarettes. Sometime before the commencement of
this action defendant Alahmbra Cigar began the
manufacture of cigarettes, offering them to the
public in packages on the front side of each of
which appeared the words "Alhambra Isabelas."
The complaint contained two counts, one for the
violation or infringement of the trade-name
"Isabela," and the other for unfair competition
arising out of the use by the defendant of the word
"Isabelas" on its cigarettes. The trial court
dismissed the count based on unfair competition.
Although neither count in the complaint was based
on the infringement or violation of a trade-mark,
and plaintiff, during the trial, offered no evidence
on the subject, nevertheless the court, in its
decision for plaintiff, treated the action as one for
the infringement of a trade-mark. Judgment was
for plaintiff and defendant appealed from that part
founded on the violation of trade-mark and
decreeing a perpetual injunction.
ISSUE:
Plaintiff's claim is this: It has trade-name rights in
the word "Isabela." The defendant has violated
those rights. Plaintiff is entitled to damages on the
theory of violation of a trade name, or unfair
competition, or both. Can it recover?
RULING:
The Court said that none of these claims have been
sustained and that plaintiff is not entitled to
recover on any theory mentioned.
First, it has not proved that the word "Isabela" has
been used in the manner and form alleged in the
complaint; and, in the second place, for the reason
that it is the name of the geographical place of
production or origin of the material composing the
article to which it is affixed and that it is the name,
quality and description thereof. The burden is on
plaintiff to prove the use of word "Isabela" for such
a length of time and under such circumstances as
to give it the right to its exclusive use. The evidence
show that not a single instance in the history of the
plaintiff corporation has a package of its cigarettes
with the word "Isabela" alone or the package as a
separate or distinct word or name. In every
instance, the packages have been marked by the
phrase "La Flor de la Isabela." As far back as the
time when the plaintiff obtained the right to use
the trade-name "La Flor de la Isabela" the exhibit
filed in its application for registration of that trade-
name demonstrate, that the trade-name which
plaintiff desired to secure was "La Flor de la
Isabela" and not "Isabela." So far as the record
shows, plaintiff nowhere advertised or advertises
its cigarettes as "Isabela" cigarettes and we find
nothing in the exhibits which shows that the
plaintiff has or ever had the slightest intention to
use the word "Isabela" as a trade-name.
22. ASIA BREWERY, INC. vs. CA
FACTS:
San Miguel Corp. (SMC) filed a complaint
against Asia Brewery Inc. (ABI) for infringement of
trademark and unfair competition on account of
the latter's BEER PALE PILSEN or BEER NA BEER
product which creates confusion with SMC's SAN
MIGUEL PALE PILSEN.
RTC dismissed SMC’s complaint while the
CA reversed the trial court’s decision.
ISSUE:
WON ABI infringed upon the trademark of
SMC
RULING:
No.
Infringement is determined by the "test of
dominancy" rather than by differences or variations
in the details of one trademark and of another.
There is hardly any dispute that the
dominant feature of SMC's trademark is the name
of the product: SAN MIGUEL PALE PILSEN, written
in white Gothic letters with elaborate serifs at the
beginning and end of the letters "S" and "M" on an
amber background across the upper portion of the
rectangular design.
On the other hand, the dominant feature of
ABI's trademark is the name: BEER PALE PILSEN,
with the word "Beer" written in large amber letters,
larger than any of the letters found in the SMC
label.
The trial court perceptively observed that
the word "BEER" does not appear in SMC's
trademark, just as the words "SAN MIGUEL" do not
appear in ABI's trademark. Hence, there is
absolutely no similarity in the dominant features of
both trademarks.
The fact that BEER PALE PILSEN like SAN
MIGUEL PALE PILSEN is bottled in amber-colored
steinie bottles of 320 ml. capacity and is also
advertised in print, broadcast, and television
media, does not necessarily constitute unfair
competition.
The use of ABI of the steinie bottle, similar
but not identical to the SAN MIGUEL PALE PILSEN
bottle, is not unlawful. As pointed out by ABI's
counsel, SMC did not invent but merely borrowed
the steinie bottle from abroad and it claims neither
patent nor trademark protection for that bottle
shape and design. 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.
Petitioner ABI has neither infringed SMC's
trademark nor committed unfair competition with
the latter's SAN MIGUEL PALE PILSEN product.
While its BEER PALE PILSEN admittedly competes
with the latter in the open market, that competition
is neither unfair nor fraudulent. Hence, we must
deny SMC's prayer to suppress it
24. DEL ROSARIO v. QUIOGUE
FACTS:
Petronilo del Rosario conducted an undertaker's
establishment known as "La Funeraria Paz," on the
Calzada de Bilibid, now named Calle Paz, in the
district of Santa Cruz, for nine years.
Vicente Quiogue is operating a similar undertaker's
establishment, under the name "La Nueva Funeraria
Paz," with a sign bearing the said name placed in a
most conspicuous spot, which name he also used
in his advertisements in the local papers.
The name being almost the same, and the
establishment being situated in the same place
where "La Funeraria Paz" had been located and
known for nine years, these facts have actually
deceived those who, intending to send their orders
to "La Funeraria Paz" of Petronilo del Rosario,
inadvertently employed "La Nueva Funeraria Paz"
of Vicente Quiogue, and that the latter succeeded
in obtaining benefits which should have gone to the
real establishment whose services were sought.
Petronilo del Rosario prayed the CFI of Manila to
issue a preliminary injunction and another final
one, prohibiting Vicente Quiogue from using the
name "Funeraria Paz". The court below granted
the two injunctions with the costs against the
defendant.
Upon appeal Quiogue alleged that the court below
erred in maintaining that the plaintiff had acquired
the exclusive right to the use of the word 'Paz' in
his trade name as against any other person.
Because he had used said word for a long time,
and by virtue of the recording of the same in the
registry of trade-marks and trade-names, it
appearing that 'Paz' is the name of the street where
the undertaker's establishment is located."
Issue/s: WON “LA NUEVA FUNERARIA PAZ” and
“LA FUNERARIA PAZ” are confusingly similar with
each other.
Held:
Yes. The use of the words "Funeraria Paz"
answered no other purpose than that of making it
easy to mistake the defendant's establishment for
that of the plaintiff formerly located in the same
place, or so that it might be considered as its
successor.
That the addition of "La Nueva" was nothing more
than a trick employed by the defendant in order to
covertly appropriate the trade name of the
plaintiff.
The appellant cannot use the name "Paz," because
it does not appear that it is a "geographical name
of the place of production or origin of an article,"
as in the examples of names rejected in the
decisions cited by the appellant, such as
"Pennsylvania wheat," "Kentucky hemp," "Virginia
tobacco," "Sea-island cotton," etc.
"Paz" is a name which has been used by the
plaintiff to designate his establishment but such
name was not necessarily taken from the name of
the street on which it is situated at the present
time. The name "Paz" was also applied to his other
establishments situated on different locations like
CalleIlaya in Tondo, and on CalleAlix in Sampaloc.
25. SHANG PROPERTIES REALTY CORPORATION
vs. ST. FRANCIS DEVELOPMENT CORPORATION
FACTS:
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 a
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 (1) that it has used the mark “ST.
FRANCIS” to identify its numerous property
development projects; and(2) that as a result of its
continuous use of the mark in its real estate
business, it has gained substantial goodwill with
the public that consumers and traders closely
identify the said mark with its property
development projects. Accordingly, respondent
claimed that petitioners could not have the mark
“THE ST. FRANCIS TOWERS” registered in their
names.
On the other hand, Shang maintained that they
could register the mark “THE ST. FRANCIS
TOWERS” and “THE ST. FRANCIS SHANGRI­LA
PLACE” under their names; and that respondent is
barred from claiming ownership and exclusive use
of the mark “ST. FRANCIS” because: (1) it is
geographically descriptive of the goods or services
for which it is intended to be used; and (2)
respondent’s and petitioners’ real estate
development projects are located along the streets
bearing the name “St. Francis,” particularly, St.
Francis Avenue and St. Francis Street (now known
as Bank Drive),both within the vicinity of the
Ortigas Center.
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.
There is unfair competition 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.
The “true test” of unfair competition has thus been
“whether the acts of the defendant have the intent
of deceiving or are calculated to deceive the
ordinary buyer making his purchases under the
ordinary conditions of the particular trade to which
the controversy relates.”
It is therefore essential to prove the existence of
fraud, or the intent to deceive, actual or probable.
In this case, the elements of fraud is wanting,
hence, there can be no unfair competition.There is
no showing (1) that Shang gave their
goods/services the general appearance that it was
respondent which was offering the same to the
public; (2) that Shang employed any means to
induce the public towards a false belief that it was
offering respondent’s goods/services; (3) that
Shang made any false statement or commit acts
tending to discredit the goods/services offered by
respondent.
The mark “ST. FRANCIS” is geographically
descriptive in nature in which respondent’s realty
developments have been built, i.e., St. Francis
Avenue and St. Francis Street, and 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. Thus, it cannot be exclusively
appropriated unless a secondary meaning is
acquired.
2) NO. The mark ‘ST. FRANCIS” did not acquire
secondary meaning.
Under Section 123.2of the IP Code, specific
requirements have to be met in order to conclude
that a 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.
Respondent was not able to prove its compliance
with the requirements stated in the said section to
be able to conclude that it acquired a secondary
meaning — and, thereby, an exclusive right — to
the “ST. FRANCIS” mark.
While respondent had been using the mark “ST.
FRANCIS” since 1992, its use thereof has been
merely confined to its realty projects within the
Ortigas Center. It is limited to a certain locality,
thus, it cannot be said that:
(1) there was substantial commercial use
of the same recognized all throughout
the country; and
(2) there is any showing of a mental
recognition in buyers’ and potential
buyers’ minds that products
connected with the mark “ST.
FRANCIS” are associated with the
same source.
Thus, absent any showing that there exists a
clear goods/service-association between the
realty projects located in the said area and
respondent as the developer thereof, the latter
cannot be said to have acquired a secondary
meaning as to its use of the “ST. FRANCIS” mark.
Petition is granted.
III. Equitable Principles
1. SHANGRI-LA INTERNATIONAL HOTEL
MANAGEMENT vs. DEVELOPERS GROUP OF
COMPANIES
FACTS:
Respondent DGCI applied for and was granted
registration by the Bureau of Patents, Trademarks
& Technology Transfer of the Shangri-La mark and
S logo in its restaurant business. Petitioner Shangri-
La, chain of hotels and establishments owned by
the Kuok family worldwide, moved to cancel the
former’s registration of the mark on the ground
that it was illegally and fraudulently obtained and
appropriated by DGCI.
Petitioner also moved to register the mark and logo
in its own name. Later, DGCI filed before the trial
court a complaint for infringement against
petitioner alleging that DGCI had been prior
exclusive user and the registered owner of the
mark and logo in the Philippines.
Petitioner argued that DGCI had no right to apply
for the registration because it had no prior actual
commercial use thereof. The trial court ruled in
favor of DGCI. CA affirmed.
ISSUE: Whether or not DGCI’s prior use of the mark
is a requirement for its registration
HELD:
YES.
While the present law on trademarks has
dispensed with the requirement of prior actual use
at the time of registration, the law in force at the
time of registration must be applied.
Under the provisions of the former trademark law,
the law in force at the time of DGCI’s application,
the root of ownership of a trademark is actual use
in commerce for not less than two months.
Trademark is a creation of use and therefore actual
use is a pre-requisite to exclusive ownership and its
registration with the Philippine Patent Office is a
mere administrative confirmation of the existence
of such right.
While the petitioners may not have qualified under
the former law, neither did DGCI, since the latter
also failed to fulfill the two-month actual use
requirement. What is worse, DGCI was not even the
owner of the mark. For it to have been the owner,
the mark must not have already been appropriated
by someone else. At the time of DGCI’s registration
of the mark, the same was already being used by
Shangri-La, albeit abroad.
2. Sterling Products v. Farbenfabriken Bayer
FACTS:
The word BAYER was the surname of
Friedrich Bayer, a German, who, organized a drug
company bearing his name — Friedr Bayer et comp.
— at Barmen, Germany, which first engaged in the
manufacture and sale of chemicals. At about the
year 1888 it started to manufacture pharmaceutical
preparations also. With the discovery in 1899 of
the Bayer Aspirin, the mark BAYER acquired
prestige. The time was ripe to register the
trademarks. The record, however, does not clearly
show when the word BAYER was registered as a
trademark in Germany. The BAYER CROSS IN
CIRCLE trademark was registered in Germany. It
was intended to be used on "medicines for human
beings and animals, disinfectants preservatives, tar
dyestuffs and chemical preparations for dyes and
for photographic purposes." This registered
trademark consists of the BAYER CROSS encircled
by the company's name Farbenfabrikenvorm.
Friedr. Bayer & Co. Elberfeld (FFB). Sometime in
1895, FFB established a subsidiary in New York,
United States. Its purpose was to sell FFB's
products in the United States and Canada. It was
this subsidiary that registered the trademarks
BAYER and BAYER CROSS IN CIRCLE in the United
States between the years 1907-1908
When the US declared war on Germany, it
seizedall the assets of The Bayer Co., Inc. of New
York which were then sold to Sterling Drug, Inc..
Winthrop Chemical Co., Inc. was later organized as
a new subsidiary of SDI.SDI secured registrations of
the BAYER trademarks in different countries of the
world. Before World War I, BAYER products
entering the Philippines came from Germany.
In 1922, a worldwide conflict of interests
occurred between Farbenfabrikenvorm. Friedrich
Bayer & Co. and The Bayer Co., Inc. of New York, in
reference to the trademarks BAYER and BAYER
CROSS IN CIRCLE as they were applied to various
products. Two agreements resolved this conflict
which were subsequently declared violative of the
US anti-trust laws.
Meanwhile, in 1935, plaintiff Sterling
Products International, Inc. (SPI), a subsidiary of
SDI of New York, was issued a license to do
business in the Philippines. The trademarks BAYER
and BAYER CROSS IN CIRCLE were then registered
in the Philippines under the old Trademark Law
(Act 666) by The Bayer Co., Inc.; the BAYER CROSS
IN CIRCLE trademark on April 18, 1939 for which it
was issued Certificate of Registration No. 13081;
the BAYER trademark on April 22, 1939 for which
it was issued Registration Certificate No. 13089.
These trademark rights were assigned to SPI on
December 30, 1942 and the assignment was
recorded in the Philippines Patent Office on March
5, 1947. With the passage of Republic Act 166
repealing the old Trademark Law (Act 666), SPI was
issued by the Philippines Patent Office on June 18,
1948 two new certificates of registration. The
registration of these trademarks was only for
"Medicines".
Sometime in 1958, defendant Allied
Manufacturing & Trading Co., Inc. (AMATCO)
started selling FBA's products especially "Folidol" a
chemical insecticide which bears the BAYER CROSS
IN CIRCLE trademark. On November 18, 1959, FBA
applied for the registration of the BAYER CROSS IN
CIRCLE trademark with the Philippines Patent
Office (PPO) for animal and plant destroying
agents. The examiner's report stated that the
subject mark appears to be similar to SPI's
registered BAYER trademarks. He concluded that
"registration of applicant's mark is proscribed by
Section 4-d of the Statute because it would cause
confusion or mistake or [to] deceive purchasers."
This action of the PPO drew a reply from FBA,
stating that it "offers no question or objection to
the assertion of the Examiner that the registrant's
mark and that of the applicant are similar to each
other.” It emphasized the fact that it was seeking
registration in the Supplemental Register.On
February 25, 1960, FBA was issued a certificate of
registration in the Supplemental Register
In this, a case for trademark infringement
and unfair competition, each of the principal
suitors, namely, plaintiff Sterling Products
International, Inc., and defendant Farbenfabriken
Bayer Aktiengesellschaft, seeks to exclude the
other from use in the Philippines of the trademarks
BAYER and BAYER CROSS IN CIRCLE. SPI asks this
Court to strike down FBA's registration of BAYER
CROSS IN CIRCLE covering industrial and
agricultural products — insecticides and other
chemicals, not medicines — from the supplemental
register. FBA, for its part, prays for the cancellation
from the principal register of SPI's certifAicates of
registration of the trademarks aforesaid for
medicines.
ISSUE:
Whether or not SPI's certificates of
registration of the trademarks for medicines may
be cancelled.
RULING:
No. Defendants' claim is stale; it suffers
from the defect of non-use. While it is conceded
that FBA's predecessors first introduced medical
products with the BAYER trademarks in the
Philippine market, it is equally true that, after
World War I, no definite evidence there is that
defendants or their professors traded in the
Philippines in medicines with the BAYER
trademarks thereafter. FBA did not seasonably voice
its objection. Lack of protest thereto connoted
acquiescence. (Failure to object for more than thirty
years to the use of the trademark of a registered
owner by somebody else constitutes acquiescence.)
And this; notwithstanding the fact that the 1923
and 1926 agreements were set aside in the anti-
trust suits. Defendants did use the marks; but it
was much later, i.e., in 1958 — and on chemicals
and insecticides — not on medicines. FBA only
bestirred itself and challenged plaintiff's right to
the trademarks on medicines when this suit was
filed. Vigilantibusnon dormientibusequitassubvenit.
Equity aids the vigilant, not the ones who sleep
over their rights.
The net result is that, as the trial court aptly
observed, plaintiff may hold on to its BAYER
trademarks for medicines. And defendants may
continue using the same trademarks for
insecticides and other chemicals, not medicines.
IV. Infringement
1. McDonald's Corp v. L.C. Big Mak,
GR 143993 437 SCRA 10
18 August 2004
Facts:
 Petitioner McDonalds is a corporation
organized under the laws of Delaware,
United States.
 McDonalds owns a family of marks
including the Big Mac mark for its
double-decker hamburger sandwich
which was registered in United States
Trademark Registry on 16 October
1979. McDonalds applied
for the registration of the same mark in
the Principal Register of the Philippine
Bureau of Patents, Trademarks and
Technology (PBPTT).
 Sept 1981 - While the application
is Pending, McDonalds introduced its
Big Mac hamburger sandwiches in the
PH.
 18 July 1985 - PBPTT allowed
registration of the Big Mac mark in
the PrincipalRegister based on its
Home Registration in the US.
 McDonalds displays the Big Mac mark
in items and paraphernalia in its
restaurants, and in its outdoor and
indoor signages. From 1982 to 1990,
McDonalds spent P10.5 million in
ISSUE 1:
advertisement for Big Mac hamburger
sandwiches alone.
 Petitioner McGeorge Food Industries, a
domestic corporation, is McDonalds
Philippine franchisee.
 Respondent L.C. Big Mak Burger, Inc. is
HELD: Yes
a domestic corporation which operates
fast-food outlets and snack vans in
Metro Manila and nearby provinces.
 21 Oct 1988 - respondent applied with
the PBPTT for the registration of the Big
Mak mark for its hamburger
sandwiches. McDonalds opposed
respondent‘s application on the ground
that Big Mak was a colorable imitation
of its registered Big Mac mark for the
same food products.
 McDonalds also informed of its
exclusive right to the mark and
requested to desist from using it.
 6 June 1990 - petitioners on sued
respondents for trademark
infringement and unfair competition.
 RTC issued TRO against respondents
and rendered judgment finding
respondent corporation liable for
trademark infringement and unfair
competition. RTC reasoned that “There
exist some distinctions between the
names "Big Mac" and "Big Mak" as
appearing in the respective signages,
wrappers and containers of the food
products of the parties. But
infringement goes beyond the physical
features of the questioned name and
the original name. There are still other
factors to be considered.”
RTC also stated in its decisioin that the
contending parties are both in the
business of fast-food chains and
restaurants. An average person who is
hungry and wants to eat a hamburger
sandwich may not be discriminating
enough to look for a McDonald's
restaurant and buy a "Big Mac"
hamburger. Once he sees a stall selling
hamburger sandwich, in all likelihood,
he will dip into his pocket and order a
"Big Mak" hamburger sandwich.
 CA reversed RTC decision. CA is fully
convinced that no colorable imitation
exists. As the definition dictates, it is
not sufficient that a similarity exists
in both names, but that more
importantly, the over-all presentation,
or in their essential, substantive and
distinctive parts is such as would likely
MISLEAD or CONFUSE persons in the
ordinary course of purchasing the
genuine article.
Whether or not respondents used the
words "Big Mak" not only as part of the
corporate name "L.C. Big Mak Burger, Inc."
but also as a trademark for their
hamburger products
Respondents' plastic wrappers and bags
were identical with those petitioner’s except
 that the letters "L.C." and the words "Burger,
Inc." in respondents' evidence were added
above and below the words "Big
Mak," respectively.
ISSUE 2:
Whether or not respondent is liable for
trademark infringement and unfair competition.
HELD: Yes
 To establish trademark infringement, the ff
elements must be shown:
I. validity of plaintiff's mark
II. plaintiff's ownership of the mark
III. 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.
I.& II. On the Validity of the "Big Mac"Mark and
McDonald's Ownership of such Mark – not valid
& plaintiff is the owner.
 A mark is valid if it is "distinctive" and thus
not barred from registration under Section
4of RA 166 However, once registered, not
only the mark's validity but also the
registrant's ownership of the mark is prima
facie presumed.
 Respondents contend that of the two words
in the "Big Mac" mark, it is only the word
"Mac" that is valid because the word "Big" is
generic and descriptive and thus "incapable
of exclusive appropriation."
 The "Big Mac" mark should be treated in its
entirety and not dissected word for word. It
is neither generic nor descriptive.
o Generic marks are commonly used
as the name or description of
a kind o fgoods,such as "Lite" for
beeror "Chocolate Fudge" for
chocolate soda drink.
o Descriptive marks - 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.
 Petitioners also have duly established
McDonald's exclusive ownership of the "Big
Mac" mark.
o Although Topacio and the Isaiyas
Group registered the "Big Mac" mark
ahead of McDonald's, Topacio, as
petitioners disclosed, had already
assigned his rights to McDonald's.
The Isaiyas Group registered its
trademark only in the Supplemental
Register. A mark which is not
registered in the Principal Register,
and thus not distinctive, has no real
protection.
II. Use of the mark or its colorable imitation by
the alleged infringer results in "likelihood of
confusion.” - YES
 Two Types of confusion arising from the use
of similar or colorable imitation marks:
1. confusion of goods / product confusion - in
which event the ordinarily prudent purchaser
would be induced to purchase one product in
the belief that he was purchasing the other
2. confusion of business / source or origin
confusion - 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 when the products
are competing, confusion of business exists
when the products are non-competing but
related enough to produce confusion of
affiliation. In this case, both confusion of goods
and confusion of business apply.
o “Defendants' unauthorized acts are
likely, and calculated, to confuse,
mislead or deceive the public into
believing that the products and
services offered by defendant Big
Mak Burger, and the business it is
engaged in, are approved and
sponsored by, or affiliated with,
plaintiffs.”
o For a period of time, defendant Big
Mak Burger acting through
individual defendants, has been
operating "Big Mak Burger", a fast
food restaurant business dealing in
the sale of food and has caused to
be printed on the wrapper of
defendant's food products and
incorporated in its signages the
name "Big Mak Burger", which is
confusingly similar to and/or is a
colorable imitation of the plaintiff
McDonald's mark "Big Mac” which
are likely to have caused confusion
 or deceived the public as to the true
source, sponsorship or affiliation of
defendants' food products and
restaurant business.
o Respondents admit that their
business includes selling hamburger
sandwiches, the same food product
that petitioners sell using the "Big
Mac" mark. Thus, trademark
infringement through confusion of
business is also a proper issue in
this case.
 In determining likelihood of confusion,
jurisprudence has developed two tests:
1. Dominancy test focuses on the
similarity of the prevalent features
of the competing trademarks that
might cause confusion.
2. Holistic test requires the court to
consider the entirety of the marks as
applied to the products, including
the labels and packaging,
in determining confusing similarity.
 SC relied on the dominancy test. The
dominancy test considers the dominant
features in the competing marks
in determining whether they are confusingly
similar. Under the dominancy test, courts give
greater weight to the similarity of the
appearance of the product arising
from the adoption of the dominant features of
the registered mark,
disregarding minor differences.
 Through the test, Court finds that respondents'
use of the "Big Mak" mark results in likelihood
of confusion. First, "Big Mak" sounds exactly the
same as "Big Mac." Second, the first word in "Big
Mak" is exactly the same as the first word in
"Big Mac." Third, the first two letters in "Mak"
are the same as the first two letters in "Mac."
Fourth, the last letter in "Mak" while a "k"
sounds the same as "c" when the word "Mak" is
pronounced. Fifth, in Filipino, the letter "k"
replaces "c" in spelling, thus "Caloocan" is
spelled "Kalookan." In short, the two marks are
the same, with the first word of both marks
phonetically the same, and the second word
of both marks also phonetically the same.
Visually, the two marks have both two words
and six letters, with the first word
of both marks having the same letters and the
second word having the same first two letters.
In spelling, considering the Filipino language,
even the last letters of both marks are the same.
 Clearly, respondents have adopted in "Big
Mak" not only the dominant but also almost
all the features of "Big Mac." Applied to the
same food product of hamburgers, the two
marks will likely result in confusion in the
public mind.
oCourt has taken into account
the aural effects of the words and
letters contained in the marks
in determining the issue of confusing
similarity:
 "Big Mac" and "Big Mak" for
hamburgers create even
greater confusion, not only
aurally but also visually.
Indeed, a person cannot
distinguish "Big Mac" from
"Big Mak" by their sound -
one would not know whether
the "Mac" or "Mak" ends with
a "c" or a "k."
 Petitioners' aggressive
promotion of the "Big Mac"
mark, as borne by their
advertisement expenses, has
built goodwill and reputation
for such mark making it one
of the easily recognizable
marks in the market today.
 Respondents' inability to
explain sufficiently how and
why they came to choose "Big
Mak" for their hamburger
sandwiches indicates their
intent to imitate petitioners'
"Big Mac" mark.

2. PAGASA INDUSTRIAL CORPORATION vs.
COURT OF APPEALS, TIBURCIO S. EVALLE as
Director of Patents, and YOSHIDA KOGYO
KABUSHIKI KAISHA
Facts: Director of Patents issued to Yoshida on
November 9, 1961 Certificate of for the said
trademark for slide fasteners and zippers. It
claimed to have used the trademark
since September 1, 1950.
The Director on April 4, 1968, or more than
six years later, issued to Pagasa Certificate of
Registration for the same trademarkfor its zippers,
based on alleged use of the trademark since March
1, 1966.
January 23, 1975, Yoshida asked the
Director to cancel the registration in favor of
Pagasa. The trademark, used for the same product
by two different entities, has caused confusion,
mistake and deception. The Director explained that
the duplicitous registration was attributable to the
fact that his examiner "miserably overlooked" the
anterior registration by Yoshida. Had it not been
for such costly oversight, Pagasa's application
would have been rejected.
 May 5, 1977, the Director cancelled Pagasa's
certificate. Pagasa appealed to the Court of Appeals
which affirmed the cancellation. It found that prior
to 1968 Pagasa knew that Yoshida was the
registered owner and user of the YKK trademark
which is an acronym of its corporate name, and
concluded that Pagasa's knowledge that Yoshida
was using the YKK trademark precludes the
application of the equitable principle of laches,
estoppel and acquiescence. It noted that Pagasa
acted in bad faith.
Issue: WoN Pagasa shall be granted registration
over the zippers
Held: NO
The appeal should not have been given due
course. The Director of Patents sensibly and
correctly cancelled the registration in favor of
Pagasa which has not shown any semblance of
justification for usurping the trademark YKK. The
registration in favor of Pagasa was admitted by the
Director to be a mistake. He said that Pagasa's
application should have been denied outright.
Pagasa cannot rely on equity because he
who comes into equity must come with clean
hands. Equity refuses to lend its aid in any manner
to one seeking its active interposition who has been
guilty of unlawful or inequitable conduct in the
matter with relation to which he seeks relief
3. Coffee Partners vs. San Francisco Coffee and
Roastery
Facts:
Petitioner Coffee Partners entered into a franchise
agreement with Coffee Partners Ltd. to operate
coffee shops in the country using the trademark
‘San Francisco Coffee.’ Respondent on the other
hand, is a local corporation engaged in the
wholesale and retail sale of coffee and uses the
business name ‘San Francisco Coffee & Roastery’
registered with the DTI. Later, respondent filed an
infringement and/or unfair competition complaint
against petitioner alleging that the latter was about
to open a coffee shop under the name ‘San
Francisco Coffee’ causing confusion in the minds of
the public as it bore a similar name and is engaged
also in selling of coffee. Petitioner contended no
infringement would arise because respondent’s
tradename was not registered.
Issue:
Whether or not petitioner’s trademark would
infringe respondent’s tradename.
Held:
Yes. Under the law, what constitutes
infringement of unregistered trade name is that the
trademark or trade name is reproduced,
counterfeited, copied, or imitated by the infringer;
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; 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 It is without the
consent of the trademark or trade name owner or
the assignee thereof.
In this case, the contention of the petitioner that
the trade name was unregistered is of no moment,
because it is the confusion that is the gravamen of
infringement. 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.
4. BATISTIS vs. PEOPLE
Facts:
The Fundador trademark characterized the brandy
products manufactured by Pedro Domecq, S.A.
of Cadiz, Spain. It was duly registered in the
Principal Register of the Philippines Patent Office
for a term of 20 years. The registration was
renewed for another 20 years effective November 5,
1990.
Allied Domecq Philippines, Inc., a Philippine
corporation exclusively authorized to
distribute Fundador brandy products imported
from Spain wholly in finished form, initiated this
case against Batistis. NBI conducted a test-buy in
the premises of Batistis, and thereby confirmed
that he was actively engaged in the manufacture,
sale and distribution of
counterfeit Fundador brandy products. Upon
application of the NBI agents based on the positive
results of the test-buy, Judge Antonio M. Eugenio,
Jr. of the Manila RTC issued on December 20, 2001
Search Warrant authorizing the search of the
premises of Batistis. The search yielded 20
empty Carlos I bottles, 10 empty bottles of Black
Label whiskey, two empty bottles of Johnny Walker
Swing, an empty bottle of Remy Martin XO, an
empty bottle of Chabot, 241
empty Fundador bottles, 163 boxes of Fundador, a
half sack of Fundador plastic caps, two filled
bottles of Fundador brandy, and eight cartons of
empty Jose Cuervo bottles.
Petitioner’s claims:
Petitioner contends that the Trial Court
erred in convicting him of the violation of Section
155 (Infringement of Trademark) of the Intellectual
Property Law on the basis of the self-serving
affidavits and testimonies of the police officers
who conducted the raid on his house.
Respondent’s claims: Respondent claims that
Petitioner is guilty of Infringement of Trademark in
actively engaging in the manufacture, sale and
distribution of counterfeit Fundador brandy
products which would likely induce the public to
believe that the said fake Fundador Brandy
reproduced and/or sold are the real Fundador
Brandy produced or distributed by the Allied
Domecq Spirits and Wines Limited, U.K. and Allied
Domecq Philippines, Inc. to the damage and
prejudice of the latter and the public.
Issue:
Whether or not the Trial Court erred in
ruling that the Petitioner is guilty of violation of
Sections 155 of the Intellectual Property Law.
Ruling:
The Supreme Court ruled that the petition has no
merit based on the following reasons:
1. The appeal is improper considering that his
petition for review on certiorari should raise
only the errors committed by the CA as the
appellate court, not the errors of the RTC.
Also, the petition requires a re-appreciation
of facts and such is not allowed as the
Court is not a trier of facts and the findings
of the CA is conclusive unless they were
mistaken, absurd, speculative, conflicting,
tainted with grave abuse of discretion, or
contrary to the findings reached by the
court of origin.
2. Assuming that the appeal is permissible,
the RTC and the CA correctly appreciated
the evidence against the accused and
correctly applied the pertinent law to their
findings of fact. It has been found out that
the seized Fundador brandy, when
compared with the genuine product,
revealed several characteristics of
counterfeiting. There is no question,
therefore, that Batistis exerted effort to
make the counterfeit products look genuine
to deceive the unwary public into regarding
the products as genuine.
5. Del Monte v. CA
Facts:
Petitioner Del Monte Corporation is a
foreign company organized under the laws of the
United States and not engaged in business in the
Philippines. Both the Philippines and the United
States are signatories to the Convention of Paris, a
treaty which grants to the nationals of the parties
rights and advantages which their own nationals
enjoy for the repression of acts of infringement
and unfair competition. On the other hand,
petitioner Philippine Packing Corporation
(Philpack) is a domestic corporation duly organized
under the laws of the Philippines.
Sometime in 1965, Del Monte authorized
Philpack to register with the Philippine Patent
Office the Del Monte catsup bottle configuration,
for which it was granted Certificate of Trademark
Registration by the Philippine Patent Office under
the Supplemental Register. In 1969, Del Monte
granted Philpack the right to manufacture,
distribute and sell in the Philippines various
agricultural products, including catsup, under the
Del Monte trademark and logo. In 1972, Del Monte
also obtained two registration certificates for its
trademark “DEL MONTE” and its logo.
Respondent Sunshine Sauce Manufacturing
Industries was issued a Certificate of Registration
by the Bureau of Domestic Trade in 1980 to engage
in the manufacture, packing, distribution and sale
of various kinds of sauce, identified by the logo
Sunshine Fruit Catsup. The logo was registered in
the Supplemental Register in 1983. Sunshine
Sauce’s product itself was contained in various
kinds of bottles, including the Del Monte bottle,
which it bought from the junk shops for recycling.
Philpack received reports that Sunshine
Sauce was using its exclusively designed bottles
and a logo confusingly similar to Del Monte’s.
Philpack warned Sunshine Sauce to desist from
doing so on pain of legal action. Thereafter,
claiming that the demand had been ignored,
Philpack and Del Monte filed a complaint against
the Sunshine Sauce for infringement of trademark
and unfair competition.
 Sunshine alleged that: (1) it had long ceased
to use the Del Monte bottle and that (2) its logo was
substantially different from the Del Monte logo and
would not confuse the buying public to the
detriment of the petitioners.
The RTC dismissed the complaint on the following
grounds: (1)there were substantial differences
between the logos or trademarks of the parties;
(2)Sunshine Sauce became the owner of the said
bottles upon its purchase thereof from the junk
yards; (3)Del Monte and Philpack had failed to
establish the its malice or bad faith, which is an
essential element of infringement of trademark or
unfair competition
The CA affirmed RTC’s decision in toto.
Hence, the appeal.
Issue(s):
(1) Whether or not Sunshine Sauce is guilty of
unfair competition.
(2) Whether or not Sunshine Sauce is guilty of
infringement for having used the Del Monte
bottle.
Held:
(1) Yes, it is guilty of unfair
competition.
The SC compared the Del Monte and
Sunshine Sauce’s packaging. While it recognized
several distinctions, it does not agree with the
conclusion that there was no infringement or
unfair competition.
According to the SC, side-by-side comparison is not
the final test of similarity. Such comparison
requires a careful scrutiny to determine in what
points the labels of the products differ, as was
done by the trial judge. The ordinary buyer does
not usually make such scrutiny nor does he usually
have the time to do so. The average shopper is
usually in a hurry and does not inspect every
product on the shelf as if he were browsing in a
library.
The question is not whether the two articles are
distinguishable by their label when set side by side
but whether the general confusion made by the
article upon the eye of the casual purchaser who is
unsuspicious and off his guard, is such as to likely
result in his confounding it with the original.
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.
It has also been held that it is not the function of
the court in cases of infringement and unfair
competition to educate purchasers but rather to
take their carelessness for granted, and to be ever
conscious of the fact that marks need not be
identical. A confusing similarity will justify the
intervention of equity. The judge must also be
aware of the fact that usually a defendant in cases
of infringement does not normally copy but makes
only colorable changes. Well has it been said that
the most successful form of copying is to employ
enough points of similarity to confuse the public
with enough points of difference to confuse the
courts.
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.
(2) No, it is not guilty of infringement.
Sunshine Sauce is not guilty of infringement
for having used the Del Monte bottle. The reason is
that the configuration of the said bottle was merely
registered in the Supplemental Register.
Registration only in the Supplemental Register
means absence of the following presumptions:
validity of the trademark, the registrant’s
ownership of the mark and his right to its exclusive
use.
V. Unfair Competition
1. 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.
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 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.
1ST ISSUE:W/N 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.
2ND ISSUE: W/N 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.
2. CATERPILLAR INC. V. SAMSON
The determination of probable cause to charge a
person in court for a criminal offense is
exclusively lodged in the Executive Branch of the
Government, through the Department of Justice.
Initially, the determination is done by the
investigating public prosecutor, and on review by
the Secretary of Justice or his duly authorized
subordinate. The courts will respect the
determination, unless the same shall be shown to
have been made in grave abuse of discretion
amounting to lack or excess of jurisdiction.
Facts:
Petitioner Caterpillar, Inc. is a foreign corporation
engaged in the business of manufacturing shoes,
clothing items, among others. Search warrant
applications were filed against Manolo Samson
(herein after referred to as Samson) for violations
of unfair competition provided under Section
168.3(a) in relation to Sections 131.3, 123(e) and
170 of Republic Act No. 8293, otherwise known as
the Intellectual Property Code.
Search warrants were then issued against
respondent Samson and his other business
establishments (Itti Shoes Corporation, Kolm’s
Manufacturing, and Caterpillar Boutique and
General Merchandise). Pursuant to the search
warrants various merchandise garments, footwear,
bags, wallets, deodorant sprays, shoe cleaners and
accessories, all bearing the trademarks "CAT," "CAT
AND DESIGN," "CATERPILLAR," "CATERPILLAR AND
DESIGN," "WALKING MACHINES" and/or "Track-
type Tractor and Design" were seized.
Respondent Samson filed a motion to quash the
search warrants but was denied. However, the
Court ordered the release of the articles that were
seized since there was no criminal action filed
against the respondent. Petitioner then filed Motion
for Partial Reconsideration but was denied by the
TC. CA also denied the petition after noting that all
the criminal complaints that were filed against the
respondent were dismissed by the investigating
prosecutor and that the respondent never denied
the existence of the said items.
Issues:
1) Whether or not the CA erred in upholding the
immediate release of the seized items on the
ground that there was no criminal action for unfair
competition filed against the respondent?
2) Whether or not the CA erred in ruling that the
subsequent dismissal of the investigating State
Prosecutor of the criminal complaints against
respondent justifies the return of the seized items?
Held/Ratio
1) No. The Joint Resolution of the DOJ has become
final; therefore no criminal case was filed against
the respondent in relation with the five search
warrants that were issued by the Trial Court. There
was also no criminal case filed against the articles
that were seized. With these, the seized articles
should be immediately released. Also, the
numerous articles of clothing, footwear and
accessories, among others, that were seized had
little, if any, evidentiary value for the criminal
action of unfair competition.
An action for unfair competition is based on the
proposition that no dealer in merchandise should
be allowed to dress his goods in simulation of the
goods of another dealer, so that purchasers
desiring to buy the goods of the latter would be
induced to buy the goods of the former. The most
usual devices employed in committing this crime
are the simulation of labels and the reproduction
of form, color and general appearance of the
package used by the pioneer manufacturer or
dealer. In the case at hand the respondent already
admitted the existence of the seized articles. The
Court therefore ruled that the admissions of the
respondent in the case at hand are already
suffiecient to establish that he used such
trademarks in order to sell merchandise at a
commercial scale and that the actual products
manufactured by the respondent need not be
presented to prove such fact. Also, there were
already available samples from the purchases as
well as photographs of the particular parts of the
merchandise where the trademark in dispute were
attached or used, therefore there is no more need
for the court to take custody of the countless
articles that were seized.
2) No. In the case at hand there is no criminal
action that has been filed. The Court therefore was
left with no custody of the highly depreciable
merchandise that were seized. More importantly,
these highly depreciable articles would have been
superfluous if presented as evidence for the
following reasons: (1) the respondent had already
admitted that he is the owner of the merchandise
seized, which made use of the trademarks in
dispute; (2) the court required the respondent to
execute an undertaking to produce the articles
seized when the court requires and had already in
its possession a complete inventory of the items
seized as secondary evidence; (3) actual samples of
the respondent’s merchandise are in the
possession of the police officers who had applied
for the search warrant, and photographs thereof
had been made part of the records, and respondent
did not dispute that these were obtained from his
stores. Where the purpose of presenting as
evidence the articles seized is no longer served,
there is no justification for severely curtailing the
rights of a person to his property. Hence, petition
denied.
3. MIGHTY CORPORATION and LA CAMPANA
FABRICA DE TABACO, INC., petitioner,
vs.
E. & J. GALLO WINERY and THE ANDRESONS
GROUP, INC., respondents.
Facts:
Respondent Gallo Winery is a foreign
corporation not doing business in the Philippines
but organized and existing under the laws of the
State of California, United States of America (U.S.),
where all its wineries are located. Gallo Winery
produces different kinds of wines and brandy
products and sells them in many countries under
different registered trademarks, including the
GALLO and ERNEST & JULIO GALLO wine
trademarks.
Respondent domestic corporation, Andresons, has
been Gallo Winery’s exclusive wine importer and
distributor in the Philippines since 1991, selling
these products in its own name and for its own
account.
On the other hand, petitioners Mighty
Corporation and La Campana and their sister
company, Tobacco Industries of the Philippines
(Tobacco Industries), are engaged in the cultivation,
manufacture, distribution and sale of tobacco
products for which they have been using the
GALLO cigarette trademark since 1973.
Respondents sued petitioners in the Makati RTC for
trademark and tradename infringement and unfair
competition.
In their answer, petitioners alleged that:
petitioner’s GALLO cigarettes and Gallo Winery’s
wines were totally unrelated products; Gallo
Winery’s GALLO trademark registration certificate
covered wines only, not cigarettes; GALLO
cigarettes and GALLO wines were sold through
different channels of trade;

The Makati RTC denied, for lack of merit,
respondent’s prayer for the issuance of a writ of
preliminary injunction, holding that respondent’s
GALLO trademark registration certificate covered
wines only, that respondents’ wines and
petitioners’ cigarettes were not related goods and
respondents failed to prove material damage or
great irreparable injury as required by Section 5,
Rule 58 of the Rules of Court.
The CA likewise dismissed respondents’ petition
for review on certiorari thereby affirming the
Makati RTC’s denial of the application for issuance
of a writ of preliminary injunction against
petitioners.
After trial on the merits, however, the Makati RTC,
on November 26, 1998, held petitioners liable for,
and permanently enjoined them from, committing
trademark infringement and unfair competition
with respect to the GALLO trademark.
Issue: WON Petitioners are liable for trademark
infringement.
Held:
No. Mighty Corporation, et al. are not liable
for trademark infringement or unfair competition
and reaffirmed the doctrine that the use of an
identical mark does not, by itself, lead to a legal
conclusion that there is trademark infringement. A
crucial issue in any trademark infringement case is
the likelihood of confusion, mistake or deceit as to
the identity, source or origin of the goods, or
identity of the business as a consequence of using
a certain mark.
There are two types of confusion in
trademark infringement, namely, "confusion of
goods" and "confusion of business." Confusion of
goods is evident where the litigants are actually in
competition; but confusion of business may arise
between non-competing interests as well. Thus,
there is likelihood of confusion when, although the
goods of the parties are different, they are so
related that the defendant's product can reasonably
be assumed to originate from the plaintiff.
The GALLO trademark registration certificates in
the Philippines and in other countries expressly
state that they cover wines only, without any
evidence or indication that registrant Gallo Winery
expanded or intended to expand its business to
cigarettes.
The Supreme Court distinguished between
GALLO wines and GALLO cigarettes as follows: (1)
wines are bottled and consumed by drinking while
cigarettes are packed in cartons or packages and
smoked; (2) there is a whale of a difference
between their descriptive properties, physical
attributes or essential characteristics like form,
composition, texture and quality; (3) GALLO
cigarettes are inexpensive items that appeal only to
simple folks like farmers, fishermen, laborers and
other low-income workers while GALLO wines are
patronized by middle-to-high-income earners; and
(4) GALLO cigarettes are distributed through
sidewalk vendors, sari-sari stores and grocery
stores in rural areas, mainly in Misamis Oriental,
Pangasinan, Bohol, and Cebu, whereas GALLO
wines are imported and exclusively distributed by a
local entity and sold in hotels, expensive bars and
restaurants, and high-end grocery stores and
supermarkets.
Based on these distinctions wines and
cigarettes are non-competing and totally unrelated
products which are not likely to cause confusion
vis-à-vis the goods or business of Gallo Winery and
Mighty Corporation, et al. Thus, even though
similar marks are used, there is no trademark
infringement if the public does not expect the
plaintiff to make or sell the same class of goods as
those made or sold by the defendant.
4. PRO LINE SPORTS CENTER, INC., and QUESTOR
CORPORATION vs. COURT OF APPEALS,
UNIVERSAL ATHLETICS INDUSTRIAL PRODUCTS,
INC., and MONICO SEHWANI
FACTS: Proline is the exclusive distributor of
Spalding sports products in the Philippines.
Questor, on the other hand, is a US-based
corpora±on that subsequently became the owner of
the trademark ìSpaldingî. They filed a petition
against respondent Universal, a domes±c
corporation which manufactures and sell sports
goods including fakeìSpaldingballsî. By virtue of
valid search warrant, Universalís factory was
searched resulting to the seizure of fake
ìspaldingballsî and the instruments used in the
manufacture thereof. Civil and criminalcases were
filed against Universal. The civil case was dropped
for it was doubtful whether Questor had indeed
acquired the registra±on rights over the mark
ìSpaldingî. The criminal case was also
dismissedbdue to insufficiency of evidence through
a demurer. The CA affirmed the lower courtís
decision.
ISSUE: Whether or not Universal is liable for unfair
competition.
RULING:
YES. In the instant case, the court found
aberrant Sehwani's reason for the manufacture of
1,200 "Spalding" balls, i.e., the pending application
for trademark registration of 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.
Arguably, respondents' act may constitute
unfair competition even if the element of selling
has not been proved. To hold that the act of selling
is an indispensable element of the crime of unfair
competition is illogical because if the law punishes
the seller of imitation goods, then with more
reason should the law penalize the manufacturer.
In U. S. v. Manuel, the Court ruled that the test of
unfair competition is whether certain goods have
been intentionally clothed with an appearance
which is likely to deceive the ordinary purchasers
exercising ordinary care. In this case, it was
observed by the Minister of Justice that the
manufacture of the "Spalding" balls was obviously
done to deceive would-be buyers. The projected
sale would have pushed through were it not for the
timely seizure of the goods made by the NBI. That
there was intent to sell or distribute the product to
the public cannot also be disputed given the
number of goods manufactured and the nature of
the machinery and other equipment installed in the
factory.
5. ROBERTO CO vs. KENG HUAN JERRY YEUNG
AND EMMA YEUNG G.R. No. 212705, 10
September 2014
Unfair competition is defined as the passing off (or
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. This takes
place where the defendant gives his goods the
general appearance of the goods of his competitor
with the intention of deceiving the public that the
goods are those of his competitor.
FACTS:
Ruivivar bought a bottle of Greenstone from Royal
Chinese Drug Store in Binondo, Manila, owned by Li
ng Na Lau. However, he doubted its authenticity be
cause it had a different smell, and theheat it produ
ced was not as strong as the original Greenstone he
frequently used. He then informed his brother-in-
law Yeung, the owner of Greenstone Pharmaceutica
l. The latter went to Royal and found 7 bottles of co
unterfeit Greenstone on display for sale. He was tol
d by Pinky Lau – the store’s proprietor –
that the items came from Co of KiaoAn Chinese Dr
ug Store. According to Pinky, Co offered the produc
ts as “Tienchi Fong Sap Oil Greenstone” (Tienchi) w
hich she eventually availed from him.
Sps. Yeung filed a civil complaint for trademark inf
ringement and unfair competition before the RTC a
gainst Ling Na Lau, her sister Pinky Lau, and Co for
allegedly conspiring in the sale of counterfeit Green
stone products to the public.
The RTC ruled in favor of Sps. Yeung. It found that t
he Sps. Yeung had proven by preponderance of evid
ence that the Laus and Co committed unfair compet
ition through their conspiracy to sell counterfeit Gr
eenstone products that resulted in confusion and d
eception not only to the ordinary purchaser, like Rui
vivar, but also to the public. It, however, did not fin
d the Laus and Co liable for trademark infringement
as there was no showing that the trademark “Green
stone” was registered at the time the acts complaine
d of occurred. CA affirmed the RTC Decision.
ISSUE:
Whether or not only suit for unfair competition will
prosper considering the trademark was not registe
red.
HELD:
Yes, the defendants cannot be liable for trademark
infringement. In the case at bar, the Court defined
unfair competition as the passing off (or palming o
ff) or attempting to pass off upon the public of the
goods or business of one person as the goods or bu
siness of another with the end and probable effect
of deceiving the public. This takes place where the
defendant gives his goods the general appearance o
f the goods of his competitor with the intention of
deceiving the public that
the goods are those of his competitor.
Here, it has been established that Co conspired wit
h the Laus in the sale/distribution of
counterfeit Greenstone products to the public, whic
h were even packaged in bottles identical to that of
the original, thereby giving rise to the presumption
of fraudulent intent.
Although liable for unfair competition, the Court d
eems it apt to clarify that Co was properly exculpat
ed from the charge of trademark infringement cons
idering that the registration of the trademark “Gree
nstone”essential as it is in a trademark infringemen
t case was not proven to have existed during the ti
me the acts complained of were committed. In this
relation, the distinctions between suits for tradema
rk infringement and unfair competition prove usef
ul: (a) the former is the unauthorized use of a trade
mark, whereas the latter is the passing off of one’s
goods as those of another; (b) fraudulent intent is u
nnecessary in the former, while it is essential in the
latter; and (c)in the former, prior registration of th
e trademark is a prerequisite to the action, while it
is not necessary in the latter.
6. BP Philippines, Inc. (Formerly Burmah Castrol
Philippines, Inc.) vs. Clark Trading Corporation
Facts
Petitioner BP Philippines, Inc., a corporation
engaged in the development, manufacture,
importation, distribution, marketing, and wholesale
of: (i) the products of the BURMAH CASTROL
GROUP, including, x xx the CASTROL range of
lubricants and associated products x xx, filed a
Complaint for injunction with prayer for
preliminary injunction and TRO and damages in
the RTC against respondent Clark Trading
Corporation, owner of Parkson Duty Free, which, in
turn, is a duty free retailer operating inside the
Clark Special Economic Zone (CSEZ). Parkson Duty
Free sells, among others, imported duty-free
Castrol products not sourced from petitioner.
Petitioner alleged that sometime in 1994 it had
entered into a Marketing and Technical Assistance
Licensing Agreement and a Marketing and
Distribution Agreement (Agreements) with Castrol
Limited, U.K., the owner and manufacturer of
Castrol products. Essentially, under the terms of
the agreements, Castrol Limited, U.K. granted
petitioner the title exclusive wholesaler importer
and exclusive distributor of Castrol products in the
Philippines.
Petitioner claimed that respondent, by selling and
distributing Castrol products not sourced from
petitioner in the Philippines, violated petitioner’s
exclusive rights under the agreements.
Petitioner contended that the unauthorized
distribution and sale of Castrol products by
respondent will cause grave and irreparable
damage to its goodwill and reputation.
A certain Farley Cuizon testified that he had
purchased one box containing 12 bottles with red
caps of Castrol GTX motor oil, and that these red
caps signified that the Castrol motor oil did not
come from petitioner, since the bottles of Castrol
motor oil petitioner sold had white caps. Moreover,
Cuizon further testified that the bottles of Castrol
motor oil bought from Parkson Duty Free had on
them printed labels stating that these “may not be
resold outside North America.” However, on cross-
examination, he testified that no patent violation
existed since the red caps on the Castrol GTX
products were not significant.
Issue: WON there is unfair competition?
Ruling:
NO.
Article 28 of the Civil Code provides, “Unfair
competition in agricultural, commercial or
industrial enterprises or in labor through the use of
force, intimidation, deceit, machination or any other
unjust, oppressive or highhanded method shall give
rise to a right of action by the person who thereby
suffers damages.”
Petitioner was not able to establish the existence of
a clear legal right to be protected and the acts
which would constitute the alleged violation of said
right.
Petitioner did not allege in its Complaint nor prove
who the supplier of respondent was with respect to
said Castrol GTX products sold in Parkson Duty
Free Shop. There is no showing that respondent
sought Castrol Limited of England in order to
procure Castrol GTX products for retailing inside
the duty free shop of respondent within the Clark
Special Economic Zone, with the intention of
violating the purported exclusive marketing and
distributorship agreement between petitioner and
Castrol Limited of England. There is also no
showing that Castrol Limited of England took up
the cudgels for petitioner, by corresponding with
respondent, in connection with the latter’s retailing
of Castrol GTX products with red caps in its duty
free shop at the Clark Special Economic Zone.
Further, there is no evidence that any party was
duped and that respondent, who is not a privy to
the marketing and distribution agreement between
petitioner and Castrol Limited of England,
employed any sinister scheme or ploy at all.
There is no showing of a scenario whereby
respondent induced any party to renege or violate
its undertaking under said agreement, thereby
entitling petitioner to injunctive relief and
damages. Thus, petitioner’s insistence that
respondent’s obligation to petitioner does not arise
from contract, but from law, which protects parties
to a contract from the wrongful interference of
strangers, does not have any factual or legal basis.
Thus, petitioner is not entitled to a permanent
injunction and damages. In the absence of any
actual, existing, clear legal right to be protected,
injuction does not lie and consequently, there is no
ground for the award of damages as claimed by
petitioner.
Decision
Petition denied, judgment affirmed.
7. SAVAGE/K ANGELIN EXPORT TRADING,
owned and managed by GEMMA DEMORAL-
SAVAGE vs. JUDGE APRONIANO B. TAYPIN,
Presiding Judge, RTC-BR. 12, Cebu City
FACTS: Petitioners Savage, seek to nullify the
search warrant issued by respondent Judge
Aproniano B. Taypin of the Regional Trial Court, Br.
12 Cebu City, which resulted in the seizure of
certain pieces of wrought iron furniture from the
factory of petitioners located in Biasong, Talisay,
Cebu.
The complaint was lodged by private respondent
Eric Ng Mendoza, president and general manager of
Mendco Development Corporation (MENDCO),
alleging that Savage’s products are the object of
unfair competition involving design patents,
punishable under Art. 189 of the Revised Penal
Code as amended. Savage contends however, that
there was no existence of offense leading to the
issuance of a search warrant and eventual seizure
of its products.

ISSUE: Whether or not unfair competition involving

design patents are punishable under Article 189 of
the Revised Penal Code.

HELD: To provide a clear view, the Intellectual

Property Code took effect on January 1, 1998. The
repealing clause of the IPC provides that Articles
188 and 189 of the Revised Penal Code (RPC),
Presidential Decree No. 49, are hereby repealed The
issue involving the existence of "unfair
competition" as a felony involving design patents,
referred to in Art. 189 of the Revised Penal Code,
has been rendered moot and academic by the
repeal of the article. Hence, the search warrant
cannot even be issued by virtue of a possible
violation of the IPR Code.
There is no mention of any crime of "unfair
competition" involving design patents in the
controlling provisions on Unfair Competition of the
RPC. It is therefore unclear whether the crime
exists at all, for the enactment of RA 8293 did not
result in the reenactment of Art. 189 of the Revised
Penal Code.
The court is are prevented from applying these
principles, along with the new provisions on Unfair
Competition found in the IPR Code, to the alleged
acts of the petitioners, for such acts constitute
patent infringement as defined by the same Code
Although the case traces its origins to the year
1997 or before the enactment of the IPR Code,
Article 22 of the Revised Penal Code provides that
penal laws shall be applied retrospectively, if such
application would be beneficial to the accused.
Since the IPR Code effectively obliterates the
possibility of any criminal liability attaching to the
acts alleged, then RPC provisions must be applied.