COMMERCIAL LAW REVIEW || Intellectual Property Law
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1. SMITH KLINE BECKMAN CORPORATION VS. COURT
OF APPEALS
G.R. NO. 126627, AUGUST 12, 2003
When the language of its claims is clear and distinct, the
patentee is bound thereby and may not claim anything beyond
them.
Facts:
Petitioner Smith Kline Beckman Corporation (SKBC) was
granted by the Philippine Patent Office Letters Patent No.
14561 over an invented compound entitled “Methods and
Compositions for Producing Biphasic Parasiticide Activity
Using Methyl 5 Propylthio-2-Benzimidazole Carbamate.” Such
compound is claimed to be an active ingredient in fighting
various parasites in certain types of domestic and
livestock animals. Respondent Tryco Pharma (Tryco) sells
veterinary products including a drug Impregon which contains
Albendazole as an active ingredient which fights against
parasites in animals. Petitioner SKBC then filed an action
against respondent Tryco for patent infringement claiming that
the patent granted to them includes said Albendazole. In their
defense respondent Tryco alleges that Letters Patent No.
14561 granted to petitioner SKBC does not include
Albendazole for nowhere is such word found in the patent. The
Trial Court rendered its decision in favor of respondent Tryco
which was affirmed by the Court of Appeals.
Issue:
Whether or not the Court of Appeals erred in not finding that
Albendazole is included in petitioners Letter Pattent No.
14561?
Ruling:
1
From an examination of the evidence on record, the Court
finds nothing infirm in the appellate court’s conclusions with
respect to the principal issue of whether Tycho Pharma
committed patent infringement to the prejudice of SKBC. The
burden of proof to substantiate a charge for patent
infringement rests on the plaintiff. In the case at bar,
petitioner’s evidence consists primarily of its Letters Patent No.
14561, and the testimony of Dr. Orinion, its general manager
in the Philippines for its Animal Health Products Division, by
which it sought to show that its patent for the compound
methyl 5 propylthio-2- benzimidazole carbamate also covers
the substance Albendazole. From a reading of the 9 claims of
Letters Patent No. 14561 in relation to the other portions
thereof, no mention is made of the compound Albendazole.
When the language of its claims is clear and distinct, the
patentee is bound thereby and may not claim anything beyond
them. And so are the courts bound which may not add to or
detract from the claims matters not expressed
or necessarily implied, nor may they enlarge the patent
beyond the scope of that which the inventor claimed and the
patent office allowed, even if the patentee may have been
entitled to something more than the words it had chosen would
include. It bears stressing that the mere absence of
the word Albendazole in Letters Patent No. 14561 is not
determinative of Albendazole’s non-inclusion in the claims of
the patent. While Albendazole is admittedly a chemical
compound that exists by a name different from that covered in
SKBC’s letters patent, the language of Letter Patent No.
14561 fails to yield anything at all regarding Albendazole. And
no extrinsic evidence had been adduced to prove that
Albendazole inheres in SKBC’s patent in spite of its omission
therefrom or that the meaning of the claims of the patent
embraces the same. While SKBC concedes that the mere
literal wordings of its patent cannot establish Tyco Pharma’s
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infringement, it urges the Court to apply the doctrine of
equivalents.
The doctrine of equivalents provides that an infringement also
takes place when a device appropriates a prior invention by
incorporating its innovative concept and, although with some
modification and change, performs substantially the same
function in substantially the same way to achieve substantially
the same result. Yet again, a scrutiny of SKBC’s evidence fails
to convince the Court of the substantial sameness of SKBC’s
patented compound and Albendazole. While both compounds
have the effect of neutralizing parasites in animals, identity of
result does not amount to infringement of patent unless
Albendazole operates in substantially the same way or by
substantially the same means as the patented compound,
even though it performs the same function and achieves the
same result.
In other words, the principle or mode of operation must be the
same or substantially the same. The doctrine of equivalents
thus requires satisfaction of the function-means-and-result
test, the patentee having the burden to show that all three
components of such equivalency test are met.
2. CRESER PRECISION SYSTEMS, INC. VS. COURT OF
APPEALS and FLORO INTERNATIONAL CORP.,
G.R. No. 118708. February 2, 1998
2
There can be no infringement of patent until a patent has been
issued, since whatever right one has to the invention covered
by the patent arises alone from the grant of patent.
A Patentee, has in its favor not only the presumption of validity
of its patent, but that of a legal and factual first and true
inventor of the invention.
Facts:
Floro International Corp. is a domestic corporation engaged in
the manufacture, production, distribution and sale of military
armaments, munitions, airmunitions and other similar
materials.
On January 23, 1990, it was granted by the Bureau of
Patents, Trademarks and Technology Transfer (BPTTT), a
Letters Patent covering an aerial fuze.
Sometime in November 1993, Floro International Corp.,
through its president, Mr. Gregory Floro, Jr., discovered that
Petitioner Creser Precision Systems, Inc., submitted samples
of Floro International Corp.’s patented aerial fuze to the Armed
Forces of the Philippines (AFP) for testing. Mr. Floro, Jr.,
learned that Creser Precision Systems, Inc., was claiming the
aforesaid aerial fuze as its own and planning to bid and
manufacture the same commercially without license or
authority from Floro International Corp.
To protect its right, Floro International Corp. sent a letter to
Creser Precision Systems advising it of its existing patent and
rights thereunder, warning the latter of a possible court action
and/or application for injunction, should it proceed with the
possible testing by the military.
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In response to Floro International Corp.’s demand, Creser
Precision Systems, Inc. filed on December 8, 1993 a complaint
for injunction and damages arising from alleged infringement
before the RTC of Quezon City. The complaint alleged that
Creser Precision Systems, Inc., is the first, true and actual
inventor of an aerial fuze denominated as Fuze, PDR77 CD4
which is developed as early as December 1981 under the Self-
Reliance Defense Posture Program (SRDP) of the AFP; that
sometime in 1986, Creser Precision Systems, Inc., began
supplying the AFP with the said aerial fuze; that Floro
International Corp., aerial fuze is identical in every respect to
Creser Precision Systems, Inc.’s fuze; and that the only
difference between the two fuzes are miniscule and merely
cosmetic in nature.
Creser Precision Systems, Inc. prayed that a temporary
restraining order and/or writ of preliminary injunction be issued
enjoining Floro International Corp. including any and all
persons acting on its behalf from manufacturing, marketing
and/or profiting therefrom, and/ or from performing any other
act in connection therewith or tending to prejudice and deprive
it of any rights, privileges and benefits to which it is duly
entitled as the first, true and actual inventor of the aerial fuze.
Issue:
Does Creser Precision Systems, Inc. have a cause of
action to file a complaint for infringement against Floro
International Corp.?
Ruling:
3
None.
There can be no infringement of a patent until a patent has
been issued, since whatever right one has to the invention
covered by the patent arises alone from the grant of patent. In
short, a person or entity who has not been granted letters
patent over an invention and has not acquired any right or title
thereto either as assignee or as licensee, has no cause of
action for infringement because the right to maintain an
infringement suit depends on the existence of the patent.
Petitioner admits it has no patent over its aerial fuze.
Therefore, it has no legal basis or cause of action to institute
the petition for injunction and damages arising from the
alleged infringement by private respondent. While petitioner
claims to be the first inventor of the aerial fuze, still it has no
right of property over the same upon which it can maintain a
suit unless it obtains a patent therefor. Under American
jurisprudence, and inventor has no common-law right to a
monopoly of his invention. He has the right to make, use and
vend his own invention but if he voluntarily discloses it, such
as by offering it for sale, the world is free to copy and use it
with impunity. A patent, however, gives the inventor the right to
exclude all others. As a patentee, he has the exclusive right of
making, using or selling the invention.
Petitioner (Creser Precision Systems, Inc.), can, under
Section 28 of the Patent Law file a petition for cancellation of
the patent within three (3) years from the publication of said
patent with the Director of Patents and raise as ground
therefor that the person to whom the patent was issued is not
true and actual inventor, but not to file an action for injunction
or infringement. Petitioner Creser Precision Systems, Inc.,
failed to do so.
Thus, as correctly ruled by the respondent Court of
Appeals, in its assailed decision, since the Petitioner (private
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respondent herein) is the patentee of the disputed invention
embraced by letters of patent UM No.6938 issued to it on
January 23, 1990 by the Bureau of Patents, it has in its favor
not only the presumption of validity of its patent, but that of a
legal and factual first and true inventor of the invention.
5. E.Y. INDUSTRIAL SALES, INC., ET. AL VS. SHEN DAR
ELECTRICITY CO., LTD.
G.R. NO. 184850. OCTOBER 20, 2010
Ownership of a mark or trade name may be acquired not
necessarily by registration but by adoption and use in trade or
commerce. As between actual use of a mark without
registration, and registration of the mark without actual use
thereof, the former prevails over the latter.
Facts:
EYIS and Shen Dar claimed to have the right to register the
trademark "VESPA" for air compressors. They both filed
Trademark Application with the IPO for the mark "VESPA”.
The IPO issued COR in favor of both.
Shen Dar filed a Petition for Cancellation of EYIS’ COR with
the BLA. Shen Dar primarily argued that the issuance of the
COR in favor of EYIS violated Section 123.1 paragraphs (d),
(e) and (f) of RA 8293 (IP Code), having first filed an
application for the mark.
EYIS and Yap denied the claim of Shen Dar to be the true
owners of the mark "VESPA" being the sole assembler and
fabricator of air compressors since the early 1990s. They
further alleged that the air compressors that Shen Dar
allegedly supplied them bore the mark "SD" for Shen Dar and
4
not "VESPA." Moreover, EYIS argued that Shen Dar, not being
the owner of the mark, could not seek protection from the
provisions of the IP Code
The Director of the BLA ruled in favor of EYIS. Shen Dar
appealed to the Director General of the IPO but it upheld the
COR of EYIS and cancelled the COR of Shen Dar. Shen Dar
appealed to the CA and CA ruled in favor of Shen Dar. EYIS
filed a motion for reconsideration of the assailed decision
which the CA denied in the assailed resolution.
Issue:
Whether EYIS is the true owner of the mark "VESPA"?
Ruling:
Yes. The registration of a mark is prevented with the filing of
an earlier application for registration. However, this must not
be interpreted to mean that ownership should be based upon
an earlier filing date. While RA 8293 removed the previous
requirement of proof of actual use prior to the filing of an
application for registration of a mark, proof of prior and
continuous use is necessary to establish ownership of a mark.
Such ownership constitutes sufficient evidence to oppose the
registration of a mark.
The Court has ruled that the prior and continuous use of a
mark may even overcome the presumptive ownership of the
registrant and be held as the owner of the mark. Registration,
without more, does not confer upon the registrant an absolute
right to the registered mark. The certificate of registration is
merely a prima facie proof that the registrant is the owner of
the registered mark or trade name. Evidence of prior and
continuous use of the mark or trade name by another can
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overcome the presumptive ownership of the registrant and
may very well entitle the former to be declared owner in an
appropriate case.
Ownership of a mark or trade name may be acquired not
necessarily by registration but by adoption and use in trade or
commerce. As between actual use of a mark without
registration, and registration of the mark without actual use
thereof, the former prevails over the latter. For a rule widely
accepted and firmly entrenched, because it has come down
through the years, is that actual use in commerce or business
is a pre-requisite to the acquisition of the right of ownership.
On the other hand, Shen Dar failed to refute the evidence cited
by the BLA in its decision. Shen Dar failed to present sufficient
evidence to prove its own prior use of the mark "VESPA." The
Court’s only conclusion is that Shen Dar was not able to prove
to be the owner of the VESPA mark by appropriation. Neither
was it able to prove actual commercial use in the Philippines of
the mark VESPA prior to its filing of a trademark application.
As such, EYIS must be considered as the prior and continuous
user of the mark "VESPA" and its true owner. Hence, EYIS is
entitled to the registration of the mark in its name.

Registration merely creates a prima facie presumption of the

validity of the registration, of the registrant’s ownership of the
trademark and of the exclusive right to the use thereof. Such
presumption, just like the presumptive regularity in the
performance of official functions, is rebuttable and must give
way to evidence to the contrary.

Here, the incontrovertible truth, as established by the evidence

submitted by the parties, is that EYIS is the prior user of the
mark. Respondent’s prior adoption and continuous use of the
mark "VESPA" on air compressors is bolstered by numerous 6. MCDONALD’S CORPORATION VS. MACJOY
documentary evidence consisting of sales invoices issued in FASTFOOD CORPORATION
the name of respondent EY Industrial and Bills of Lading. The G.R. NO. 166115, 2 FEBRUARY 2007
use by respondent-registrant in the concept of owner is shown
by commercial documents, sales invoices unambiguously
The dominancy test focuses on the similarity of the prevalent
describing the goods as "VESPA" air compressors. Private
features of the competing trademarks that might cause
respondents have sold the air compressors bearing the
confusion or deception. In contrast, the holistic test requires
"VESPA" to various locations in the Philippines since the early
the court to consider the entirety of the marks as applied to the
1990’s. There is no doubt that it is through private
products, including the labels and packaging, in determining
respondents’ efforts that the mark "VESPA" used on air
confusing similarity. Under the latter test, a comparison of the
compressors has gained business goodwill and reputation in
words is not the only determinant factor.
the Philippines for which it has validly acquired trademark
rights.
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Facts:
On 14 March 1991, respondent MacJoy Fastfood Corporation,
a domestic corporation engaged in the sale of fast food
products in Cebu City, filed with the then Bureau of Patents,
Trademarks and Technology Transfer (BPTT), now the
Intellectual Property Office (IPO), an application, thereat
identified as Application Serial No. 75274, for the registration
of the trademark "MACJOY & DEVICE" for fried chicken,
chicken barbeque, burgers, fries, spaghetti, palabok, tacos,
sandwiches, halo-halo and steaks under classes 29 and 30 of
the International Classification of Goods.
Petitioner McDonald's Corporation, a corporation duly
organized and existing under the laws of the State of
Delaware, USA, filed a verified Notice of Opposition3 against
the respondent's application claiming that the trademark
"MACJOY & DEVICE" so resembles its corporate logo,
otherwise known as the Golden Arches or "M" design, and its
marks "McDonalds," McChicken," "MacFries," "BigMac,"
"McDo," "McSpaghetti," "McSnack," and "Mc," such that when
used on identical or related goods, the trademark applied for
would confuse or deceive purchasers into believing that the
goods originate from the same source or origin. Likewise, the
petitioner alleged that the respondent's use and adoption in
bad faith of the "MACJOY & DEVICE" mark would falsely tend
to suggest a connection or affiliation with petitioner's
restaurant services and food products, thus, constituting a
fraud upon the general public and further cause the dilution of
the distinctiveness of petitioner's registered and internationally
recognized MCDONALD'S marks to its prejudice and
irreparable damage.
6
On December 28, 1998, the IPO sustained the petitioner’s
opposition and rejected the respondent’s application. The
Court of Appeals reversed the decision of the IPO hence this
petition.
Issue’s:
1. What are the tests in determining whether or not there
exists confusing similarity between competing marks?
2. Are the “Mcjoy and Device” marks confusingly similar to
“McDonald’s marks?”
3. Who has the rightful claim of ownership over the said
marks?
Ruling:
1. In determining similarity and likelihood of confusion,
jurisprudence has developed two tests, the dominancy test
and the holistic test. The dominancy test focuses on the
similarity of the prevalent features of the competing
trademarks that might cause confusion or deception. In
contrast, the holistic test requires the court to consider the
entirety of the marks as applied to the products, including the
labels and packaging, in determining confusing
similarity. Under the latter test, a comparison of the words is
not the only determinant factor.
2. Applying the dominancy test to the instant case, the Court
finds that herein petitioner's "MCDONALD'S" and respondent's
"MACJOY" marks are confusingly similar with each other such
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that an ordinary purchaser can conclude an association or
relation between the marks.
To begin with, both marks use the corporate "M" design logo
and the prefixes "Mc" and/or "Mac" as dominant features. The
first letter "M" in both marks puts emphasis on the prefixes
"Mc" and/or "Mac" by the similar way in which they are
depicted i.e. in an arch-like, capitalized and stylized manner.
For sure, it is the prefix "Mc," an abbreviation of "Mac," which
visually and aurally catches the attention of the consuming
public. Verily, the word "MACJOY" attracts attention the same
way as did "McDonalds," "MacFries," "McSpaghetti," "McDo,"
"Big Mac" and the rest of the MCDONALD'S marks which all
use the prefixes Mc and/or Mac.
Besides and most importantly, both trademarks are used in the
sale of fastfood products. Indisputably, the respondent's
trademark application for the "MACJOY & DEVICE" trademark
covers goods under Classes 29 and 30 of the International
Classification of Goods, namely, fried chicken, chicken
barbeque, burgers, fries, spaghetti, etc. Likewise, the
petitioner's trademark registration for the MCDONALD'S marks
in the Philippines covers goods which are similar if not
identical to those covered by the respondent's application.
3. A mark is valid if it is distinctive and hence not barred from
registration under the Trademark Law. However, once
registered, not only the mark's validity but also the registrant's
ownership thereof is prima facie presumed.
Pursuant to Section 3727 of R.A. No. 166, as amended, as
well as the provision regarding the protection of industrial
property of foreign nationals in this country as embodied in the
7
Paris Convention under which the Philippines and the
petitioner's domicile, the United States, are adherent-
members, the petitioner was able to register its MCDONALD'S
marks successively, i.e., "McDonald's" in 04 October, 1971;
the corporate logo which is the "M" or the golden arches
design and the "McDonald's" with the "M" or golden arches
design both in 30 June 1977; and so on and so forth.
On the other hand, it is not disputed that the respondent's
application for registration of its trademark "MACJOY &
DEVICE" was filed only on March 14, 1991 albeit the date of
first use in the Philippines was December 7, 1987.
Hence, from the evidence on record, it is clear that the
petitioner has duly established its ownership of the mark/s.
7. FREDCO MANUFACTURING CORPORATION, VS.
PRESIDENT AND FELLOWS OF HARVARD COLLEGE
(HARVARD UNIVERSITY),
G.R. NO. 185917, JUNE 1, 2011
Before a trademark can be registered, it must have been
actually used in commerce for not less than two months in the
Philippines prior to the filing of an application for its
registration,
While under the territoriality principle a mark must be used in
commerce in the Philippines to be entitled to protection,
internationally well-known marks are the exceptions to this
rule.
Section 123.1(e) of R.A. No. 8293 now categorically states
that “a mark which is considered by the competent authority of
the Philippines to be well-known internationally and in the
Philippines, whether or not it is registered here,” cannot be
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registered by another in the Philippines. Section 123.1(e) does
not require that the well-known mark be used in commerce in
the Philippines but only that it be well-known in the Philippines.
The Philippines is obligated to assure nationals of countries of
the Paris Convention that they are afforded an effective
protection against violation of their intellectual property rights
in the Philippines in the same way that their own countries are
obligated to accord similar protection to Philippine Nationals
Facts:
On August 10, 2005, Fredco Manufacturing Corporation
(Fredco), a corporation organized and existing under the laws
of the Philippines, filed a Petition for Cancellation of
Registration No. 56561 before the Bureau of Legal Affairs of
the Intellectual Property Office (IPO) against respondents
President and Fellows of Harvard College (Harvard
University), a corporation organized and existing under the
laws of Massachusetts, United States of America.
Fredco alleged that, Registration No. 56561 was issued to
Harvard University on 25 November 1993 for the mark
"Harvard Veritas Shield Symbol" for decals, tote bags, serving
trays, sweatshirts, t-shirts, hats and flying discs under Classes
16, 18, 21, 25 and 28 of the Nice International Classification of
Goods and Services. Fredco alleged that the mark "Harvard"
for t-shirts, polo shirts, sandos, briefs, jackets and slacks was
first used in the Philippines on 2 January 1982 by New York
Garments Manufacturing & Export Co., Inc. (New York
8
Garments), a domestic corporation and Fredco’s predecessor-
in-interest.
On 24 January 1985, New York Garments filed for trademark
registration of the mark "Harvard" for goods under Class 25.
The application matured into a registration and a Certificate of
Registration was issued on 12 December 1988, with a 20-year
term subject to renewal at the end of the term. Fredco alleged
that it was formed and registered with the Securities and
Exchange Commission on 9 November 1995 and had since
then handled the manufacture, promotion and marketing of
"Harvard" clothing articles. Harvard University, on the other
hand, alleged that it is the lawful owner of the name and mark
"Harvard" in numerous countries worldwide, including the
Philippines. The name and mark "Harvard" was adopted in
1639 as the name of Harvard College of Cambridge,
Massachusetts, U.S.A. The name and mark "Harvard" were
allegedly used in commerce as early as 1872. Harvard
University alleged that in March 2002, it discovered, through
its international trademark watch program, Fredco’s website
www.harvard-usa.com. In 1989, Harvard University
established the Harvard Trademark Licensing Program,
operated by the Office for Technology and Trademark
Licensing, to oversee and manage the worldwide licensing of
the "Harvard" name and trademarks for various goods and
services. Harvard University stated that it never authorized or
licensed any person to use its name and mark "Harvard" in
connection with any goods or services in the Philippines.
The Director of the Bureau of Legal Affairs, IPO cancelled
Harvard University’s registration of the mark "Harvard" under
Class 25 however upon appeal to the Office of the Director
General of the IPO, the Office of the Director General, IPO
reversed the decision of the Bureau of Legal Affairs, IPO. The
Court of Appeals affirmed the decision of the Office of the
Director General of the IPO.
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Issue:
Whether or not Fredco has the right to use the trademark
“Harvard”?
Ruling:
No, The Supreme Court Held that under Section 2 of Republic
Act No. 166, as amended (R.A. No. 166), before a trademark
can be registered, it must have been actually used in
commerce for not less than two months in the Philippines prior
to the filing of an application for its registration. While Harvard
University had actual prior use of its marks abroad for a long
time, it did not have actual prior use in the Philippines of the
mark "Harvard Veritas Shield Symbol" before its application for
registration of the mark "Harvard" with the then Philippine
Patents Office. However, where the trademark sought to be
registered has already been registered in a foreign country
that is a member of the Paris Convention, the requirement of
proof of use in the commerce in the Philippines for the said
period is not necessary. An applicant for registration based on
home certificate of registration need not even have used the
mark or trade name in this country. under Section 239.2 of
Republic Act No. 8293 (R.A. No. 8293), "marks registered
under Republic Act No. 166 shall remain in force but shall be
deemed to have been granted under this Act x x x," which
does not require actual prior use of the mark in the Philippines.
Since the mark "Harvard Veritas Shield Symbol" is now
deemed granted under R.A. No. 8293, any alleged defect
arising from the absence of actual prior use in the Philippines
has been cured by Section 239.2.
Fredco’s petition must fail.
9
First, Fredco’s registration of the mark "Harvard" and its
identification of origin as "Cambridge, Massachusetts" falsely
suggest that Fredco or its goods are connected with Harvard
University, which uses the same mark "Harvard" and is also
located in Cambridge, Massachusetts. This can easily be
gleaned from the following oblong logo of Fredco that it
attaches to its clothing line:
Fredco’s registration of the mark "Harvard" should not have
been allowed because Section 4(a) of R.A. No. 166 prohibits
the registration of a mark "which may disparage or falsely
suggest a connection with persons, living or
dead, institutions, beliefs x x x." Section 4(a) of R.A. No. 166
provides:
Section 4. Registration of trade-marks, trade-names
and service- marks on the principal register. ‒ There is
hereby established a register of trade-mark, trade-
names and service-marks which shall be known as the
principal register. The owner of a trade-mark, a trade-
name or service-mark used to distinguish his goods,
business or services from the goods, business or
services of others shall have the right to register the
same on the principal register, unless it:
(a) Consists of or comprises immoral, deceptive or
scandalous manner, or matter which may
disparage or falsely suggest connection
with persons, living or dead, institutions, beliefs,
or national symbols, or bring them into contempt or
disrepute;
(b) x x x (emphasis supplied)
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
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alone, Fredco’s registration of the mark "Harvard" should have
been disallowed.
Second, the Philippines and the United States of America are
both signatories to the Paris Convention for the Protection of
Industrial Property (Paris Convention). this Court has ruled
that the Philippines is obligated to assure nationals of
countries of the Paris Convention that they are afforded an
effective protection against violation of their intellectual
property rights in the Philippines in the same way that their
own countries are obligated to accord similar protection to
Philippine nationals.
8. In-N-Out Burger, Inc. vs. Sehwani Inc., et. Al
G.R. No. 179127, Dec. 24, 2008
The essential elements of an action for unfair competition are
(1) confusing similarity in the general appearance of the goods
and (2) intent to deceive the public and defraud a competitor.
The confusing similarity may or may not result from similarity in
the marks, but may result from other external factors in the
packaging or presentation of the goods. The intent to deceive
and defraud may be inferred from the similarity of the
appearance of the goods as offered for sale to the public.
Actual fraudulent intent need not be shown.
Facts:
Petitioner IN-N-OUT BURGER, INC., is a business entity
incorporated under the laws of California. It is a signatory to
the Convention of Paris on Protection of Industrial Property
and the TRIPS Agreement. It is engaged mainly in the
10
restaurant business, but it has never engaged in business in
the Philippines.
Respondents Sehwani, Incorporated and Benita Frites, Inc.
are corporations organized in the Philippines. Sometime in
1991, Sehwani filed with the BPTTT an application for the
registration of the mark “IN N OUT (the inside of the letter “O”
formed like a star). Its application was approved and a
certificate of registration was issued in its name on 1993. In
2000, Sehwani, Incorporated and Benita Frites, Inc. entered
into a Licensing Agreement, wherein the former entitled the
latter to use its registered mark, “IN N OUT.”
Sometime in 1997, In-N-Out Burger filed trademark and
service mark applications with the Bureau of Trademarks for
the “IN-N-OUT” and “IN-N-OUT Burger & Arrow Design. In
2000, In-N-Out Burger found out that Sehwani, Incorporated
had already obtained Trademark Registration for the mark “IN
N OUT (the inside of the letter “O” formed like a star).” Also in
2000, In-N-Out Burger sent a demand letter directing Sehwani,
Inc. to cease and desist from claiming ownership of the mark
“IN-N-OUT” and to voluntarily cancel its trademark registration.
Sehwani Inc. did not accede to In-N-Out Burger’s demand but
it expressed its willingness to surrender its registration for a
consideration.
In 2001 In-N-Out Burger filed before the Bureau of Legal
Affairs an administrative complaint against the Sehwani, Inc.
and Benita Frites, Inc. for unfair competition and cancellation
of trademark registration.
Issue’s:
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1. Whether or not the Intellectual Property Office (an
administrative body) have jurisdiction of cases involving
provisions of the IPC (e.g. unfair competition)?
2. Whether or not there was unfair competition?
Ruling:
FIRST ISSUE: Yes, the IPO (an administrative body) has
jurisdiction in cases involving provisions of the IPC (e.g. unfair
competition) due to the following reasons:
 Section 10 of the Intellectual Property Code
specifically identifies the functions of the Bureau of
Legal Affairs, thus:
Section 10. The Bureau of Legal Affairs.“The Bureau of Legal
Affairs shall have the following functions:
10.1 Hear and decide opposition to the application for
registration of marks; cancellation of trademarks; subject to
the provisions of Section 64, cancellation of patents and utility
models, and industrial designs; and petitions for compulsory
licensing of patents;
10.2 (a) Exercise original jurisdiction in administrative
complaints for violations of laws involving intellectual
property rights; Provided, That its jurisdiction is limited to
complaints where the total damages claimed are not less
than Two hundred thousand pesos
11
(P200,000): Provided, futher, That availment of the
provisional remedies may be granted in accordance with
the Rules of Court. Xxx
Xxx
(vi) The cancellation of any permit, license, authority, or
registration which may have been granted by the Office, or
the suspension of the validity thereof for such period of time as
the Director of Legal Affairs may deem reasonable which shall
not exceed one (1) year;
Xxx
(viii) The assessment of damages;
Unquestionably, petitioner’s complaint, which seeks the
cancellation of the disputed mark in the name of
respondent Sehwani, Incorporated, and damages for
violation of petitioner’s intellectual property rights, falls
within the jurisdiction of the IPO Director of Legal Affairs.
 While Section 163 thereof vests in civil courts
jurisdiction over cases of unfair competition,
nothing in the said section states that the regular
courts have sole jurisdiction over unfair
competition cases, to the exclusion of
administrative bodies.
 Sections 160 and 170, which are also found under
Part III of the Intellectual Property Code, recognize
the concurrent jurisdiction of civil courts and the
IPO over unfair competition cases.
These two provisions read:
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Section 160. Right of Foreign Corporation to Sue in
Trademark or Service Mark Enforcement Action. Any
foreign national or juridical person who meets the
requirements of Section 3 of this Act and does not engage in
business in the Philippines may bring a civil or administrative
action hereunder for opposition, cancellation, infringement,
unfair competition, or false designation of origin and false
description, whether or not it is licensed to do business in the
Philippines under existing laws.
Section 170. Penalties. Independent of the civil
and administrative sanctions imposed by law, a criminal
penalty of imprisonment from two (2) years to five (5) years
and a fine ranging from Fifty thousand pesos (P50,000) to Two
hundred thousand pesos (P200,000), shall be imposed on any
person who is found guilty of committing any of the acts
mentioned in Section 155, Section168, and Subsection169.1.
Based on the foregoing discussion, the IPO Director of
Legal Affairs had jurisdiction to decide the petitioner’s
administrative case against respondents and the IPO
Director General had exclusive jurisdiction over the
appeal of the judgment of the IPO Director of Legal
Affairs.
SECOND ISSUE: Yes. The evidence on record shows that
Sehwani Inc. and Benita Frites were not using their registered
trademark but that of In-n-Out Burger. Sehwani and Benita
Frites are also giving their products the general appearance
that would likely influence the purchasers to believe that their
products are that of In-N-Out Burger. The intention to deceive
may be inferred from the similarity of the goods as packed and
offered for sale, and, thus, an action will lie to restrain unfair
competition. The respondents’ frauduulent intention to deceive
12
purchasers is also apparent in their use of the In-N-Out Burger
in business signages.
The essential elements of an action for unfair competition are
(1) confusing similarity in the general appearance of the goods
and (2) intent to deceive the public and defraud a competitor.
The confusing similarity may or may not result from similarity in
the marks, but may result from other external factors in the
packaging or presentation of the goods. The intent to deceive
and defraud may be inferred from the similarity of the
appearance of the goods as offered for sale to the public.
Actual fraudulent intent need not be shown.
 IPO – Director of Legal Affairs decision
 In-N-Out Burger has legal capacity to sue in the
Philippines because the latter is a signatory of the
Convention of Paris on Protection of Industrial
Property.
 IN-N-OUT Burger, Inc. – right to use its tradename and
mark to the exclusion of the others
 Respondents’ use of the petitioner’s mark was made in
good faith and therefore they are not guilty of unfair
competition.
 IPO – Director General’s Decision
 Respondents are guilty of unfair competition.
 The following are ordered to be paid to In-N-Out
Burger, inc.
 Damages in the amount of PHP 212, 574.28
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 Exemplary damages in the amount of PHP 500,000
 Attorney’s fees and expenses of litigation in the amount
of PHP 500,000
 CA Decision
 Regular courts, and not the BLA-IPO, have sole
jurisdiction to hear and decide cases involving
provisions of the IPC.
9. La Chemise Lacoste v. Fernandez
G.R. No. L-63796-97 May 2, 1984
The law on trademarks and tradenames is based on the
principle of business integrity and common justice' This law,
both in letter and spirit, is laid upon the premise that, while it
encourages fair trade in every way and aims to foster, and not
to hamper, competition, no one, especially a trader, is justified
in damaging or jeopardizing another's business by fraud,
deceit, trickery or unfair methods of any sort. This necessarily
precludes the trading by one dealer upon the good name and
reputation built up by another.
Facts:
Petitioner La Chemise Lacoste is a foreign corporation and the
actual owner of the trademarks ‘Lacoste,’ ‘Chemise Lacoste,’
and ‘Crocodile Device’ used on clothing and other goods that
are sold in many parts of the world. Herein respondent
Hemadas & Co., a domestic firm, applied and was granted
registration of the mark ‘Chemise Lacoste and Crocodile
Device’ for its garment products. Sometime later, petitioner
applied for the registration of its mark ‘Crocodile Device’ and
‘Lacoste’ but was opposed by herein respondent. Later,
13
petitioner filed a letter-complaint of unfair competition before
the NBI which led to the issuance of search warrants and the
seizure of goods of respondent Hemadas. Respondent moved
to quash the warrants alleging that its trademark was different
from petitioner’s trademark. Respondent court ruled to set
aside the warrants and to return the seized goods.
Issue:
Whether or not petitioner’s trademark is a well-known mark
protected under the Paris Convention?
Ruling:
YES.
In upholding the right of the petitioner to maintain the present
suit before our courts for unfair competition or infringement of
trademarks of a foreign corporation, we are moreover
recognizing our duties and the rights of foreign states under
the Paris Convention for the Protection of Industrial Property to
which the Philippines and France are parties.
Pursuant to this obligation, the Ministry of Trade issued a
memorandum addressed to the Director of the Patents Office
directing the latter to reject all pending applications for
Philippine registration of signature and other world famous
trademarks by applicants other than its original owners or
users. The conflicting claims over internationally known
trademarks involve such name brands as Lacoste, et. al. It is
further directed that, in cases where warranted, Philippine
registrants of such trademarks should be asked to surrender
their certificates of registration, if any, to avoid suits for
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damages and other legal action by the trademarks’ foreign or
local owners or original users.
The Intermediate Appellate Court, in the La Chemise Lacoste
S.A. v. Sadhwani decision which we cite with approval
sustained the power of the Minister of Trade to issue the
implementing memorandum and declared La Chemise
Lacoste S.A. the owner of the disputed trademark, stating: “In
the case at bar, the Minister of Trade, as ‘the competent
authority of the country of registration,’ has found that among
other well-known trademarks ‘Lacoste’ is the subject of
conflicting claims. For this reason, applications for its
registration must be rejected or refused, pursuant to the treaty
obligation of the Philippines.”
10. BIRKENSTOCK ORTHOPAEDIE GMBH VS PHIL. SHOE
EXPO MARKETING CORP.
G.R. NO. 194307 NOV. 20, 2013
Clearly, it is not the application or registration of a trademark
that vests ownership thereof, but it is the ownership of a
trademark that confers the right to register the same. A
trademark is an industrial property over which its owner is
entitled to property rights which cannot be appropriated by
unscrupulous entities that, in one way or another, happen to
register such trademark ahead of its true and lawful owner.
The presumption of ownership accorded to a registrant must
then necessarily yield to superior evidence of actual and real
ownership of a trademark.
Facts:
14
Petitioner, a corporation duly organized and existing under the
laws of Germany, applied for various trademark registrations
before the IPO. namely: (a) "BIRKENSTOCK" with filing date
of March 11, 1994; (b) "BIRKENSTOCK BAD HONNEF-
RHEIN & DEVICE COMPRISING OF ROUND COMPANY
SEAL AND REPRESENTATION OF A FOOT, CROSS AND
SUNBEAM" with filing date of March 11, 1994; and (c)
"BIRKENSTOCK BAD HONNEF-RHEIN & DEVICE
COMPRISING OF ROUND COMPANY SEAL AND
REPRESENTATION OF A FOOT, CROSS AND SUNBEAM"
with filing date of September 5, 1994.
However, registration proceedings of the subject applications
were suspended in view of an existing registration of the mark
"BIRKENSTOCK AND DEVICE" under Registration No. 56334
dated (October 21, 1993) in the name of Shoe Town
International and Industrial Corporation, the predecessor-in-
interest of respondent Philippine Shoe Expo Marketing
Corporation.
In this regard petitioner filed a petition for cancellation of
Registration No. 56334 on the ground that it is the lawful and
rightful owner of the Birkenstock marks. During its pendency,
however, respondent and/or its predecessor-in-interest failed
to file the required 10th Year Declaration of Actual Use
(10thYear DAU) for Registration No. 56334 on or thereby
resulting in the cancellation of such mark.
Accordingly, the cancellation case was dismissed for being
moot and academic.
In response, respondent claims, that: (a) it, together with its
predecessor-in-interest, has been using Birkenstock marks in
the Philippines for more than 16 years through the mark
"BIRKENSTOCK AND DEVICE"; (b) the marks covered by the
subject applications are identical to the one covered by
Registration No. 56334 and thus, petitioner has no right to the
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registration of such marks; (c) on November 15, 1991,
respondent's predecessor-in-interest likewise obtained a
Certificate of Copyright Registration No. 0-11193 for the word
"BIRKENSTOCK"; (d) while respondent and its predecessor-
in-interest failed to file the 10th Year DAU, it continued the use
of "BIRKENSTOCK AND DEVICE" in lawful commerce; and
(e) to record its continued ownership and exclusive right to use
the "BIRKENSTOCK" marks, it has filed TASN 4-2006-010273
as a "re-application" of its old registration, Registration No.
56334.
Bureau of Legal Affairs (BLA) sustained respondent's
opposition, thus, ordering the rejection of the subject
applications. It ruled that the competing marks of the parties
are confusingly similar since they contained the word
"BIRKENSTOCK" and are used on the same and related
goods. It found respondent and its predecessor-in- interest as
the prior user and adopter of "BIRKENSTOCK" in the
Philippines, while on the other hand, petitioner failed to
present evidence of actual use in the trade and business in
this country.
The IPO Director General reversed and set aside the ruling of
the BLA, thus allowing the registration of the subject
applications. He held that with the cancellation of Registration
No. 56334 for respondent's failure to file the 10th Year DAU,
there is no more reason to reject the subject applications on
the ground of prior registration by another proprietor.
The CA reversed and set aside the ruling of the IPO Director
General and reinstated that of the BLA. It disallowed the
registration of the subject applications on the ground that the
marks covered by such applications "are confusingly similar, if
not outright identical" with respondent's mark. It equally held
that respondent's failure to file the 10th Year DAU for
Registration No. 56334 "did not deprive petitioner of its
ownership of the 'BIRKENSTOCK' mark since it has submitted
15
substantial evidence showing its continued use, promotion and
advertisement thereof up to the present."
Issue:
Whether or not the subject marks should be allowed
registration in the name of petitioner?
Ruling:
Yes. Petitioner has duly established its true and lawful
ownership of the mark "BIRKENSTOCK."
Under Section 2 of RA 166, which is also the law governing
the subject applications, in order to register a trademark, one
must be the owner thereof and must have actually used the
mark in commerce in the Philippines for two (2) months prior to
the application for registration. Section 2-A of the same law
sets out to define how one goes about acquiring ownership
thereof. Under the same section, it is clear that actual use in
commerce is also the test of ownership but the provision went
further by saying that the mark must not have been so
appropriated by another. Significantly, to be an owner, Section
2-A does not require that the actual use of a trademark must
be within the Philippines. Thus, under RA 166, one may be an
owner of a mark due to its actual use but may not yet have the
right to register such ownership here due to the owner's failure
to use the same in the Philippines for two (2) months prior to
registration.
It must be emphasized that registration of a trademark, by
itself, is not a mode of acquiring ownership. If the applicant is
not the owner of the trademark, he has no right to apply for its
registration. Registration merely creates a prima facie
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presumption of the validity of the registration of the registrant's
ownership of the trademark, and of the exclusive right to the
use thereof. Such presumption, just like the presumptive
regularity in the performance of official functions, is rebuttable
and must give way to evidence to the contrary.
Clearly, it is not the application or registration of a trademark
that vests ownership thereof, but it is the ownership of a
trademark that confers the right to register the same. A
trademark is an industrial property over which its owner is
entitled to property rights which cannot be appropriated by
unscrupulous entities that, in one way or another, happen to
register such trademark ahead of its true and lawful owner.
The presumption of ownership accorded to a registrant must
then necessarily yield to superior evidence of actual and real
ownership of a trademark.
In the instant case, petitioner was able to establish that it is the
owner of the mark "BIRKENSTOCK." It submitted evidence
relating to the origin and history of "BIRKENSTOCK" and its
use in commerce long before respondent was able to register
the same here in the Philippines.
It has sufficiently proven that "BIRKENSTOCK" was first
adopted in Europe in 1774 by its inventor, Johann Birkenstock,
a shoemaker, on his line of quality footwear and thereafter,
numerous generations of his kin continuously engaged in the
manufacture and sale of shoes and sandals bearing the mark
"BIRKENSTOCK" until it became the entity now known as the
petitioner. Petitioner also submitted various certificates of
registration of the mark "BIRKENSTOCK" in various countries
and that it has used such mark in different countries
worldwide, including the Philippines.
On the other hand, aside from Registration No. 56334 which
had been cancelled, respondent only presented copies of
sales invoices and advertisements, which are not conclusive
16
evidence of its claim of ownership of the mark
"BIRKENSTOCK" as these merely show the transactions
made by respondent involving the same.
In view of the foregoing circumstances, the Court finds the
petitioner to be the true and lawful owner of the mark
"BIRKENSTOCK" and entitled to its registration, and that
respondent was in bad faith in having it registered in its name.
11. CANON KABUSHIKI KAISHA VS. COURT OF
APPEALS
G.R. NO. 120900, JULY 20, 2000
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 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.11 Thus, the exclusive right of
petitioner in this case to use the trademark CANON is limited
to the products covered by its certificate of registration.
Facts:
On January 15, 1985, private respondent NSR Rubber
Corporation filed an application for registration of the mark
CANON for sandals in the Bureau of Patents, Trademarks,
and Technology Transfer (BPTTT). Canon Kabushiki Kaisha
filed a Verified Notice of Opposition alleging that it will be
damaged by the registration of the trademark CANON in the
name of private respondent since they were using the same
trademark for their footwear line of products. The private
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respondent will also use the name Canon for its footwear
products.
Based on the records, the evidence presented by petitioner
consisted of its certificates of registration for the mark CANON
in various countries covering goods belonging to class 2,
paints, chemical products, toner, and dye stuff. Petitioner also
submitted in evidence its Philippine Trademark Registration
No. 39398, showing its ownership over the trademark CANON.
The BPTTT, on November 10, 1992, issued its decision
dismissing the opposition of petitioner and giving due course
to NSR's application for the registration of the trademark
CANON. Canon Kabushiki Kaisha filed an appeal with the
Court of Appeals that eventually affirmed the decision of the
BPTTT.
Issue:
Is the use of trademark, CANON, by the private respondent
affects the business of Canon Kabushiki Kaisha who has an
existing ownership of a trademark also known as CANON?
Ruling:
NO.
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
petitioner, clearly showed that said certificates of registration
17
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), private respondent can use the trademark
CANON for its goods classified as class 25 (sandals). Clearly,
there is a world of difference between the paints, chemical
products, toner, and dyestuff of petitioner and the sandals of
private respondent.
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.11 Thus, the exclusive right of
petitioner in this case to use the trademark CANON is limited
to the products covered by its certificate of registration.
The likelihood of confusion of goods or business is a relative
concept, to be determined only according to the particular, and
sometimes peculiar, circumstances of each case. Indeed, in
trademark law cases, even more than in other litigation,
precedent must be studied in the light of the facts of the
particular case. Contrary to petitioner's supposition, the facts
of this case will show that the cases of Sta. Ana vs. Maliwat,,
Ang vs. Teodoro and Converse Rubber Corporation vs.
Universal Rubber Products, Inc. are hardly in point. The just
cited cases involved goods that were confusingly similar, if not
identical, as in the case of Converse Rubber Corporation vs.
Universal Rubber Products, Inc. Here, the products involved
are so unrelated that the public will not be misled that there is
the slightest nexus between petitioner and the goods of private
respondent.
In cases of confusion of business or origin, the question that
usually arises is whether the respective goods or services of
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the senior user and the junior user are so related as to likely
cause confusion of business or origin, and thereby render the
trademark or tradenames confusingly similar. 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.
12. GSIS FAMILY BANK - THRIFT BANK [Formerly Inc.],
vs. BPI FAMILY BANK
G.R. NO. 175278 September 23, 2015
To fall within the prohibition of the law on the right to the
exclusive use of a corporate name, two requisites must be
proven, namely:(1) that the complainant corporation acquired
a prior right over the use of such corporate name; and (2) the
proposed name is either (a) identical or (b) deceptive or
confusingly similar to that of any existing corporation or to any
other name already protected by law; or (c) patently deceptive,
confusing or contrary to existing law.
Facts:
In 1987, the Government Service Insurance System (GSIS)
acquired petitioner from the Commercial Bank of Manila.
Petitioner's management and control was thus transferred to
GSIS. To improve its marketability to the public, especially to
the members of the GSIS, petitioner sought Securities and
Exchange Commission (SEC) approval to change its corporate
name to "GSIS Family Bank, a Thrift Bank." Petitioner likewise
18
applied with the Department of Trade and Industry (DTI) and
Bangko Sentral ng Pilpinas (BSP) for authority to use "GSIS
Family Bank, a Thrift Bank" as its business name. The DTI and
the BSP approved the applications.
BPI Family Bank was a product of the merger between the
Family Bank and Trust Company (FBTC) and the Bank of the
Philippine Islands (BPI). On June 27, 1969, the Gotianum
family registered with the SEC the corporate name "Family
First Savings Bank," which was amended to "Family Savings
Bank," and then later to "Family Bank and Trust
Company." Since its incorporation, the bank has been
commonly known as "Family Bank." In 1985, Family Bank
merged with BPI, and the latter acquired all the rights,
privileges, properties, and interests of Family Bank, including
the right to use names, such as "Family First Savings Bank,"
"Family Bank," and "Family Bank and Trust Company." BPI
Family Savings Bank was registered with the SEC as a wholly-
owned subsidiary of BPI. BPI Family Savings Bank then
registered with the Bureau of Domestic Trade the trade or
business name "BPI Family Bank," and acquired a reputation
and goodwill under the name.
Issue:
Whether or not GSIS Family Bank is identical or deceptively
similar to that of BPI Family Bank?
Ruling:
YES. In Philips Export B.V. v. Court of Appeals, this Court
ruled that to fall within the prohibition of the law on the right to
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the exclusive use of a corporate name, two requisites must be
proven, namely:
(1) that the complainant corporation acquired a prior right over
the use of such corporate name; and (2) the proposed name is
either
(a) identical or
(b) deceptive or confusingly similar to that of any existing
corporation or to any other name already protected by law; or
(c) patently deceptive, confusing or contrary to existing law.
These two requisites are present in this case.
In this case, respondent was incorporated in 1969 as Family
Savings Bank and in 1985 as BPI Family Bank. Petitioner, on
the other hand, was incorporated as GSIS Family – Thrift Bank
only in 2002, or at least seventeen (17) years after respondent
started using its name. The respondent has the prior right over
the use of the corporate name.
The second requisite in the Philips Export case likewise
obtains on two points: the proposed name is (a) identical or (b)
deceptive or confusingly similar to that of any existing
corporation or to any other name already protected by law.
On the first point (a), the words "Family Bank" present in
both petitioner and respondent's corporate name satisfy
the requirement that there be identical names in the existing
corporate name and the proposed one.
Respondent cannot justify its claim under Section 3 of the
Revised Guidelines in the Approval of Corporate and
Partnership Names, to wit:
19
3. The name shall not be identical, misleading or confusingly
similar to one already registered by another corporation or
partnership with the Commission or a sole proprietorship
registered with the Department of Trade and Industry.
Section 3 states that if there be identical, misleading or
confusingly similar name to one already registered by another
corporation or partnership with the SEC, the proposed name
must contain at least one distinctive word different from the
name of the company already registered.
Petitioner cannot argue that the word "family" is a generic or
descriptive name, which cannot be appropriated exclusively by
respondent. "Family," as used in respondent's corporate
name, is not generic. Generic marks are commonly used as
the name or description of a kind of goods, such as "Lite" for
beer or "Chocolate Fudge" for chocolate soda drink.
Descriptive marks, on the other hand, convey the
characteristics, function, 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.
Under the facts of this case, the word "family" cannot be
separated from the word "bank." In asserting their claims
before the SEC up to the Court of Appeals, both petitioner and
respondent refer to the phrase "Family Bank" in their
submissions. This coined phrase, neither being generic nor
descriptive, is merely suggestive and may properly be
regarded as arbitrary. Arbitrary marks are "words or phrases
used as a mark that appear to be random in the context of its
use. They are generally considered to be easily remembered
because of their arbitrariness. They are original and
unexpected in relation to the products they endorse, thus,
becoming themselves distinctive." Suggestive marks, on the
other hand, "are marks which merely suggest some quality or
ingredient of goods. xxx The strength of the suggestive marks
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lies on how the public perceives the word in relation to the
product or service."
The word "family" is defined as "a group consisting of parents
and children living together in a household" or "a group of
people related to one another by blood or marriage." Bank, on
the other hand, is defined as "a financial establishment that
invests money deposited by customers, pays it out when
requested, makes loans at interest, and exchanges
currency." By definition, there can be no expected relation
between the word "family" and the banking business of
respondent. Rather, the words suggest that respondent’s bank
is where family savings should be deposited.
13. UFC VS FIESTA BARRIO
G.R. NO. 198889, JANUARY 20, 2016
There are two tests to determine likelihood of confusion: the
dominancy test and holistic test. The dominancy test focuses
on the similarity of the main, prevalent or essential features of
the competing trademarks that might cause confusion.
Infringement takes place when the competing trademark
20
contains the essential features of another. Imitation or an effort
to imitate is unnecessary. The question is whether the use of
the marks is likely to cause confusion or deceive purchasers.
Facts:
UFC filed an opposition for the use of the Label Papa.
Petitioner contended that "PAPA BOY & DEVICE" is
confusingly similar with its "PAPA" marks inasmuch as the
former incorporates the term "PAPA," which is the dominant
feature of petitioner's "PAPA" marks. Petitioner averred that
respondent's use of "PAPA BOY & DEVICE" mark for its
lechon sauce product, if allowed, would likely lead the
consuming public to believe that said lechon sauce product
originates from or is authorized by petitioner, and that the
"PAPA BOY & DEVICE" mark is a variation or derivative of
petitioner's "PAPA" marks. Petitioner argued that this was
especially true considering that petitioner's ketchup product
and respondent's lechon sauce product are related articles
that fall under the same Class 30. Hence the registration of
such would do damage to petitioner’s business. While
respondent on the other hand, countered that Papa Boy &
Device will not create any likelihood of confusion as the marks
are clearly distinguishable from one another. This marks
include the word PAPA BOY and the use of a smiling hog with
a thumbs up gesture. IPO-BLA and director general however
ruled in favor of UFC. Upon appeal to the CA, the same was
reversed ruling that the trademark as whole and not piecemeal
must be the basis for ascertaining the likelihood of confusion.
Hence, the petition.
Issue:
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Whether or not there is confusion in the use of the
Trademarks?
Ruling:
Yes, there is confusion.
A scrutiny of petitioner's and respondent's respective marks
would show that the IPO-BLA and the IPO Director General
correctly found the word "PAPA" as the dominant feature of
petitioner's mark "PAPA KETSARAP." "KETSARAP" cannot be
the dominant feature of the mark as it is merely descriptive of
the product. Furthermore, it is the "PAPA" mark that has been
in commercial use for decades and has established
awareness and goodwill among consumers. We likewise
agree with the IPO-BLA that the word "PAPA" is also the
dominant feature of respondent's "PAPA BOY & DEVICE"
mark subject of the application, such that "the word 'PAPA' is
written on top of and before the other words such that it is the
first word/figure that catches the eyes." Furthermore, as the
IPO Director General put it, the part of respondent's mark
which appears prominently to the eyes and ears is the phrase
"PAPA BOY" and that is what a purchaser of respondent's
product would immediately recall, not the smiling hog.
Furthermore, Respondent's mark is related to a product,
lechon sauce, an everyday all-purpose condiment and sauce,
that is not subjected to great scrutiny and care by the casual
purchaser, who knows from regular visits to the grocery store
under what aisle to find it, in which bottle it is contained, and
approximately how much it costs. Since petitioner's product,
catsup, is also a household product found on the same
grocery aisle, in similar packaging, the public could think that
petitioner had expanded its product mix to include lechon
sauce, and that the "PAPA BOY" lechon sauce is now part of
the "PAPA" family of sauces, which is not unlikely considering
21
the nature of business that petitioner is in. Thus, if allowed
registration, confusion of business may set in, and petitioner's
hard-earned goodwill may be associated to the newer product
introduced by respondent, all because of the use of the
dominant feature of petitioner's mark on respondent's mark,
which is the word "PAPA." The words "Barrio Fiesta" are not
included in the mark, and although printed on the label of
respondent's lechon sauce packaging, still do not remove the
impression that "PAPA BOY" is a product owned by the
manufacturer of "PAPA" catsup, by virtue of the use of the
dominant feature. It is possible that petitioner could expand its
business to include lechon sauce, and that would be well
within petitioner's rights, but the existence of a "PAPA BOY"
lechon sauce would already eliminate this possibility and
deprive petitioner of its rights as an owner of a valid mark
included in the Intellectual Property Code.
The Court of Appeals likewise erred in finding that "PAPA,"
being a common term of endearment for one's father, is a
word over which petitioner could not claim exclusive use and
ownership. The Merriam-Webster dictionary defines "Papa"
simply as "a person's father." True, a person's father has no
logical connection with catsup products, and that precisely
makes "PAPA" as an arbitrary mark capable of being
registered, as it is distinctive, coming from a family name that
started the brand several decades ago. What was registered
was not the word "Papa" as defined in the dictionary, but the
word "Papa" as the last name of the original owner of the
brand. In fact, being part of several of petitioner's marks, there
is no question that the IPO has found "PAPA" to be a
registrable mark. Respondent had an infinite field of words and
combinations of words to choose from to coin a mark for its
lechon sauce. While its claim as to the origin of the term
"PAPA BOY" is plausible, it is not a strong enough claim to
overrule the rights of the owner of an existing and valid mark.
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Furthermore, this Court cannot equitably allow respondent to
profit by the name and reputation carefully built by petitioner
without running afoul of the basic demands
14. TAIWAN KOLIN CORPORATION. LTD. VS. KOLIN
ELECTRONICS, INC.,
GR. No. 209843, March 25, 2015
Mere uniformity in categorization, by itself, does not
automatically preclude the registration of what appears to be
an identical mark, if that be the case. It is hornbook doctrine
that, emphasis should be on the similarity of the products
involved and not on the arbitrary classification or general
description of their properties or characteristics. The mere fact
that one person has adopted and used a trademark on his
goods would not, without more, prevent the adoption and use
22
of the same trademark by others on unrelated articles of a
different kind.
Facts:
Taiwan Kolin filed with the Intellectual Property Office (IPO),
then Bureau of Patents, Trademarks, and Technology
Transfer, a trademark application for the use of "KOLIN" on a
combination of goods, including colored televisions,
refrigerators, window-type and split-type air conditioners,
electric fans and water dispensers. Said goods allegedly fall
under Classes 9, 11, and 21 of the Nice Classification (NCL).
Application would eventually be considered abandoned for
Taiwan Kolin's failure to respond to IPO's Paper No. 5
requiring it to elect one class of good for its coverage.
However, the same application was subsequently revived with
petitioner electing Class 9 as the subject of its application,
particularly: television sets, cassette recorder, VCD Amplifiers,
camcorders and other audio/video electronic equipment, flat
iron, vacuum cleaners, cordless handsets, videophones,
facsimile machines, tele printers, cellular phones and
automatic goods vending machine. The application would in
time be duly published.
Kolin Electronic opposed the application on the ground that the
trademark “KOLIN” is identical, if not confusingly similar, with
the registered trademark “KOLIN” which covers the following
products under Class 9 of the NCL: automatic voltage
regulator, converter, recharger, stereo booster, AC-DC
regulated power supply, step-down transformer, and PA
amplified AC-DC.
Kolin 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
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products and are plugged into electric sockets and perform a
useful function.
Issue’s:
1. Whether or not petitioner is entitled to its trademark
registration of "KOLIN" over its specific goods of
television sets and DVD players?
2. Whether or not the products of the two corporation are
closely-related?
Ruling:
1. Yes, The petition is impressed with merit.
Identical marks may be registered for products from the same
classification.
The parties admit that their respective sets of goods belong to
Class 9 of the NCL, which includes the following:
Class 9 - Scientific, nautical, surveying, photographic,
cinematographic, optical, weighing, measuring, signaling,
checking (supervision), life-saving and teaching apparatus and
instruments; apparatus and instruments for conducting,
switching, transforming, accumulating, regulating or...
controlling electricity; apparatus for recording, transmission or
reproduction of sound or images; magnetic data carriers,
recording discs; compact discs, DVDs and other digital
recording media; mechanisms for coin-operated apparatus;
cash registers, calculating machines, data... processing
equipment, computers; computer software; fire-extinguishing
apparatus.
23
But mere uniformity in categorization, by itself, does not
automatically preclude the registration of what appears to be
an identical mark, if that be the case.
It is hornbook doctrine, as held in the above-cited cases, that
emphasis should be on the similarity of the products... involved
and not on the arbitrary classification or general description of
their properties or characteristics. The mere fact that one
person has adopted and used a trademark on his goods would
not, without more, prevent the adoption and use of the same
trademark by others on... unrelated articles of a different kind.
Taiwan Kolin's goods are classified as home appliances as
opposed to Kolin Electronics' goods which are power supply
and audio equipment accessories;
Taiwan Kolin's television sets and DVD players perform
distinct function and purpose from Kolin Electronics' power
supply and audio equipment; and
Taiwan Kolin sells and distributes its various home appliance
products on wholesale and to accredited dealers, whereas
Kolin Electronics' goods are sold and flow through electrical
and hardware stores.
The ordinarily intelligent buyer... is not likely to be confused
2. 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 only the arbitrary classification or general
description of their properties or characteristics.
First, products classified under Cass 9 can be further classified
into five categories. Accordingly, the goods covered by the
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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 ordinary intelligent buyer is not likely to be
confused. The distinct visual and aural difference between the
two trademarks “KOLIN”, although appear to be minimal, are
sufficient to distinguest between one brand or another. The
casual buyer is predispose to be more cautious ,
discriminating in 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, ketchup or soap which are of minimal cost. Hence,
confusion is less likely.
15. MIGHTY CORPORATION AND LA CAMPANA FABRICA
DE TABACO, INC. VS. E. & J. GALLO WINERY AND THE
ANDRESONS GROUP, INC.,
G.R. No. 154342, July 14, 2004
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.
Facts:
24
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,
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. On the other hand, petitioners Mighty Corporation
and La Campana and their sister company, Tobacco
Industries of the Philippines, 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 and
GALLO filter cigarette mark, both for the manufacture and sale
of its cigarette products. Subsequently,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 applied for trademark registration in the Philippine
Patent Office. Then, 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 Mighty Corporation 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 and
GALLO SPECIAL MENTHOL 100’s cigarette brand.
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.
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As a result, respondents sued petitioners for trademark and
tradename infringement and unfair competition.
Issue:
Whether or not petitioners were liable for trademark
infringement and unfair competition?
Ruling:
No. Under Sections 2, 2-A, 9-A, 20 and 22 of the Trademark
Law therefore, the following constitute the elements of
trademark infringement: a trademark actually used in
commerce in the Philippines and registered in the principal
register of the Philippine Patent Office is used by another
person 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 such
trademark is reproduced, counterfeited, copied or colorably
imitated by another person and such reproduction, counterfeit,
copy or colorable imitation 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 as likely cause confusion or mistake or to deceive
purchasers, the trademark is used for identical or similar
goods, and such act is done without the consent of the
trademark registrant or assignee. Hence, proof of all the
elements of trademark infringement is a condition precedent to
any finding of liability.
By respondents’ own judicial admission, the GALLO wine
trademark was registered in the Philippines in November 1971
25
but the wine itself was first marketed and sold in the country
only in 1974 and only within the former U.S. military facilities,
and outside thereof, only in 1979. On the other hand, by
testimonial evidence supported by the BIR authorization
letters, forms and manufacturer’s sworn statement, it appears
that petitioners and its predecessor-in-interest, Tobacco
Industries, have indeed been using and selling GALLO
cigarettes in the Philippines since 1973 or before July 9, 1981.
In Emerald Garment Manufacturing Corporation vs. Court
of Appeals, the Court reiterated its rulings in Pagasa
Industrial Corporation vs. Court of Appeals, Converse
Rubber Corporation vs. Universal Rubber Products, Inc.,
Sterling Products International, Inc. vs. Farbenfabriken
Bayer Aktiengesellschaft, Kabushi Kaisha Isetan vs.
Intermediate Appellate Court, and Philip Morris vs. Court of
Appeals, giving utmost importance to the actual commercial
use of a trademark in the Philippines prior to its registration,
notwithstanding the provisions of the Paris Convention:
“Actual use in commerce in the Philippines is an essential
prerequisite for the acquisition of ownership over a trademark
pursuant to Sec. 2 and 2-A of the Philippine Trademark Law
(R.A. No. 166) x x x”
For lack of adequate proof of actual use of its trademark in
the Philippines prior to petitioner's use of its own mark and for
failure to establish confusing similarity between said
trademarks, private respondent's action for infringement must
necessarily fail. In view of the foregoing jurisprudence and
respondents’ judicial admission that the actual commercial use
of the GALLO wine trademark was subsequent to its
registration in 1971 and to Tobacco Industries’ commercial use
of the GALLO cigarette trademark in 1973, the Court ruled
that, on this account, respondents never enjoyed the exclusive
right to use the GALLO wine trademark to the prejudice of
Tobacco Industries and its successors-in-interest, herein
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petitioners, either under the Trademark Law or the Paris
Convention.
Further, by strict application of Section 20 of the
Trademark Law, Gallo Winery’s exclusive right to use the
GALLO trademark should be limited to wines, the only product
indicated in its registration certificates. 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. Likelihood of confusion is admittedly a relative
term, to be determined rigidly according to the particular (and
sometimes peculiar) circumstances of each case. Thus, in
trademark cases, more than in other kinds of litigation,
precedents must be studied in the light of each particular case.
In determining the likelihood of confusion, the Court must
consider: [a] the resemblance between the trademarks; [b] the
similarity of the goods to which the trademarks are attached;
[c] the likely effect on the purchaser and [d] the registrant’s
express or implied consent and other fair and equitable
considerations.
Petitioners and respondents both use “GALLO” in the
labels of their respective cigarette and wine products. But,
accroding to jurisprudence, the use of an identical mark does
not, by itself, lead to a legal conclusion that there is trademark
infringement. Whether a trademark causes confusion and is
likely to deceive the public hinges on “colorable imitation”
which has been defined as “such similarity in form, content,
words, sound, meaning, special arrangement or general
appearance of the trademark or tradename in their overall
presentation or in their essential and substantive and
distinctive parts as would likely mislead or confuse persons in
the ordinary course of purchasing the genuine article.”
Jurisprudence has developed two tests in determining
similarity and likelihood of confusion in trademark
resemblance:
26
the Dominancy Test applied in Asia Brewery, Inc. vs. Court of
Appeals and other cases, and the Holistic or Totality Test used
in Del Monte Corporation vs. Court of Appeals and its
preceding cases.
The Dominancy Test focuses on the similarity of the
prevalent features of the competing trademarks which might
cause confusion or deception, and thus infringement. If the
competing trademark contains the main, essential or dominant
features of another, and confusion or deception is likely to
result, infringement takes place. Duplication or imitation is not
necessary; nor is it necessary that the infringing label should
suggest an effort to imitate. The question is whether the use of
the marks involved is likely to cause confusion or mistake in
the mind of the public or deceive purchasers. On the other
hand, the Holistic Test requires that the entirety of the marks in
question be considered in resolving confusing
similarity. Comparison of words is not the only determining
factor. The trademarks in their entirety as they appear in their
respective labels or hang tags must also be considered in
relation to the goods to which they are attached. 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. In comparing the
resemblance or colorable imitation of marks, various factors
have been considered, such as the dominant color, style, size,
form, meaning of letters, words, designs and emblems used,
the likelihood of deception of the mark or name's tendency to
confuse and the commercial impression likely to be conveyed
by the trademarks if used in conjunction with the respective
goods of the parties.
Applying the Dominancy and Holistic Tests, the Court
found that the dominant feature of the GALLO cigarette
trademark is the device of a large rooster facing left, outlined
in black against a gold background. The rooster’s color is
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either green or red – green for GALLO menthols and red for
GALLO filters. Directly below the large rooster device is the
word GALLO. The rooster device is given prominence in the
GALLO cigarette packs in terms of size and location on the
labels. The many different features like color schemes, art
works and other markings of both products drown out the
similarity between them – the use of the word “GALLO” — a
family surname for the Gallo Winery’s wines and a Spanish
word for rooster for petitioners’ cigarettes.
As to the liability of petitioners for unfair competition,
under Section 29 of the Trademark Law, any person who
employs deception or any other means contrary to good faith
by which he passes 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 commits any
acts calculated to produce said result, is guilty of unfair
competition. It includes the following acts:
“Any person, who in selling his goods shall give them the
general appearance of goods of another manufacturer or
dealer, either as to the goods themselves or in the wrapping of
the packages in which they are contained, or the devices or
words thereon, or in any other feature of their appearance,
which would be likely to influence purchasers to believe that
the goods offered are those of a manufacturer or dealer other
than the actual manufacturer or dealer, or who otherwise
clothes the goods with such appearance as shall deceive the
public and defraud another of his legitimate trade, or any
subsequent vendor of such goods or any agent of any vendor
engaged in selling such goods with a like purpose;
Any person who by any artifice, or device, or who
employs any other means calculated to induce the false belief
that such person is offering the services of another who has
identified such services in the mind of the public;
27
Any person who shall make any false statement in the
course of trade or who shall commit any other act contrary to
good faith of a nature calculated to discredit the goods,
business or services of another.
The universal test question is whether the public is likely
to be deceived. Nothing less than conduct tending to pass off
one man’s goods or business as that of another constitutes
unfair competition. Actual or probable deception and
confusion on the part of customers by reason of defendant’s
practices must always appear. On this score, the Court found
that petitioners never attempted to pass off their cigarettes as
those of respondents. There is no evidence of bad faith or
fraud imputable to petitioners in using their GALLO cigarette
mark.
All told, after applying all the tests provided by the
governing laws as well as those recognized by jurisprudence,
the Court concluded that petitioners are not liable for
trademark infringement and unfair competition.
16. SOCIETE DES PRODUITS NESTLE, S.A. VS. MARTIN T.
DY, JR., G.R. No. 172276, August 08, 2010
Among the elements, the element of likelihood of confusion is
the gravamen of trademark infringement.
Facts:
Petitioner Societe Des Produits Nestle, S.A. (Nestle) is a
foreign corporation organized under the laws of Switzerland. It
manufactures food products and beverages. As evidenced by
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Certificate of Registration by the then Bureau of Patents,
Trademarks and Technology Transfer, Nestle owns the "NAN"
trademark for its line of infant powdered milk products,
consisting of PRE-NAN, NAN-H.A., NAN-1, and NAN-2. NAN
is classified under Class 6 -- "diatetic preparations for infant
feeding." Nestle distributes and sells its NAN milk products all
over the Philippines. It has been investing tremendous
amounts of resources to train its sales force and to promote
the NAN milk products through advertisements and press
releases. On the other hand, Dy, Jr. owns 5M Enterprises. He
imports Sunny Boy powdered milk from Australia and repacks
the powdered milk into three sizes of plastic packs bearing the
name "NANNY." NANNY is is also classified under Class 6 --
"full cream milk for adults in all ages." Dy, Jr. distributes and
sells the powdered milk in Dumaguete, Negros Oriental,
Cagayan de Oro, and parts of Mindanao. In a letter, Nestle
requested Dy, Jr. to refrain from using "NANNY" and to
undertake that he would stop infringing the "NAN"
trademark. Dy, Jr. did not act on Nestle's request. As a result,
Nestle filed a complaint against Dy, Jr. for infringement. The
trial court found Dy, Jr. liable for infringement. On appeal, the
Court of Appeals reversed the decision of the trial court and
held the respondent not liable for infringement.
Issue:
Whether or not respondent Dy, Jr. is liable for infringement.
Ruling:
Yes. Section 22 of Republic Act (R.A.) No. 166, as amended,
states:
28
Infringement, what constitutes. -- Any person who 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 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.
Section 155 of R.A. No. 8293 states:
Remedies; Infringement. -- Any person who shall, without
the consent of the owner of the registered mark:
155.1. Use in commerce any reproduction, counterfeit,
copy, or colorable imitation of a registered mark or the same
container or a dominant feature thereof in connection with the
sale, offering for sale, distribution, advertising of any goods or
services including other preparatory steps necessary to carry
out the sale of any goods or services on or in connection with
which such use is likely to cause confusion, or to cause
mistake, or to deceive; or
155.2. Reproduce, counterfeit, copy or colorably imitate a
registered mark or a dominant feature thereof and apply such
reproduction, counterfeit, copy or colorable imitation to labels,
signs, prints, packages, wrappers, receptacles or
advertisements intended to be used in commerce upon or in
connection with the sale, offering for sale, distribution, or
advertising of goods or services on or in connection with which
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such use is likely to cause confusion, or to cause mistake, or
to deceive, shall be liable in a civil action for infringement by
the registrant for the remedies hereinafter set forth: Provided,
That the infringement takes place at the moment any of the
acts stated in Subsection 155.1 or this subsection are
committed regardless of whether there is actual sale of goods
or services using the infringing material.
In Prosource International, Inc. v. Horphag Research
Management SA,the Court laid down the elements of
infringement under R.A. Nos. 166 and 8293:
In accordance with Section 22 of R.A. No. 166, as well as
Sections 2, 2-A, 9-A, and 20 thereof, the following constitute
the elements of trademark infringement:
"(a) A trademark actually used in commerce in the
Philippines and registered in the principal register of the
Philippine Patent Office[;]
(b) [It] is used by another person 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 such trademark is reproduced,
counterfeited, copied or colorably imitated by another person
and such reproduction, counterfeit, copy or colorable imitation
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 as to likely
cause confusion or mistake or to deceive purchasers[;]
(c) [The trademark is used for identical or similar goods
[;] and
29
(d) Such act is done without the consent of the
trademark registrant or assignee."
On the other hand, the elements of infringement under R.A.
No. 8293 are as follows:
“(1) The trademark being infringed is registered in the
Intellectual Property Office; however, in infringement of trade
name, the same need not be registered;
(2) The trademark or trade name is reproduced,
counterfeited, copied, or colorably imitated by the infringer;
(3) The infringing mark or trade name is used in
connection with the sale, offering for sale, or advertising of any
goods, business or services; or the infringing mark or trade
name is applied to labels, signs, prints, packages, wrappers,
receptacles or advertisements intended to be used upon or in
connection with such goods, business or services;
(4) The use or application of the infringing mark or trade
name is likely to cause confusion or mistake or to deceive
purchasers or others as to the goods or services themselves
or as to the source or origin of such goods or services or the
idenity of such business; and
(5) It is without the consent of the trademark or trade
name owner or the assignee thereof.”
Among the elements, the element of likelihood of
confusion is the gravamen of trademark infringement. There
are two types of confusion in trademark infringement:
confusion of goods and confusion of business. There are two
tests to determine likelihood of confusion: the dominancy test
and holistic test. The dominancy test focuses on the similarity
of the main, prevalent or essential features of the competing
trademarks that might cause confusion. Infringement takes
place when the competing trademark contains the essential
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features of another. Imitation or an effort to imitate is
unnecessary. The question is whether the use of the marks is
likely to cause confusion or deceive purchasers. The holistic
test considers the entirety of the marks, including labels and
packaging, in determining confusing similarity. The focus is
not only on the predominant words but also on the other
features appearing on the labels.
In the light of the facts of the present case, the Court
holds that the dominancy test is applicable. In recent cases
with similar factual milieus, the Court has consistently applied
the dominancy test. Applying the dominancy test in the present
case, the Court finds that "NANNY" is confusingly similar to
"NAN." "NAN" is the prevalent feature of Nestle's line of infant
powdered milk products. It is written in bold letters and used
in all products. The line consists of PRE-NAN, NAN-H.A.,
NAN-1, and NAN-2. Clearly, "NANNY" contains the prevalent
feature "NAN." The first three letters of "NANNY" are exactly
the same as the letters of "NAN." When "NAN" and "NANNY"
are pronounced, the aural effect is confusingly similar.
NANNY and NAN have the same classification,
descriptive properties and physical attributes. Both are
classified under Class 6, both are milk products, and both are
in powder form. Also, NANNY and NAN are displayed in the
same section of stores -- the milk section.
The Court agreed with the lower courts that there are
differences between NAN and NANNY: (1) NAN is intended for
infants while NANNY is intended for children past their infancy
and for adults; and (2) NAN is more expensive than
NANNY. However, as the registered owner of the "NAN"
mark, Nestle should be free to use its mark on similar
products, in different segments of the market, and at different
price levels. In McDonald's Corporation v. L.C. Big Mak
Burger, Inc., the Court held that the scope of protection
30
afforded to registered trademark owners extends to market
areas that are the normal expansion of business:
“x x x Even respondent's use of the "Big Mak" mark on
non-hamburger food products cannot excuse their
infringement of petitioners' registered mark, otherwise
registered marks will lose their protection under the law.
The registered trademark owner may use his mark on the
same or similar products, in different segments of the market,
and at different price levels depending on variations of the
products for specific segments of the market. The Court has
recognized that the registered trademark owner enjoys
protection in product and market areas that are the normal
potential expansion of his business. Thus, the Court has
declared:
Modern law recognizes that the protection to which the
owner of a trademark is entitled is not limited to guarding his
goods or business from actual market competition with
identical or similar products of the parties, but extends to all
cases in which the use by a junior appropriator of a trade-mark
or trade-name is likely to lead to a confusion of source, as
where prospective purchasers would be misled into thinking
that the complaining party has extended his business into the
field or is in any way connected with the activities of the
infringer; or when it forestalls the normal potential expansion of
his business.
Therefore, the Court held the respondent liable for
infringement.
17. Sterling Products International, Inc. vs. Farbenfabriken
Bayer Aktiengesellschaft
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G.R. No. L-19906. April 30, 1969
Section 11 of the Trademark Law requires that the certificate
of registration state “the particular goods x x x for which it is
registered.” This is controlling. Under section 11 aforesaid,
likewise to be entered in the certificate of registration is “the
date of the first use in commerce or business.” SPI may not
claim “first use” of the trademarks prior .to the registrations
thereof on any product other than medicines.
Facts:
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 the 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.
The word BAYER was the surname of Friedrich Bayer, a
German, who, on August 1, 1868, organized a drug company
bearing his name — Friedr Bayer et comp. — at Barmen,
Germany. The company was at first engaged in the
manufacture and sale of chemicals.
The BAYER CROSS IN CIRCLE trademark was registered in
Germany on January 6, 1904 — No. 65777. 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 Farbenfabriken vorm. Friedr. Bayer &
Co. Elberfeld.
31
The trademark BAYER CROSS IN CIRCLE was registered by
FFB and its subsidiaries in other parts of the world; the United
States in 1908.
On April 6, 1917,the United States declared war on Germany.
Pursuant to the provisions of the Trading with the Enemy Act,
the Alien Property Custodian classified The Bayer Co., Inc. of
New York as an enemy-controlled corporation. Hence, all the
assets of The Bayer Co., Inc. of New York were sold by the
Alien Property Custodian to Sterling Drug, Inc. for the sum of
US $5,310,000.00.
Sterling Drug, Inc. secured registrations of the BAYER
trademarks in different countries of the world.
It would appear that the trademark BAYER for medicines was
known in the Philippines about the close of the 19th century.
Before World War I, BAYER products entering the Philippines
came from Germany.
In 1922, a worldwide conflict of interests occurred between
Farbenfabriken vorm. 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.
FBA attempted to register its chemical products with the
“Bayer Cross in Circle” trademarks. Sterling Products
International and FBA seek to exclude each other from use of
the trademarks in the Philippines.
Issue:
Whether or not SPI’s ownership of the trademarks extends to
products not related to medicine?
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Ruling: of registration for medicines issued by the Director of Patents

upon which the protection is enjoyed are only for medicines.
No. The BAYER trademarks registered in the Philippines to Nothing in those certificates recited would include chemical or
which plaintiff SPI may lay claim are those which cover insecticides. The net result is that plaintiff may hold on to its
medicines only. BAYER trademarks for medicines. And defendants may
continue using the same trademarks for insecticides and other
Section 11 of the Trademark Law requires that the certificate chemicals, not medicines.
of registration state “the particular goods x x x for which it is
registered.” This is controlling. Under Section 11 aforesaid,
likewise to be entered in the certificate of registration is “the
date of the first use in commerce or business.” SPI may not
claim “first use” of the trademarks prior .to the registrations
thereof on any product other than medicines.

Defendants ask to delist plaintiff’s BAYER trademarks for

medicines from the Principal Register, claiming- right thereto
for said use. Said trademarks had been registered since 1939
by plaintiff’s predecessor, the Bayer Co., Inc. Defendants’
claim is stale; it suffer 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 predecessors traded in the
Philippines in medicines with the BAYER trademarks
thereafter. FBA did not seasonably voice its objection. Lack of
protest thereto connoted acquiescence. And this,
notwithstanding the fact that the 1923 and 1926 agreements
were set aside in the anti-trust suits.
18. PROSOURCE INTERNATIONAL, INC. VS. HORPHAG
Defendants did use, the marks, but it was much later, i.e., in RESEARCH MANAGEMENT SA
1958 – and on chemicals and insecticides – not on medicines. G.R. No. 180073, November 25, 2009
FBA only bestirred itself and challenged plaintiff’s right to the
trademarks on medicines when this suit was filed. Vigilantibus
non dormientibus equitas subvenit. The Dominancy Test focuses on the similarity of the prevalent
features of the competing trademarks that might cause
For, it was on said goods that the BAYER trademarks were confusion and deception, thus constituting infringement. If the
actually used by it in the Philippines. Therefore, the certificates competing trademark contains the main, essential and
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dominant features of another, and confusion or deception is the trademark PYCNOGENOL, but one Horphag
likely to result, infringement takes place. Duplication or Research Limited;
imitation is not necessary; nor is it necessary that the infringing
label should suggest an effort to imitate. b. The two marks were not confusingly similar; and

c. It already discontinued the use of the mark prior to the

institution of the infringement case
Facts:

Horphag is a corporation duly organized and existing under

the laws of Switzerland and the owner of trademark Issue:
PYCNOGENOL, a food supplement sold and distributed by
Zuellig Pharma Corporation. Horphag later on discovered that Whether or not Prosource is guilty of trademark infringement?
Prosource, a domestic corporation, was also distributing a
similar food supplement using the mark PCO-GENOLS since
1996. This prompted Horphag to demand that Prosource Ruling:
cease and desist from using the aforesaid mark. Without
notifying Horphag, Prosource discontinued the use of, and YES.
withdrew from the market, the products under the name PCO-
GENOLS as of June 19, 2000. It, likewise, changed its mark Petitioner's use of the questioned mark started in 1996 and
from PCO-GENOLS to PCO-PLUS. ended in June 2000. This case will be decided in light of the
provisions of R.A. No. 166 for the acts committed until
August 22, 2000, Horphag filed a Complaint for Infringement of December 31, 1997, and R.A. No. 8293 for those committed
Trademark with Prayer for Preliminary Injunction against from January 1, 1998 until June 19, 2000.
Prosource, praying that the latter cease and desist from using
the brand PCO-GENOLS for being confusingly similar with A trademark is any distinctive word, name, symbol, emblem,
Horphas’s trademark PYCNOGENOL. sign, or device, or any combination thereof, adopted and used
by a manufacturer or merchant on his goods to identify and
distinguish them from those manufactured, sold, or dealt by
others. Inarguably, a trademark deserves protection.
Horphag’s PYCNOGENOL is duly registered with the IPO but
not with the BFAD. Prosource’s PCO-GENOLS is duly
registered with the BFAD but not with IPO.
Elements of Trademark Infringement
Prosource’s defense:
RA 166 RA 8293
a. Horphag could not file the infringement case
considering that the latter is not the registered owner of 1. A trademark actually 1. The trademark being
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used in commerce in infringed is registered in the with such goods,

the Philippines and Intellectual Property Office; business or services as
registered in the however, in infringement of to likely cause
principal register of the trade name, the same need confusion or mistake or
Philippine Patent not be registered; to deceive purchasers;
Office;
3. The trademark is used 3. The infringing mark or
2. It is used by another 2. The trademark or trade for identical or similar trade name is used in
person in connection name is reproduced, goods; and connection with the sale,
with the sale, offering counterfeited, copied, or offering for sale, or
for sale, or advertising colorably imitated by the advertising of any goods,
of any goods, business infringer; business or services; or the
or services or in infringing mark or trade
connection with which name is applied to labels,
such use is likely to signs, prints, packages,
cause confusion or wrappers, receptacles or
mistake or to deceive advertisements intended to
purchasers or others as be used upon or in
to the source or origin connection with such goods,
of such goods or business or services;
services, or identity of
such business; or such 4. Such act is done 4. The use or application of
trademark is without the consent of the infringing mark or trade
reproduced, the trademark name is likely to cause
counterfeited, copied or registrant or assignee. confusion or mistake or to
colorably imitated by deceive purchasers or others
another person and as to the goods or services
such reproduction, themselves or as to the
counterfeit, copy or source or origin of such
colorable imitation is goods or services or the
applied to labels, signs, identity of such business;
prints, packages, and
wrappers, receptacles
or advertisements 5. It is without the consent of
intended to be used the trademark or trade name
upon or in connection owner or the assignee
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thereof. The question is whether the

use of the marks involved is
likely to cause confusion or
mistake in the mind of the
In the foregoing enumeration, it is the element of "likelihood of public or to deceive
confusion" that is the gravamen of trademark infringement. But purchasers.
"likelihood of confusion" is a relative concept. The particular,
and sometimes peculiar, circumstances of each case are Courts will consider more the
determinative of its existence. Thus, in trademark infringement aural and visual impressions
cases, precedents must be evaluated in the light of each created by the marks in the
particular case. public mind, giving little
weight to factors like prices,
In determining similarity and likelihood of confusion, quality, sales outlets, and
jurisprudence has developed two tests: the Dominancy Test market segments.
and the Holistic or Totality Test.

The trial and appellate courts applied the Dominancy Test in

Dominancy Test
-focuses on the similarity of
the prevalent features of the
competing trademarks that
might cause confusion and
deception, thus constituting
infringement
If the competing trademark
contains the main, essential
and dominant features of
another, and confusion or
deception is likely to result,
infringement takes place.
Duplication or imitation is not
necessary; nor is it necessary
that the infringing label should
suggest an effort to imitate.
Holistic Test
-a consideration of the entirety
of the marks as applied to the
products, including the labels
and packaging, in determining
confusing similarity
The discerning eye of the
observer must focus not only
on the predominant words but
also on the other features
appearing on both labels in
order that the observer may
draw his conclusion whether
one is confusingly similar to
the other.
determining whether there was a confusing similarity between
the marks PYCNOGENOL and PCO-GENOL. We find no
cogent reason to depart from such conclusion.
In this case, the trial court and the CA found that both the
words PYCNOGENOL and PCO-GENOLS have the same
suffix "GENOL" which on evidence, appears to be merely
descriptive and furnish no indication of the origin of the article
and hence, open for trademark registration by the Horphag
thru combination with another word or phrase such as
PYCNOGENOL. Furthermore, although the letters "Y"
between P and C, "N" between O and C and "S" after L are
missing in the Prosource’s mark PCO-GENOLS, nevertheless,
when the two words are pronounced, the sound effects are
confusingly similar not to mention that they are both described
by their manufacturers as a food supplement and thus,
identified as such by their public consumers. And although
there were dissimilarities in the trademark due to the type of
letters used as well as the size, color and design employed on
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their individual packages/bottles, still the close relationship of
the competing products' name in sounds as they were
pronounced, clearly indicates that purchasers could be misled
into believing that they are the same and/or originates from a
common source and manufacturer.
19. ESSO STANDARD VS COURT OF APPEALS
G.R. NO. L- 29971, AUG. 31, 1992
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. 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. in the former case of related goods,
36
confusion of business could arise out of the use of similar
marks; in the latter case of non-related goods, it could not. The
vast majority of courts today follow the modern theory or
concept of "related goods" which the Court has likewise
adopted and uniformly recognized and applied.
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.
Facts:
Esso Standard Eastern, Inc., then a foreign corporation duly
licensed to do business in the Philippines, is engaged in the
sale of petroleum products which are Identified with its
trademark ESSO United Cigarette Corporation 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, for
which a permit had been duly granted by the Bureau of
Internal Revenue.
The complaint of ESSO alleged that it had been for many
years engaged in the sale of petroleum products and its
trademark ESSO had acquired a considerable goodwill to such
an extent that the buying public had always taken the
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trademark ESSO as equivalent to high quality petroleum
products. It asserted that the continued use by United
Cigarettes Corporation of the same trademark ESSO on its
cigarettes was being carried out for the purpose of deceiving
the public as to its quality and origin to the detriment and
disadvantage of its own products.
Unite Cigarettes Corporation admitted that it used the
trademark ESSO on its own product of cigarettes, which was
not Identical to those produced and sold by the petitioner and
therefore did not in any way infringe on or imitate petitioner's
trademark. It further argues that in order that there may be
trademark infringement, it is indispensable that the mark must
be used by one person in connection or competition with
goods of the same kind as the complainant's.
Issue:
Whether or not there is trademark infringement?
Ruling:
None.
It is undisputed that the goods on which petitioner uses the
trademark ESSO, petroleum products, and the product of
respondent, cigarettes, are non-competing. 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
37
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. in the former case of related goods,
confusion of business could arise out of the use of similar
marks; in the latter case of non-related goods, it could not. The
vast majority of courts today follow the modern theory or
concept of "related goods" which the Court has likewise
adopted and uniformly recognized and applied.
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.
In the present case, the goods are obviously different from
each other with "absolutely no iota of similitude" as stressed in
respondent court's judgment. 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.ºThe
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.
Considering the general appearances of each mark as a
whole, the possibility of any confusion is unlikely. A
comparison of the labels of the samples of the goods
submitted by the parties shows a great many differences on
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the trademarks used. Even the lower court, which ruled initially
for petitioner, found that a "noticeable difference between the
brand ESSO being used by the defendants and the trademark
ESSO of the plaintiff is that the former has a rectangular
background, while in that of the plaintiff the word ESSO is
enclosed in an oval background."
20. ASIA BREWERY, INC., VS. THE HON. COURT OF
APPEALS AND SAN MIGUEL CORPORATION G.R. No.
103543, July 5, 1993
Infringement is determined by the test of dominancy, which
provides that 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. x x x 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.
38
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.
SMC alleged that ABI infringed the label and design upon
SMC’s Pale Pilsen, in its trademark San Miguel Pale Pilsen,
and in the use of its amber-colored steinie bottles.
The trial court dismissed the complaint. On appeal, the CA
affirmed the RTC decision.
Issue:
Whether or not ABI has committed trademark infringement and
unfair competition in its production of Beer Pale Pilsen?
Ruling:
No, ABI has not committed trademark infringement and unfair
competition.
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Infringement of trademark is a form of unfair competition. Sec.
22 of Republic Act No. 166, otherwise known as the
Trademark Law, defines infringement as the use of any
person, without the consent of the registrant, any reproduction
or colorable imitation of any registered mark or trade name in
connection with the business 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 of such goods. Only
registered trademarks, trade names and service marks are
protected against infringement or unauthorized use of others.
In this case, the trademark of SMC for its pale pilsen is “San
Miguel Pale Pilsen with Rectangular Hops and Malt Design”.
While ABI’s is “Beer Pale Pilsen with buds of flowers with
leaves”.
Infringement is determined by the test of dominancy, which
provides that 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.
In this case, the dominant features 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 letter "S" and "M" on an amber background across the
upper portion of the rectangular design.
39
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 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. no person can appropriate to himself exclusively
any word or expression, properly descriptive of the article, its
qualities, ingredients or characteristics, and thus limit other
persons in the use of language appropriate to the description
of their manufactures, the right to the use of such language
being common to all.
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The circumstance that the manufacturer of Beer Pale Pilsen,
Asia Brewery Incorporated, has printed its name all over the
bottle of its beer product: on the label, on the back of the
bottle, as well as on the bottle cap, disproves SMC's charge
that ABI dishonestly and fraudulently intends to palm off its
Beer Pale Pilsen as SMC's product. In view of the visible
differences between the two products, the Court believes it is
quite unlikely that a customer of average intelligence would
mistake a bottle of Beer Pale Pilsen for San Miguel Pale
Pilsen.
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. The
petitioner's contention that bottle size, shape and color may
not be the exclusive property of any one beer manufacturer is
well taken. SMC's being the first to use the steinie bottle does
not give SMC a vested right to use it to the exclusion of
everyone else. Being of functional or common use, and not the
exclusive invention of any one, it is available to all who might
need to use it within the industry.
40
With regard to the white label of both beer bottles, ABI
explained that it used the color white for its label because
white presents the strongest contrast to the amber color of
ABI's bottle; it is also the most economical to use on labels,
and the easiest to "bake" in the furnace. No one can have a
monopoly of the color amber for bottles, nor of white for labels,
nor of the rectangular shape which is the usual configuration of
labels.
Considering further that San Miguel Pale Pilsen has virtually
monopolized the domestic beer market for the past hundred
years, those who have been drinking no other beer but San
Miguel Pale Pilsen these many years certainly know their beer
too well to be deceived by a newcomer in the market. If they
gravitate to ABI's cheaper beer, it will not be because they are
confused or deceived, but because they find the competing
product to their taste.
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. That ruling may not apply to all
kinds of products. The Court itself cautioned that in resolving
cases of infringement and unfair competition, the courts should
"take into consideration several factors which would affect its
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conclusion, to wit: the age, training and education of the usual
purchaser, the nature and cost of the article, whether the
article is bought for immediate consumption and also the
conditions under which it is usually purchased"
21. VICTORIO P. DIAZ VS.
PEOPLE OF THE PHILIPPINES AND LEVI STRAUSS
[PHILS.], INC.
G.R. NO. 180677, FEBRUARY 18, 2013
The dominancy test focuses on the similarity of the main,
prevalent or essential features of the competing trademarks
that might cause confusion. Infringement takes place when the
competing trademark contains the essential features of
another. Imitation or an effort to imitate is unnecessary. The
question is whether the use of the marks is likely to cause
confusion or deceive purchasers. The holistic test considers
the entirety of the marks, including labels and packaging, in
determining confusing similarity. The focus is not only on the
predominant words but also on the other features appearing
on the labels.
Facts:
The Department of Justice filed two informations in the RTC of
Las Piñas City, charging Diaz with violation of Section 155, in
relation to Section 170, of the Intellectual Property Code.
Levi Strauss and Company (Levi’s), a foreign corporation
based in the State of Delaware, United States of America, had
been engaged in the apparel business. It is the owner of
trademarks and designs of Levi’s jeans. After receiving
41
information that Diaz was selling counterfeit LEVI’S 501 jeans
in his tailoring shops. Levi’s Philippines hired a private
investigation group to verify the information. Levi’s Philippines
then sought the assistance of the NBI for purposes of applying
for a search warrant against Diaz to be served at his tailoring
shops. The search warrants were issued in due course. Armed
with the search warrants, NBI agents searched the tailoring
shops of Diaz and seized several fake LEVI’S 501 jeans from
them.
Issue:
Whether or not Diaz should be criminally liable for violations of
the Intellectual Property Code?
Ruling:
Section 155 of R.A. No. 8293 defines the acts that constitute
infringement of trademark.
The likelihood of confusion is the gravamen of the offense of
trademark infringement. There are two tests to determine
likelihood of confusion, namely: the dominancy test, and the
holistic test. The holistic test considers the entirety of the
marks, including labels and packaging, in determining
confusing similarity. The focus is not only on the predominant
words but also on the other features appearing on the labels.
The holistic test is applicable here considering that the herein
criminal cases involved trademark infringement in relation to
jeans products. Accordingly, the jeans trademarks of Levi’s
Philippines and Diaz must be considered as a whole in
determining the likelihood of confusion between them.
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Under the circumstances, the consuming public could easily
discern if the jeans were original or fake LEVI’S 501, or were
manufactured by other brands of jeans. 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. Diaz used the trademark "LS JEANS TAILORING"
for the jeans he produced and sold in his tailoring shops. His
trademark was visually and aurally different from the
trademark "LEVI STRAUSS & CO.” Moreover, based on the
certificate issued by the Intellectual Property Office, "LS
JEANS TAILORING" was a registered trademark of Diaz. He
had registered his trademark prior to the filing of the present
cases. The Intellectual Property Office would certainly not
have allowed the registration had Diaz’s trademark been
confusingly similar with the registered trademark for LEVI’S
501 jeans.
Given the foregoing, it should be plain that there was no
likelihood of confusion between the trademarks involved.
Thereby, the evidence of guilt did not satisfy the quantum of
proof required for a criminal conviction, which is proof beyond
reasonable doubt. Consequently, Diaz should be acquitted of
the charges.
WHEREFORE, the Court ACQUITS petitioner VICTORIO P.
DIAZ of the crimes of infringement of trademark for failure of
the State to establish his guilt by proof beyond reasonable
doubt.
42
23. DE LA SALLE MONTESSORI INTERNATIONAL OF
MALOLOS, INC. v. DE LA SALLE BROTHERS, INC., DE LA
SALLE UNIVERSITY, INC., LA SALLE ACADEMY, INC., DE
LA SALLE-SANTIAGO ZOBEL SCHOOL, INC. (FORMERLY
NAMED DE LA SALLE-SOUTH INC.), DE LA SALLE
CANLUBANG, INC. (FORMERLY NAMED DE LA SALLE
UNIVERSITY-CANLUBANG, INC.)
G.R. No. 205548, February 07, 2018
Generic terms are those which constitute "the common
descriptive name of an article or substance," or comprise the
"genus of which the particular product is a species," or are
"commonly used as the name or description of a kind of
goods," or "characters," or "refer to the basic nature of the
wares or services provided rather than to the more
idiosyncratic characteristics of a particular product," and are
not legally protectable. It has been held that if a mark is so
commonplace that it cannot be readily distinguished from
others, then it is apparent that it cannot identify a particular
business; and he who first adopted it cannot be injured by any
subsequent appropriation or imitation by others, and the public
will not be deceived.
A suggestive mark is therefore a word, picture, or other symbol
that suggests, but does not directly describe something about
the goods or services in connection with which it is used as a
mark and gives a hint as to the quality or nature of the product.
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Suggestive trademarks therefore can be distinctive and are
registrable.
Facts:
Petitioner reserved with the SEC its corporate name De La
Salle Montessori International Malolos, Inc. from June 4 to
August 3, 2007, after which the SEC indorsed petitioner's
articles of incorporation and by-laws to the DepEd for
comments and recommendation. The DepEd returned the
indorsement without objections. Consequently, the SEC
issued a certificate of incorporation to petitioner.
Afterwards, DepEd Region III, City of San Fernando,
Pampanga granted petitioner government recognition for its
pre-elementary, elementary courses and for its secondary
courses.
On January 29, 2010, respondents De La Salle Brothers, Inc.,
De La Salle University, Inc., La Salle Academy, Inc., De La
Salle-Santiago Zobel School, Inc. (formerly De La Salle-South,
Inc.), and De La Salle Canlubang, Inc. (formerly De La Salle
University-Canlubang, Inc.) filed a petition with the SEC
seeking to compel petitioner to change its corporate name.
They claim that petitioner's corporate name is misleading or
confusingly similar to that which respondents have acquired a
prior right to use, and that respondents' consent to use such
name was not obtained. According to respondents, petitioner's
use of the dominant phrases "La Salle" and "De La Salle"
gives an erroneous impression that De La Salle Montessori
International of Malolos, Inc. is part of the "La Salle" group,
which violates Section 18 of the Corporation Code of the
43
Philippines. Moreover, being the prior registrant, respondents
have acquired the use of said phrases as part of their
corporate names and have freedom from infringement of the
same.
On May 12, 2010, the SEC OGC issued an Order directing
petitioner to change or modify its corporate name. It held,
among others, that respondents have acquired the right to the
exclusive use of the name "La Salle" with freedom from
infringement by priority of adoption, as they have all been
incorporated using the name ahead of petitioner. Furthermore,
the name "La Salle" is not generic in that it does not
particularly refer to the basic or inherent nature of the services
provided by respondents. Neither is it descriptive in the sense
that it does not forthwith and clearly convey an immediate idea
of what respondents' services are. In fact, it merely gives a
hint, and requires imagination, thought and perception to reach
a conclusion as to the nature of such services. Hence, the
SEC OGC concluded that respondents' use of the phrase "De
La Salle" or "La Salle" is arbitrary, fanciful, whimsical and
distinctive, and thus legally protectable. As regards petitioner's
argument that its use of the name does not result to confusion,
the SEC OGC held otherwise, noting that confusion is
probably or likely to occur considering not only the similarity in
the parties' names but also the business or industry they are
engaged in, which is providing courses of study in pre-
elementary, elementary and secondary education.The SEC
OGC disagreed with petitioner's argument that the case of
Lyceum of the Philippines, Inc. v. CA (Lyceum of the
Philippines) applies since the word "lyceum" is clearly
descriptive of the very being and defining purpose of an
educational corporation, unlike the term "De La Salle" or "La
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Salle." Hence, the Court held in that case that the Lyceum of
the Philippines, Inc. cannot claim exclusive use of the name
"lyceum."
Petitioner filed an appeal before the SEC En Banc, which
affirmed the Order of the SEC OGC. It held, among others,
that the Lyceum of the Philippines case does not apply since
the word "lyceum" is a generic word that pertains to a category
of educational institutions and is widely used around the world.
Further, the Lyceum of the Philippines failed to prove that
"lyceum" acquired secondary meaning capable of exclusive
appropriation. Petitioner also failed to establish that the term
"De La Salle" is generic for the principle enunciated in Lyceum
of the Philippines to apply.
Petitioner filed a petition for review with the CA which affirmed
the Order of the SEC OGC and the Decision of the SEC En
Banc in toto.
Issue:
1. Whether or not “De La Salle” is a generic term?
2. Whether or not the CA erred in not applying the doctrine
laid down in the case of Lyceum of the Philippines?
Ruling:
1. NO.
44
As early as Western Equipment and Supply Co. v. Reyes, the
Court declared that a corporation's right to use its corporate
and trade name is a property right, a right in rem, which it may
assert and protect against the world in the same manner as it
may protect its tangible property, real or personal, against
trespass or conversion. It is regarded, to a certain extent, as a
property right and one which cannot be impaired or defeated
by subsequent appropriation by another corporation in the
same field. Furthermore, in Philips Export B.V. v. CA, we held:
A name is peculiarly important as necessary to the very
existence of a corporation x x x. Its name is one of its
attributes, an element of its existence, and essential to its
identity x x x. The general rule as to corporations is that each
corporation must have a name by which it is to sue and be
sued and do all legal acts. The name of a corporation in this
respect designates the corporation in the same manner as the
name of an individual designates the person x x x; and the
right to use its corporate name is as much a part of the
corporate franchise as any other privilege granted x x x.
A corporation acquires its name by choice and need not select
a name identical with or similar to one already appropriated by
a senior corporation while an individual's name is thrust upon
him x x x. A corporation can no more use a corporate name in
violation of the rights of others than an individual can use his
name legally acquired so as to mislead the public and injure
another x x x.
Recognizing the intrinsic importance of corporate names, our
Corporation Code established a restrictive rule insofar as
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corporate names are concerned. Thus, Section 18 thereof
provides:
Sec. 18. Corporate name. - No corporate name may be
allowed by the Securities and Exchange Commission if the
proposed name is identical or deceptively or confusingly
similar to that of any existing corporation or to any other name
already protected by law or is patently deceptive, confusing or
contrary to existing laws. When a change in the corporate
name is approved, the Commission shall issue an amended
certificate of incorporation under the amended name.
The policy underlying the prohibition in Section 18 against the
registration of a corporate name which is "identical or
deceptively or confusingly similar" to that of any existing
corporation or which is "patently deceptive" or "patently
confusing" or "contrary to existing laws," is the avoidance of
fraud upon the public which would have occasion to deal with
the entity concerned, the evasion of legal obligations and
duties, and the reduction of difficulties of administration and
supervision over corporations.
Indeed, parties organizing a corporation must choose a name
at their peril; and the use of a name similar to one adopted by
another corporation, whether a business or a non-profit
organization, if misleading or likely to injure in the exercise of
its corporate functions, regardless of intent, may be prevented
by the corporation having a prior right, by a suit for injunction
against the new corporation to prevent the use of the name.
In Philips Export B.V. v. CA, the Court held that to fall within
the prohibition of Section 18, two requisites must be proven, to
wit: (1) that the complainant corporation acquired a prior right
45
over the use of such corporate name; and (2) the proposed
name is either: (a) identical, or (b) deceptively or confusingly
similar to that of any existing corporation or to any other name
already protected by law; or (c) patently deceptive, confusing
or contrary to existing law.
With respect to the first requisite, the Court has held that the
right to the exclusive use of a corporate name with freedom
from infringement by similarity is determined by priority of
adoption.
In this case, respondents' corporate names were registered on
the following dates: (1) De La Salle Brothers, Inc. on October
9, 1961; (2) De La Salle University, Inc. on December 19,
1975; (3) La Salle Academy, Inc. on January 26, 1960; (4) De
La Salle-Santiago Zobel School, Inc. on October 7, 1976; and
(5) De La Salle Canlubang, Inc. on August 5, 1998.
On the other hand, petitioner was issued a Certificate of
Registration only on July 5, 2007. It being clear that
respondents are the prior registrants, they certainly have
acquired the right to use the words "De La Salle" or "La Salle"
as part of their corporate names.
The second requisite is also satisfied since there is a
confusing similarity between petitioner's and respondents'
corporate names. While these corporate names are not
identical, it is evident that the phrase "De La Salle" is the
dominant phrase used.
Petitioner asserts that it has the right to use the phrase "De La
Salle" in its corporate name as respondents did not obtain the
right to its exclusive use, nor did the words acquire secondary
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meaning. It endeavoured to demonstrate that no confusion will
arise from its use of the said phrase by stating that its
complete name, "De La Salle Montessori International of
Malolos, Inc.," contains four other distinctive words that are not
found in respondents' corporate names. Moreover, it obtained
the words "De La Salle" from the French word meaning
"classroom," while respondents obtained it from the French
priest named Saint Jean Baptiste de La Salle. Petitioner also
compared its logo to that of respondent De La Salle University
and argued that they are different. Further, petitioner argued
that it does not charge as much fees as respondents, that its
clients knew that it is not part of respondents' schools, and that
it never misrepresented nor claimed to be an affiliate of
respondents. Additionally, it has gained goodwill and a name
worthy of trust in its own right.
In determining the existence of confusing similarity in
corporate names, the test is whether the similarity is such as to
mislead a person using ordinary care and discrimination. In so
doing, the Court must look to the record as well as the names
themselves.
Petitioner's assertion that the words "Montessori International
of Malolos, Inc." are four distinctive words that are not found in
respondents' corporate names so that their corporate name is
not identical, confusingly similar, patently deceptive or contrary
to existing laws, does not avail. As correctly held by the SEC
OGC, all these words, when used with the name "De La Salle,"
can reasonably mislead a person using ordinary care and
discretion into thinking that petitioner is an affiliate or a branch
of, or is likewise founded by, any or all of the respondents,
thereby causing confusion.
46
Petitioner's argument that it obtained the words "De La Salle"
from the French word meaning "classroom," while respondents
obtained it from the French priest named Saint Jean Baptiste
de La Salle, similarly does not hold water. We quote with
approval the ruling of the SEC En Banc on this matter. Thus:
Generic terms are those which constitute "the common
descriptive name of an article or substance," or comprise the
"genus of which the particular product is a species," or are
"commonly used as the name or description of a kind of
goods," or "characters," or "refer to the basic nature of the
wares or services provided rather than to the more
idiosyncratic characteristics of a particular product," and are
not legally protectable. It has been held that if a mark is so
commonplace that it cannot be readily distinguished from
others, then it is apparent that it cannot identify a particular
business; and he who first adopted it cannot be injured by any
subsequent appropriation or imitation by others, and the public
will not be deceived.
Contrary to [petitioner's] claim, the word salle only means
"room" in French. The word la, on the other hand, is a definite
article ("the") used to modify salle. Thus, since salle is nothing
more than a room, [respondents'] use of the term is actually
suggestive.
A suggestive mark is therefore a word, picture, or other symbol
that suggests, but does not directly describe something about
the goods or services in connection with which it is used as a
mark and gives a hint as to the quality or nature of the product.
Suggestive trademarks therefore can be distinctive and are
registrable.
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The appropriation of the term "la salle" to associate the words
with the lofty ideals of education and learning is in fact
suggestive because roughly translated, the words only mean
"the room." Thus, the room could be anything - a room in a
house, a room in a building, or a room in an office.
xxx
In fact, the appropriation by [respondents] is fanciful, whimsical
and arbitrary because there is no inherent connection between
the words la salle and education, and it is through
[respondents'] painstaking efforts that the term has become
associated with one of the top educational institutions in the
country. Even assuming arguendo that la salle means
"classroom" in French, imagination is required in order to
associate the term with an educational institution and its
particular brand of service.
SC affirm that the phrase "De La Salle" is not merely a generic
term. Respondents' use of the phrase being suggestive and
may properly be regarded as fanciful, arbitrary and whimsical,
it is entitled to legal protection. Petitioner's use of the phrase
"De La Salle" in its corporate name is patently similar to that of
respondents that even with reasonable care and observation,
confusion might arise. The Court notes not only the similarity
in the parties' names, but also the business they are engaged
in. They are all private educational institutions offering pre-
elementary, elementary and secondary courses. As aptly
observed by the SEC En Banc, petitioner's name gives the
impression that it is a branch or affiliate of respondents. It is
settled that proof of actual confusion need not be shown. It
suffices that confusion is probable or likely to occur.
47
2. No. the Court's ruling in Lyceum of the Philippines does not
apply.
In that case, the Lyceum of the Philippines, Inc., an
educational institution registered with the SEC, commenced
proceedings before the SEC to compel therein private
respondents who were all educational institutions, to delete the
word "Lyceum" from their corporate names and permanently
enjoin them from using the word as part of their respective
names.
The Court there held that the word "Lyceum" today generally
refers to a school or institution of learning. It is as generic in
character as the word "university." Since "Lyceum" denotes a
school or institution of learning, it is not unnatural to use this
word to designate an entity which is organized and operating
as an educational institution. Moreover, the Lyceum of the
Philippines, Inc.'s use of the word "Lyceum" for a long period
of time did not amount to mean that the word had acquired
secondary meaning in its favor because it failed to prove that it
had been using the word all by itself to the exclusion of others.
More so, there was no evidence presented to prove that the
word has been so identified with the Lyceum of the
Philippines, Inc. as an educational institution that confusion will
surely arise if the same word were to be used by other
educational institutions.
Here, the phrase "De La Salle" is not generic in relation to
respondents. It is not descriptive of respondent's business as
institutes of learning, unlike the meaning ascribed to "Lyceum."
Moreover, respondent De La Salle Brothers, Inc. was
registered in 1961 and the De La Salle group had been using
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the name decades before petitioner's corporate registration. In
contrast, there was no evidence of the Lyceum of the
Philippines, Inc.'s exclusive use of the word "Lyceum," as in
fact another educational institution had used the word 17 years
before the former registered its corporate name with the SEC.
Also, at least nine other educational institutions included the
word in their corporate names. There is thus no similarity
between the Lyceum of the Philippines case and this case that
would call for a similar ruling.
The enforcement of the protection accorded by Section 18 of
the Corporation Code to corporate names is lodged
exclusively in the SEC. By express mandate, the SEC has
absolute jurisdiction, supervision and control over all
corporations. It is the SEC's duty to prevent confusion in the
use of corporate names not only for the protection of the
corporations involved, but more so for the protection of the
public. It has authority to de-register at all times, and under all
circumstances, corporate names which in its estimation are
likely to generate confusion.
24. PACITA I. HABANA, ALICIA L. CINCO and JOVITA N.
FERNANDO, VS. FELICIDAD C. ROBLES and GOODWILL
TRADING CO., INC.,
G.R. No. 131522 July 19, 1999
In cases of infringement, copying alone is not what is
prohibited. The copying must produce an "injurious effect".
Facts:
48
Petitioners are authors and copyright owners of duly issued
certificates of copyright registration covering their published
works, entitled COLLEGE ENGLISH FOR TODAY (CET),
Books 1 and 2, and WORKBOOK FOR COLLEGE
FRESHMAN ENGLISH, Series 1. Respondent Felicidad
Robles and Goodwill Trading Co., Inc. are the author/publisher
and distributor/seller of another published work entitled
"DEVELOPING ENGLISH PROFICIENCY" (DEP), Books 1
and 2 (1985 edition) which book was covered by copyrights
issued to them.
In the course of revising their published works, petitioners
scouted and looked around various bookstores to check on
other textbooks dealing with the same subject matter. By
chance they came upon the book of respondent Robles and
upon perusal of said book they were surprised to see that the
book was strikingly similar to the contents, scheme of
presentation, illustrations and illustrative examples in their own
book, CET. After an itemized examination and comparison of
the two books (CET and DEP), petitioners found that several
pages of the respondent's book are similar, if not all together a
copy of petitioners' book, which is a case of plagiarism and
copyright infringement.
On July 7, 1988; petitioners filed with the RTC a complaint
for "Infringement and/or unfair competition with
damages" against private respondents. On August 1, 1988,
respondent Goodwill Trading Co., Inc. filed its answer to the
complaint and alleged that petitioners had no cause of action
against Goodwill Trading Co., Inc. since it was not privy to the
misrepresentation, plagiarism, incorporation and reproduction
of the portions of the book of petitioners; that there was an
agreement between Goodwill and the respondent Robles that
Robles guaranteed Goodwill that the materials utilized in the
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manuscript were her own or that she had secured the
necessary permission from contributors and sources; that the
author assumed sole responsibility and held the publisher
without any liability.
On November 28, 1988, respondent Robles filed her
answer, and denied the allegations of plagiarism and copying
that petitioners claimed. Respondent stressed that (1) the
book DEP is the product of her independent researches,
studies and experiences, and was not a copy of any existing
valid copyrighted book; (2) DEP followed the scope and
sequence or syllabus which are common to all English
grammar writers as recommended by the Association of
Philippine Colleges of Arts and Sciences (APCAS), so any
similarity between the respondents book and that of the
petitioners was due to the orientation of the authors to both
works and standards and syllabus; and (3) the similarities may
be due to the authors' exercise of the "right to fair use of
copyrigthed materials, as guides."
Respondent interposed a counterclaim for damages on
the ground that bad faith and malice attended the filing of the
complaint, because petitioner Habana was professionally
jealous and the book DEP replaced CET as the official
textbook of the graduate studies department of the Far
Eastern University.
49
RTC dismissed the complaint. Petitioners filed their notice
of appeal with the trial court CA ruled in favor of respondents
Robles and Goodwill Trading Co., Inc.
Issue:
Whether or not, despite the apparent textual, thematic and
sequential similarity between DEP and CET, respondents
committed no copyright infringement?
Ruling:
The essence of intellectual piracy should be essayed in
conceptual terms in order to underscore its gravity by an
appropriate understanding thereof. Infringement of a copyright
is a trespass on a private domain owned and occupied by the
owner of the copyright, and, therefore, protected by law, and
infringement of copyright, or piracy, which is a synonymous
term in this connection, consists in the doing by any person,
without the consent of the owner of the copyright, of anything
the sole right to do which is conferred by statute on the owner
of the copyright.
The respondents claim that their similarity in style can be
attributed to the fact that both of them were exposed to the
APCAS syllabus and their respective academic experience,
teaching approach and methodology are almost identical
because they were of the same background. However, we
believe that even if petitioners and respondent Robles were of
the same background in terms of teaching experience and
orientation, it is not an excuse for them to be identical even in
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examples contained in their books. The similarities in

examples and material contents are so obviously present in
this case. How can similar/identical examples not be
considered as a mark of copying?

In cases of infringement, copying alone is not what is

prohibited. The copying must produce an "injurious
effect". Here, the injury consists in that respondent Robles
lifted from petitioners' book materials that were the result of the
latter's research work and compilation and misrepresented
them as her own. She circulated the book DEP for commercial
use did not acknowledged petitioners as her source.
Hence, there is a clear case of appropriation of
copyrighted work for her benefit that respondent Robles
committed. Petitioners' work as authors is the product of their
long and assiduous research and for another to represent it as
her own is injury enough. In copyrighting books the purpose is 25. Filipino Society of Composers vs. Benjamin Tan
to give protection to the intellectual product of an author. This G.R. No. L-36402, March 16, 1987
is precisely what the law on copyright protected, under
Section 184.1 (b). Quotations from a published work if they
are compatible with fair use and only to the extent justified by Copyright; Music provided by a combo in a restaurant
the purpose, including quotations from newspaper articles and constitutes public performance for profit within the meaning
periodicals in the form of press summaries are allowed of the Copyright Law.
provided that the source and the name of the author, if
appearing on the work, are mentioned.
Facts:
In the case at bar, the least that respondent Robles could Petitioner is the owner of certain musical compositions
have done was to acknowledge petitioners Habana et. al. as among which are the songs entitled: "Dahil Sa Iyo";
the source of the portions of DEP. The final product of an "Sapagkat Ikaw Ay Akin"; "Sapagkat Kami Ay Tao
author's toil is her book. To allow another to copy the book Lamang" and "The Nearness Of You." On the other hand,
without appropriate acknowledgment is injury enough. Tan is the operator of a restaurant where a combo with
professional singers, hired to play and sing musical
compositions to entertain customers, were playing and
singing the above mentioned compositions. Petitioner
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demanded from Tan payment of license fee for the playing
and singing of aforesaid compositions but the demand was
ignored. Hence, petitioner filed a complaint for copyright
infringement.
Issue’s:
1. Whether or not the playing and singing of musical
compositions inside the restaurant of Tan constitute a
public performance for profit, within the meaning and
contemplation of the Copyright Law?
2. Assuming that there were indeed public performances
for profit, whether or not Tan can be held liable
therefor?
Ruling:
1. Yes.
Section 3(c) of the Copyright Law provides: "SEC. 3. The
proprietor of a copyright or his heirs or assigns shall have
the exclusive right: x x x (c) To exhibit, perform, represent,
produce, or reproduce the copyrighted work in any manner
or by any method whatever for profit or otherwise; if not
reproduced in copies for sale, to sell any manuscripts or
any record whatsoever thereof; x x x”
In the case at bar, the patrons of the restaurant in question
pay only for the food and drinks and apparently not for
listening to the music. The music provided is for the
purpose of entertaining and amusing the customers in
order to make the establishment more attractive and
desirable. For the playing and singing the musical
compositions involved, the combo was paid as
51
independent contractors by Tan. It is therefore obvious
that the expenses entailed thereby are added to the
overhead of the restaurant which are either eventually
charged in the price of the food and drinks or to the overall
total of additional income produced by the bigger volume of
business which the entertainment was programmed to
attract. Consequently, the playing and singing of the
combo in Tan's restaurant constituted performance for
profit contemplated by the Copyright Law.
2. No.
Nevertheless, Tan cannot be said to have infringed upon
the Copyright Law. Tan's allegation that the composers of
the contested musical compositions waived their right in
favor of the general public, when they allowed their
intellectual creations to become property of the public
domain before applying for the corresponding copyrights
for the same, is correct.
Patent Office Administrative Order No. 3 of 1947 provides
among things that an intellectual creation should be
copyrighted (30) days after its publication, if made in
Manila, or within (60) days if made elsewhere, failure of
which renders such creation public property. Indeed, if the
general public has made use of the object sought to be
copyrighted for (30) days prior to the copyright application,
the law deems the object to have been donated to the
public domain and the same can no longer be copyrighted.
Here, the song "Dahil Sa Iyo" which was registered in 1956
became popular in radios and juke boxes long before
registration. While the song "The Nearness Of You"
registered in 1955 had become popular (25) years prior to
1968, (the year of the hearing) or from 1943. And the
songs "Sapagkat Ikaw Ay Akin" and "Sapagkat Kami Ay
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Tao Lamang" both registered in 1966, appear to have been
known and sang by the witnesses as early as 1965 or
three years before the hearing in 1968. Hence, the
musical compositions in question had long become public
property, and are therefore beyond the protection of the
Copyright Law.
26. ABS-CBN CORPORATION vs. FELIPE GOZON,
GILBERTO R. DUAVIT, JR., MARISSA L. FLORES,
JESSICA A. SORO, GRACE DELA PENA-REYES, JOHN
OLIVER T. MANALASTAS, JOHN DOES AND JANE DOES,
G.R. No. 195956 March 11, 2015
The Intellectual Property Code is clear about the rights
afforded to authors of various kinds of work. Under the Code,
"works are protected by the sole fact of their creation,
irrespective of their mode or form of expression, as well as of
their content, quality and purpose." These include "audiovisual
works and cinematographic works and works produced by a
process analogous to cinematography or any process for
making audiovisual recordings." Contrary to the old copyright
law, the Intellectual Property Code does not require
registration of the work to fully recover in an infringement suit.
Facts:
ABS-CBN filed a complaint against GMA for alleged acts of
copyright infringement under Sections 177 and 211 of the
52
Intellectual Property Code on the ground that GMA aired
footage of the arrival of Angelo Dela Cruz at NAIA from Iraq
without ABS-CBN’s consent. ABS-CBN claims that it has an
agreement with Reuter’s that ABS-CBN will contribute news
and content that it owns and makes to Reuters in exchange of
the latter’s news and video material and Reuters will ensure
that ABS-CBN’s material cannot be aired in the country. GMA
was a subscriber of Reuter’s and CNN’s live feeds. After it took
notice of Angelo Dela Cruz’s arrival, it immediately aired the
video from the said feeds. GMA was not aware of the
agreement between ABS-CBN and Reuters nor were they
aware to the footage made by ABS-CBN. The Prosecutor’s
office found probable cause to indict respondents. On appeal
before the DOJ, the DOJ ruled in favor of respondents stating
that respondents acted in good faith. This was later on
reversed by a different DOJ Secretary who found probable
cause to indict respondents. The CA found no criminal liability
to speak of.
Issue:
Whether or not the news footage is copyrightable?
Ruling:
YES. The News is copyrightable.
The Intellectual Property Code is clear about the rights
afforded to authors of various kinds of work. Under the Code,
"works are protected by the sole fact of their creation,
irrespective of their mode or form of expression, as well as of
their content, quality and purpose." These include
"[a]udiovisual works and cinematographic works and works
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produced by a process analogous to cinematography or any
process for making audiovisual recordings."
Contrary to the old copyright law, the Intellectual Property
Code does not require registration of the work to fully recover
in an infringement suit. Nevertheless, both copyright laws
provide that copyright for a work is acquired by an intellectual
creator from the moment of creation.
It is true that under Section 175 of the Intellectual Property
Code, "news of the day and other miscellaneous facts having
the character of mere items of press information" are
considered unprotected subject matter. However, the Code
does not state that expression of the news of the day,
particularly when it underwent a creative process, is not
entitled to protection.
27. Pearl & Dean (Phil.), Incorporated vs. Shoemart,
Incorporated,
G.R. No. 148222. August 15, 2003
Intellectual Property; Copyrights; Patents; Being a mere
statutory grant, the rights are limited to what the statute
confers; It can cover only the works falling within the statutory
enumeration or description.
To be able to effectively and legally preclude others from
copying and profiting from the invention, a patent is a
primordial requirement.
Facts:
Pearl and Dean (Phil.), Inc. is a corporation engaged in the
manufacture of advertising display units simply referred to as
53
light boxes. Pearl and Dean was able to secure a Certificate of
Copyright Registration over these illuminated display units.
The advertising light boxes were marketed under the
trademark “Poster Ads”. The application for registration of the
trademark was filed with the Bureau of Patents, Trademarks
and Technology Transfer but was approved only on
September 12, 1988. From 1981 to about 1988, Pearl and
Dean employed the services of Metro Industrial Services to
manufacture its advertising displays.
Pearl and Dean negotiated with defendant-appellant
Shoemart, Inc. (SMI) for the lease and installation of the light
boxes in SM North Edsa. Since SM City North Edsa was under
construction at that time, SMI offered as an alternative, SM
Makati and SM Cubao.
SMI’s house counsel informed Pearl and Dean that it
was rescinding the contract for SM Makati due to non-
performance of the terms thereof. In his reply, Vergara
protested saying it was without basis. He pushed for the
signing of the contract for SM Cubao.
2 years later, Metro Industrial Services, the company
formerly contracted by Pearl and Dean to fabricate its display
units, offered to construct light boxes for Shoemart. SMI
approved the proposal. After its contract with Metro Industrial
was terminated, SMI engaged the services of EYD Rainbow
Advertising Corporation to make the light boxes.
Pearl and Dean, received reports that exact copies of
its light boxes were installed at SM City and in the fastfood
section of SM Cubao. Upon investigation, Pearl and Dean
found out that aside from the two (2) reported SM branches,
light boxes similar to those it manufactures were also installed
in 2 other SM stores. It further discovered that defendant-
appellant North Edsa Marketing Inc. (NEMI), through its
marketing arm, Prime Sports Marketing Services, was set up
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primarily to sell advertising space in lighted display units
located in SMI’s different branches. Pearl and Dean noted that
NEMI is a sister company of SMI.
Pearl and Dean sent a letter to both SMI and NEMI
enjoining them to cease using the subject light boxes and to
remove the same from SMI’s establishments. It also
demanded the discontinued use of the trademark “Poster
Ads,” and the payment of compensatory damages in the
amount of P20,000,000.00.
Issue:
Whether SMI infringed on its copyright over the light boxes
when SMI had the units manufactured by Metro and EYD
Rainbow Advertising for its own account?
Ruling:
There was no copyright infringement. The copyright was
limited to the drawings alone and not to the light box itself. The
petitioner’s application for a copyright certificate, as well as
Copyright Certificate No. PD-R2588 issued by the National
Library clearly stated that it was for a class “O” work under
Section 2 of The Intellectual Property Decree which was the
statute then prevailing. Said Section 2 expressly enumerated
the works subject to copyright:
SEC. 2. The rights granted by this Decree shall, from
the moment of creation, subsist with respect to any of the
following works: xxx O) Prints, pictorial illustrations, advertising
copies, labels, tags, and box wraps; xxx
54
Although petitioner’s copyright certificate was entitled
“Advertising Display Units” its claim of copyright infringement
cannot be sustained. P & D secured its copyright under the
classification class “O” work. The petitioner’s copyright
protection extended only to the technical drawings and not to
the light box itself because the latter was not at all in the
aforementioned category “O.” Stated otherwise, even as we
find that P & D indeed owned a valid copyright, the same could
have referred only to the technical drawings within the
category of “pictorial illustrations.” This does not include the
underlying light box. Neither could the lack of statutory
authority to make the light box copyrightable be remedied by
the simplistic act of entitling the copyright certificate issued by
the National Library as “Advertising Display Units.”
During the trial, the president of P & D himself admitted
that the light box was neither a literary not an artistic work but
an “engineering or marketing invention.” There appeared to be
some confusion regarding what ought or ought not to be the
proper subjects of copyrights, patents and trademarks. These
three legal rights are completely distinct and separate from
one another, and the protection afforded by one cannot be
used interchangeably to cover items or works that exclusively
pertain to the others.
On the Issue of Patent Infringement. The petitioner
never secured a patent for the light boxes. It therefore
acquired no patent rights which could have protected its
invention, if in fact it really was. And because it had no patent,
petitioner could not legally prevent anyone from manufacturing
or commercially using the contraption. To be able to effectively
and legally preclude others from copying and profiting from the
invention, a patent is a primordial requirement. No patent, no
protection. The ultimate goal of a patent system is to bring new
designs and technologies into the public domain through
disclosure.
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On the Issue of Trademark Infringement. This issue
concerns the use by respondents of the mark “Poster Ads”
which petitioner’s president said was a contraction of “poster
advertising.” P & D was able to secure a trademark certificate
for it, but one where the goods specified were “stationeries
such as letterheads, envelopes, calling cards and newsletters.”
Petitioner admitted it did not commercially engage in or market
these goods. On the contrary, it dealt in electrically operated
backlit advertising units and the sale of advertising spaces
thereon, which, however, were not at all specified in the
trademark certificate.
28. COLUMBIA PICTURES, INC., ORION PICTURES
CORPORATION, PARAMOUNT PICTURES
CORPORATION, TWENTIETH CENTURY FOX FILM
CORPORATION, UNITED ARTISTS CORPORATION,
UNIVERSAL CITY STUDIOS, INC., THE WALT DISNEY
COMPANY, and WARNER BROTHERS, INC., ) vs. COURT
OF APPEALS, SUNSHINE HOME VIDEO, INC. and DANILO
A. PELINDARIO (G.R. No. 110318. August 28, 1996
It is evidently incorrect to suggest, as the ruling in 20th
Century Fox may appear to do, that in copyright infringement
cases, the presentation of master tapes of the copyrighted
films is always necessary to meet the requirement of probable
cause and that, in the absence thereof, there can be no finding
of probable cause for the issuance of a search warrant.
Facts:
Complainants Columbia pictures and other corp of same
nature thru counsel lodged a formal complaint with the
55
National Bureau of Investigation for violation of PD No. 49, as
amended, and sought its assistance in their anti-film piracy
drive. Thus, Agents of the NBI and private researchers made
discreet surveillance on various video establishments in Metro
Manila including Sunshine Home Video.
NBI Senior Agent then applied for a search warrant with the
court a quo against Sunshine seeking the seizure, among
others, of pirated video tapes of copyrighted films all of which
were enumerated in a list attached to the application; and,
television sets, video cassettes and/or laser disc recordings
equipment and other machines and paraphernalia used or
intended to be used in the unlawful exhibition, showing,
reproduction, sale, lease or disposition of videograms tapes in
the premises above described. Such application was
subsequently granted.
In the course of the search of the premises indicated in the
search warrant, the NBI Agents found and seized various
video tapes of duly copyrighted motion pictures/films owned or
exclusively distributed by private complainants, and machines,
equipment, television sets, paraphernalia, materials,
accessories all of which were included in the receipt for
properties accomplished by the raiding team. Copy of the
receipt was furnished and/or tendered to Mr. Danilo A.
Pelindario, registered owner-proprietor of Sunshine Home
Video.A Return of Search Warrant was filed with the Court.
A Motion To Lift the Order of Search Warrant was filed but was
later denied for lack of merit.
A Motion for reconsideration of the Order of denial was
filed. The court a quo granted the same and lifted search
warrant. Petitioners thereafter appealed the order to the Court
of Appeals. CA dismissed appeal uphold lift of search warrant
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Hence, this petition was brought to this Court particularly
challenging the validity of respondent courts retroactive
application of the ruling in 20th Century Fox Film Corporation
vs. Court of Appeals, thus upholding lift of SW: which provides
that that for the determination of probable cause to support the
issuance of a search warrant in copyright infringement cases
involving videograms, the production of the master tape for
comparison with the allegedly pirate copies is necessary.
Issue:
Whether or not there can be retroactive application to the
present controversy of the ruling in 20th Century Fox Film
Corporation vs. Court of Appeals, et al., promulgated on
August 19, 1988 correct?
Ruling:
NO. In fine, the supposed pronunciamento in said case
regarding the necessity for the presentation of the master
tapes of the copyrighted films for the validity of search
warrants should at most be understood to merely serve as a
guidepost in determining the existence of probable cause in
copyright infringement cases where there is doubt as to the
true nexus between the master tape and the pirated copies.
An objective and careful reading of the decision in said case
could lead to no other conclusion than that said directive was
hardly intended to be a sweeping and inflexible requirement in
all or similar copyright infringement cases. Judicial dicta
should always be construed within the factual matrix of their
parturition, otherwise a careless interpretation thereof could
unfairly fault the writer with the vice of overstatement and the
reader with the fallacy of undue generalization.
56
It is evidently incorrect to suggest, as the ruling in 20th
Century Fox may appear to do, that in copyright infringement
cases, the presentation of master tapes of the copyrighted
films is always necessary to meet the requirement of probable
cause and that, in the absence thereof, there can be no finding
of probable cause for the issuance of a search warrant.
It is true that such master tapes are object evidence, with the
merit that in this class of evidence the ascertainment of the
controverted fact is made through demonstrations involving
the direct use of the senses of the presiding magistrate. Such
auxiliary procedure, however, does not rule out the use of
testimonial or documentary evidence, depositions, admissions
or other classes of evidence tending to prove the factum
probandum, especially where the production in court of object
evidence would result in delay, inconvenience or expenses out
of proportion to its evidentiary value.
Here, Both testimonies of Agent Reyes and Atty. Domingo
were corroborated by Rene C. Baltazar, a private researcher
retained by Motion Pictures Association of America, Inc.
(MPAA, Inc.), who was likewise presented as a witness during
the search warrant proceedings.The records clearly reflect that
the testimonies of the abovenamed witnesses were
straightforward and stemmed from matters within their
personal knowledge. They displayed none of the ambivalence
and uncertainty that the witnesses in the 20th Century
Fox case exhibited. This categorical forthrightness in their
statements, among others, was what initially and correctly
convinced the trial court to make a finding of the existence of
probable cause.
29. NBI- MICROSOFT CORP. VS HWANG
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G.R. NO. 147043, JUNE 21, 2005
The gravamen of copyright infringement is not merely the
unauthorized "manufacturing" of intellectual works but rather
the... unauthorized performance of any of the acts covered by
Section 5. Hence, any person who performs any of the acts
under Section 5 without obtaining the copyright owner's prior
consent renders himself civilly and criminally liable for
copyright infringement.
Infringement of a copyright is a trespass on a private domain
owned and occupied by the owner of the copyright, and,
therefore, protected by law, and infringement of copyright, or
piracy, which is a synonymous term in this connection,
consists in the doing by any person, without the consent of the
owner of the copyright, of anything the sole right to do which is
conferred by statute on the owner of the copyright.
Facts:
Microsoft Corporation ("Microsoft"), a Delaware, United States
Corporation, owns the copyright and trademark to several
computer software. Microsoft and respondents Benito Keh
and Yvonne Keh president/managing director and general
director of Beltron Computer Phil. (Beltron), Jonathan Chua
and Emily Chua, et al , and Judy Hwang, et al from Taiwan
Machinery Display & Trade Center (TMTC) entered into a
Licensing Agreement, Microsoft authorized Beltron, for a fee,
to: (i) reproduce and install no more than one 1 copy of
Microsoft software on each Customer System hard disk or
Read Only Memory ("ROM"); and (ii) distribute directly or
indirectly and license copies of the Product in object code form
to end users.
57
The Agreement also authorized Microsoft and Beltron to
terminate the contract if the other fails to comply with any of
the Agreement's provisions. Microsoft terminated the
Agreement effective 22 June 1995 for Beltron's non-payment
of royalties. Subsequently, Microsoft learned that respondents
were illegally copying and selling Microsoft software. Microsoft
hired the services of Pinkerton Consulting Services &PCS, a
private investigative firm and sought the assistance of the NBI.
The investigating agents, posing as representatives of a
computer shop, bought computer hardware and software from
the respondents. The items contained Microsoft Software, and
the ROM’s are encased in containers with Microsoft
packaging. Microsoft applied for search warrants against the
respondents in the Regional Trial Court, Branch 23, Manila.
The NBI searched the premises of Beltron and TMTC and
seized several computer-related hardware, software,
accessories, and paraphernalia. Among these were 2,831
pieces of CD-ROMs containing Microsoft software.
Based on articles obtained, Petitioner charged the
respondents before the DOJ with Copyright Infringement
and Unfair Competition. DOJ dismissed Microsoft’s complaint
for lack of merit and insufficiency of evidence. Hence, this
petition.
Issue:
Whether the DOJ acted with grave abuse of discretion in not
finding probable cause to charge respondents with copyright
infringement and unfair competition?
Ruling:
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YES. The DOJ acted with grave abuse of discretion in not
finding probable cause to charge respondents with Copyright
Infringement and Unfair Competition.
Section 5 of PD 49 the rights vested exclusively on the
copyright owner. Contrary to the DOJ's ruling, the gravamen of
copyright infringement is not merely the unauthorized
"manufacturing" of intellectual works but rather the
unauthorized performance of any of the acts covered by
Section 5. Hence, any person who performs any of the acts
under Section 5 without obtaining the copyright owner's prior
consent renders himself civilly and criminally liable for
copyright infringement.
In this case, the counterfeit non- installer CD-ROMS that the
agents bought from the respondents suffice to support a
finding of probable cause to indict respondents for unfair
competition for passing off Microsoft products. From the
pictures of CD-ROMS packaging, one cannot distinguish them
from the packaging of CD-ROMS containing genuine Microsoft
software. Such replication coupled with similarity of content of
these fake CD-ROMS and CD-ROMS with genuine Microsoft
software implies intent to deceive.
The Court finds that the 12 CD-ROMs ("installer" and "non-
installer") and the CPU with pre-installed Microsoft software
suffice to support a finding of probable cause to indict the
respondent for copyright infringement under Section 5(A) in
relation to Section 29 of PD 49 for unauthorized copying and
selling of protected intellectual works. The installer CD-ROMs
with Microsoft software, are counterfeit per se.
30. MICROSOFT CORPORATION V. ROLANDO D.
MANANSALA AND/OR MEL MANANSALA, DOING
58
BUSINESS AS DATAMAN TRADING COMPANY AND/OR
COMIC ALLEY, G.R. NO. 166391, OCTOBER 21, 2015
The "gravamen of copyright infringement is not merely the
unauthorized manufacturing of intellectual works but rather the
unauthorized performance of any of the acts covered by
Section 5. Hence, any person who performs any of the acts
under Section 5 without obtaining the copyright owners prior
consent renders himself civilly and criminally liable for
copyright infringement.
Facts:
Petitioner (Microsoft Corporation) is the copyright and
trademark owner of all rights relating to all versions and
editions of Microsoft software. Rolando Manansala is doing
business under the name of DATAMAN TRADING COMPANY
and/or COMIC ALLEY with business address at 3rd Floor,
University Mall Building, Tail Avc, Manila.
Manansala, without authority from petitioner, was engaged in
distributing and selling Microsoft computer software programs.
Mr. John Benedict A. Sacriz, a private investigator
accompanied by an agent from the National Bureau of
Investigation (NBI) was able to purchase six (6) CD-ROMs
containing various computer programs belonging to Microsoft.
As a result of the test-purchase, the agent from the NBI
applied for a search warrant to search the premises of the
Manansala. The search warrant was served on the private
respondent's premises and yielded several illegal copies of
Microsoft programs.
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Subsequently, petitioner Affidavit-Complaint in the DOJ based
on the results of the search and seizure operation. However,
respondent State Prosecutor dismissed the charge against
Manansala for violation of Section 29 P.D. 49 stating that
evidence is extant in the records to show that Manansala is
selling Microsoft computer software programs bearing the
copyrights and trademarks owned by Microsoft Corporation.
There is, however, no proof that respondent was the one who
really printed or copied the products of complainant for sale in
his store.
Issue:
Whether or not printing was essential in the commission of the
crime of copyright infringement under Sec. 29 of the
Presidential Decree No. 4?
The mere sale of the illicit copies of the software programs
was enough by itself to show the existence of probable cause
for copyright infringement. There was no need for the
petitioner to still prove who copied, replicated or reproduced
the software programs. Indeed, the public prosecutor and the
DOJ gravely abused their discretion in dismissing the
petitioner's charge for copyright infringement against the
respondents for lack of evidence. There was grave abuse of
discretion because the public prosecutor and the DOJ acted
whimsically or arbitrarily in disregarding the settled
jurisprudential rules on finding the existence of probable cause
to charge the offender in court. Accordingly, the CA erred in
upholding the dismissal by the DOJ of the petitioner's petition
for review. The Supreme Court reversed the ruling of CA and
granted the petition of Microsoft Corporation.

Ruling:

No. Presidential Decree No. 49 thereby already acknowledged

the existence of computer programs as works or creations
protected by copyright. To hold, as the CA incorrectly did, that
the legislative intent was to require that the computer
programs be first photographed, photo-engraved, or pictorially
illustrated as a condition for the commission of copyright
infringement invites ridicule. Such interpretation of Section 5(a)
of Presidential Decree No. 49 defied logic and common sense
because it focused on terms like "copy," "multiply," and "sell,"
but blatantly ignored terms like "photographs," "photo-
engravings," and "pictorial illustrations." Had the CA taken the
latter words into proper account, it would have quickly seen
the absurdity of its interpretation.