DEFINITION OF INTELLECTUAL PROPERTY

Republic Act No. 8293             June 6, 1997 4.4. The term "IPO Gazette" refers to the gazette
published by the Office under this Act. (n)
AN ACT PRESCRIBING THE INTELLECTUAL
PROPERTY CODE AND ESTABLISHING THE
INTELLECTUAL PROPERTY OFFICE,
PROVIDING FOR ITS POWERS AND FUNCTIONS,
AND FOR OTHER PURPOSES

Section 4. Definitions. - 4.1. The term "intellectual

property rights" consists of:

a) Copyright and Related Rights;

b) Trademarks and Service Marks;

c) Geographic Indications;

d) Industrial Designs;

e) Patents;

f) Layout-Designs (Topographies) of
Integrated Circuits; and

g) Protection of Undisclosed Information

(n, TRIPS).

4.2. The term "technology transfer arrangements"

refers to contracts or agreements involving the
transfer of systematic knowledge for the
manufacture of a product, the application of a
process, or rendering of a service including
management contracts; and the transfer,
assignment or licensing of all forms of intellectual
property rights, including licensing of computer
software except computer software developed for
mass market.

4.3. The term "Office" refers to the Intellectual

Property Office created by this Act.

1|IPL Part I
DEFINITION OF INTELLECTUAL PROPERTY
SECOND DIVISION
G.R. No. 115758      March 19, 2002
ELIDAD C. KHO, doing business under the name
and style of KEC COSMETICS LABORATORY,
petitioner,
vs.
HON. COURT OF APPEALS, SUMMERVILLE
GENERAL MERCHANDISING and
COMPANY, and ANG TIAM CHAY, respondents.
DE LEON, JR., J.:
Before us is a petition for review on certiorari of
the Decision1 dated May 24, 1993 of the Court of
Appeals setting aside and declaring as null and
void the Orders2 dated February 10, 1992 and
March 19, 1992 of the Regional Trial Court,
Branch 90, of Quezon City granting the issuance of
a writ of preliminary injunction.
The facts of the case are as follows:
On December 20, 1991, petitioner Elidad C. Kho
filed a complaint for injunction and damages with
a prayer for the issuance of a writ of preliminary
injunction, docketed as Civil Case No. Q-91-10926,
against the respondents Summerville General
Merchandising and Company (Summerville, for
brevity) and Ang Tiam Chay.
The petitioner's complaint alleges that petitioner,
doing business under the name and style of KEC
Cosmetics Laboratory, is the registered owner of
the copyrights Chin Chun Su  and Oval Facial
Cream Container/Case, as shown by Certificates of
Copyright Registration No. 0-1358 and No. 0-
3678; that she also has patent rights on Chin Chun
Su & Device and Chin Chun Su for medicated cream
after purchasing the same from Quintin Cheng, the
registered owner thereof in the Supplemental
Register of the Philippine Patent Office on
February 7, 1980 under Registration Certificate
No. 4529; that respondent Summerville advertised
and sold petitioner's cream products under the
brand name Chin Chun Su, in similar containers
that petitioner uses, thereby misleading the
public, and resulting in the decline in the
petitioner's business sales and income; and, that
the respondents should be enjoined from allegedly
infringing on the copyrights and patents of the
petitioner.
The respondents, on the other hand, alleged as
their defense that Summerville is the exclusive
and authorized importer, re-packer and
distributor of Chin Chun Su products
manufactured by Shun Yi Factory of Taiwan; that
the said Taiwanese manufacturing company
authorized Summerville to register its trade
name Chin Chun Su Medicated Cream with the
Philippine Patent Office and other appropriate
governmental agencies; that KEC Cosmetics
Laboratory of the petitioner obtained the
copyrights through misrepresentation and
falsification; and, that the authority of Quintin
Cheng, assignee of the patent registration
certificate, to distribute and market Chin Chun
Su products in the Philippines had already been
terminated by the said Taiwanese Manufacturing
Company.
After due hearing on the application for
preliminary injunction, the trial court granted the
same in an Order dated February 10, 1992, the
dispositive portion of which reads:
ACCORDINGLY, the application of plaintiff
Elidad C. Kho, doing business under the
style of KEC Cosmetic Laboratory, for
preliminary injunction, is hereby granted.
Consequentially, plaintiff is required to
file with the Court a bond executed to
defendants in the amount of five hundred
thousand pesos (P500,000.00) to the
effect that plaintiff will pay to defendants
all damages which defendants may
sustain by reason of the injunction if the
Court should finally decide that plaintiff is
not entitled thereto.
SO ORDERED.3
The respondents moved for reconsideration but
their motion for reconsideration was denied by
the trial court in an Order dated March 19, 1992.4
On April 24, 1992, the respondents filed a petition
for certiorari with the Court of Appeals, docketed
as CA-G.R. SP No. 27803, praying for the
nullification of the said writ of preliminary
injunction issued by the trial court. After the
respondents filed their reply and almost a month
after petitioner submitted her comment, or on
August 14 1992, the latter moved to dismiss the
petition for violation of Supreme Court Circular
No. 28-91, a circular prohibiting forum shopping.
According to the petitioner, the respondents did
not state the docket number of the civil case in the
caption of their petition and, more significantly,
they did not include therein a certificate of non-
forum shopping. The respondents opposed the
petition and submitted to the appellate court a
certificate of non-forum shopping for their
petition.
On May 24, 1993, the appellate court rendered a
Decision in CA-G.R. SP No. 27803 ruling in favor of
the respondents, the dispositive portion of which
reads:
WHEREFORE, the petition is hereby given
due course and the orders of respondent
court dated February 10, 1992 and March
19, 1992 granting the writ of preliminary
2|IPL Part I
DEFINITION OF INTELLECTUAL PROPERTY
injunction and denying petitioners'
motion for reconsideration are hereby set
aside and declared null and void.
Respondent court is directed to forthwith
proceed with the trial of Civil Case No. Q-
91-10926 and resolve the issue raised by
the parties on the merits.
SO ORDERED.5
In granting the petition, the appellate court ruled
that:
The registration of the trademark or
brandname "Chin Chun Su" by KEC with
the supplemental register of the Bureau
of Patents, Trademarks and Technology
Transfer cannot be equated with
registration in the principal register,
which is duly protected by the Trademark
Law.1âwphi1.nêt
xxx      xxx      xxx
As ratiocinated in La Chemise Lacoste, S.S.
vs. Fernandez, 129 SCRA 373, 393:
"Registration in the
Supplemental Register, therefore,
serves as notice that the
registrant is using or has
appropriated the trademark. By
the very fact that the trademark
cannot as yet be on guard and
there are certain defects, some
obstacles which the use must still
overcome before he can claim
legal ownership of the mark or
ask the courts to vindicate his
claims of an exclusive right to the
use of the same. It would be
deceptive for a party with
nothing more than a registration
in the Supplemental Register to
posture before courts of justice
as if the registration is in the
Principal Register.
The reliance of the private
respondent on the last sentence
of the Patent office action on
application Serial No. 30954 that
'registrants is presumed to be the
owner of the mark until after the
registration is declared cancelled'
is, therefore, misplaced and
grounded on shaky foundation.
The supposed presumption not
only runs counter to the precept
embodied in Rule 124 of the
Revised Rules of Practice before
the Philippine Patent Office in
Trademark Cases but considering
all the facts ventilated before us
in the four interrelated petitions
involving the petitioner and the
respondent, it is devoid of factual
basis. As even in cases where
presumption and precept may
factually be reconciled, we have
held that the presumption is
rebuttable, not conclusive,
(People v. Lim Hoa, G.R. No. L-
10612, May 30, 1958,
Unreported). One may be
declared an unfair competitor
even if his competing trademark
is registered (Parke, Davis & Co.
v. Kiu Foo & Co., et al., 60 Phil
928; La Yebana Co. v. chua Seco &
Co., 14 Phil 534)."6
The petitioner filed a motion for reconsideration.
This she followed with several motions to declare
respondents in contempt of court for publishing
advertisements notifying the public of the
promulgation of the assailed decision of the
appellate court and stating that genuine Chin Chun
Su products could be obtained only from
Summerville General Merchandising and Co.
In the meantime, the trial court went on to hear
petitioner's complaint for final injunction and
damages. On October 22, 1993, the trial court
rendered a Decision7 barring the petitioner from
using the trademark Chin Chun Su and upholding
the right of the respondents to use the same, but
recognizing the copyright of the petitioner over
the oval shaped container of her beauty cream.
The trial court did not award damages and costs
to any of the parties but to their respective
counsels were awarded Seventy-Five Thousand
Pesos (P75,000.00) each as attorney's fees. The
petitioner duly appealed the said decision to the
Court of Appeals.
On June 3, 1994, the Court of Appeals promulgated
a Resolution8 denying the petitioner's motions for
reconsideration and for contempt of court in CA-
G.R. SP No. 27803.
Hence, this petition anchored on the following
assignment of errors:
I
RESPONDENT HONORABLE COURT OF
APPEALS COMMITTED GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OF
JURISDICTION IN FAILING TO RULE ON
PETITIONER'S MOTION TO DISMISS.
II
RESPONDENT HONORABLE COURT OF
APPEALS COMMITTED GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OF
JURISDICTION IN REFUSING TO
PROMPTLY RESOLVE PETITIONER'S
MOTION FOR RECONSIDERATION.
3|IPL Part I
DEFINITION OF INTELLECTUAL PROPERTY
III
IN DELAYING THE RESOLUTION OF
PETITIONER'S MOTION FOR
RECONSIDERATION, THE HONORABLE
COURT OF APPEALS DENIED
PETITIONER'S RIGHT TO SEEK TIMELY
APPELLATE RELIEF AND VIOLATED
PETITIONER'S RIGHT TO DUE PROCESS.
IV
RESPONDENT HONORABLE COURT OF
APPEALS COMMITTED GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OF
JURISDICTION IN FAILING TO CITE THE
PRIVATE RESPONDENTS IN CONTEMPT.9
The petitioner faults the appellate court for not
dismissing the petition on the ground of violation
of Supreme Court Circular No. 28-91. Also, the
petitioner contends that the appellate court
violated Section 6, Rule 9 of the Revised Internal
Rules of the Court of Appeals when it failed to rule
on her motion for reconsideration within ninety
(90) days from the time it is submitted for
resolution. The appellate court ruled only after the
lapse of three hundred fifty-four (354) days, or on
June 3, 1994. In delaying the resolution thereof,
the appellate court denied the petitioner's right to
seek the timely appellate relief. Finally, petitioner
describes as arbitrary the denial of her motions
for contempt of court against the respondents.
We rule in favor of the respondents.
Pursuant to Section 1, Rule 58 of the Revised
Rules of Civil Procedure, one of the grounds for
the issuance of a writ of preliminary injunction is
a proof that the applicant is entitled to the relief
demanded, and the whole or part of such relief
consists in restraining the commission or
continuance of the act or acts complained of,
either for a limited period or perpetually. Thus, a
preliminary injunction order may be granted only
when the application for the issuance of the same
shows facts entitling the applicant to the relief
demanded.10 This is the reason why we have ruled
that it must be shown that the invasion of the right
sought to be protected is material and substantial,
that the right of complainant is clear and
unmistakable, and, that there is an urgent and
paramount necessity for the writ to prevent
serious damage.11
In the case at bar, the petitioner applied for the
issuance of a preliminary injunctive order on the
ground that she is entitled to the use of the
trademark on Chin Chun Su and its container
based on her copyright and patent over the same.
We first find it appropriate to rule on whether the
copyright and patent over the name and container
of a beauty cream product would entitle the
registrant to the use and ownership over the same
to the exclusion of others.
Trademark, copyright and patents are different
intellectual property rights that cannot be
interchanged with one another. A trademark is
any visible sign capable of distinguishing the
goods (trademark) or services (service mark) of
an enterprise and shall include a stamped or
marked container of goods.12 In relation thereto, a
trade name means the name or designation
identifying or distinguishing an
enterprise.13 Meanwhile, the scope of a copyright
is confined to literary and artistic works which are
original intellectual creations in the literary and
artistic domain protected from the moment of
their creation.14 Patentable inventions, on the
other hand, refer to any technical solution of a
problem in any field of human activity which is
new, involves an inventive step and is industrially
applicable.15
Petitioner has no right to support her claim for the
exclusive use of the subject trade name and its
container. The name and container of a beauty
cream product are proper subjects of a trademark
inasmuch as the same falls squarely within its
definition. In order to be entitled to exclusively
use the same in the sale of the beauty cream
product, the user must sufficiently prove that she
registered or used it before anybody else did. The
petitioner's copyright and patent registration of
the name and container would not guarantee her
the right to the exclusive use of the same for the
reason that they are not appropriate subjects of
the said intellectual rights. Consequently, a
preliminary injunction order cannot be issued for
the reason that the petitioner has not proven that
she has a clear right over the said name and
container to the exclusion of others, not having
proven that she has registered a trademark
thereto or used the same before anyone did.
We cannot likewise overlook the decision of the
trial court in the case for final injunction and
damages. The dispositive portion of said decision
held that the petitioner does not have trademark
rights on the name and container of the beauty
cream product. The said decision on the merits of
the trial court rendered the issuance of the writ of
a preliminary injunction moot and academic
notwithstanding the fact that the same has been
appealed in the Court of Appeals. This is
supported by our ruling in La Vista Association,
Inc. v. Court of Appeals16, to wit:
Considering that preliminary injunction is
a provisional remedy which may be
granted at any time after the
commencement of the action and before
judgment when it is established that the
plaintiff is entitled to the relief demanded
and only when his complaint shows facts
entitling such reliefs xxx and it appearing
that the trial court had already granted
the issuance of a final injunction in favor of
petitioner in its decision rendered after
trial on the merits xxx the Court resolved
4|IPL Part I
DEFINITION OF INTELLECTUAL PROPERTY
to Dismiss the instant petition having been
rendered moot and academic. An
injunction issued by the trial court after it
has already made a clear pronouncement
as to the plaintiff's right thereto, that is,
after the same issue has been decided on
the merits, the trial court having
appreciated the evidence presented, is
proper, notwithstanding the fact that the
decision rendered is not yet final xxx. Being
an ancillary remedy, the proceedings for
preliminary injunction cannot stand
separately or proceed independently of
the decision rendered on the merit of the
main case for injunction. The merit of the
main case having been already
determined in favor of the applicant, the
preliminary determination of its non-
existence ceases to have any force and
effect. (italics supplied)
La Vista categorically pronounced that the
issuance of a final injunction renders any question
on the preliminary injunctive order moot and
academic despite the fact that the decision
granting a final injunction is pending appeal.
Conversely, a decision denying the applicant-
plaintiff's right to a final injunction, although
appealed, renders moot and academic any
objection to the prior dissolution of a writ of
preliminary injunction.
The petitioner argues that the appellate court
erred in not dismissing the petition for certiorari
for non-compliance with the rule on forum
shopping. We disagree. First, the petitioner
improperly raised the technical objection of non-
compliance with Supreme Court Circular No. 28-
91 by filing a motion to dismiss the petition for
certiorari filed in the appellate court. This is
prohibited by Section 6, Rule 66 of the Revised
Rules of Civil Procedure which provides that "(I)n
petitions for certiorari before the Supreme Court
and the Court of Appeals, the provisions of Section
2, Rule 56, shall be observed. Before giving due Finally, we rule that the Court of Appeals correctly
course thereto, the court may require the denied the petitioner's several motions for
respondents to file their comment to, and not a contempt of court. There is nothing contemptuous
motion to dismiss, the petition xxx (italics about the advertisements complained of which, as
supplied)". Secondly, the issue was raised one regards the proceedings in CA-G.R. SP No. 27803
month after petitioner had filed her merely announced in plain and straightforward
answer/comment and after private respondent language the promulgation of the assailed
had replied thereto. Under Section 1, Rule 16 of Decision of the appellate court. Moreover,
the Revised Rules of Civil Procedure, a motion to pursuant to Section 4 of Rule 39 of the Revised
dismiss shall be filed within the time for but Rules of Civil Procedure, the said decision
before filing the answer to the complaint or nullifying the injunctive writ was immediately
pleading asserting a claim. She therefore could no executory.
longer submit a motion to dismiss nor raise
defenses and objections not included in the WHEREFORE, the petition is DENIED. The
answer/comment she had earlier tendered. Decision and Resolution of the Court of Appeals
Thirdly, substantial justice and equity require this dated May 24, 1993 and June 3, 1994,
Court not to revive a dissolved writ of injunction respectively, are hereby AFFIRMED. With costs
in favor of a party without any legal right thereto against the petitioner.
merely on a technical infirmity. The granting of an
injunctive writ based on a technical ground rather SO ORDERED.
than compliance with the requisites for the
issuance of the same is contrary to the primary
Bellosillo, Mendoza, Quisumbing, and Buena,
objective of legal procedure which is to serve as a
JJ., concur.
means to dispense justice to the deserving party.
The petitioner likewise contends that the
appellate court unduly delayed the resolution of
her motion for reconsideration. But we find that
petitioner contributed to this delay when she filed
successive contentious motions in the same
proceeding, the last of which was on October 27,
1993, necessitating counter-manifestations from
private respondents with the last one being filed
on November 9, 1993. Nonetheless, it is well-
settled that non-observance of the period for
deciding cases or their incidents does not render
such judgments ineffective or void.17 With respect
to the purported damages she suffered due to the
alleged delay in resolving her motion for
reconsideration, we find that the said issue has
likewise been rendered moot and academic by our
ruling that she has no right over the trademark
and, consequently, to the issuance of a writ of
preliminary injunction.1âwphi1.nêt
5|IPL Part I
THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Definition)
the Director of Trademarks and approved by the
Republic Act No. 8293             June 6, 1997 Director General; and

AN ACT PRESCRIBING THE INTELLECTUAL 121.7. "Examiner" means the trademark examiner.
PROPERTY CODE AND ESTABLISHING THE (Sec. 38, R.A. No. 166a)
INTELLECTUAL PROPERTY OFFICE,
PROVIDING FOR ITS POWERS AND FUNCTIONS,
AND FOR OTHER PURPOSES

PART III
THE LAW ON TRADEMARKS, SERVICE MARKS
AND TRADE NAMES

Section 121. Definitions. - As used in Part III, the

following terms have the following meanings:

121.1. "Mark" means any visible sign capable of

distinguishing the goods (trademark) or services
(service mark) of an enterprise and shall include a
stamped or marked container of goods; (Sec. 38,
R.A. No. 166a)

121.2. "Collective mark" means any visible sign

designated as such in the application for
registration and capable of distinguishing the
origin or any other common characteristic,
including the quality of goods or services of
different enterprises which use the sign under the
control of the registered owner of the collective
mark; (Sec. 40, R.A. No. 166a)

121.3. "Trade name" means the name or

designation identifying or distinguishing an
enterprise; (Sec. 38, R.A. No. 166a)

121.4. "Bureau" means the Bureau of Trademarks;

121.5. "Director" means the Director of

Trademarks;

121.6. "Regulations" means the Rules of Practice

in Trademarks and Service Marks formulated by

6|IPL Part I
THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Definition)
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 120961 October 17, 1996
DISTILLERIA WASHINGTON, INC. or
WASHINGTON DISTILLERY, INC., petitioner,
vs.
THE HONORABLE COURT OF APPEALS and LA
TONDEÑA DISTILLERS, INC., respondents.
VITUG, J.:p
The initiatory suit was instituted on 02 November
1987 with the trial court (docketed Civil Case No.
87-42639) for manual delivery with damages
instituted by La Tondeñ a Distillers, Inc. ("LTDI"),
against Distilleria Washington ("Washington").
LTDI, under a claim of ownership, sought to seize
from Distilleria Washington 18,157 empty "350
c.c. white flint bottles" bearing the blown-in marks
of "La Tondeñ a Inc." and "Ginebra San Miguel."
The court, on application of LTDI, issued an order
of replevin on 05 November 1987 for the seizure
of the empty gin bottles from Washington. These
bottles, it was averred, were being used by
Washington for its own "Gin Seven" products
without the consent of LTDI.
LTDI asserted that, being the owner and registrant
of the bottles, it was entitled to the protection so
extended by Republic Act ("R.A.") No. 623, as
amended, notwithstanding its sale of the Ginebra
San Miguel gin product contained in said bottles.
Washington countered that R.A. No. 623, invoked
by LTDI, should not apply to gin, an alcoholic
beverage which is unlike that of "soda water,
mineral or aerated water, ciders, milks, cream, or
other lawful beverages" mentioned in the law, and
that, in any case, ownership of the bottles should,
considering the attendant facts and circumstances,
be held lawfully transferred to the buyers upon
the sale of the gin and containers at a single price.
After hearing the parties, the trial court rendered
its decision, dated 03 December 1991, holding
against LTDI; viz:
WHEREFORE, premises
considered, the complaint is
hereby DISMISSED and plaintiff
is ordered:
1. To return to defendant the
18,157 empty bottles seized by
virtue of the writ for the Seizure
of Personal Property issued by
this Court on November 6, 1987;
2. In the event of failure to return
said empty bottles, plaintiff is
ordered to indemnify defendant
in the amount of P18,157.00
representing the value of the
bottles.
3. Costs against plaintiff. 1
LTDI appealed the decision to the Court of Appeals
(CA-G.R. CV No. 36971). The appellate court
reversed the court a quo and ruled against
Washington; thus:
WHEREFORE, the appealed
decision is hereby REVERSED
and SET ASIDE. The appellant,
being the owner, is authorized to
retain in its possession the
18,157 bottles registered in its
name delivered to it by the
sheriff following their seizure
from the appellee pursuant to the
writ of replevin issued by the
trial court on November 6, 1987.
Costs against the appellee. 2
Washington is now before this Court assailing the
reversal of the trial court's decision. In its petition,
Washington points out that —
4.00.a. Under the undisputed
facts, petitioner is the lawful
owner of the personal properties
(18,157 empty bottles) involved
in the petition. Respondent LTDI
is precluded by law from
claiming the same;
4.00.b. The decision and
resolution appealed from violate
equity and applicable canons in
the interpretation and
construction of statutes; and
4.00.c. Liquor products are not
covered by Republic Act. No. 623.
The holding of the Court in
Cagayan Valley Enterprises, Inc.
vs. Honorable Court of Appeals,
179 SCRA 218 [1989] should be
reviewed and reconsidered in
light of the Constitution and
House Bill No. 20585. 3
It is a fact that R.A. No. 623 extends trademark
protection in the use of containers duly registered
with the Philippine Patent Office. The pertinent
provisions of R.A. 623, as amended, so reads:
7|IPL Part I
THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Definition)
Sec. 1. Persons engaged or
licensed to engage in the
manufacture, bottling, or selling
of soda water, mineral or aerated
waters, cider, milk, cream or
other lawful beverages in bottles,
boxes, casks, kegs, or barrels, and
other similar containers, or in the
manufacture, compressing or
selling of gases such as oxygen,
acetylene, nitrogen, carbon
dioxide, ammonia, hydrogen,
chloride, helium, sulphur dioxide,
butane, propane, freon, methyl
chloride or similar gases
contained in steel cylinders,
tanks, flasks, accumulators or
similar containers, with their
names or the names of their
principals or products, or other
marks of ownership stamped or
marked thereon, may register
with the Philippine Patent Office
a description of the names or
marks, and the purpose for which
the containers so marked are
used by them, under the same
conditions, rules, and regulations,
made applicable by law or
regulation to the issuance of
trademarks.
Sec. 2. It shall be unlawful for any
person, without the written
consent of the manufacturer,
bottler, or seller, who has
successfully registered the marks
of ownership in accordance with
the provisions of the next
preceding section, to fill such
bottles, boxes, kegs, barrels, steel
cylinders, tanks, flasks,
accumulators, or other similar
containers so marked or
stamped, for the purpose of sale,
or to sell, dispose of, buy or
traffic in, or wantonly destroy the
same, whether filled or not to use
the same for drinking vessels or
glasses or drain pipes, foundation
pipes, for any other purpose than
that registered by the
manufacturer, bottler or seller.
Any violation of this section shall
be punished by a fine of not more
than one thousand pesos or
imprisonment of not more than
one year or both.
Sec. 3. The use by any person
other than the registered
manufacturer, bottler or seller,
without written permission of
the latter of any such bottle, cask,
barrel, keg, box, steel cylinders,
tanks, flask, accumulators, or
other similar containers, or the
possession thereof without
written permission of the
manufacturer, by any junk dealer
or dealer in casks, barrels, kegs,
boxes, steel cylinders, tanks,
flasks, accumulators or other
similar containers, the same
being duly marked or stamped
and registered as herein
provided, shall give rise to
a prima facie presumption that
such use or possession is
unlawful. 4
As the outset, the Court must state that is sees no
cogent reason for either departing from or
changing the basic rule it laid down in Cagayan
Valley Enterprises, Inc., vs. Court of Appeals. 5 The
Court has there held:
The above-quoted provisions
grant protection to a qualified
manufacturer who successfully
registered with the Philippine
Patent Office its duly stamped or
marked bottles, boxes, casks and
other similar containers. The
mere use of registered bottles or
containers without the written
consent of the manufacturer is
prohibited, the only exceptions
being when they are used as
containers for "sisi," "bagoong,"
"patis" and similar native
products.
It is an admitted fact that herein
petitioner Cagayan buys form
junk dealers and retailers bottles
which bear the marks or names
"La Tondeñ a, Inc." and "Ginebra
San Miguel" and uses them as
containers for its own liquor
products. The contention of
Cagayan that the aforementioned
bottles without the words
"properly of" indicated thereon
are not the registered bottles of
LTI, since they do not conform
with the statement or description
in the supporting affidavits
attached to the original
registration certificate and
renewal, is untenable.
Republic Act No. 623 which
governs the registration of
marked bottles and containers
merely requires that the bottles,
in order to be eligible for
registration, must be stamped or
marked with the names of the
manufacturers or the names of
their principals or products, or
8|IPL Part I
THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Definition)
other marks of ownership. No
drawings or labels are required
but, instead, two photographs of
the container, duly signed by the
applicant, showing clearly and
legibly the names and other
marks of ownership sought to be
registered and a bottle showing
the name or other mark or
ownership, irremovably stamped
or marked, shall be submitted.
xxx xxx xxx
The claim of petitioner that hard
liquor is not included under the
term "other lawful beverages" as
provided in Section 1 of Republic
Act No. 623, as amended by
Republic Act No. 5700, is without
merit. The title of the law itself,
which reads "An Act to Regulate
the Use of Duly Stamped or
Marked Bottles, Boxes, Casks,
Kegs, Barrels and Other Similar
Containers" clearly shows the
legislative intent to give
protection to all marked bottles
and containers of all lawful
beverages regardless of the
nature of their contents. The
words "other lawful beverages" is
used in its general sense,
referring to all beverages not
prohibited by law. Beverage is
defined as a liquor or liquid for
drinking. Hard liquor, although
regulated, is not prohibited by
law, hence it is within the
purview and coverage of
Republic Act No. 623, as
amended. 6
Given the nature of the action in Cagayan, as well
as its factual milieu, the Court indeed hardly has
had a choice but to sustain the registrant's right to
the injunctive writ against the unauthorized use of
its containers. The case before us, however, goes
beyond just seeking to have such use stopped but
it so takes on even the ownership issue as well.
Parenthetically, petitioner is not here being
charged with a violation of Section 2 of R.A. No.
623 or of the Trademark Law. The instant suit is
one for replevin (manual delivery) where the
claimant must be able to show convincingly that
he is either the owner or clearly entitled to the
possession of the object sought to be recovered.
Replevin is a possessory action the gist of which
focuses on the right of possession that, in turn, is
dependent on a legal basis that, not infrequently,
looks to the ownership of the object sought to be
replevied.
It is to be pointed out that a trademark refers to a
word, name, symbol, emblem, sign or device or
any combination thereof adopted and used by a
merchant to identify, and distinguish from others,
his goods of commerce. It is basically an
intellectual creation that is susceptible to
ownership 7 and, consistently therewith, gives rise
to its own elements of jus posidendi,  jus utendi, jus
fruendi, jus disponendi, and jus abutendi, along
with the applicable jus lex, comprising that
ownership. The incorporeal right, however, is
distinct from the property in the material object
subject to it. Ownership in one does not
necessarily vest ownership in the other. Thus, the
transfer or assignment of the intellectual property
will not necessarily constitute a conveyance of the
thing it covers, nor would a conveyance of the
latter imply the transfer or assignment of the
intellectual right. 8
R.A. No. 623 evidently does not disallow the sale
or transfer of ownership of the marked bottles or
containers. In fact, the contrary is implicit in the
law; thus —
Sec. 5. No action shall be brought
under this Act against any person
to whom the registered
manufacturer, bottler or seller,
has transferred by way of sale,
any of the containers herein
referred to, but the sale of the
beverage contained in the said
containers shall not include the
sale of the containers unless
specifically so provided.
Sec. 6. The provisions of this Act
shall not be interpreted as
prohibiting the use of bottles as
containers for "sisi," "bagoong,"
"patis," and similar native
products.
Scarcely disputed are certain and specific industry
practices in the sale of gin: The manufacturer sells
the product in marked containers, through
dealers, to the public in supermarkets, grocery
shops, retail stores and other sales outlets. The
buyer takes the item; he is neither required to
return the bottle nor required to make a deposit
to assure its return to the seller. He could return
the bottle and get a refund. A number of bottles at
times find their way to commercial users. It
cannot be gainsaid that ownership of the
containers does pass on to the
consumer albeit subject to the statutory limitation
on the use of the registered containers and to the
trademark right of the registrant. The statement in
Section 5 of R.A. 623 to the effect that the "sale of
beverage contained in the said containers shall
not include the sale of the containers unless
specifically so provided" is not a rule of
proscription. It is a rule of construction that, in
keeping with the spirit and intent of the law,
establishes at best a presumption (of non-
conveyance of the container) and which by no
means can be taken to be either interdictive or
conclusive in character. Upon the other hand,
9|IPL Part I
THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Definition)
LTDI's sales invoice, stipulating that the "sale does
not include the bottles with the blown-in marks of
ownership of La Tondeñ a Distillers," cannot affect
those who are not privies thereto.

While it may be unwarranted then for LTDI to

simply seize the empty containers, this Court finds
it to be legally absurd, however, to still allow
petitioner to recover the possession thereof. The
fact of the matter is that R.A. 623, as amended, in
affording trademark protection to the registrant,
has additionally expressed a prima
facie presumption of illegal use by a possessor
whenever such use or possession is without the
written permission of the registered
manufacturer, a provision that is neither arbitrary
nor without appropriate rationale. Indeed, the
appellate court itself has made a finding of such
unauthorized use by petitioner. The Court sees no
other logical purpose for petitioner's insistence to
keep the bottles, except for such continued use.
The practical and feasible alternative is to merely
require the payment of just compensation to
petitioner for the bottles seized from it by LTDI.
Conventional wisdom, along with equity and
justice to both parties, dictates it.

WHEREFORE, the decision of the appellate court is

MODIFIED by ordering LTDI to pay petitioner just
compensation for the seized bottles. Instead,
however, of remanding the case to the Court of
Appeals to receive evidence on, and thereafter
resolve, the assessment thereof, this Court accepts
and accordingly adopts the quantification of
P18,157.00 made by the trial court. No costs.

SO ORDERED.

Padilla, Bellosillo, Kapunan and Hermosisima, Jr.,

JJ., concur.

10 | I P L P a r t I
THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Right ogf Priority)
been withdrawn, abandoned, or otherwise
Republic Act No. 8293             June 6, 1997 disposed of, without having been laid open to
public inspection and without leaving any rights
AN ACT PRESCRIBING THE INTELLECTUAL outstanding, and has not served, nor thereafter
PROPERTY CODE AND ESTABLISHING THE shall serve, as a basis for claiming a right of
INTELLECTUAL PROPERTY OFFICE, priority. (Sec. 37, R.A. No. 166a)
PROVIDING FOR ITS POWERS AND FUNCTIONS,
AND FOR OTHER PURPOSES

Section 131. Priority Right. - 131.1. An application

for registration of a mark filed in the Philippines
by a person referred to in Section 3, and who
previously duly filed an application for
registration of the same mark in one of those
countries, shall be considered as filed as of the day
the application was first filed in the foreign
country.

131.2. No registration of a mark in the Philippines

by a person described in this section shall be
granted until such mark has been registered in the
country of origin of the applicant.

131.3. Nothing in this section shall entitle the

owner of a registration granted under this section
to sue for acts committed prior to the date on
which his mark was registered in this country:
Provided, That, notwithstanding the foregoing, the
owner of a well-known mark as defined in Section
123.1(e) of this Act, that is not registered in the
Philippines, may, against an identical or
confusingly similar mark, oppose its registration,
or petition the cancellation of its registration or
sue for unfair competition, without prejudice to
availing himself of other remedies provided for
under the law.

131.4. In like manner and subject to the same

conditions and requirements, the right provided
in this section may be based upon a subsequent
regularly filed application in the same foreign
country: Provided, That any foreign application
filed prior to such subsequent application has

11 | I P L P a r t I
THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Functions of Trademarks)
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-48226         December 14, 1942
ANA L. ANG, petitioner,
vs.
TORIBIO TEODORO, respondent.
Cirilo Lim for petitioner.
Marcial P. Lichauco and Manuel M. Mejia for
respondent.
OZAETA, J.:
Petitioner has appealed to this Court by certiorari
to reverse the judgment of the Court of Appeals
reversing that of the Court of First Instance of
Manila and directing the Director of Commerce to
cancel the registration of the trade-mark "Ang
Tibay" in favor of said petitioner, and perpetually
enjoining the latter from using said trade-mark on
goods manufactured and sold by her.
Respondent Toribio Teodoro, at first in
partnership with Juan Katindig and later as sole
proprietor, has continuously used "Ang Tibay,"
both as a trade-mark and as a trade-name, in the
manufacture and sale of slippers, shoes, and
indoor baseballs since 1910. He formally
registered it as trade-mark on September 29,
1915, and as trade-name on January 3, 1933. The
growth of his business is a thrilling epic of Filipino
industry and business capacity. Starting in an
obscure shop in 1910 with a modest capital of
P210 but with tireless industry and unlimited
perseverance, Toribio Teodoro, then an unknown
young man making slippers with his own hands
but now a prominent business magnate and
manufacturer with a large factory operated with
modern machinery by a great number of
employees, has steadily grown with his business
to which he has dedicated the best years of his life
and which he has expanded to such proportions
that his gross sales from 1918 to 1938 aggregated
P8,787,025.65. His sales in 1937 amounted to
P1,299,343.10 and in 1938, P1,133,165.77. His
expenses for advertisement from 1919 to 1938
aggregated P210,641.56.
Petitioner (defendant below) registered the same
trade-mark "Ang Tibay" for pants and shirts on
April 11, 1932, and established a factory for the
manufacture of said articles in the year 1937. In
the following year (1938) her gross sales
amounted to P422,682.09. Neither the decision of
the trial court nor that of the Court of Appeals
shows how much petitioner has spent or
advertisement. But respondent in his brief says
that petitioner "was unable to prove that she had
spent a single centavo advertising "Ang Tibay"
shirts and pants prior to 1938. In that year she
advertised the factory which she had just built and
it was when this was brought to the attention of
the appellee that he consulted his attorneys and
eventually brought the present suit."
The trial court (Judge Quirico Abeto) presiding
absolved the defendant from the complaint, with
costs against the plaintiff, on the grounds that the
two trademarks are dissimilar and are used on
different and non-competing goods; that there had
been no exclusive use of the trade-mark by the
plaintiff; and that there had been no fraud in the
use of the said trade-mark by the defendant
because the goods on which it is used are
essentially different from those of the plaintiff.
The second division of the Court of Appeals,
composed of Justices Bengson, Padilla, Lopez Vito,
Tuason, and Alex Reyes, with Justice Padilla
as ponente, reversed that judgment, holding that
by uninterrupted an exclusive use since 191 in the
manufacture of slippers and shoes, respondent's
trade-mark has acquired a secondary meaning;
that the goods or articles on which the two trade-
marks are used are similar or belong to the same
class; and that the use by petitioner of said trade-
mark constitutes a violation of sections 3 and 7 of
Act No. 666. The defendant Director of Commerce
did not appeal from the decision of the Court of
Appeals.
First. Counsel for the petitioner, in a well-written
brief, makes a frontal sledge-hammer attack on
the validity of respondent's trade-mark "Ang
Tibay." He contends that the phrase "Ang Tibay"
as employed by the respondent on the articles
manufactured by him is a descriptive term
because, "freely translate in English," it means
"strong, durable, lasting." He invokes section 2 of
Act No. 666, which provides that words or devices
which related only to the name, quality, or
description of the merchandise cannot be the
subject of a trade-mark. He cites among others the
case of Baxter vs. Zuazua (5 Phil., 16), which
involved the trade-mark "Agua de Kananga" used
on toilet water, and in which this Court held that
the word "Kananga," which is the name of a well-
known Philippine tree or its flower, could not be
appropriated as a trade-mark any more than could
the words "sugar," "tobacco," or "coffee." On the
other hand, counsel for the respondent, in an
equally well-prepared and exhaustive brief,
contend that the words "Ang Tibay" are not
descriptive but merely suggestive and may
properly be regarded as fanciful or arbitrary in the
legal sense. The cite several cases in which similar
words have been sustained as valid trade-marks,
such as "Holeproof" for hosiery, 1 "ideal for tooth
brushes, 2 and "Fashionknit" for neckties and
sweaters. 3
12 | I P L P a r t I
THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Functions of Trademarks)
We find it necessary to go into the etymology and
meaning of the Tagalog words "Ang Tibay" to
determine whether they are a descriptive term,
i.e., whether they relate to the quality or
description of the merchandise to which
respondent has applied them as a trade-mark. The
word "ang" is a definite article meaning "the" in
English. It is also used as an adverb, a contraction
of the word "anong" (what or how). For instance,
instead of saying, "Anong ganda!" ("How
beautiful!"), we ordinarily say, "Ang
ganda!" Tibay is a root word from which are
derived the verb magpatibay (to strenghten; the
nouns pagkamatibay (strength,
durability), katibayan (proof, support,
strength), katibay-tibayan (superior strength);
and the adjectives matibay (strong, durable,
lasting), napakatibay (very strong), kasintibay or
magkasintibay (as strong as, or of equal strength).
The phrase "Ang Tibay" is an exclamation
denoting administration of strength or durability.
For instance, one who tries hard but fails to break
an object exclaims, "Ang tibay!" (How strong!") It
may also be used in a sentence thus, "Ang tibay ng
sapatos mo!" (How durable your shoes are!") The
phrase "ang tibay" is never used adjectively to
define or describe an object. One does not say,
"ang tibay sapatos" or "sapatos ang tibay" is never
used adjectively to define or describe an object.
One does not say, "ang tibay sapatos" or "sapatos
ang tibay" to mean "durable shoes," but "matibay
na sapatos" or "sapatos na matibay."
From all of this we deduce that "Ang Tibay" is not
a descriptive term within the meaning of the
Trade-Mark Law but rather a fanciful or coined
phrase which may properly and legally be
appropriated as a trade-mark or trade-name. In
this connection we do not fail to note that when
the petitioner herself took the trouble and
expense of securing the registration of these same
words as a trademark of her products she or her
attorney as well as the Director of Commerce was
undoubtedly convinced that said words (Ang
Tibay) were not a descriptive term and hence
could be legally used and validly registered as a
trade-mark. It seems stultifying and puerile for
her now to contend otherwise, suggestive of the
story of sour grapes. Counsel for the petitioner
says that the function of a trade-mark is to point
distinctively, either by its own meaning or by
association, to the origin or ownership of the
wares to which it is applied. That is correct, and
we find that "Ang Tibay," as used by the
respondent to designate his wares, had exactly
performed that function for twenty-two years
before the petitioner adopted it as a trade-mark in
her own business. Ang Tibay shoes and slippers
are, by association, known throughout the
Philippines as products of the Ang Tibay factory
owned and operated by the respondent Toribio
Teodoro.
Second. In her second assignment of error
petitioner contends that the Court of Appeals
erred in holding that the words "Ang Tibay" had
acquired a secondary meaning. In view of the
conclusion we have reached upon the first
assignment of error, it is unnecessary to apply
here the doctrine of "secondary meaning" in
trade-mark parlance. This doctrine is to the effect
that a word or phrase originally incapable of
exclusive appropriation with reference to an
article of the market, because geographically or
otherwise descriptive, might nevertheless have
been used so long and so exclusively by one
producer with reference to his article that, in that
trade and to that branch of the purchasing public,
the word or phrase has come to mean that the
article was his product. (G. & C. Merriam Co. vs.
Salfield, 198 F., 369, 373.) We have said that the
phrase "Ang Tibay," being neither geographic nor
descriptive, was originally capable of exclusive
appropriation as a trade-mark. But were it not so,
the application of the doctrine of secondary
meaning made by the Court of Appeals could
nevertheless be fully sustained because, in any
event, by respondent's long and exclusive use of
said phrase with reference to his products and his
business, it has acquired a proprietary
connotation. (Landers, Frary, and Clark vs.
Universal Cooler Corporation, 85 F. [2d], 46.)
Third. Petitioner's third assignment of error is,
that the Court of Appeals erred in holding that
pants and shirts are goods similar to shoes and
slippers within the meaning of sections 3 and 7 of
Act No. 666. She also contends under her fourth
assignment of error (which we deem convenient
to pass upon together with the third) that there
can neither be infringement of trade-mark under
section 3 nor unfair competition under section 7
through her use of the words "Ang Tibay" in
connection with pants and shirts, because those
articles do not belong to the same class of
merchandise as shoes and slippers.
The question raised by petitioner involve the
scope and application of sections 3,7, 11, 13, and
20 of the Trade-Mark Law (Act No. 666.) Section 3
provides that "any person entitled to the exclusive
use of a trade-mark to designate the origin or
ownership of goods he has made or deals in, may
recover damages in a civil actions from any person
who has sold goods of a similar kind, bearing such
trade-mark . . . The complaining party . . . may have
a preliminary injunction, . . . and such injunction
upon final hearing, if the complainant's property
in the trade-mark and the defendant's violation
thereof shall be fully established, shall be made
perpetual, and this injunction shall be part of the
judgment for damages to be rendered in the same
cause." Section 7 provides that any person who, in
selling his goods, shall give them the general
appearance of the goods of another either in the
wrapping of the packages, or in 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 the complainant, shall be guilty of unfair
competition, and shall be liable to an action for
damages and to an injunction, as in the cases of
13 | I P L P a r t I
THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Functions of Trademarks)
trade-mark infringement under section 3. Section
11 requires the applicant for registration of a
trade-mark to state, among others, "the general
class of merchandise to which the trade-mark
claimed has been appropriated." Section 13
provides that no alleged trade-mark or trade
name shall be registered which is identical with a
registered or known trade-mark owned by
another and appropriate to the same class of
merchandise, or which to nearly resembles
another person's lawful trade-mark or trade-name
as to be likely to cause confusion or mistake in the
mind of the public, or to deceive purchasers. And
section 2 authorizes the Director of Commerce to
establish classes of merchandise for the purpose of
the registration of trade-marks and to determine
the particular description of articles included in
each class; it also provides that "an application for
registration of a trade-mark shall be registered
only for one class of articles and only for the
particular description of articles mentioned in
said application."
We have underlined the key words used in the
statute: "goods of a similar kin," "general class of
merchandise," "same class of merchandise,"
"classes of merchandise," and "class of articles,"
because it is upon their implications that the
result of the case hinges. These phrases, which
refer to the same thing, have the same meaning as
the phrase "merchandise of the same descriptive
properties" used in the statutes and jurisprudence
of other jurisdictions.
The burden of petitioner's argument is that under
sections 11 and 20 the registration by respondent
of the trade-mark "Ang Tibay" for shoes and
slippers is no safe-guard against its being used by
petitioner for pants and shirts because the latter
do not belong to the same class of merchandise or
articles as the former; that she cannot be held
guilty of infringement of trade-mark under section
3 because respondent's mark is not a valid trade-
mark, nor has it acquired a secondary meaning;
that pants and shirts do not possess the same
descriptive properties as shoes and slippers; that
neither can she be held guilty of unfair
competition under section 7 because the use by
her of the trade-mark "Ang Tibay" upon pants and
shirts is not likely to mislead the general public as
to their origin or ownership; and that there is now
showing that she in unfairly or fraudulently using
that mark "Ang Tibay" against the respondent. If
we were interpreting the statute for the first time
and in the first decade of the twentieth century,
when it was enacted, and were to construe it
strictly and literally, we might uphold petitioner's
contentions. But law and jurisprudence must keep
abreast with the progress of mankind, and the
courts must breathe life into the statutes if they
are to serve their purpose. Our Trade-mark Law,
enacted nearly forty years ago, has grown in its
implications and practical application, like a
constitution, in virtue of the life continually
breathed into it. It is not of merely local
application; it has its counterpart in other
jurisdictions of the civilized world from whose
jurisprudence it has also received vitalizing
nourishment. We have to apply this law as it has
grown and not as it was born. Its growth or
development abreast with that of sister statutes
and jurisprudence in other jurisdictions is
reflected in the following observation of a well-
known author:
This fundamental change in attitude first
manifested itself in the year 1915-1917.
Until about then, the courts had
proceeded on the theory that the same
trade-mark, used on un-like goods, could
not cause confusion in trade and that,
therefore, there could be no objection to
the use and registration of a well-known
mark by a third party for a different class
of goods. Since 1916 however, a growing
sentiment began to arise that in the
selection of a famous mark by a third
party, there was generally the hidden
intention to "have a free ride" on the
trade-mark owner's reputation and good
will. (Derenberg, Trade-Mark Protection
& Unfair Trading, 1936 edition, p. 409.)
In the present state of development of the law on
Trade-Marks, Unfair Competition, and Unfair
Trading, the test employed by the courts to
determine whether noncompeting goods are or
are not of the same class is confusion as to the
origin of the goods of the second user. Although
two noncompeting articles may be classified
under two different classes by the Patent Office
because they are deemed not to possess the same
descriptive properties, they would, nevertheless,
be held by the courts to belong to the same class if
the simultaneous use on them of identical or
closely similar trade-marks would be likely to
cause confusion as to the origin, or personal
source, of the second user's goods. They would be
considered as not falling under the same class
only if they are so dissimilar or so foreign to each
other as to make it unlikely that the purchaser
would think the first user made the second user's
goods.
Such construction of the law is induced by cogent
reasons of equity and fair dealing. The courts have
come to realize that there can be unfair
competition or unfair trading even if the goods are
non-competing, and that such unfair trading can
cause injury or damage to the first user of a given
trade-mark, first, by prevention of the natural
expansion of his business and, second, by having
his business reputation confused with and put at
the mercy of the second user. Then
noncompetitive products are sold under the same
mark, the gradual whittling away or dispersion of
the identity and hold upon the public mind of the
mark created by its first user, inevitably results.
The original owner is entitled to the preservation
of the valuable link between him and the public
that has been created by his ingenuity and the
merit of his wares or services. Experience has
14 | I P L P a r t I
THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Functions of Trademarks)
demonstrated that when a well-known trade-
mark is adopted by another even for a totally
different class of goods, it is done to get the benefit
of the reputation and advertisements of the
originator of said mark, to convey to the public a
false impression of some supposed connection
between the manufacturer of the article sold
under the original mark and the new articles being
tendered to the public under the same or similar
mark. As trade has developed and commercial
changes have come about, the law of unfair
competition has expanded to keep pace with the
times and the element of strict competition in
itself has ceased to be the determining factor. The
owner of a trade-mark or trade-name has a
property right in which he is entitled to
protection, since there is damage to him from
confusion of reputation or goodwill in the mind of
the public as well as from confusion of goods. The
modern trend is to give emphasis to the
unfairness of the acts and to classify and treat the
issue as a fraud.
A few of the numerous cases in which the
foregoing doctrines have been laid down in one
form or another will now be cited: (1) In Teodoro
Kalaw Ng Khe vs. Level Brothers Company (G.R. No.
46817), decided by this Court on April 18, 1941,
the respondent company (plaintiff below) was
granted injunctive relief against the use by the
petitioner of the trade-mark "Lux" and "Lifebuoy"
for hair pomade, they having been originally used
by the respondent for soap; The Court held in
effect that although said articles are
noncompetitive, they are similar or belong to the
same class. (2) In Lincoln Motor Co. vs. Lincoln
Automobile Co. (44 F. [2d], 812), the manufacturer
of the well-known Lincoln automobile was
granted injunctive relief against the use of the
word "Lincoln" by another company as part of its
firm name. (3) The case of Aunt Jemima Mills Co.
vs. Rigney & Co. (247 F., 407), involved the trade-
mark "Aunt Jemima," originally used on flour,
which the defendant attempted to use on syrup,
and there the court held that the goods, though
different, are so related as to fall within the
mischief which equity should prevent. (4)
In Tiffany & Co., vs. Tiffany Productions, Inc. (264
N.Y.S., 459; 23 Trade-mark Reporter, 183), the
plaintiff, a jewelry concern, was granted injunctive
relief against the defendant, a manufacturer of
motion pictures, from using the name "Tiffany."
Other famous cases cited on the margin, wherein
the courts granted injunctive relief, involved the
following trade-marks or trade-names: "Kodak,"
for cameras and photographic supplies, against its
use for bicycles. 4 "Penslar," for medicines and
toilet articles, against its use for cigars; 5 "Rolls-
Royce," for automobiles. against its use for radio
tubes; 6 "Vogue," as the name of a magazine,
against its use for hats; 7 "Kotex," for sanitary
napkins, against the use of "Rotex" for vaginal
syringes; 8 "Sun-Maid," for raisins, against its use
for flour; 9 "Yale," for locks and keys, against its use
for electric flashlights; 10 and "Waterman," for
fountain pens, against its use for razor
blades. 11lawphil.net
Against this array of famous cases, the industry of
counsel for the petitioner has enabled him to cite
on this point only the following cases: (1) Mohawk
Milk Products vs. General Distilleries
Corporation  (95 F. [2d], 334), wherein the court
held that gin and canned milk and cream do not
belong to the same class; (2) Fawcett Publications,
Inc. vs. Popular Mechanics Co. (80 F. [2d], 194),
wherein the court held that the words "Popular
Mechanics" used as the title of a magazine and
duly registered as a trade-mark were not infringed
by defendant's use of the words "Modern
Mechanics and Inventions" on a competitive
magazine, because the word "mechanics" is
merely a descriptive name; and (3) Oxford Book
Co. vs. College Entrance Book Co. (98 F. [2d], 688),
wherein the plaintiff unsuccessfully attempted to
enjoin the defendant from using the word
"Visualized" in connection with history books, the
court holding that said word is merely descriptive.
These cases cites and relied upon by petitioner are
obviously of no decisive application to the case at
bar.
We think reasonable men may not disagree that
shoes and shirts are not as unrelated as fountain
pens and razor blades, for instance. The mere
relation or association of the articles is not
controlling. As may readily be noted from what we
have heretofore said, the proprietary connotation
that a trade-mark or trade-name has acquired is of
more paramount consideration. The Court of
Appeals found in this case that by uninterrupted
and exclusive use since 1910 of respondent's
registered trade-mark on slippers and shoes
manufactured by him, it has come to indicate the
origin and ownership of said goods. It is certainly
not farfetched to surmise that the selection by
petitioner of the same trade-mark for pants and
shirts was motivated by a desire to get a free ride
on the reputation and selling power it has
acquired at the hands of the respondent. As
observed in another case, 12 the field from which a
person may select a trade-mark is practically
unlimited, and hence there is no excuse for
impinging upon or even closely approaching the
mark of a business rival. In the unlimited field of
choice, what could have been petitioner's purpose
in selecting "Ang Tibay" if not for its fame?
Lastly, in her fifth assignment of error petitioner
seems to make a frantic effort to retain the use of
the mark "Ang Tibay." Her counsel suggests that
instead of enjoining her from using it, she may be
required to state in her labels affixed to her
products the inscription: "Not manufactured by
Toribio Teodoro." We think such practice would
be unethical and unworthy of a reputable
businessman. To the suggestion of petitioner,
respondent may say, not without justice though
with a tinge of bitterness: "Why offer a perpetual
apology or explanation as to the origin of your
products in order to use my trade-mark instead of
creating one of your own?" On our part may we
15 | I P L P a r t I
THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Functions of Trademarks)
add, without meaning to be harsh, that a self-
respecting person does not remain in the shelter
of another but builds one of his own.

The judgment of the Court of Appeals is affirmed,

with costs against the petitioner in the three
instances. So ordered.

Yulo, C.J., Moran, Paras and Bocobo, JJ., concur.

16 | I P L P a r t I
THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Functions of Trademarks)
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-20635             March 31, 1966
ETEPHA, A.G., petitioner,
vs.
DIRECTOR OF PATENTS and WESTMONT
PHARMACEUTICALS, INC., respondents.
McClure, Salas and Gonzalez, for petitioner.
Sycip, Salazar, Manalo, Luna and Associates, for
respondent.
SANCHEZ, J.:
To the question: May trademark ATUSSIN be
registered, given the fact that PERTUSSIN, another
trademark, had been previously registered in the
Patent Office? — the Director of Patents answered
affirmatively. Hence this appeal.
On April 23, 1959, respondent Westmont
Pharmaceuticals, Inc., a New York corporation,
sought registration of trademark "Atussin" placed
on its "medicinal preparation of expectorant
antihistaminic, bronchodilator sedative, ascorbic
acid (Vitamin C) used in the treatment of cough".
The trademark is used exclusively in the
Philippines since January 21, 1959.1
Petitioner, Etepha, A. G., a Liechtenstin
(principality) corporation, objected. Petitioner
claims that it will be damaged because Atussin is
so confusedly similar to its Pertussin (Registration
No. 6089, issued on September 25, 1957) used on
a preparation for the treatment of coughs, that the
buying public will be misled into believing that
Westmont's product is that of petitioner's which
allegedly enjoys goodwill.
1. The objects of a trademark are "to point
out distinctly the origin or ownership of
the articles to which it is affixed, to secure
to him who has been instrumental in
bringing into market a superior article or
merchandise the fruit of his industry and
skill, and to prevent fraud and
imposition."2 Our over-all task then is to
ascertain whether or not Atussin so
resembles Pertussin "as to be likely, when
applied to or used in connection with the
goods ... of the applicant, to cause
confusion or mistake or to deceive
purchasers".3 And, we are to be guided by
the rule that the validity of a cause for
infringement is predicated upon colorable
imitation. The phrase "colorable
imitation" denotes such a "close or
ingenious imitation as to be calculated to
deceive ordinary persons, or such a
resemblance to the original as to deceive
an ordinary purchaser, giving such
attention as a purchaser usually gives,
and to cause him to purchase the one
supposing it to be the other."4
2. That the word "tussin" figures as a
component of both trademarks is nothing
to wonder at. The Director of Patents
aptly observes that it is "the common
practice in the drug and pharmaceutical
industries to 'fabricate' marks by using
syllables or words suggestive of the
ailments for which they are intended and
adding thereto distinctive prefixes or
suffixes".5 And appropriately to be
considered now is the fact that,
concededly, the "tussin" (in Pertussin and
Atussin) was derived from the Latin root-
word "tussis" meaning cough.6
"Tussin" is merely descriptive; it is
generic; it furnishes to the buyer no
indication of the origin of the goods; it is
open for appropriation by anyone. It is
accordingly barred from registration as
trademark. With jurisprudence holding
the line, we feel safe in making the
statement that any other conclusion
would result in "appellant having
practically a monopoly"7 of the word
"tussin" in a trademark.8
While "tussin" by itself cannot thus be
used exclusively to identify one's goods, it
may properly become the subject of a
trademark "by combination with another
word or phrase".9 And this union of words
is reflected in petitioner's Pertussin and
respondent's Atussin, the first with prefix
"Per" and the second with Prefix
"A".1äwphï1.ñët
3. A practical approach to the problem of
similarity or dissimilarity is to go into
the whole of the two trademarks pictured
in their manner of display. Inspection
should be undertaken from the viewpoint
of a prospective buyer. The trademark
complained of should be compared and
contrasted with the purchaser's memory
(not in juxtaposition) of the trademark
said to be infringed. 10 Some such factors
as "sound; appearance; form, style, shape,
size or format; color; ideas connoted by
marks; the meaning, spelling, and
pronunciation, of words used; and the
setting in which the words appear" may
be considered. 11 For, indeed, trademark
infringement is a form of unfair
competition. 12
We take a casual look at the two labels —
without spelling out the details — bearing
in mind the easy-to-remember earmarks
17 | I P L P a r t I
THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Functions of Trademarks)
thereof. Respondent's label underscores
the trademark Atussin in bold, block
letters horizontally written. In
petitioner's, on the other hand, Pertussin
is printed diagonally upwards and across
in semiscript style with flourishes and
with only the first letter "P" capitalized.
Each label plainly shows the source of the
medicine: petitioner's at the foot bears
"Etepha Ltd. Schaan Fl", and on top,
"Apothecary E. Taeschner's";
respondent's projects "Westmont
Pharmaceuticals, Inc. New York, USA" at
the bottoms, and on the lower left side the
word "Westmont" upon a white diamond
shaped enclosure and in red ink — a color
different from that of the words above
and below it. Printed prominently along
the left, bottom and right edges of
petitioner's label are indications of the
use: "for bronchial catarrh — whopping-
cough — coughs and asthma".
Respondent's for its part briefly
represents what its produce actually is - a
"cough syrup". The two labels are entirely
different in colors, contents, arrangement
of words thereon, sizes, shapes and
general appearance. The contrasts in
pictorial effects and appeals to the eye is
so pronounced that the label of one
cannot be mistaken for that of the other,
not even by persons unfamiliar with the
two trademarks. 13
On this point the following culled from a
recent decision of the United States Court
of Customs and Patent Appeals (June 15,
1956) is persuasive: 14
Confusion is likely between
trademarks, however, only if
their over-all presentations in
any of the particulars of
sound, appearance, or meaning
are such as would lead the
purchasing public into believing
that the products to which the
marks are applied emanated
from the same source. In testing
this issue, fixed legal rules exist
— if not in harmony, certainly in
abundance — but, in the final
analysis, the application of these
rules in any given situation
necessarily reflects a matter of
individual judgment largely
predicated on opinion. There is,
however, and can be no
disagreement with the rule that
the purchaser is confused, if at
all, by the marks as a whole.
4. We now consider exclusively the two
words — Pertussin and Atussin — as they
appear on the respective labels. As
previously adverted to, these words are
presented to the public in different styles
of writing and methods of design. The
horizontal plain, block letters of Atussin
and the diagonally and artistically upward
writing of Pertussin leave distinct visual
impressions. One look is enough to
denude the mind of that illuminating
similarity so essential for a trademark
infringement case to prosper.
5. As we take up Pertussin and Atussin
once again, we cannot escape notice of the
fact that the two words do not sound alike
— when pronounced. There is not much
phonetic similarity between the two. The
Solicitor General well-observed that in
Pertussin the pronunciation of the prefix
"Per", whether correct or incorrect,
includes a combination of three letters
P, e and r; whereas, in Atussin the whole
starts with the single letter A added to
suffix "tussin". Appeals to the ear are
disimilar. And this, because in a word
combination, the part that comes first is
the most pronounced. An expositor of the
applicable rule here is the decision in the
Syrocol-Cheracol controversy. 15 There,
the ruling is that trademark Syrocol (a
cough medicine preparation) is not
confusedly similar to
trademark Cheracol (also a cough
medicine preparation). Reason: the two
words "do not look or sound enough alike
to justify a holding of trademark
infringement", and the "only similarity is
in the last syllable, and that is not
uncommon in names given drug
compounds".
6. In the solution of a trademark
infringement problem, regard too should
be given to the class of persons who buy
the particular product and the
circumstances ordinarily attendant to its
acquisition. 16 The medicinal preparation
clothed with the trademarks in question,
are unlike articles of everyday use such as
candies, ice cream, milk, soft drinks and
the like which may be freely obtained by
anyone, anytime, anywhere. Petitioner's
and respondent's products are to be
dispensed upon medical prescription. The
respective labels say so. An intending
buyer must have to go first to a licensed
doctor of medicine; he receives
instructions as to what to purchase; he
reads the doctor's prescription; he knows
what he is to buy. He is not of the
incautious, unwary, unobservant or
unsuspecting type; he examines the
product sold to him; he checks to find out
whether it conforms to the medical
prescription. The common trade channel
is the pharmacy or the drugstore.
Similarly, the pharmacist or druggist
verifies the medicine sold. The margin of
18 | I P L P a r t I
THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Functions of Trademarks)
error in the acquisition of one for the
other is quite remote.

We concede the possibility that buyers might be

able to obtain Pertussin or Attusin without
prescription. When this happens, then the buyer
must be one throughly familiar with what he
intends to get, else he would not have the temerity
to ask for a medicine — specifically needed to cure
a given ailment. In which case, the more
improbable it will be to palm off one for the other.
For a person who purchases with open eyes is
hardly the man to be deceived.

For the reasons given, the appealed decision of the

respondent Director of Patents — giving due
course to the application for the registration of
trademark ATTUSIN is hereby affirmed. Costa
against petitioner. So ordered.

Bengzon, C.J., Bautista Angelo, Concepcion, Reyes,

J.B.L., Barrera, Regala, Makalintal, Bengzon, J. P.,
and Zaldivar, JJ., concur.
Dizon, J., took no part.

19 | I P L P a r t I
THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Functions of Trademarks)
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
 
G.R. No. 114508 November 19, 1999
PRIBHDAS J. MIRPURI, petitioner,
vs.
COURT OF APPEALS, DIRECTOR OF PATENTS
and the BARBIZON
CORPORATION, respondents.
 
PUNO, J.:
The Convention of Paris for the Protection of
Industrial Property is a multi-lateral treaty which
the Philippines bound itself to honor and enforce
in this country. As to whether or not the treaty
affords protection to a foreign corporation against
a Philippine applicant for the registration of a
similar trademark is the principal issue in this
case.
On June 15, 1970, one Lolita Escobar, the
predecessor-in-interest of petitioner Pribhdas J.
Mirpuri, filed an application with the Bureau of
Patents for the registration of the trademark
"Barbizon" for use in brassieres and ladies
undergarments. Escobar alleged that she had been
manufacturing and selling these products under
the firm name "L & BM Commercial" since March
3, 1970.
Private respondent Barbizon Corporation, a
corporation organized and doing business under
the laws of New York, U.S.A., opposed the
application. It claimed that:
The mark BARBIZON of
respondent-applicant is
confusingly similar to the
trademark BARBIZON which
opposer owns and has not
abandoned.
That opposer will be damaged by
the registration of the mark
BARBIZON and its business
reputation and goodwill will
suffer great and irreparable
injury.
That the respondent-applicant's
use of the said mark BARBIZON
which resembles the trademark
used and owned by opposer,
constitutes an unlawful
appropriation of a mark
previously used in the
Philippines and not abandoned
and therefore a statutory
violation of Section 4 (d) of
Republic Act No. 166, as
amended. 1
This was docketed as Inter Partes Case
No. 686 (IPC No. 686). After filing of the
pleadings, the parties submitted the case
for decision.
On June 18, 1974, the Director of Patents rendered
judgment dismissing the opposition and giving
due course to Escobar's application, thus:
WHEREFORE, the opposition
should be, as it is hereby,
DISMISSED. Accordingly,
Application Serial No. 19010 for
the registration of the trademark
BARBIZON, of respondent Lolita
R. Escobar, is given due course.
IT IS SO ORDERED. 2
This decision became final and on
September 11, 1974, Lolita Escobar was
issued a certificate of registration for the
trademark "Barbizon." The trademark
was "for use in "brassieres and lady's
underwear garments like panties." 3
Escobar later assigned all her rights and interest
over the trademark to petitioner Pribhdas J.
Mirpuri who, under his firm name then, the
"Bonito Enterprises," was the sole and exclusive
distributor of Escobar's "Barbizon" products.
In 1979, however, Escobar failed to file with the
Bureau of Patents the Affidavit of Use of the
trademark required under Section 12 of Republic
Act (R.A.) No. 166, the Philippine Trademark Law.
Due to this failure, the Bureau of Patents cancelled
Escobar's certificate of registration.
On May 27, 1981, Escobar reapplied for
registration of the cancelled trademark. Mirpuri
filed his own application for registration of
Escobar's trademark. Escobar later assigned her
application to herein petitioner and this
application was opposed by private respondent.
The case was docketed as Inter Partes Case No.
2049 (IPC No. 2049).
In its opposition, private respondent alleged that:
(a) The Opposer has adopted the
trademark BARBIZON (word),
sometime in June 1933 and has
then used it on various kinds of
wearing apparel. On August 14,
1934, Opposer obtained from the
20 | I P L P a r t I
THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Functions of Trademarks)
United States Patent Office a
more recent registration of the
said mark under Certificate of
Registration No. 316,161. On
March 1, 1949, Opposer obtained
from the United States Patent
Office a more recent registration
for the said trademark under
Certificate of Registration No.
507,214, a copy of which is
herewith attached as Annex "A."
Said Certificate of Registration
covers the following goods —
wearing apparel: robes, pajamas,
lingerie, nightgowns and slips;
(b) Sometime in March 1976,
Opposer further adopted the
trademark BARBIZON and Bee
design and used the said mark in
various kinds of wearing apparel.
On March 15, 1977, Opposer
secured from the United States
Patent Office a registration of the
said mark under Certificate of
Registration No. 1,061,277, a
copy of which is herein enclosed
as Annex "B." The said Certificate
of Registration covers the
following goods: robes, pajamas,
lingerie, nightgowns and slips;
(c) Still further, sometime in
1961, Opposer adopted the
trademark BARBIZON and a
Representation of a Woman and
thereafter used the said
trademark on various kinds of
wearing apparel. Opposer
obtained from the United States
Patent Office registration of the
said mark on April 5, 1983 under
Certificate of Registration No.
1,233,666 for the following
goods: wearing apparel: robes,
pajamas, nightgowns and
lingerie. A copy of the said
certificate of registration is
herewith enclosed as Annex "C."
(d) All the above registrations are
subsisting and in force and
Opposer has not abandoned the
use of the said trademarks. In
fact, Opposer, through a wholly-
owned Philippine subsidiary, the
Philippine Lingerie Corporation,
has been manufacturing the
goods covered by said
registrations and selling them to
various countries, thereby
earning valuable foreign
exchange for the country. As a
result of respondent-applicant's
misappropriation of Opposer's
BARBIZON trademark, Philippine
Lingerie Corporation is
prevented from selling its goods
in the local market, to the
damage and prejudice of Opposer
and its wholly-owned subsidiary.
(e) The Opposer's goods bearing
the trademark BARBIZON have
been used in many countries,
including the Philippines, for at
least 40 years and has enjoyed
international reputation and
good will for their quality. To
protect its registrations in
countries where the goods
covered by the registrations are
being sold, Opposer has procured
the registration of the trademark
BARBIZON in the following
countries: Australia, Austria, Abu
Dhabi, Argentina, Belgium,
Bolivia, Bahrain, Canada, Chile,
Colombia, Denmark, Ecuador,
France, West Germany, Greece,
Guatemala, Hongkong, Honduras,
Italy, Japan, Jordan, Lebanon,
Mexico, Morocco, Panama, New
Zealand, Norway, Sweden,
Switzerland, Syria, El Salvador,
South Africa, Zambia, Egypt, and
Iran, among others;
(f) To enhance its international
reputation for quality goods and
to further promote goodwill over
its name, marks and products,
Opposer has extensively
advertised its products,
trademarks and name in various
publications which are circulated
in the United States and many
countries around the world,
including the Philippines;
(g) The trademark BARBIZON
was fraudulently registered in
the Philippines by one Lolita R.
Escobar under Registration No.
21920, issued on September 11,
1974, in violation of Article 189
(3) of the Revised Penal Code and
Section 4 (d) of the Trademark
Law. Herein respondent
applicant acquired by assignment
the "rights" to the said mark
previously registered by Lolita
Escobar, hence respondent-
applicant's title is vitiated by the
same fraud and criminal act.
Besides, Certificate of
Registration No. 21920 has been
cancelled for failure of either
Lolita Escobar or herein
respondent-applicant, to
seasonably file the statutory
affidavit of use. By applying for a
21 | I P L P a r t I
THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Functions of Trademarks)
re-registration of the mark
BARBIZON subject of this
opposition, respondent-applicant
seeks to perpetuate the fraud and
criminal act committed by Lolita
Escobar.
(h) Opposer's BARBIZON as well
as its BARBIZON and Bee Design
and BARBIZON and
Representation of a Woman
trademarks qualify as well-
known trademarks entitled to
protection under Article 6bis of
the Convention of Paris for the
Protection of Industrial Property
and further amplified by the
Memorandum of the Minister of
Trade to the Honorable Director
of Patents dated October 25,
1983 [sic], 4 Executive Order No.
913 dated October 7, 1963 and
the Memorandum of the Minister
of Trade and Industry to the
Honorable Director of Patents
dated October 25, 1983.
(i) The trademark applied for by
respondent applicant is identical
to Opposer's BARBIZON
trademark and constitutes the
dominant part of Opposer's two
other marks namely, BARBIZON
and Bee design and BARBIZON
and a Representation of a
Woman. The continued use by
respondent-applicant of
Opposer's trademark BARBIZON
on goods belonging to Class 25
constitutes a clear case of
commercial and criminal piracy
and if allowed registration will
violate not only the Trademark
Law but also Article 189 of the
Revised Penal Code and the
commitment of the Philippines to
an international treaty. 5
Replying to private respondent's
opposition, petitioner raised the defense
of res judicata.
On March 2, 1982, Escobar assigned to petitioner
the use of the business name "Barbizon
International." Petitioner registered the name
with the Department of Trade and Industry (DTI)
for which a certificate of registration was issued in
1987.
Forthwith, private respondent filed before the
Office of Legal Affairs of the DTI a petition for
cancellation of petitioner's business name.
On November 26, 1991, the DTI, Office of Legal
Affairs, cancelled petitioner's certificate of
registration, and declared private respondent the
owner and prior user of the business name
"Barbizon International." Thus:
WHEREFORE, the petition is
hereby GRANTED and petitioner
is declared the owner and prior
user of the business name
"BARBIZON INTERNATIONAL"
under Certificate of Registration
No. 87-09000 dated March 10,
1987 and issued in the name of
respondent, is [sic] hereby
ordered revoked and cancelled. . .
. . 6
Meanwhile, in IPC No. 2049, the evidence of both
parties were received by the Director of Patents.
On June 18, 1992, the Director rendered a decision
declaring private respondent's opposition barred
by res judicata and giving due course to
petitioner's application for registration, to wit:
WHEREFORE, the present
Opposition in Inter Partes Case
No. 2049 is hereby DECLARED
BARRED by res judicata and is
hereby DISMISSED. Accordingly,
Application Serial No. 45011 for
trademark BARBIZON filed by
Pribhdas J. Mirpuri is GIVEN DUE
COURSE.
SO ORDERED. 7
Private respondent questioned this decision
before the Court of Appeals in CA-G.R. SP No.
28415. On April 30, 1993, the Court of Appeals
reversed the Director of Patents finding that IPC
No. 686 was not barred by judgment in IPC No.
2049 and ordered that the case be remanded to
the Bureau of Patents for further proceedings, viz:
WHEREFORE, the appealed
Decision No. 92-13 dated June 18,
1992 of the Director of Patents in
Inter Partes Case No. 2049 is
hereby SET ASIDE; and the case
is hereby remanded to the
Bureau of Patents for further
proceedings, in accordance with
this pronouncement. No costs. 8
In a Resolution dated March 16, 1994, the
Court of Appeals denied reconsideration
of its decision. 9 Hence, this recourse.
Before us, petitioner raises the following issues:
1. WHETHER OR NOT THE
DECISION OF THE DIRECTOR OF
PATENTS IN INTER PARTES
CASE NO. 686 RENDERED ON
JUNE 18, 1974, ANNEX C
HEREOF, CONSTITUTED RES
JUDICATA IN SO FAR AS THE
22 | I P L P a r t I
THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Functions of Trademarks)
CASE BEFORE THE DIRECTOR OF BEFORE THE DIRECTOR OF Modern authorities on trademark law view
PATENTS IS CONCERNED; PATENTS IN INTER PARTES trademarks as performing three distinct functions:
CASE NO. 2049 HAS THE RIGHT (1) they indicate origin or ownership of the
2. WHETHER OR NOT THE TO DECIDE SUCH articles to which they are attached; (2) they
DIRECTOR OF PATENTS CANCELLATION NOT ON THE guarantee that those articles come up to a certain
CORRECTLY APPLIED THE BASIS OF THE BUSINESS NAME standard of quality; and (3) they advertise the
PRINCIPLE OF RES JUDICATA IN LAW (AS IMPLEMENTED BY THE articles they symbolize. 14
DISMISSING PRIVATE BUREAU OF DOMESTIC TRADE)
RESPONDENT BARBIZON'S BUT ON THE BASIS OF THE Symbols have been used to identify the ownership
OPPOSITION TO PETITIONER'S PARIS CONVENTION AND THE or origin of articles for several centuries. 15 As
APPLICATION FOR TRADEMARK LAW (R.A. 166) early as 5,000 B.C., markings on pottery have been
REGISTRATION FOR THE WHICH IS WITHIN THE found by archaeologists. Cave drawings in
TRADEMARK BARBIZON, WHICH ORIGINAL AND EXCLUSIVE southwestern Europe show bison with symbols on
HAS SINCE RIPENED TO JURISDICTION OF THE their flanks. 16 Archaeological discoveries of
CERTIFICATE OF REGISTRATION DIRECTOR OF PATENTS. 10 ancient Greek and Roman inscriptions on
NO. 53920 ON NOVEMBER 16, sculptural works, paintings, vases, precious
1992; Before ruling on the issues of the case, there is stones, glassworks, bricks, etc. reveal some
need for a brief background on the function and features which are thought to be marks or
3. WHETHER OR NOT THE historical development of trademarks and symbols. These marks were affixed by the creator
REQUISITE THAT A "JUDGMENT trademark law. or maker of the article, or by public authorities as
ON THE MERITS" REQUIRED A indicators for the payment of tax, for disclosing
"HEARING WHERE BOTH A "trademark" is defined under R.A. 166, the state monopoly, or devices for the settlement of
PARTIES ARE SUPPOSED TO Trademark Law, as including "any word, name, accounts between an entrepreneur and his
ADDUCE EVIDENCE" AND symbol, emblem, sign or device or any workmen. 17
WHETHER THE JOINT combination thereof adopted and used by a
SUBMISSION OF THE PARTIES manufacturer or merchant to identify his goods In the Middle Ages, the use of many kinds of marks
TO A CASE ON THE BASIS OF and distinguish them from those manufactured, on a variety of goods was commonplace. Fifteenth
THEIR RESPECTIVE PLEADINGS sold or dealt in by others. 11 This definition has century England saw the compulsory use of
WITHOUT PRESENTING been simplified in R.A. No. 8293, the Intellectual identifying marks in certain trades. There were
TESTIMONIAL OR Property Code of the Philippines, which defines a the baker's mark on bread, bottlemaker's marks,
DOCUMENTARY EVIDENCE "trademark" as "any visible sign capable of smith's marks, tanner's marks, watermarks on
FALLS WITHIN THE MEANING distinguishing goods." 12 In Philippine paper, etc. 18 Every guild had its own mark and
OF "JUDGMENT ON THE MERITS" jurisprudence, the function of a trademark is to every master belonging to it had a special mark of
AS ONE OF THE REQUISITES TO point out distinctly the origin or ownership of the his own. The marks were not trademarks but
CONSTITUTE RES JUDICATA; goods to which it is affixed; to secure to him, who police marks compulsorily imposed by the
has been instrumental in bringing into the market sovereign to let the public know that the goods
4. WHETHER A DECISION OF a superior article of merchandise, the fruit of his were not "foreign" goods smuggled into an area
THE DEPARTMENT OF TRADE industry and skill; to assure the public that they where the guild had a monopoly, as well as to aid
AND INDUSTRY CANCELLING are procuring the genuine article; to prevent fraud in tracing defective work or poor craftsmanship to
PETITIONER'S FIRM NAME and imposition; and to protect the manufacturer the artisan. 19 For a similar reason, merchants also
"BARBIZON INTERNATIONAL" against substitution and sale of an inferior and used merchants' marks. Merchants dealt in goods
AND WHICH DECISION IS STILL different article as his product. 13 acquired from many sources and the marks
PENDING RECONSIDERATION enabled them to identify and reclaim their goods
NEVER OFFERED IN EVIDENCE upon recovery after shipwreck or piracy. 20
23 | I P L P a r t I
THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Functions of Trademarks)
With constant use, the mark acquired popularity
and became voluntarily adopted. It was not
intended to create or continue monopoly but to
give the customer an index or guarantee of
quality. 21 It was in the late 18th century when the
industrial revolution gave rise to mass production
and distribution of consumer goods that the mark
became an important instrumentality of trade and
commerce. 22 By this time, trademarks did not
merely identify the goods; they also indicated the
goods to be of satisfactory quality, and thereby
stimulated further purchases by the consuming
public. 23 Eventually, they came to symbolize the
goodwill and business reputation of the owner of
the product and became a property right
protected by law. 24 The common law developed
the doctrine of trademarks and tradenames "to
prevent a person from palming off his goods as
another's, from getting another's business or
injuring his reputation by unfair means, and, from
defrauding the public." 25 Subsequently, England
and the United States enacted national legislation
on trademarks as part of the law regulating unfair
trade. 26 It became the right of the trademark
owner to exclude others from the use of his mark,
or of a confusingly similar mark where confusion
resulted in diversion of trade or financial injury.
At the same time, the trademark served as a
warning against the imitation or faking of
products to prevent the imposition of fraud upon
the public. 27
Today, the trademark is not merely a symbol of
origin and goodwill; it is often the most effective
agent for the actual creation and protection of
goodwill. It imprints upon the public mind an
anonymous and impersonal guaranty of
satisfaction, creating a desire for further
satisfaction. In other words, the mark actually
sells the goods. 28 The mark has become the "silent
salesman," the conduit through which direct
contact between the trademark owner and the
consumer is assured. It has invaded popular
culture in ways never anticipated that it has
become a more convincing selling point than even
the quality of the article to which it refers. 29 In the
last half century, the unparalleled growth of
industry and the rapid development of
communications technology have enabled
trademarks, tradenames and other distinctive
signs of a product to penetrate regions where the
owner does not actually manufacture or sell the
product itself. Goodwill is no longer confined to
the territory of actual market penetration; it
extends to zones where the marked article has
been fixed in the public mind through
advertising. 30 Whether in the print, broadcast or
electronic communications medium, particularly
on the Internet, 31 advertising has paved the way
for growth and expansion of the product by
creating and earning a reputation that crosses
over borders, virtually turning the whole world
into one vast marketplace.
This is the mise-en-scene of the present
controversy. Petitioner brings this action claiming
that "Barbizon" products have been sold in the
Philippines since 1970. Petitioner developed this
market by working long hours and spending
considerable sums of money on advertisements
and promotion of the trademark and its products.
Now, almost thirty years later, private respondent,
a foreign corporation, "swaggers into the country
like a conquering hero," usurps the trademark and
invades petitioner's market. 32 Justice and fairness
dictate that private respondent be prevented from
appropriating what is not its own. Legally, at the
same time, private respondent is barred from
questioning petitioner's ownership of the
trademark because of res judicata. 33
Literally, res judicata means a matter adjudged, a
thing judicially acted upon or decided; a thing or
matter settled by judgment. 34 In res judicata, the
judgment in the first action is considered
conclusive as to every matter offered and received
therein, as to any other admissible matter which
might have been offered for that purpose, and all
other matters that could have been adjudged
therein. 35 Res judicata is an absolute bar to a
subsequent action for the same cause; and its
requisites are: (a) the former judgment or order
must be final; (b) the judgment or order must be
one on the merits; (c) it must have been rendered
by a court having jurisdiction over the subject
matter and parties; (d) there must be between the
first and second actions, identity of parties, of
subject matter and of causes of action. 36
The Solicitor General, on behalf of respondent
Director of Patents, has joined cause with
petitioner. Both claim that all the four elements
of res judicata have been complied with: that the
judgment in IPC No. 686 was final and was
rendered by the Director of Patents who had
jurisdiction over the subject matter and parties;
that the judgment in IPC No. 686 was on the
merits; and that the lack of a hearing was
immaterial because substantial issues were raised
by the parties and passed upon by the Director of
Patents. 37
The decision in IPC No. 686 reads as follows:
xxx xxx xxx.
Neither party took testimony nor
adduced documentary evidence.
They submitted the case for
decision based on the pleadings
which, together with the
pertinent records, have all been
carefully considered.
Accordingly, the only issue for
my disposition is whether or not
the herein opposer would
probably be damaged by the
registration of the trademark
BARBIZON sought by the
respondent-applicant on the
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Functions of Trademarks)
ground that it so resembles the
trademark BARBIZON allegedly
used and owned by the former to
be "likely to cause confusion,
mistake or to deceive
purchasers."
On record, there can be no doubt
that respondent-applicant's
sought-to-be-registered
trademark BARBIZON is similar,
in fact obviously identical, to
opposer's alleged trademark
BARBIZON, in spelling and
pronunciation. The only
appreciable but very negligible
difference lies in their respective
appearances or manner of
presentation. Respondent-
applicant's trademark is in bold
letters (set against a black
background), while that of the
opposer is offered in stylish
script letters.
It is opposer's assertion that its
trademark BARBIZON has been
used in trade or commerce in the
Philippines prior to the date of
application for the registration of
the identical mark BARBIZON by
the respondent-applicant.
However, the allegation of facts
in opposer's verified notice of
opposition is devoid of such
material information. In fact, a
reading of the text of said verified
opposition reveals an apparent, if
not deliberate, omission of the
date (or year) when opposer's
alleged trademark BARBIZON
was first used in trade in the
Philippines (see par. No. 1, p. 2,
Verified Notice of Opposition,
Rec.). Thus, it cannot here and
now be ascertained whether
opposer's alleged use of the
trademark BARBIZON could be
prior to the use of the identical
mark by the herein respondent-
applicant, since the opposer
attempted neither to substantiate
its claim of use in local commerce
with any proof or evidence.
Instead, the opposer submitted
the case for decision based
merely on the pleadings.
On the other hand, respondent-
applicant asserted in her
amended application for
registration that she first used
the trademark BARBIZON for
brassiere (or "brasseire") and
ladies underwear garments and
panties as early as March 3, 1970.
Be that as it may, there being no
testimony taken as to said date of
first use, respondent-applicant
will be limited to the filing date,
June 15, 1970, of her application
as the date of first use (Rule 173,
Rules of Practice in Trademark
Cases).
From the foregoing, I conclude
that the opposer has not made
out a case of probable damage by
the registration of the
respondent-applicant's mark
BARBIZON.
WHEREFORE, the opposition
should be, as it is hereby,
DISMISSED. Accordingly,
Application Serial No. 19010, for
the registration of the trademark
BARBIZON of respondent Lolita
R. Escobar, is given due course.38
The decision in IPC No. 686 was a judgment on the
merits and it was error for the Court of Appeals to
rule that it was not. A judgment is on the merits
when it determines the rights and liabilities of the
parties based on the disclosed facts, irrespective
of formal, technical or dilatory objections. 39 It is
not necessary that a trial should have been
conducted. If the court's judgment is general, and
not based on any technical defect or objection, and
the parties had a full legal opportunity to be heard
on their respective claims and contentions, it is on
the merits although there was no actual hearing or
arguments on the facts of the case. 40 In the case at
bar, the Director of Patents did not dismiss private
respondent's opposition on a sheer technicality.
Although no hearing was conducted, both parties
filed their respective pleadings and were given
opportunity to present evidence. They, however,
waived their right to do so and submitted the case
for decision based on their pleadings. The lack of
evidence did not deter the Director of Patents
from ruling on the case, particularly on the issue
of prior use, which goes into the very substance of
the relief sought by the parties. Since private
respondent failed to prove prior use of its
trademark, Escobar's claim of first use was
upheld.
The judgment in IPC No. 686 being on the merits,
petitioner and the Solicitor General allege that IPC
No. 686 and IPC No. 2049 also comply with the
fourth requisite of res judicata, i.e., they involve
the same parties and the same subject matter, and
have identical causes of action.
Undisputedly, IPC No. 686 and IPC No. 2049
involve the same parties and the same subject
matter. Petitioner herein is the assignee of
Escobar while private respondent is the same
American corporation in the first case. The subject
matter of both cases is the trademark "Barbizon."
25 | I P L P a r t I
THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Functions of Trademarks)
Private respondent counter-argues, however, that
the two cases do not have identical causes of
action. New causes of action were allegedly
introduced in IPC No. 2049, such as the prior use
and registration of the trademark in the United
States and other countries worldwide, prior use in
the Philippines, and the fraudulent registration of
the mark in violation of Article 189 of the Revised
Penal Code. Private respondent also cited
protection of the trademark under the Convention
of Paris for the Protection of Industrial Property,
specifically Article 6bis thereof, and the
implementation of Article 6bis by two Memoranda
dated November 20, 1980 and October 25, 1983 of
the Minister of Trade and Industry to the Director
of Patents, as well as Executive Order (E.O.) No.
913.
The Convention of Paris for the Protection of
Industrial Property, otherwise known as the Paris
Convention, is a multilateral treaty that seeks to
protect industrial property consisting of patents,
utility models, industrial designs, trademarks,
service marks, trade names and indications of
source or appellations of origin, and at the same
time aims to repress unfair competition. 41 The
Convention is essentially a compact among
various countries which, as members of the Union,
have pledged to accord to citizens of the other
member countries trademark and other rights
comparable to those accorded their own citizens
by their domestic laws for an effective protection
against unfair competition. 42 In short, foreign
nationals are to be given the same treatment in
each of the member countries as that country
makes available to its own citizens. 43 Nationals of
the various member nations are thus assured of a
certain minimum of international protection of
their industrial property. 44
The Convention was first signed by eleven
countries in Paris on March 20, 1883. 45 It
underwent several revisions — at Brussels in
1900, at Washington in 1911, at The Hague in
1925, at London in 1934, at Lisbon in 1958, 46 and
at Stockholm in 1967. Both the Philippines and the
United States of America, herein private
respondent's country, are signatories to the
Convention. The United States acceded on May 30,
1887 while the Philippines, through its Senate,
concurred on May 10, 1965. 47 The Philippines'
adhesion became effective on September 27,
1965, 48 and from this date, the country obligated
itself to honor and enforce the provisions of the
Convention. 49
In the case at bar, private respondent anchors its
cause of action on the first paragraph of Article
6bis  of the Paris Convention which reads as
follows:
Article 6bis
(1) The countries of the Union
undertake, either
administratively if their
legislation so permits, or at the
request of an interested party, to
refuse or to cancel the
registration and to prohibit the
use, of a trademark which
constitutes a reproduction, an
imitation, or a translation, liable
to create confusion, of a mark
considered by the competent
authority of the country of
registration or use to be well-
known in that country as being
already the mark of a person
entitled to the benefits of this
Convention and used for identical
or similar goods. These
provisions shall also apply when
the essential part of the mark
constitutes a reproduction of any
such well-known mark or an
imitation liable to create
confusion therewith.
(2) A period of at least five years
from the date of registration shall
be allowed for seeking the
cancellation of such a mark. The
countries of the Union may
provide for a period within which
the prohibition of use must be
sought.
(3) No time limit shall be fixed
for seeking the cancellation or
the prohibition of the use of
marks registered or used in bad
faith. 50
This Article governs protection of well-
known trademarks. Under the first
paragraph, each country of the Union
bound itself to undertake to refuse or
cancel the registration, and prohibit the
use of a trademark which is a
reproduction, imitation or translation, or
any essential part of which trademark
constitutes a reproduction, liable to
create confusion, of a mark considered by
the competent authority of the country
where protection is sought, to be well-
known in the country as being already the
mark of a person entitled to the benefits
of the Convention, and used for identical
or similar goods.
Art. 6bis was first introduced at The Hague in
1925 and amended in Lisbon in 1952. 51 It is a self-
executing provision and does not require
legislative enactment to give it effect in the
member country. 52 It may be applied directly by
the tribunals and officials of each member country
by the mere publication or proclamation of the
Convention, after its ratification according to the
public law of each state and the order for its
execution. 53
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Functions of Trademarks)
The essential requirement under Article 6bis is
that the trademark to be protected must be "well-
known" in the country where protection is sought.
The power to determine whether a trademark is
well-known lies in the "competent authority of the
country of registration or use." This competent
authority would be either the registering
authority if it has the power to decide this, or the
courts of the country in question if the issue
comes before a court. 54
Pursuant to Article 6bis, on November 20, 1980,
then Minister Luis Villafuerte of the Ministry of
Trade issued a Memorandum to the Director of
Patents. The Minister ordered the Director that:
Pursuant to the Paris Convention
for the Protection of Industrial
Property to which the Philippines
is a signatory, you are hereby
directed 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, Jordache,
Vanderbilt, Sasson, Fila, Pierre
Cardin, Gucci, Christian Dior,
Oscar de la Renta, Calvin Klein,
Givenchy, Ralph Lauren, Geoffrey
Beene, Lanvin and Ted Lapidus.
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 damages
and other legal action by the
trademarks' foreign or local
owners or original users.
You are also required to submit
to the undersigned a progress
report on the matter.
For immediate compliance. 55
Three years later, on October 25, 1983, then
Minister Roberto Ongpin issued another
Memorandum to the Director of Patents, viz:
Pursuant to Executive Order No.
913 dated 7 October 1983 which
strengthens the rule-making and
adjudicatory powers of the
Minister of Trade and Industry
and provides inter alia, that "such
rule-making and adjudicatory
powers should be revitalized in
order that the Minister of Trade
and Industry can . . . apply more
swift and effective solutions and
remedies to old and new
problems . . . such as
infringement of internationally-
known tradenames and
trademarks . . ." and in view of
the decision of the Intermediate
Appellate Court in the case of LA
CHEMISE LACOSTE, S.A., versus
RAM SADWHANI [AC-G.R. SP NO.
13359 (17) June 1983] 56 which
affirms the validity of the
MEMORANDUM of then Minister
Luis R. Villafuerte dated 20
November 1980 confirming our
obligations under the PARIS
CONVENTION FOR THE
PROTECTION OF INDUSTRIAL
PROPERTY to which the Republic
of the Philippines is a signatory,
you are hereby directed to
implement measures necessary
to effect compliance with our
obligations under said
Convention in general, and, more
specifically, to honor our
commitment under
Section 6bis 57 thereof, as follows:
1. Whether the trademark
under consideration is
well-known in the
Philippines or is a mark
already belonging to a
person entitled to the
benefits of the
CONVENTION, this should
be established, pursuant to
Philippine Patent Office
procedures in inter
partes and ex parte cases,
according to any of the
following criteria or any
combination thereof:
(a) a declaration by the Minister of Trade and
Industry that the trademark being considered is
already well-known in the Philippines such that
permission for its use by other thanits original
owner will constitute a reproduction, imitation,
translation or other infringement;
(b) that the trademark is used in commerce
internationally, supported by proof that goods
bearing the trademark are sold on an
international scale, advertisements, the
establishment of factories, sales offices,
distributorships, and the like, in different
countries, including volume or other measure of
international trade and commerce;
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Functions of Trademarks)
(c) that the trademark is duly registered in the
industial property office(s) of another country or
counties, taking into consideration the date of
such registration;
(d) that the trademark has long been established
and obtained goodwill and international
consumer recognition as belonging to one owner
or source;
(e) that the trademark actually belongs to a party
claiming ownership and has the right to
registrtion under the provisions of the aforestated
PARIS CONVENTION.
2. The word trademark, as used in this
MEMORANDUM, shall include tradenames, service
marks, logos, signs, emblems, insignia or other
similar devices used for identification and
recognition by consumers.
3. The Philippine Patent Office shall refuse all
applications for, or cancel the registration of,
trademarks which constitute a reproduction,
translation or imitation of a trademark owned by
a person, natural or corporate, who is a citizen of a
country signatory to the PARIS CONVENTION FOR
THE PROTECTION OF INDUSTRIAL PROPERTY.
4. The Philippine Patent Office shall give due
course to the Opposition in cases already or
hereafter filed against the registration of
trademarks entitled to protection of Section
6bis of said PARIS CONVENTION as outlined
above, by remanding applications filed by one not
entitled to such protection for final disallowance
by the Examination Division.
5. All pending applications for Philippine
registration of signature and other world-famous
trademarks filed by applicants other than their
original owners or users shall be rejected
forthwith. Where such applicants have already
obtained registration contrary to the
abovementioned PARIS CONVENTION and/or
Philippine Law, they shall be directed to surrender
their Certificates of Registration to the Philippine
Patent Office for immediate cancellation
proceedings.
xxx xxx xxx. 58
In the Villafuerte Memorandum, the Minister of
Trade instructed the Director of Patents to reject
all pending applications for Philippine registration
of signature and other world-famous trademarks
by applicants other than their original owners or
users. The Minister enumerated several
internationally-known trademarks and ordered
the Director of Patents to require Philippine
registrants of such marks to surrender their
certificates of registration.
In the Ongpin Memorandum, the Minister of Trade
and Industry did not enumerate well-known
trademarks but laid down guidelines for the
Director of Patents to observe in determining
whether a trademark is entitled to protection as a
well-known mark in the Philippines under Article
6bis of the Paris Convention. This was to be
established through Philippine Patent Office
procedures in inter partes and ex parte cases
pursuant to the criteria enumerated therein. The
Philippine Patent Office was ordered to refuse
applications for, or cancel the registration of,
trademarks which constitute a reproduction,
translation or imitation of a trademark owned by
a person who is a citizen of a member of the
Union. All pending applications for registration of
world-famous trademarks by persons other than
their original owners were to be rejected
forthwith. The Ongpin Memorandum was issued
pursuant to Executive Order No. 913 dated
October 7, 1983 of then President Marcos which
strengthened the rule-making and adjudicatory
powers of the Minister of Trade and Industry for
the effective protection of consumers and the
application of swift solutions to problems in trade
and industry. 59
Both the Villafuerte and Ongpin Memoranda were
sustained by the Supreme Court in the 1984
landmark case of La Chemise Lacoste, S.A. v.
Fernandez. 60 This court ruled therein that under
the provisions of Article 6bis of the Paris
Convention, the Minister of Trade and Industry
was the "competent authority" to determine
whether a trademark is well-known in this
country. 61
The Villafuerte Memorandum was issued in
1980, i.e., fifteen (15) years after the adoption of
the Paris Convention in 1965. In the case at bar,
the first inter partes case, IPC No. 686, was filed in
1970, before the Villafuerte Memorandum but five
(5) years after the effectivity of the Paris
Convention. Article 6bis was already in effect five
years before the first case was instituted. Private
respondent, however, did not cite the protection
of Article 6bis, neither did it mention the Paris
Convention at all. It was only in 1981 when IPC
No. 2049 was instituted that the Paris Convention
and the Villafuerte Memorandum, and, during the
pendency of the case, the 1983 Ongpin
Memorandum were invoked by private
respondent.
The Solicitor General argues that the issue of
whether the protection of Article 6bis of the
Convention and the two Memoranda is barred
by res judicata has already been answered
in Wolverine Worldwide, Inc. v. Court of
Appeals. 62 In this case, petitioner Wolverine, a
foreign corporation, filed with the Philippine
Patent Office a petition for cancellation of the
registration certificate of private respondent, a
Filipino citizen, for the trademark "Hush Puppies"
and "Dog Device." Petitioner alleged that it was
the registrant of the internationally-known
trademark in the United States and other
countries, and cited protection under the Paris
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Functions of Trademarks)
Convention and the Ongpin Memorandum. The
petition was dismissed by the Patent Office on the
ground of res judicata. It was found that in 1973
petitioner's predecessor-in-interest filed two
petitions for cancellation of the same trademark
against respondent's predecessor-in-interest. The
Patent Office dismissed the petitions, ordered the
cancellation of registration of petitioner's
trademark, and gave due course to respondent's
application for registration. This decision was
sustained by the Court of Appeals, which decision
was not elevated to us and became final and
executory. 63
Wolverine claimed that while its previous
petitions were filed under R.A. No. 166, the
Trademark Law, its subsequent petition was
based on a new cause of action, i.e., the Ongpin
Memorandum and E.O. No. 913 issued in 1983,
after finality of the previous decision. We held that
the said Memorandum and E.O. did not grant a
new cause of action because it did "not amend the
Trademark Law," . . . "nor did it indicate a new
policy with respect to the registration in the
Philippines of world-famous trademarks." 64 This
conclusion was based on the finding that
Wolverine's two previous petitions and
subsequent petition dealt with the same issue of
ownership of the trademark. 65 In other words,
since the first and second cases involved the same
issue of ownership, then the first case was a bar to
the second case.
In the instant case, the issue of ownership of the
trademark "Barbizon" was not raised in IPC No.
686. Private respondent's opposition therein was
merely anchored on:
(a) "confusing similarity" of its
trademark with that of Escobar's;
(b) that the registration of
Escobar's similar trademark will
cause damage to private
respondent's business reputation
and goodwill; and
(c) that Escobar's use of the
trademark amounts to an
unlawful appropriation of a mark
previously used in the
Philippines which act is penalized
under Section 4 (d) of the
Trademark Law.
In IPC No. 2049, private respondent's
opposition set forth several issues
summarized as follows:
(a) as early as 1933, it adopted
the word "BARBIZON" as
trademark on its products such
as robes, pajamas, lingerie,
nightgowns and slips;
(b) that the trademark
"BARBIZON" was registered with
the United States Patent Office in
1934 and 1949; and that
variations of the same
trademark, i.e., "BARBIZON" with
Bee design and "BARBIZON" with
the representation of a woman
were also registered with the U.S.
Patent Office in 1961 and 1976;
(c) that these marks have been in
use in the Philippines and in
many countries all over the
world for over forty years.
"Barbizon" products have been
advertised in international
publications and the marks
registered in 36 countries
worldwide;
(d) Escobar's registration of the
similar trademark "BARBIZON"
in 1974 was based on fraud; and
this fraudulent registration was
cancelled in 1979, stripping
Escobar of whatsoever right she
had to the said mark;
(e) Private respondent's
trademark is entitled to
protection as a well-known mark
under Article 6bis of the Paris
Convention, Executive Order No.
913, and the two Memoranda
dated November 20, 1980 and
October 25, 1983 of the Minister
of Trade and Industry to the
Director of Patents;
(f) Escobar's trademark is
identical to private respondent's
and its use on the same class of
goods as the latter's amounts to a
violation of the Trademark Law
and Article 189 of the Revised
Penal Code.
IPC No. 2049 raised the issue of
ownership of the trademark, the first
registration and use of the trademark in
the United States and other countries, and
the international recognition and
reputation of the trademark established
by extensive use and advertisement of
private respondent's products for over
forty years here and abroad. These are
different from the issues of confusing
similarity and damage in IPC No. 686. The
issue of prior use may have been raised in
IPC No. 686 but this claim was limited to
prior use in the Philippines only. Prior use
in IPC No. 2049 stems from private
respondent's claim as originator of the
word and symbol "Barbizon," 66 as the
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Functions of Trademarks)
first and registered user of the mark
attached to its products which have been
sold and advertised worldwide for a
considerable number of years prior to
petitioner's first application for
registration of her trademark in the
Philippines. Indeed, these are substantial
allegations that raised new issues and
necessarily gave private respondent a
new cause of action. Res judicata does not
apply to rights, claims or demands,
although growing out of the same subject
matter, which constitute separate or
distinct causes of action and were not put
in issue in the former action. 67
Respondent corporation also introduced in the
second case a fact that did not exist at the time the
first case was filed and terminated. The
cancellation of petitioner's certificate of
registration for failure to file the affidavit of use
arose only after IPC No. 686. It did not and could
not have occurred in the first case, and this gave
respondent another cause to oppose the second
application. Res judicata extends only to facts and
conditions as they existed at the time judgment
was rendered and to the legal rights and relations
of the parties fixed by the facts so
determined. 68 When new facts or conditions
intervene before the second suit, furnishing a new
basis for the claims and defenses of the parties,
the issues are no longer the same, and the former
judgment cannot be pleaded as a bar to the
subsequent action. 69
It is also noted that the oppositions in the first and
second cases are based on different laws. The
opposition in IPC No. 686 was based on specific
provisions of the Trademark Law, i.e., Section 4
(d) 70 on confusing similarity of trademarks and
Section 8 71 on the requisite damage to file an
opposition to a petition for registration. The
opposition in IPC No. 2049 invoked the Paris
Convention, particularly Article 6bis thereof, E.O.
No. 913 and the two Memoranda of the Minister of
Trade and Industry. This opposition also invoked
Article 189 of the Revised Penal Code which is a
statute totally different from the Trademark
Law. 72 Causes of action which are distinct and
independent from each other, although arising out
of the same contract, transaction, or state of facts,
may be sued on separately, recovery on one being
no bar to subsequent actions on others. 73 The
mere fact that the same relief is sought in the
subsequent action will not render the judgment in
the prior action operative as res judicata, such as
where the two actions are based on different
statutes. 74 Res judicata therefore does not apply to
the instant case and respondent Court of Appeals
did not err in so ruling.
Intellectual and industrial property rights cases
are not simple property cases. Trademarks deal
with the psychological function of symbols and the
effect of these symbols on the public at
large. 75 Trademarks play a significant role in
communication, commerce and trade, and serve
valuable and interrelated business functions, both
nationally and internationally. For this reason, all
agreements concerning industrial property, like
those on trademarks and tradenames, are
intimately connected with economic
development. 76 Industrial property encourages
investments in new ideas and inventions and
stimulates creative efforts for the satisfaction of
human needs. They speed up transfer of
technology and industrialization, and thereby
bring about social and economic progress. 77 These
advantages have been acknowledged by the
Philippine government itself. The Intellectual
Property Code of the Philippines declares that "an
effective intellectual and industrial
property system is vital to the development of
domestic and creative activity, facilitates transfer
of technology, it attracts foreign investments, and
ensures market access for our products." 78 The
Intellectual Property Code took effect on January
1, 1998 and by its express provision, 79 repealed
the Trademark Law, 80 the Patent Law, 81 Articles
188 and 189 of the Revised Penal Code, the Decree
on Intellectual Property, 82 and the Decree on
Compulsory Reprinting of Foreign
Textbooks. 83 The Code was enacted to strengthen
the intellectual and industrial property system in
the Philippines as mandated by the country's
accession to the Agreement Establishing the
World Trade Organization (WTO). 84
The WTO is a common institutional framework for
the conduct of trade relations among its members
in matters related to the multilateral and
plurilateral trade agreements annexed to the WTO
Agreement. 85 The WTO framework ensures a
"single undertaking approach" to the
administration and operation of all agreements
and arrangements attached to the WTO
Agreement. Among those annexed is the
Agreement on Trade-Related Aspects of
Intellectual Property Rights or TRIPs. 86 Members
to this Agreement "desire to reduce distortions
and impediments to international trade, taking
into account the need to promote effective and
adequate protection of intellectual property
rights, and to ensure that measures and
procedures to enforce intellectual property rights
do not themselves become barriers to legitimate
trade." To fulfill these objectives, the members
have agreed to adhere to minimum standards of
protection set by several Conventions. 87 These
Conventions are: the Berne Convention for the
Protection of Literary and Artistic Works (1971),
the Rome Convention or the International
Convention for the Protection of Performers,
Producers of Phonograms and Broadcasting
Organisations, the Treaty on Intellectual Property
in Respect of Integrated Circuits, and the Paris
Convention (1967), as revised in Stockholm on July
14, 1967. 88
A major proportion of international trade depends
on the protection of intellectual property
rights. 89 Since the late 1970's, the unauthorized
30 | I P L P a r t I
THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Functions of Trademarks)
counterfeiting of industrial property and
trademarked products has had a considerable
adverse impact on domestic and international
trade revenues. 90 The TRIPs Agreement seeks to
grant adequate protection of intellectual property
rights by creating a favorable economic
environment to encourage the inflow of foreign
investments, and strengthening the multi-lateral
trading system to bring about economic, cultural
and technological independence. 91

The Philippines and the United States of America

have acceded to the WTO Agreement. This
Agreement has revolutionized international
business and economic relations among states,
and has propelled the world towards trade
liberalization and economic
globalization. 92 Protectionism and isolationism
belong to the past. Trade is no longer confined to a
bilateral system. There is now "a new era of global
economic cooperation, reflecting the widespread
desire to operate in a fairer and more open
multilateral trading system." 93 Conformably, the
State must reaffirm its commitment to the global
community and take part in evolving a new
international economic order at the dawn of the
new millenium.

IN VIEW WHEREOF, the petition is denied and the

Decision and Resolution of the Court of Appeals in
CA-G.R. SP No. 28415 are affirmed.

SO ORDERED.

Davide, Jr., C.J., Kapunan, Pardo and Ynares-

Santiago, JJ., concur.

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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (How are marks acquired?)

Republic Act No. 8293             June 6, 1997

AN ACT PRESCRIBING THE INTELLECTUAL

PROPERTY CODE AND ESTABLISHING THE
INTELLECTUAL PROPERTY OFFICE,
PROVIDING FOR ITS POWERS AND FUNCTIONS,
AND FOR OTHER PURPOSES

Section 122. How Marks are Acquired. - The rights

in a mark shall be acquired through registration
made validly in accordance with the provisions of
this law. (Sec. 2-A, R A. No. 166a)

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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (How are marks acquired?)
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-28554 February 28, 1983
UNNO COMMERCIAL ENTERPRISES,
INCORPORATED, petitioner,
vs.
GENERAL MILLING CORPORATION and
TIBURCIO S. EVALLE, in his capacity as
Director of Patents, respondents.
Salem & Dionisio Law Office for petitioner.
Siguion Reyna, Montecillo, Bello & Ongsiako for
private respondent.
TEEHANKEE, J.:
The Court affirms respondent Director of Patent's
decision declaring respondent General Milling
Corporation as the prior user of the trademark
"All Montana" on wheat flour in the Philippines
and ordering the cancellation of the certificate of
registration for the same trademark previously
issued in favor of petitioner Unno Commercial
Enterprises, Incorporated, it appearing that Unno
Commercial Enterprises, Inc. merely acted as
exclusive distributor of All Montana wheat flour in
the Philippines. Only the owner of a trademark,
trade name or service mark may applly for its
registration and an importer, broker, indentor or
distributor acquires no rights to the trademark of
the goods he is dealing with in the absence of a
valid transfer or assignment of the trade mark.
On December 11, 1962, respondent General
Milling Corporation filed an application for the
registration of the trademark "All Montana" to be
used in the sale of wheat flour. In view of the fact
that the same trademark was previously,
registered in favor of petitioner Unno Commercial
Enterprises, Inc., the Chief Trademark Examiner of
the Philippines Patent Office declared an
interference proceeding 1 between respondent
corporation's application (Serial No. 9732), as
Junior - Party-Applicant and petitioner company's
registration (Registration No. 9589), as Senior
Party-Applicant, docketed in the Philippines
Patent Office as Inter Partes Case No. 313, to
determine which party has previously adopted
and used the trademark "All Montana".
Respondent General Milling Corporation, in its
application for registration, alleged that it started
using the trademark "All Montana" on August 31,
1955 and subsequently was licensed to use the
same by Centennial Mills, Inc. by virtue of a deed
of assignment executed on September 20, 1962.
On the other hand petitioner Unno Commercial
Enterprises, Inc. argued that the same trademark
had been registered in its favor on March 8, 1962
asserting that it started using the trademark on
June 30, 1956, as indentor or broker for S.H.
Huang Bros. & Co., a local firm.
The Director of Patents, after hearing, ruled in
favor of respondent General Milling Corporation
and rendered its decision as follows:
However, there is testimony in
the record (t.s.n., pp. 11-12,
Jan.17,1967, testimony of Jose
Uy) to the effect that,
indispensable, "ALL MONTANA"
wheat flour is a premium flour
produced from premium wheat
coming from the State of
Montana, U.S.A. It is apparent
that the trademark is primarily
geographically descriptive of the
goods. It is therefore a matter
overlooked by the Trademark
Examiner, and it is incumbent
upon him to determine if the
applicant should claim and is
qualified to claim distinctiveness
under Section 4(f) of the
Trademark Statute. Otherwise, it
is registrable on the
Supplemental Register and
should thus be registered therein.
WHEREFORE, the Junior Party-
Applicant is adjudged prior -user
of the trademark ALL MONTANA,
but 'because it is primarily
geographically descriptive, the
application is herein remanded to
the Chief Trademark Examiner
for proper proceeding before
issuance of the certificate of
registration.
The certificate of registration
issued to the Senior Party is
ordered cancelled.
IT IS SO ORDERED.
After its motion for reconsideration was denied,
petitioner brought the instant petition seeking the
reversal of the decision and praying that it be
declared the owner and prior user of the
trademark "All Montana" on wheat flour.
Petitioner based its claim of ownership over the
trademark in question by the fact that it acted as
an indentor or broker for S. H. Huang Bros. & Co., a
local importer of wheat flour, offering as evidence
the various shipments, documents, invoices and
other correspondence of Centennial Mills, Inc.,
shipping thousand of bags of wheat flour bearing
33 | I P L P a r t I
THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (How are marks acquired?)
the trademark "All Montana" to the Philippines.
Petitioner argued that these documents, invoices
and correspondence proved the fact that it has
been using the trademark "All Montana" as early
as 1955 in the concept of an owner and
maintained that anyone, whether he is only an
importer, broker or indentor can appropriate, use
and own a particular mark of its own choice
although he is not the manufacturer of the goods
he deals with. Relying on the provisions of Section
2-A of the Trademarks Law 2 (Republic Act 166),
petitioner insists that "the appropriation and
ownership of a particular trademark is not merely
confined to producers or manufacturers but
likewise to anyone who lawfully deals in
merchandise who renders any lawful service in
commerce, like petitioner in the case at bar. 3
The right to register trademark is based on
ownership. 4 When the applicant is not the owner
of the trademark being applied for, he has no right
to apply for the registration of the same. 5 Under
the Trademark Law only the owner of the
trademark, trade name or service mark used to
distinguish his goods, business or service from the
goods, business or service of others is entitled to
register the same. 6
The term owner does not include the importer of
the goods bearing the trademark, trade name,
service mark, or other mark of ownership, unless
such importer is actually the owner thereof in the
country from which the goods are imported. A
local importer, however, may make application for
the registration of a foreign trademark, trade
name or service mark if he is duly authorized by
the actual owner of the name or other mark of
ownership. 7
Thus, this Court, has on several occasions ruled
that where the applicant's alleged ownership is
not shown in any notarial document and the
applicant appears to be merely an importer or
distributor of the merchandise covered by said
trademark, its application cannot be granted. 8
Moreover, the provision relied upon by petitioner
(Sec. 2-A, Rep. Act No. 166) allows one "who
lawfully produces or deals in merchandise ... or
who engages in any lawful business or who
renders any lawful service in commerce, by actual
use thereof . . . (to) appropriate to his exclusive
use a trademark, or a service mark not so
appropriated by another. " In the case at bar, the
evidence showed that the trademark "All
Montana" was owned and registered in the name
of Centennial Mills, Inc. which later transferred it
to respondent General Milling Corporation by way
of a deed of assignment. It is undisputed that way
back in March, 1955, Centennial Mills, Inc. under
the tradename Wenatchee Milling Co., exported
flour to the Philippines, through its distributor,
herein petitioner Unno Commercial Enterprises,
Inc. which acted as indentor or broker for the firm
S. H. Huang Bros. & Co. However, because of
increased taxes and subsidies, Centennial Mills
discontinued shipments of flour in the Philippines
and eventually sold its brands for wheat flour,
including "All Montana" brand to respondent
General Milling Corporation in consideration of
1,000 shares of stock of respondent corporation
with a par value of P100.00 per share or a total of
P100,000.00. Respondent General Milling
Corporation, since the start of the operation in
1961 of its flour mills located in Lapu-lapu City,
Cebu has been manufacturing and selling "All
Montana" flour in the Philippines.
As against petitioner's argument that respondent
failed to establish convincingly the ownership of
the trademark "All Montana" by its assignor
Centennial Mills, Inc., the Director of Patents
correctly found that ample evidence was
presented that Centennial Mills, Inc. was the
owner and prior user in the Philippines of the
trademark "All Montana" through a local importer
and broker. The Deed of Assignment itself
constitutes sufficient proof of its ownership of the
trademark "All Montana," showing that Centennial
Mills was a corporation duly organized and
existing under and by virtue of the laws of the
State of Oregon, U.S.A. with principal place and
business at Portland, Oregon, U.S.A. and the
absolute and registered owner of several
trademarks for wheat flour, i.e. (Imperial, White
Lily, Duck, General, Swan, White Horse, Vinta, El
Paro, Baker's Joy, Choice, Red Bowl All Montana
and Dollar.) all of which were assigned by it to
respondent General Milling Corporation. The deed
of assignment was signed by its president, Dugald
MacGregor, duly acknowledged before James
Hunt, a notary public for the State of Oregon,
accompanied by a certification issued by the
Secretary of State of the State of Oregon stating
that the said James Hunt is a duly qualified Notary
Public with full power and authority to take
acknowledgments of all oaths and that full faith
and credit should be given to his official acts as
notary public.
The Director of Patents likewise correctly rejected
petitioner's contention that in a 1954 conference
in Manila the ownership and use by petitioner of
the brand "All Montana" was agreed upon, on the
contrary finding that "Details of that meeting
were, however, explained by Mr. Dugald
MacGregor, President of Centennial Mills, Inc., as
the Junior Party's rebuttal witness. Mr. MacGregor
confirmed holding such conference in a restaurant
in Manila with representatives of the Senior Party,
namely; Messrs. Jose Uy, Francisco Gonzales and S.
H. Huang although he could not remember the
name of the restaurant. He further explained that
his company owned the trademark; that it had
been using the mark in the United States; and that
ownership of the mark had never been conferred
upon any other company, much less the Senior
Party"; and "Inasmuch as it was not the owner of
the trademark, the Senior Party could not be
regarded as having used and adopted it, and had
no right to apply for its registration. It
34 | I P L P a r t I
THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (How are marks acquired?)
acknowledged that it was a mere importer of
flour, and a mere importer and distributor
acquires no rights in the mark used on the
imported goods by the foreign exporter in the
absence of an assignment of any kind ...
Trademarks used and adopted on goods
manufactured or packed in a foreign country in
behalf of a domestic importer, broker, or indentor
and distributor are presumed to be owned by the
manufacturer or packer, unless there is a written
agreement clearly showing that ownership vests
in the importer, broker, indentor or distributor.
Thus, petitioner's contention that it is the owner
of the mark "All Montana" because of its certificate
of registration issued by the Director of Patents,
must fail, since ownership of a trademark is not
acquired by the mere fact of registration
alone. 9 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. 10 Registration does not perfect a
trademark right. 11 As conceded itself by
petitioner, evidence may be presented to
overcome the presumption. Prior use by one will
controvert a claim of legal appropriation, by
subsequent users. In the case at bar, the Director
of Patents found that "ample evidence was
presented in the record that Centennial Mills, Inc.
was the owner and prior user in the Philippines of
the trademark 'All Montana' through a local
importer and broker. Use of a trademark by a
mere importer, indentor or exporter (the Senior
Party herein) inures to the benefit of the foreign
manufacturer whose goods are Identified by the
trademark. The Junior Party has hereby
established a continuous chain of title and,
consequently, prior adoption and use" and ruled
that "based on the facts established, it is safe to
conclude that the Junior Party has satisfactorily
discharged the burden of proving priority of
adoption and use and is entitled to registration." It
is well-settled that we are precluded from making
further inquiry, since the findings of fact of the
Director of Patents in the absence of any showing
that there was grave abuse of discretion is binding
on us 12 and the findings of facts by the Director of
Patents are deemed conclusive in the Supreme
Court provided that they are supported by
substantial evidence. 13 Petitioner has failed to
show that the findings of fact of the Director of
Patents are not substantially supported by
evidence nor that any grave abuse of discretion
was committed.
Finally, the Court finds without merit petitioner's
argument that the Director of Patents could not
order the cancellation of' its certificate of
registration in an interference proceeding and
that the question of whether or not a certificate of
registration is to be cancelled should have been
brought in cancellation proceedings. Under Rule
178 of the Rules of the Patent Office in Trademark
Cases, 14 the Director of Patents is expressly
authorized to order the cancellation of a
registered mark or trade name or name or other
mark of ownership in an inter partes case, such as
the interference proceeding at bar. 15
WHEREFORE, the appealed decision is hereby
affirmed. No costs.
Melencio-Herrera, Plana, Vasquez, Relova and
Gutierrez, Jr., JJ., concur.
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (How are marks acquired?)
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-75420 November 15, 1991
KABUSHI KAISHA ISETAN, also known and
trading as ISETAN CO., LTD., petitioner,
vs.
THE INTERMEDIATE APPELLATE COURT, THE
DIRECTOR OF PATENTS, and ISETANN
DEPARTMENT STORE, INC., respondents.
GUTIERREZ, JR., J.:
This is a petition for review on certiorari which
seeks to set aside - (1) the decision of the Court of
Appeals dated June 2, 1986 in AC-G.R. SP No.
008873 entitled "Kabushi Kaisha Isetan, also
known and trading as Isetan Company Limited v.
Isetann Department Store, Inc." dismissing the
petitioner's appeal from the decision of the
Director of Patents; and (2) the Resolution dated
July 11, 1986 denying the petitioner's motion for
reconsideration.
As gathered from the records, the facts are as
follows:
Petitioner Kabushi Kaisha Isetan is a foreign
corporation organized and existing under the laws
of Japan with business address at 14-1 Shinjuku,
3-Chrome, Shinjuku, Tokyo, Japan. It is the owner
of the trademark "Isetan" and the "Young Leaves
Design".
The petitioner alleges that it first used the
trademark Isetan on November 5, 1936. It states
that the trademark is a combination of "Ise" taken
from "Iseya" the first name of the rice dealer in
Kondo, Tokyo in which the establishment was first
located and "Tan" which was taken from "Tanji
Kosuge the First". The petitioner claims to have
expanded its line of business internationally from
1936 to 1974. The trademark "Isetan" and "Young
Leaves Design" were registered in Japan covering
more than 34 classes of goods. On October 3,
1983, the petitioner applied for the registration of
"Isetan" and "Young Leaves Design" with the
Philippine Patent Office under Permanent Serial
Nos. 52422 and 52423 respectively. (Rollo, p. 43)
Private respondent, Isetann Department Store, on
the other hand, is a domestic corporation
organized and existing under the laws of the
Philippines with business address at 423-430
Rizal Avenue, Sta. Cruz, Manila, Philippines.
It claims that it used the word "Isetann" as part of
its corporated name and on its products
particularly on shirts in Joymart Department Store
sometime in January 1979. The suffix "Tann"
means an altar, the place of offering in Chinese
and this was adopted to harmonize the corporate
name and the corporate logo of two hands in cup
that symbolizes the act of offering to the Supreme
Being for business blessing.
On May 30, 1980 and May 20, 1980, the private
respondent registered "Isetann Department Store,
Inc." and Isetann and Flower Design in the
Philippine Patent Office under SR. Reg. No. 4701
and 4714, respectively, as well as with the Bureau
of Domestic Trade under Certificate of
Registration No. 32020. (Rollo, pp. 43-44)
On November 28, 1980, the petitioner filed with
the Phil. Patent Office two (2) petitions for the
cancellation of Certificates of Supplemental
Registration Nos. SR-4714 and SR-4701 stating
among others that:
. . . except for the additional letter "N" in
the word "Isetan", the mark registered by
the registrant is exactly the same as the
trademark ISETAN owned by the
petitioner and that the young leaves
registered by the registrant is exactly the
same as the young leaves design owned
by the petitioner.
The petitioner further alleged that private
respondent's act of registering a trademark which
is exactly the same as its trademark and adopting
a corporate name similar to that of the petitioner
were with the illegal and immoral intention of
cashing in on the long established goodwill and
popularity of the petitioner's reputation, thereby
causing great and irreparable injury and damage
to it (Rollo, p. 521). It argued that both the
petitioner's and respondent's goods move in the
same channels of trade, and ordinary people will
be misled to believe that the products of the
private respondent originated or emanated from,
are associated with, or are manufactured or sold,
or sponsored by the petitioner by reason of the
use of the challenged trademark.
The petitioner also invoked the Convention of
Paris of March 20, 1883 for the Protection of
Industrial Property of which the Philippines and
Japan are both members. The petitioner stressed
that the Philippines' adherence to the Paris
Convention committed to the government to the
protection of trademarks belonging not only to
Filipino citizens but also to those belonging to
nationals of other member countries who may
seek protection in the Philippines. (Rollo, p. 522)
The petition was docketed as Inter Partes Cases
Nos. 1460 and 1461 (Rollo, p. 514)
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Meanwhile, the petitioner also filed with the
Securities and Exchange Commission (SEC) a
petition to cancel the mark "ISETAN" as part of the
registered corporate name of Isetann Department
Store, Inc. which petition was docketed as SEC
Case No. 2051 (Rollo, p. 524) On May 17, 1985,
this petition was denied in a decision rendered by
SEC's Hearing Officer, Atty. Joaquin C. Garaygay.
On appeal, the Commission reversed the decision
of the Hearing Officer on February 25, 1986. It
directed the private respondent to amend its
Articles of Incorporation within 30 days from
finality of the decision.
On April 15, 1986, however, respondent Isetann
Department Store filed a motion for
reconsideration. (Rollo, pp. 325-353). And on
September 10, 1987, the Commission reversed its
earlier decision dated February 25, 1986 thereby
affirming the decision rendered by the Hearing
Officer on May 17, 1985. The Commission stated
that since the petitioner's trademark and
tradename have never been used in commerce on
the petitioner's products marketed in the
Philippines, the trademark or tradename have not
acquired a reputation and goodwill deserving of
protection from usurpation by local competitors.
(Rollo, p. 392).
This SEC decision which denied and dismissed the
petition to cancel was submitted to the Director of
Patents as part of the evidence for the private
respondent.
On January 24, 1986, the Director of Patents after
notice and hearing rendered a joint decision in
Inter Partes Cases Nos. 1460 and 1461, the
dispositive portion of which reads:
WHEREFORE, all the foregoing
considered, this Office is constrained to
hold that the herein Petitioner has not
successfully made out a case of
cancellation. Accordingly, Inter Partes
Cases Nos. 1460 and 1461 are, as they are
hereby, DISMISSED. Hence, Respondent's
Certificate of Supplemental Registration
No. 4714 issued on May 20, 1980
covering the tradename "ISETANN DEPT.
STORE, INC. & FLOWER DESIGN" are, as
they are hereby, ordered to remain in full
force and effect for the duration of their
term unless sooner or later terminated by
law.
The corresponding application for
registration in the Principal Register of
the Trademark and of the tradename
aforesaid are hereby given due course.
Let the records of these cases be
transmitted to the Trademark Examining
Division for appropriate action in
accordance with this Decision.
On February 21, 1986, Isetan Company Limited
moved for the reconsideration of said decision but
the motion was denied on April 2, 1986 (Rollo, pp.
355-359).
From this adverse decision of the Director of
Patents, the petitioner appealed to the
Intermediate Appellate Court (now Court of
Appeals).
On June 2, 1986, the IAC dismissed the appeal on
the ground that it was filed out of time.
The petitioner's motion for reconsideration was
likewise denied in a resolution dated July 11,
1986.
Hence, this petition.
Initially, the Court dismissed the petition in a
resolution dated July 8, 1987, on the ground that it
was filed fourteen (14) days late. However, on
motion for reconsideration, whereby the
petitioner appealed to this Court on equitable
grounds stating that it has a strong and
meritorious case, the petition was given due
course in a resolution dated May 19, 1988 to
enable us to examine more fully any possible
denial of substantive justice. The parties were
then required to submit their memoranda. (Rollo,
pp. 2-28; Resolution, pp. 271; 453)
After carefully considering the records of this case,
we reiterate our July 8, 1987 resolution dismissing
the petition. There are no compelling equitable
considerations which call for the application of the
rule enunciated in Serrano v. Court of Appeals (139
SCRA 179 [1985]) and Orata v. Intermediate
Appellate Court, et al. (185 SCRA 148 [1990]) that
considerations of substantial justice manifest in
the petition may relax the stringent application of
technical rules so as not to defeat an exceptionally
meritorious petition.
There is no dispute and the petitioner does not
question the fact that the appeal was filed out of
time.
Not only was the appeal filed late in the Court of
Appeals, the petition for review was also filed late
with us. In common parlance, the petitioner's case
is "twice dead" and may no longer be reviewed.
The Court of Appeals correctly rejected the appeal
on the sole ground of late filing when it ruled:
Perfection of an appeal within the time
provided by law is jurisdictional, and
failure to observe the period is fatal.
The decision sought to be appealed is one
rendered by the Philippine Patent Office,
37 | I P L P a r t I
THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (How are marks acquired?)
a quasi-judicial body. Consequently, under
Section 23(c) of the Interim Rules of
Court, the appeal shall be governed by the
provisions of Republic Act No. 5434,
which provides in its Section 2;
Sec. 2. Appeals to Court of Appeals. -
Appeals to the Court of Appeals shall be
filed within fifteen (15) days from notice
of the ruling, award, order, decision or
judgment or from the date of its last
publication, if publication is required by
law for its effectivity; or in case a motion
for reconsideration is filed within that
period of fifteen (15) days, then within
ten (10) days from notice or publication,
when required by law, of the resolution
denying the motion for reconsideration.
No more than one motion for
reconsideration shall be allowed any
party. If no appeal is filed within the
periods here fixed, the ruling, award,
order, decision or judgment shall become
final and may be executed as provided by
existing law.
Attention is invited to that portion of
Section 2 which states that in case a
motion for reconsideration is filed, an
appeal should be filed within ten (10)
days from notice of the resolution
denying the motion for reconsideration.
The petitioner received a copy of the Court of
Appeals' resolution denying and received by us on
August 8, 1986, its motion for reconsideration on
July 17, 1986. It had only up to August 1, 1986 to
file a petition for review with us. The present
petition was posted on August 2, 1986. There is no
question that it was, again, filed late because the
petitioner filed an ex-parte motion for admission
explaining the delay.
The decision of the Patent Office has long become
final and executory. So has the Court of Appeal
decision.
Regarding the petitioner's claims of substantial
justice which led us to give due course, we decline
to disturb the rulings of the Patent Office and the
Court of Appeals.
A fundamental principle of Philippine Trademark
Law is that actual use in commerce in the
Philippines is a pre-requisite to the acquisition of
ownership over a trademark or a tradename.
The trademark Law, Republic Act No. 166, as
amended, under which this case heard and
decided provides:
SEC. 2. What are registrable.- Trademark,
tradenames and service marks owned by
persons, corporation, partnerships or
associations domiciled in the Philippines
and by persons, corporations,
partnerships or associations domicided in
any foreign country may be registered in
accordance with the provisions of this
Act: Provided, That said trademarks,
tradenames, or service marks are actually
in use in commerce and services not less
than two months in the Philippines before
the time the applications for registration
are filed: And provided, further, That the
country of which the applicant for
registration is a citizen grants by law
substantially similar privileges to citizens
of the Philippines, and such fact is
officially certified, with a certified true
copy of the foreign law translated into the
English language, by the government of
the foreign country to the Government of
the Republic of the Philippines. (As
amended by R.A. No. 865).
SEC. 2-A. Ownership of trademarks,
tradenames and service marks; how
acquired. - Anyone who lawfully produces
or deals in merchandise of any kind or
who engages in any lawful business, or
who renders any lawful service in
commerce, by actual use thereof in
manufacture or trade, in business, and in
the service rendered, may appropriate to
his exclusive use a trademark, a
tradename, or a service mark not so
appropriated by another, to distinguish
his merchandise, business or service from
the merchandise, business or service of
others. The ownership or possession of a
trademark, tradename, service mark,
heretofore or hereafter appropriated, as
in this section provided, shall be
recognized and protected in the same
manner and to the same extent as are
other property rights known to the law.
(As amended by R.A. No. 638)"
These provisions have been interpreted
in Sterling Products International, Inc. v.
Farbenfabriken Bayer Actiengesellschaft (27 SCRA
1214 [1969]) in this way:
A rule widely accepted and firmly
entrenched because it has come down
through the years is that actual use in
commerce or business is a prerequisite to
the acquisition of the right of ownership
over a trademark.
x x x           x x x          x x x
... Adoption alone of a trademark would
not give exclusive right thereto. Such right
grows out of their actual use. Adoption is
not use. One way make advertisements,
issue circulars, give out price lists on
certain goods; but these alone would not
38 | I P L P a r t I
THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (How are marks acquired?)
give exclusive right of use.For trademark
is a creation of use. The underlying reason
for all these is that purchasers have come
to understand the mark as indicating the
origin of the wares. Flowing from this is
the trader's right to protection in the
trade he has built up and the goodwill he
has accumulated from use of the
trademark. ...
In fact, a prior registrant cannot claim exclusive
use of the trademark unless it uses it in commerce.
We ruled in Pagasa Industrial Corporation v. Court
of Appeals (118 SCRA 526 [1982]):
3. The Trademark Law is very clear. It
requires actual commercial use of the
mark prior to its registration. - There is no
dispute that respondent corporation was
the first registrant, yet it failed to fully
substantiate its claim that it used in trade
or business in the Philippines the subject
mark; it did not present proof to invest it
with exclusive, continuous adoption of the
trademark which should consist among
others, of considerable sales since its first
use. The invoices (Exhibits 7, 7-a, and 8-b)
submitted by respondent which were
dated way back in 1957 show that the
zippers sent to the Philippines were to be
used as "samples" and "of no commercial
value". The evidence for respondent must
be clear, definite and free from
incosistencies. (Sy Ching v. Gaw Lui. 44
SCRA 148-149) "Samples" are not for sale
and therefore, the fact of exporting them
to the Philippines cannot be considered to
be equivalent to the "use" contemplated
by the law. Respondent did not expect
income from such "samples". "There were
no receipts to establish sale, and no proof
were presented to show that they were
subsequently sold in the Philippines."
(Pagasa Industrial Corp. v. Court of
Appeals, 118 SCRA 526 [1982]; Emphasis
Supplied)
The records show that the petitioner has never
conducted any business in the Philippines. It has
never promoted its tradename or trademark in
the Philippines. It has absolutely no business
goodwill in the Philippines. It is unknown to
Filipinos except the very few who may have
noticed it while travelling abroad. It has never
paid a single centavo of tax to the Philippine
government. Under the law, it has no right to the
remedy it seeks.
There can be no question from the records that
the petitioner has never used its tradename or
trademark in the Philippines.
The petitioner's witnesses, Mr. Mayumi Takayama
and Mr. Hieoya Murakami, admitted that:
1) The petitioner's company is not licensed to do
business in the Philippines;
2) The petitioner's trademark is not registered
under Philippine law; and
3) The petitioner's trademark is not being used on
products in trade, manufacture, or business in the
Philippines.
It was also established from the testimony of Atty.
Villasanta, petitioner's witness, that the petitioner
has never engaged in promotional activities in the
Philippines to popularize its trademark because
not being engaged in business in the Philippines,
there is no need for advertising. The claim of the
petitioner that millions of dollars have been spent
in advertising the petitioner's products, refers to
advertising in Japan or other foreign places. No
promotional activities have been undertaken in
the Philippines, by the petitioner's own admission.
Any goodwill, reputation, or knowledge regarding
the name Isetann is purely the work of the private
respondent. Evidence was introduced on the
extensive promotional activities of the private
respondent.
It might be pertinent at this point to stress that
what is involved in this case is not so much a
trademark as a tradename. Isetann Department
Store, Inc. is the name of a store and not of
product sold in various parts of the country. This
case must be differentiated from cases involving
products bearing such familiar names as "colgate",
"Singer". "Toyota", or "Sony" where the products
are marketed widely in the Philippines. There is
not product with the name "Isetann" popularized
with that brand name in the Philippines. Unless
one goes to the store called Isetann in Manila, he
would never know what the name means.
Similarly, until a Filipino buyer steps inside a store
called "Isetan" in Tokyo or Hongkong, that name
would be completely alien to him. The records
show that among Filipinos, the name cannot claim
to be internationally well-known.
The rule is that the findings of facts of the Director
of Patents are conclusive on the Supreme Court,
provided they are supported by substantial
evidence. (Chua Che v. Phil. Patent Office, 13 SCRA
67 [1965]; Chung Te v. Ng Kian Giab, 18 SCRA 747
[1966]; Marvex Commercial Co., Inc. v. Petra
Hawpia & Co., 18 SCRA 1178 [1966]; Lim Kiah v.
Kaynee, Co. 25 SCRA 485 [1968]; Kee Boc v. Dir. of
Patents, 34 SCRA 570 [1970]).
The conclusions of the Director of Patents are
likewise based on applicable law and
jurisprudence:
What is to be secured from unfair
competition in a given territory is the
trade which one has in that particular
territory. There is where his business is
39 | I P L P a r t I
THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (How are marks acquired?)
carried on where the goodwill symbolized
by the trademark has immediate value;
where the infringer may profit by
infringement.
There is nothing new in what we now say.
Plaintiff itself concedes (Brief for Plaintiff-
Appellant, p. 88) that the principle of
territoriality of the Trademark Law has
been recognized in the Philippines, citing
Ingenohl v. Walter E. Olsen, 71 L. ed. 762.
As Callmann puts it, the law of
trademarks "rests upon the doctrine of
nationality or territoriality." (2 Callmann,
Unfair Competition and Trademarks,
1945 ed., p. 1006) (Sterling Products
International, Inc. v. Farbenfabriken Bayer
Aktiengesellachaft, 27 SCRA 1214 [1969];
Emphasis supplied)
The mere origination or adoption of a particular
tradename without actual use thereof in the
market is insufficient to give any exclusive right to
its use (Johnson Mfg. Co. v. Leader Filling Stations
Corp. 196 N.E. 852, 291 Mass. 394), even though
such adoption is publicly declared, such as by use
of the name in advertisements, circulars, price
lists, and on signs and stationery. (Consumers
Petrolum Co. v. Consumers Co. of ILL. 169 F 2d
153)
The Paris Convention for the Protection of
Industrial Property does not automatically
exclude all countries of the world which have
signed it from using a tradename which happens
to be used in one country. To illustrate - If a
taxicab or bus company in a town in the United
Kingdom or India happens to use the tradename
"Rapid Transportation", it does not necessarily
follow that "Rapid" can no longer be registered in
Uganda, Fiji, or the Philippines.
As stated by the Director of Patents -
Indeed, the Philippines is a signatory to
this Treaty and, hence, we must honor our
obligation thereunder on matters
concerning internationally known or well
known marks. However, this Treaty
provision clearly indicated the conditions
which must exist before any trademark
owner can claim and be afforded rights
such as the Petitioner herein seeks and
those conditions are that:
a) the mark must be internationally
known or well known;
b) the subject of the right must be a
trademark, not a patent or copyright or
anything else;
c) the mark must be for use in the same or
similar kinds of goods; and
d) the person claiming must be the owner
of the mark (The Parties Convention
Commentary on the Paris Convention.
Article by Dr. Bogach, Director General of
the World Intellectual Property
Organization, Geneva, Switzerland, 1985)
The respondent registered its trademark in 1979.
It has continuously used that name in commerce.
It has established a goodwill through extensive
advertising. The people who buy at Isetann Store
do so because of Isetann's efforts. There is no
showing that the Japanese firm's registration in
Japan or Hongkong has any influence whatsoever
on the Filipino buying public.
WHEREFORE, premises considered, the petition is
hereby DISMISSED.
SO ORDERED.
Fernan, C.J., Paras and Bidin, JJ., concur.
40 | I P L P a r t I
THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (How are marks acquired?)
Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 91332 July 16, 1993
PHILIP MORRIS, INC., BENSON & HEDGES
(CANADA), INC., AND FABRIQUES OF TABAC
REUNIES, S.A., petitioners
vs.
THE COURT OF APPEALS AND FORTUNE
TOBACCO CORPORATION, respondents.
Quasha, Asperilla, Ancheta, Peña & Nolasco Law
Office for petitioners.
Teresita Gandionco-Oledan for private respondent.
MELO, J.:
In the petition before us, petitioners Philip Morris,
Inc., Benson and Hedges (Canada), Inc., and
Fabriques of Tabac Reunies, S.A., are ascribing
whimsical exercise of the faculty conferred upon
magistrates by Section 6, Rule 58 of the Revised
Rules of Court when respondent Court of Appeals
lifted the writ of preliminary injunction it earlier
had issued against Fortune Tobacco Corporation,
herein private respondent, from manufacturing
and selling "MARK" cigarettes in the local market.
Banking on the thesis that petitioners' respective
symbols "MARK VII", "MARK TEN", and "LARK",
also for cigarettes, must be protected against
unauthorized appropriation, petitioners twice
solicited the ancillary writ in the course the main
suit for infringement but the court of origin was
unpersuaded.
Before we proceed to the generative facts of the
case at bar, it must be emphasized that resolution
of the issue on the propriety of lifting the writ of
preliminary injunction should not be construed as
a prejudgment of the suit below. Aware of the fact
that the discussion we are about to enter into
involves a mere interlocutory order, a discourse
on the aspect infringement must thus be avoided.
With these caveat, we shall now shift our attention
to the events which spawned the controversy.
As averred in the initial pleading, Philip Morris,
Incorporated is a corporation organized under the
laws of the State of Virginia, United States of
America, and does business at 100 Park Avenue,
New York, New York, United States of America.
The two other plaintiff foreign corporations,
which are wholly-owned subsidiaries of Philip
Morris, Inc., are similarly not doing business in the
Philippines but are suing on an isolated
transaction. As registered owners "MARK VII",
"MARK TEN", and "LARK" per certificates of
registration issued by the Philippine Patent Office
on April 26, 1973, May 28, 1964, and March 25,
1964, plaintiffs-petitioners asserted that
defendant Fortune Tobacco Corporation has no
right to manufacture and sell cigarettes bearing
the allegedly identical or confusingly similar
trademark "MARK" in contravention of Section 22
of the Trademark Law, and should, therefore, be
precluded during the pendency of the case from
performing the acts complained of via a
preliminary injunction (p. 75, Court of
Appeals Rollo in AC-G.R. SP No. 13132).
For its part, Fortune Tobacco Corporation
admitted petitioners' certificates of registration
with the Philippine Patent Office subject to the
affirmative and special defense on misjoinder of
party plaintiffs. Private respondent alleged further
that it has been authorized by the Bureau of
Internal Revenue to manufacture and sell
cigarettes bearing the trademark "MARK", and
that "MARK" is a common word which cannot be
exclusively appropriated (p.158, Court of
Appeals Rollo in A.C.-G.R. SP No. 13132). On March
28, 1983, petitioners' prayer for preliminary
injunction was denied by the Presiding Judge of
Branch 166 of the Regional Trial Court of the
National Capital Judicial Region stationed at Pasig,
premised upon the following propositions:
Plaintiffs admit in paragraph 2 of
the complaint that ". . . they are
not doing business in the
Philippines and are suing on an
isolated transaction . . .". This
simply means that they are not
engaged in the sale, manufacture,
importation, expor[t]ation and
advertisement of their cigarette
products in the Philippines. With
this admission, defendant asks:
". . . how could defendant's
"MARK" cigarettes cause the
former "irreparable damage"
within the territorial limits of the
Philippines?" Plaintiffs maintain
that since their trademarks are
entitled to protection by treaty
obligation under Article 2 of the
Paris Convention of which the
Philippines is a member and
ratified by Resolution No. 69 of
the Senate of the Philippines and
as such, have the force and effect
of law under Section 12, Article
XVII of our Constitution and since
this is an action for a violation or
infringement of a trademark or
trade name by defendant, such
mere allegation is sufficient even
in the absence of proof to support
it. To the mind of the Court,
41 | I P L P a r t I
THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (How are marks acquired?)
precisely, this is the issue in the
main case to determine whether
or not there has been an invasion
of plaintiffs' right of property to
such trademark or trade name.
This claim of plaintiffs is disputed
by defendant in paragraphs 6 and
7 of the Answer; hence, this
cannot be made a basis for the
issuance of a writ of preliminary
injunction.
There is no dispute that the First
Plaintiff is the registered owner
of trademar[k] "MARK VII" with
Certificate of Registration No.
18723, dated April 26,1973 while
the Second Plaintiff is likewise
the registered owner of
trademark "MARK TEN" under
Certificate of Registration No.
11147, dated May 28, 1963 and
the Third Plaintiff is a registrant
of trademark "LARK" as shown
by Certificate of Registration No.
10953 dated March 23, 1964, in
addition to a pending application
for registration of trademark
"MARK VII" filed on November
21, 1980 under Application Serial
No. 43243, all in the Philippine
Patent Office. In same the
manner, defendant has a pending
application for registration of the
trademark "LARK" cigarettes
with the Philippine Patent Office
under Application Serial No.
44008. Defendant contends that
since plaintiffs are "not doing
business in the Philippines"
coupled the fact that the Director
of Patents has not denied their
pending application for
registration of its trademark
"MARK", the grant of a writ of
preliminary injunction is
premature. Plaintiffs contend
that this act(s) of defendant is
but a subterfuge to give
semblance of good faith intended
to deceive the public and
patronizers into buying the
products and create the
impression that defendant's
goods are identical with or come
from the same source as
plaintiffs' products or that the
defendant is a licensee of
plaintiffs when in truth and in
fact the former is not. But the fact
remains that with its pending
application, defendant has
embarked in the manufacturing,
selling, distributing and
advertising of "MARK" cigarettes.
The question of good faith or bad
faith on the part of defendant are
matters which are evidentiary in
character which have to be
proven during the hearing on the
merits; hence, until and unless
the Director of Patents has
denied defendant's application,
the Court is of the opinion and so
holds that issuance a writ of
preliminary injunction would not
lie.
There is no question that
defendant has been authorized
by the Bureau of Internal
Revenue to manufacture
cigarettes bearing the trademark
"MARK" (Letter of Ruben B.
Ancheta, Acting Commissioner
addressed to Fortune Tobacco
Corporation dated April 3, 1981,
marked as Annex "A",
defendant's "OPPOSITION, etc."
dated September 24, 1982).
However, this authority is
qualified . . . that the said brands
have been accepted and
registered by the Patent Office
not later than six (6) months
after you have been
manufacturing the cigarettes and
placed the same in the market."
However, this grant ". . . does not
give you protection against any
person or entity whose rights
may be prejudiced by
infringement or unfair
competition in relation to your
indicated trademarks/brands".
As aforestated, the registration of
defendant's application is still
pending in the Philippine Patent
Office.
It has been repeatedly held in
this jurisdiction as well as in the
United States that the right or
title of the applicant for
injunction remedy must be clear
and free from doubt. Because of
the disastrous and painful effects
of an injunction, Courts should be
extremely careful, cautious and
conscionable in the exercise of its
discretion consistent with justice,
equity and fair play.
There is no
power the
exercise of
which is more
delicate which
requires greater
caution,
deliberation,
and sound
42 | I P L P a r t I
THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (How are marks acquired?)
discretion, or for it is "MARK" cigarettes and now
(which is) more impossible to comes defendant who countered
dangerous in a foresee all and refused to be restrained
doubtful case exigencies of claiming that it has been
than the issuing society which authorized temporarily by the
of an injunction; may require Bureau of Internal Revenue
it is the strong their aid to under certain conditions to do so
arm of equity protect rights as aforestated coupled by its
that never ought and restrain pending application for
to be extended wrongs. registration of trademark
unless to cases (Merced M. Go v. "MARK" in the Philippine Patent
of great injury, Freemont, 7 Gal. Office. This circumstance in itself
where courts of 317, 321; 68 has created a dispute between
law cannot Am. Dec. 262.) the parties which to the mind of
afford an the Court does not warrant the
adequate or It is the strong issuance of a writ of preliminary
commensurate arm of the court; injunction.
remedy in and to render its
damages. The operation begin It is well-settled principle
right must be and useful, it that courts of equity will
clear, the injury must be refuse an application for
impending or exercised with the injunctive remedy
threatened, so great discretion, where the principle of law
as to be averted and when on which the right to
only by the necessary preliminary injunction
protecting requires it. rests is disputed and will
preventive (Attorney- admit of doubt, without a
process of General v. Utica decision of the court of
injunction. Inc. Co., P. John law establishing such
(Bonaparte v. Ch. (N.Y.) 371.) principle although
Camden, etc. N. satisfied as to what is a
Co., 3 F. Cas. No. Having taken a panoramic view correct conclusion of law
1, 617, Baldw. of the position[s] of both parties upon the facts. The fact,
205, 217.) as viewed from their pleadings, however, that there is no
the picture reduced to its such dispute or conflict
Courts of equity minimum size would be this: At does not in itself
constantly the crossroads are the two (2) constitute a justifiable
decline to lay contending parties, plaintiffs ground for the court to
down any rule vigorously asserting the rights refuse an application for
which injunction granted by law, treaty and the injunctive relief.
shall be granted jurisprudence to restrain (Hackensack Impr.
or withheld. defendant in its activities of Commn. v. New Jersey
There is wisdom manufacturing, selling, Midland P. Co., 22 N.J. Eg.
in this course, distributing and advertising its 94.)

43 | I P L P a r t I
THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (How are marks acquired?)
Hence, the status quo existing
between the parties prior to the
filing of this case should be
maintained. For after all, an
injunction, without reference to
the parties, should be violent,
vicious nor even vindictive. (pp.
338-341, Rollo in G.R. No. 91332.)
In the process of denying petitioners' subsequent
motion for reconsideration of the order denying
issuance of the requested writ, the court of origin
took cognizance of the certification executed on
January 30, 1984 by the Philippine Patent Office
attesting to the fact that private respondent's
application for registration is still pending
appropriate action. Apart from this
communication, what prompted the trial court
judge to entertain the idea of prematurity and
untimeliness of petitioners' application for a writ
of preliminary injunction was the letter from the
Bureau of Internal Revenue date February 2, 1984
which reads:
MRS. TERESITA GANDIONGCO
OLEDAN
Legal Counsel
Fortune Tobacco Corporation
Madam:
In connection with your letter
dated January 25, 1984,
reiterating your query as to
whether your label approval
automatically expires or becomes
null and void after six (6) months
if the brand is not accepted and
by the patent office, please be
informed that no provision in the
Tax Code or revenue regulation
that requires an applicant to
comply with the aforementioned
condition order that his label
approved will remain valid and
existing.
Based on the document you
presented, it shows that
registration of this particular
label still pending resolution by
the Patent Office. These being so ,
you may therefore continue with
the production said brand of
cigarette until this Office is
officially notified that the
question of ownership of "MARK"
brand is finally resolved.
Very truly yours,
TEODORO
Chief,
Tax
TAN-P6531-D2830-A-6 The Court cannot help but take
(p. 348, Rollo.)
It appears from the testimony of Atty. Enrique
Madarang, Chief of the Trademark Division of the
then Philippine Patent Office that Fortune's
application for its trademark is still pending
before said office (p. 311, Rollo).
Petitioners thereafter cited supervening events
which supposedly transpired since March 28,
1983, when the trial court first declined issuing a
writ of preliminary injunction, that could alter the
results of the case in that Fortune's application
had been rejected, nay, barred by the Philippine
Patent Office, and that the application had been
forfeited by abandonment, but the trial court
nonetheless denied the second motion for
issuance of the injunctive writ on April 22, 1987,
thus:
For all the prolixity of their
pleadings and testimonial
evidence, the plaintiffs-movants
have fallen far short of the legal
requisites that would justify the
grant of the writ of preliminary
injunction prayed for. For one,
they did not even bother to
establish by competent evidence
that the products supposedly
affected adversely by defendant's
trademark now subject of an
application for registration with
the Philippine Patents Office, are
in actual use in the Philippines.
For another, they concentrated
their fire on the alleged
abandonment and forfeiture by
defendant of said application for
D. PAREÑ O
registration.
Manufactured Tobacco
Division
note of the fact that in their
complaint plaintiffs included a
prayer for issuance preliminary
injunction. The petition was duly
heard, and thereafter matter was
assiduously discussed lengthily
and resolved against plaintiffs in
a 15-page Order issued by the
undersigned's predecessor on
March 28, 1983. Plaintiffs'
motion for reconsideration was
denied in another well-argued 8
page Order issued on April 5,
1984,, and the matter was made
to rest.
However, on the strength of
supposed changes in the material
facts of this case, plaintiffs came
up with the present motion citing
therein the said changes which
are: that defendant's application
44 | I P L P a r t I
THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (How are marks acquired?)
had been rejected and barred by
the Philippine Patents Office, and
that said application has been
deemed abandoned and forfeited.
But defendant has refiled the
same.
Plaintiffs' arguments in support
of the present motion appear to
be a mere rehash of their stand in
the first above-mentioned
petition which has already been
ruled upon adversely against
them. Granting that the alleged
changes in the material facts are
sufficient grounds for a motion
seeking a favorable grant of what
has already been denied, this
motion just the same cannot
prosper.
In the first place there is no proof
whatsoever that any of plaintiffs'
products which they seek to
protect from any adverse effect of
the trademark applied for by
defendant, is in actual use and
available for commercial
purposes anywhere in the
Philippines. Secondly as shown
by plaintiffs' own evidence
furnished by no less than the
chief of Trademarks Division of
the Philippine Patent Office, Atty.
Enrique Madarang, the
abandonment of an application is
of no moment, for the same can
always be refiled. He said there is
no specific provision in the rules
prohibiting such refiling (TSN,
November 21, 1986, pp. 60 & 64,
Raviera). In fact, according to
Madarang, the refiled application
of defendant is now pending
before the Patents Office. Hence,
it appears that the motion has no
leg to stand on. (pp. 350-
351, Rollo in G. R. No. 91332.)
Confronted with this rebuff, petitioners filed a
previous petition for certiorari before the Court,
docketed as G.R. No. 78141, but the petition was
referred to the Court of Appeals.
The Court of Appeals initially issued a resolution
which set aside the court of origin's order dated
April 22, 1987, and granted the issuance of a writ
of preliminary injunction enjoining Fortune, its
agents, employees, and representatives, from
manufacturing, selling, and advertising "MARK"
cigarettes. The late Justice Cacdac, speaking for
the First Division of the Court of Appeals in CA-
G.R. SP No. 13132, remarked:
There is no dispute that
petitioners are the registered
owners of the trademarks for
cigarettes "MARK VII", "MARK
TEN", and "LARK".(Annexes B, C
and D, petition). As found and
reiterated by the Philippine
Patent Office in two (2) official
communications dated April 6,
1983 and January 24, 1984, the
trademark "MARK" is
"confusingly similar" to the
trademarks of petitioners, hence
registration was barred under
Sec. 4 (d) of Rep. Act. No. 166, as
amended (pp. 106, 139,
SCA rollo). In a third official
communication dated April 8,
1986, the trademark application
of private respondent for the
"MARK" under Serial No. 44008
filed on February 13, 1981 which
was declared abandoned as of
February 16, 1986, is now
deemed forfeited, there being no
revival made pursuant to Rule 98
of the Revised Rules of
Practitioners in Trademark
Cases." (p. 107, CA rollo). The
foregoing documents or
communications mentioned by
petitioners as "the changes in
material facts which occurred
after March 28, 1983", are not
also questioned by respondents.
Pitted against the petitioners'
documentary evidence,
respondents pointed to (1) the
letter dated January 30, 1979 (p.
137, CA rollo) of Conrado P. Diaz,
then Acting Commissioner of
Internal Revenue, temporarily
granting the request of private
respondent for a permit to
manufacture two (2) new brands
of cigarettes one of which is
brand "MARK" filter-type blend,
and (2) the certification dated
September 26, 1986 of Cesar G.
Sandico, Director of Patents (p.
138, CA rollo) issued upon the
written request of private
respondents' counsel dated
September 17, 1986 attesting
that the records of his office
would show that the "trademark
MARK" for cigarettes is now the
subject of a pending application
under Serial No. 59872 filed on
September 16, 1986.
Private respondent's
documentary evidence provides
the reasons neutralizing or
weakening their probative
values. The penultimate
45 | I P L P a r t I
THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (How are marks acquired?)
paragraph of Commissioner Diaz' contrary to the Ortigas & Co. vs. Ruiz, 148 SCRA
letter of authority reads: provisions of the 326). It is a writ framed
Trademark Law, according to the circumstances of
Please be Rep. Act No. 166 the case commanding an act
informed as amended and which the Court regards as
further that the the Revised essential to justice and
authority herein Rules of Practice restraining an act it deems
granted does in Trademark contrary to equity and good
not give you Cases. conscience (Rosauro vs. Cuneta,
protection 151 SCRA 570). If it is not issued,
against any The temporary permit to the defendant may, before final
person or entity manufacture under the judgment, do or continue the
whose rights trademark "MARK" for cigarettes doing of the act which the
may be and the acceptance of the second plaintiff asks the court to
prejudiced by application filed by private restrain, and thus make
infringement or respondent in the height of their ineffectual the final judgment
unfair dispute in the main case were rendered afterwards granting the
competition in evidently made subject to the relief sought by the plaintiff (Calo
relation to your outcome of the said main case or vs. Roldan, 76 Phil. 445).
above-named Civil Case No. 47374 of the Generally, its grant or denial
brands/tradema respondent Court. Thus, the rests upon the sound discretion
rk. Court has not missed to note the of the Court except on a clear
absence of a mention in the case of abuse (Belish Investment
while Director Sandico's Sandico letter of September 26, & Finance Co. vs. State House,
certification contained similar 1986 of any reference to the 151 SCRA 636). Petitioners' right
conditions as follows: pendency of the instant action of exclusivity to their registered
filed on August 18, 1982. We trademarks being clear and
believe and hold that petitioners beyond question, the respondent
This
have shown a prima facie case for court's denial of the prohibitive
Certification,
the issuance of the writ of writ constituted excess of
however, does
prohibitory injunction for the jurisdiction and grave abuse
not give
purposes stated in their discretion. If the lower court does
protection as
complaint and subsequent not grant preliminary injunction,
against any
motions for the issuance of the the appellate court may grant the
person or entity
prohibitory writ. (Buayan Cattle same. (Service Specialists, Inc. vs.
whose right may
Co. vs. Quintillan, 125 SCRA 276) Sheriff of Manila, 145 SCRA 139).
be prejudiced by (pp. 165-167, Rollo in G.R. No.
infringement or
The requisites for the granting of 91332.)
unfair
competition in preliminary injunction are the
relation to the existence of the right protected After private respondent Fortune's motion for
aforesaid and the facts against which the reconsideration was rejected, a motion to dissolve
trademark nor injunction is to be directed as the disputed writ of preliminary injunction with
the right to violative of said right. (Buayan offer to post a counterbond was submitted which
register if Cattle Co. vs. Quintillan, supra; was favorably acted upon by the Court of Appeals,

46 | I P L P a r t I
THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (How are marks acquired?)
premised on the filing of a sufficient counterbond
to answer for whatever perjuicio petitioners may
suffer as a result thereof, to wit:
The private respondent seeks to
dissolve the preliminary
injunction previously granted by
this Court with an offer to file a
counterbond. It was pointed out
in its supplemental motion that
lots of workers employed will be
laid off as a consequence of the
injunction and that the
government will stand to lose the
amount of specific taxes being
paid by the
private respondent. The specific
taxes being paid is the sum total
of P120,120, 295.98 from January
to July 1989.
The petitioners argued in their
comment that the damages
caused by the infringement of
their trademark as well as the
goodwill it generates are
incapable of pecuniary
estimation and monetary
evaluation and not even the
counterbond could adequately
compensate for the damages it
will incur as a result of the
dissolution of the bond. In
addition, the petitioner further
argued that doing business in the
Philippines is not relevant as the
injunction pertains to an
infringement of a trademark
right.
After a thorough re-examination
of the issues involved and the
arguments advanced by both
parties in the offer to file a
counterbond and the opposition
thereto, WE believe that there are
sound and cogent reasons for US
to grant the dissolution of the
writ of preliminary injunction by
the offer of the private
respondent to put up a
counterbond to answer for
whatever damages the petitioner
may suffer as a consequence of
the dissolution of the preliminary
injunction.
The petitioner will not be
prejudiced nor stand to suffer
irreparably as a consequence of
the lifting of the preliminary
injunction considering that they
are not actually engaged in the
manufacture of the cigarettes
with the trademark in question
and the filing of the counterbond
will amply answer for such
damages.
While the rule is that an offer of a
counterbond does not operate to
dissolve an injunction previously
granted, nevertheless, it is
equally true that an injunction
could be dissolved only upon
good and valid grounds subject to
the sound discretion of the court.
As WE have maintained the view
that there are sound and good
reasons to lift the preliminary
injunction, the motion to file a
counterbond is granted. (pp. 53-
54, Rollo in G.R. No. 91332.)
Petitioners, in turn, filed their own motion for re-
examination geared towards reimposition of the
writ of preliminary injunction but to no avail (p.
55, Rollo in G.R. No. 91332).
Hence, the instant petition casting three
aspersions that respondent court gravely abused
its discretion tantamount to excess of jurisdiction
when:
I. . . . it required, contrary to law
and jurisprudence, that in order
that petitioners may suffer
irreparable injury due to the
lifting of the injunction,
petitioners should be using
actually their registered
trademarks in commerce in the
Philippines;
II. . . . it lifted the injunction in
violation of section 6 of Rule 58
of the Rules of Court; and
III. . . . after having found that the
trial court had committed grave
abuse of discretion and exceeded
its jurisdiction for having refused
to issue the writ of injunction to
restrain private respondent's
acts that are contrary to equity
and good conscience, it made a
complete about face for legally
insufficient grounds and
authorized the private
respondent to continue
performing the very same acts
that it had considered contrary to
equity and good conscience,
thereby ignoring not only the
mandates of the Trademark Law,
the international commitments of
the Philippines, the judicial
admission of private respondent
that it will have no more right to
use the trademark "MARK" after
the Director of Patents shall have
rejected the application to
register it, and the admonitions
47 | I P L P a r t I
THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (How are marks acquired?)
of the Supreme Court. (pp. 24-25,
Petition; pp. 25-26, Rollo.)
To sustain a successful prosecution of their suit
for infringement, petitioners, as foreign
corporations not engaged in local commerce, rely
on section 21-A of the Trademark Law reading as
follows:
Sec. 21-A. Any foreign
corporation or juristic person to
which a mark or trade-name has
been registered or assigned
under this act may bring an
action hereunder for
infringement, for unfair
competition, or false designation
of origin and false description,
whether or not it has been
licensed to do business in the
Philippines under Act Numbered
Fourteen hundred and fifty-nine,
as amended, otherwise known as
the Corporation Law, at the time
it brings complaint: Provided,
That the country of which the
said foreign corporation or
juristic person is a citizen or in
which it is domiciled, by treaty,
convention or law, grants a
similar privilege to corporate or
juristic persons of the
Philippines. (As inserted by Sec. 7
of Republic Act No. 638.)
to drive home the point that they
are not precluded from initiating
a cause of action in the
Philippines on account of the
principal perception that another
entity is pirating their symbol
without any lawful authority to
do so. Judging from a perusal of
the aforequoted Section 21-A, the
conclusion reached by
petitioners is certainly correct for
the proposition in support
thereof is embedded in the
Philippine legal jurisprudence.
Indeed, it was stressed in General Garments
Corporation vs. Director of Patents (41 SCRA 50
[1971]) by then Justice (later Chief Justice)
Makalintal that:
Parenthetically, it may be stated
that the ruling in the
Mentholatum case was
subsequently derogated when
Congress, purposely to
"counteract the effects" of said
case, enacted Republic Act No.
638, inserting Section 21-A in the
Trademark Law, which allows a
foreign corporation or juristic
person to bring an action in
Philippine courts for
infringement of a mark or
tradename, for unfair
competition, or false designation
of origin and false description,
"whether or not it has been
licensed to do business in the
Philippines under Act Numbered
Fourteen hundred and fifty-nine,
as amended, otherwise known as
the Corporation Law, at the time
it brings complaint."
Petitioner argues that Section 21-
A militates against respondent's
capacity to maintain a suit for
cancellation, since it requires,
before a foreign corporation may
bring an action, that its
trademark or tradename has
been registered under the
Trademark Law. The argument
misses the essential point in the
said provision, which is that the
foreign corporation is allowed
thereunder to sue "whether or
not it has been licensed to do
business in the Philippines"
pursuant to the Corporation Law
(precisely to counteract the
effects of the decision in the
Mentholatum case). (at p. 57.)
However, on May, 21, 1984, Section 21-A, the
provision under consideration, was qualified by
this Court in La Chemise Lacoste S.A. vs.
Fernandez (129 SCRA 373 [1984]), to the effect
that a foreign corporation not doing business in
the Philippines may have the right to sue before
Philippine Courts, but existing adjective axioms
require that qualifying circumstances necessary
for the assertion of such right should first be
affirmatively pleaded (2 Agbayani Commercial
Laws of the Philippines, 1991 Ed., p. 598; 4 Martin,
Philippine Commercial Laws, Rev. Ed., 1986, p.
381). Indeed, it is not sufficient for a foreign
corporation suing under Section 21-A to simply
allege its alien origin. Rather, it must additionally
allege its personality to sue. Relative to this
condition precedent, it may be observed that
petitioners were not remiss in averring their
personality to lodge a complaint for infringement
(p. 75, Rollo in AC-G.R. SP No. 13132) especially so
when they asserted that the main action for
infringement is anchored on an isolated
transaction (p. 75, Rollo in AC-G.R. SP No. 13132;
Atlantic Mutual Ins. Co. vs. Cebu Stevedoring Co.,
Inc., 17 SCRA 1037 (1966), 1 Regalado, Remedial
Law Compendium, Fifth Rev. Ed., 1988, p. 103).
Another point which petitioners considered to be
of significant interest, and which they desire to
impress upon us is the protection they enjoy
under the Paris Convention of 1965 to which the
Philippines is a signatory. Yet, insofar as this
discourse is concerned, there is no necessity to
48 | I P L P a r t I
THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (How are marks acquired?)
treat the matter with an extensive response Sec. 2. What are registrable. —
because adherence of the Philippines to the 1965 Trademarks, tradenames and
international covenant due to  pact sunt service marks owned by persons,
servanda had been acknowledged in La corporations, partnerships or
Chemise (supra at page 390). associations domiciled in the
Philippines and by persons,
Given these confluence of existing laws amidst the corporations, partnerships or
cases involving trademarks, there can be no associations domiciled in any
disagreement to the guiding principle in foreign country may be
commercial law that foreign corporations not registered in accordance with the
engaged in business in the Philippines may provisions of this Act; Provided,
maintain a cause of action for infringement That said trademarks,
primarily because of Section 21-A of the tradenames, or service marks are
Trademark Law when the legal standing to sue is actually in use in commerce and
alleged, which petitioners have done in the case at services not less than two
hand. months in the Philippines before
the time the applications for
In assailing the justification arrived at by registration are filed; And
respondent court when it recalled the writ of provided, further, That the
preliminary injunction, petitioners are of the country of which the applicant
impression that actual use of their trademarks in for registration is a citizen grants
Philippine commercial dealings is not an by law substantially similar
indispensable element under Article 2 of the Paris privileges to citizens of the
Convention in that: Philippines, and such fact is
officially certified, with a certified
true copy of the foreign law
(2) . . . . no condition as to the translated into the English
possession of a domicile or language, by the government of
establishment in the country the foreign country to the
where protection is claimed may Government of the Republic of
be required of persons entitled to the Philippines. (As amended by
the benefits of the Union for the R.A. No. 865).
enjoyment of any industrial
property of any industrial
property rights. (p. 28, Petition; Sec. 2-A. Ownership of
p. 29, Rollo in G.R. No. 91332.) trademarks, tradenames and
service marks; how acquired. —
Anyone who lawfully produces or
Yet petitioners' perception along this line is deals in merchandise of any kind
nonetheless resolved by Sections 2 and 2-A of the or who engages in any lawful
Trademark Law which speak loudly, about business, or who renders any
necessity of actual commercial use of the lawful service in commerce, by
trademark in the local forum: actual use thereof in manufacture
or trade, in business, and in the
service rendered, may
appropriate to his exclusive use a
trademark, a tradename, or a
service mark not so appropriated
by another, to distinguish his
merchandise, business or service
from the merchandise, business
or service of others. The
ownership or possession of a
trademark, tradename, service
mark, heretofore or hereafter
appropriated, as in this section
provided, shall be recognized and
protected in the same manner
and to the same extent as are
other property rights known to
the law. (As amended by R.A. No.
638). (Kabushi Kaisha Isetan vs.
Intermediate Appellate Court,
203 SCRA 583 [1991], at pp. 589-
590; emphasis supplied.)
Following universal acquiescence and comity, our
municipal law on trademarks regarding the
requirement of actual use in the Philippines must
subordinate an international agreement inasmuch
as the apparent clash is being decided by a
municipal tribunal (Mortensen vs. Peters, Great
Britain, High Court of Judiciary of Scotland, 1906,
8 Sessions 93; Paras, International Law and World
Organization, 1971 Ed., p. 20). Withal, the fact that
international law has been made part of the law of
the land does not by any means imply the primacy
of international law over national law in the
municipal sphere. Under the doctrine of
incorporation as applied in most countries, rules
of international law are given a standing equal, not
superior, to national legislative enactments
(Salonga and Yap, Public International Law,
Fourth ed., 1974, p. 16).
The aforequoted basic provisions of our
Trademark Law, according to Justice Gutierrez, Jr.,
in Kabushi Kaisha Isetan vs. Intermediate Appellate
49 | I P L P a r t I
THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (How are marks acquired?)
Court (203 SCRA 583 [1991]), have been thereto. Such 3. The Trademark law is very
construed in this manner: right grows out clear. It requires actual
of their actual commercial use of the mark prior
A fundamental principle of use. Adoption is to its registration. There is no
Philippine Trademark Law is that not use. One dispute that respondent
actual use in commerce in the may make corporation was the first
Philippines is a pre-requisite to advertisements, registrant, yet it failed to fully
the acquisition of ownership over issue circulars, substantiate its claim that it used
a trademark or a tradename. give out price in trade or business in the
lists on certain Philippines the subject mark; it
xxx xxx xxx goods; but these did not present proof to invest it
alone would not with exclusive, continuous
give exclusive adoption of the trademark which
These provisions have been right of use. For should consist among others, of
interpreted in Sterling Products trademark is a considerable sales since its first
International, Inc. v. creation of use. use. The invoices (Exhibits 7, 7-a,
Farbenfabriken Bayer The underlying and 8-b) submitted by
Actiengesellschaft (27 SCRA 1214 reason for all respondent which were dated
[1969]) in this way: these is that way back in 1957 show that the
purchasers have zippers sent to the Philippines
A rule widely come to were to be used as "samples" and
accepted and understand the "of no commercial value". The
firmly mark as evidence for respondent must be
entrenched indicating the clear, definite and free from
because it has origin of the inconsistencies. (Sy Ching v. Gaw
come down wares. Flowing Lui, 44 SCRA 148-149) "Samples"
through the from this is the are not for sale and therefore, the
years is that trader's right to fact of exporting them to the
actual use in protection in the Philippines cannot be considered
commerce or trade he has to be equivalent to the "use"
business is a built up and the contemplated by the law.
prerequisite to goodwill he has Respondent did not expect
the acquisition accumulated income from such "samples".
of the right of from use of the There were no receipts to
ownership over trademark. . . . establish sale, and no proof were
a trademark. presented to show that they were
In fact, a prior registrant cannot subsequently sold in the
x x x           x x x          x x x claim exclusive use of the Philippines. (Pagasa Industrial
trademark unless it uses it in Corp. v. Court of Appeals, 118
. . . Adoption commerce. SCRA 526 [1982]; Emphasis
alone of a Supplied)
trademark We rule[d] in Pagasa Industrial
would not give Corporation v. Court of The records show that the
exclusive right Appeals (118 SCRA 526 [1982]): petitioner has never conducted

50 | I P L P a r t I
THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (How are marks acquired?)
any business in the Philippines. It
has never promoted its
tradename or trademark in the
Philippines. It is unknown to
Filipino except the very few who
may have noticed it while
travelling abroad. It has never
paid a single centavo of tax to the
Philippine government. Under
the law, it has no right to the
remedy it seeks. (at pp. 589-591.)
In other words, petitioners may have the capacity
to sue for infringement irrespective of lack of
business activity in the Philippines on account of
Section 21-A of the Trademark Law but the
question whether they have an exclusive right
over their symbol as to justify issuance of the
controversial writ will depend on actual use of
their trademarks in the Philippines in line with
Sections 2 and 2-A of the same law. It is thus
incongruous for petitioners to claim that when a
foreign corporation not licensed to do business in
Philippines files a complaint for infringement, the
entity need not be actually using its trademark in
commerce in the Philippines. Such a foreign
corporation may have the personality to file a suit
for infringement but it may not necessarily be
entitled to protection due to absence of actual use
of the emblem in the local market.
Going back to the first assigned error, we can not
help but notice the manner the ascription was
framed which carries with it the implied but
unwarranted assumption of the existence of
petitioners' right to relief. It must be emphasized
that this aspect of exclusive dominion to the
trademarks, together with the corollary allegation
of irreparable injury, has yet to be established by
petitioners by the requisite quantum of evidence
in civil cases. It cannot be denied that our
reluctance to issue a writ of preliminary
injunction is due to judicial deference to the lower
courts, involved as there is mere interlocutory
order (Villarosa vs. Teodoro, Sr., 100 Phil. 25
[1956]). In point of adjective law, the petition has
its roots on a remedial measure which is but
ancillary to the main action for infringement still
pending factual determination before the court of
origin. It is virtually needless to stress the obvious
reality that critical facts in an infringement case
are not before us more so when even Justice
Feliciano's opinion observes that "the evidence is
scanty" and that petitioners "have yet to submit
copies or photographs of their registered marks as
used in cigarettes" while private respondent has
not, for its part, "submitted the actual labels or
packaging materials used in selling its "Mark"
cigarettes." Petitioners therefore, may not be
permitted to presume a given state of facts on
their so called right to the trademarks which could
be subjected to irreparable injury and in the
process, suggest the fact of infringement. Such a
ploy would practically place the cart ahead of the
horse. To our mind, what appears to be the
insurmountable barrier to petitioners' portrayal
of whimsical exercise of discretion by the Court of
Appeals is the well-taken remark of said court
that:
The petitioner[s] will not be
prejudiced nor stand to suffer
irreparably as a consequence of
the lifting of the preliminary
injunction considering that they
are not actually engaged in the
manufacture of the cigarettes
with the trademark in question
and the filing of the counterbond
will amply answer for such
damages. (p. 54. Rollo in G.R. No.
91332.)
More telling are the allegations of petitioners in
their complaint (p. 319, Rollo G.R. No. 91332) as
well as in the very petition filed with this Court (p.
2, Rollo in G.R. No. 91332) indicating that they are
not doing business in the Philippines, for these
frank representations are inconsistent and
incongruent with any pretense of a right which
can breached (Article 1431, New Civil Code;
Section 4, Rule 129; Section 3, Rule 58, Revised
Rules of Court). Indeed, to be entitled to an
injunctive writ, petitioner must show that there
exists a right to be protected and that the facts
against which injunction is directed are violative
of said right (Searth Commodities Corporation vs.
Court of Appeals, 207 SCRA 622 [1992]). It may be
added in this connection that albeit petitioners are
holders of certificate of registration in the
Philippines of their symbols as admitted by
private respondent, the fact of exclusive
ownership cannot be made to rest solely on these
documents since dominion over trademarks is not
acquired by the mere fact of registration alone and
does not perfect a trademark right (Unno
Commercial Enterprises, Inc. vs. General Milling
Corporation, 120 SCRA 804 [1983]).
Even if we disregard the candid statements of
petitioners anent the absence of business activity
here and rely on the remaining statements of the
complaint below, still, when these averments are
juxtaposed with the denials and propositions of
the answer submitted by private respondent, the
supposed right of petitioners to the symbol have
thereby been controverted. This is not to say,
however, that the manner the complaint was
traversed by the answer is sufficient to tilt the
scales of justice in favor of private respondent. Far
from it. What we are simply conveying is another
basic tenet in remedial law that before injunctive
relief may properly issue, complainant's right or
title must be undisputed and demonstrated on the
strength of one's own title to such a degree as to
unquestionably exclude dark clouds of doubt,
rather than on the weakness of the adversary's
evidence, inasmuch as the possibility of
irreparable damage, without prior proof of
transgression of an actual existing right, is no
ground for injunction being mere damnum absque
injuria (Talisay-Silay Milling Co., Inc. vs. CFI of
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (How are marks acquired?)
Negros Occidental, 42 SCRA 577 [1971];
Francisco, Rules of Court, Second ed., 1985, p. 225;
3 Martin, Rules of Court, 1986 ed., p. 82).
On the economic repercussion of this case, we are
extremely bothered by the thought of having to
participate in throwing into the streets Filipino
workers engaged in the manufacture and sale of
private respondent's "MARK" cigarettes who
might be retrenched and forced to join the ranks
of the many unemployed and unproductive as a
result of the issuance of a simple writ of
preliminary injunction and this, during the
pendency of the case before the trial court, not to
mention the diminution of tax revenues
represented to be close to a quarter million pesos
annually. On the other hand, if the status quo is
maintained, there will be no damage that would
be suffered by petitioners inasmuch as they are
not doing business in the Philippines.
With reference to the second and third issues
raised by petitioners on the lifting of the writ of
preliminary injunction, it cannot be gainsaid that
respondent court acted well within its
prerogatives under Section 6, Rule 58 of the
Revised Rules of Court:
Sec. 6. Grounds for objection to, or
for motion of dissolution of
injunction. — The injunction may
be refused or, if granted ex parte,
may be dissolved, upon the
insufficiency of the complaint as
shown by the complaint itself,
with or without notice to the
adverse party. It may also be
refused or dissolved on other
grounds upon affidavits on the
part of the defendants which may
be opposed by the plaintiff also
by affidavits. It may further be
refused or, if granted, may be
dissolved, if it appears after
hearing that although the plaintiff
is entitled to the injunction, the
issuance or continuance thereof,
as the case may be, would cause
great damage to the defendant
while the plaintiff can be fully
compensated for such damages
as he may suffer, and the
defendant files a bond in an
amount fixed by the judge
conditioned that he will pay all
damages which the plaintiff may
suffer by the refusal or the
dissolution of the injunction. If it
appears that the extent of the
preliminary injunction granted is
too great, it must be modified.
Under the foregoing rule, injunction may be
refused, or, if granted, may be dissolved, on the
following instances:
(1) If there is insufficiency of the
complaint as shown by the
allegations therein. Refusal or
dissolution may be granted in
this case with or without notice
to the adverse party.
(2) If it appears after hearing that
although the plaintiff is entitled
to the injunction, the issuance or
continuance thereof would cause
great damage to the defendant,
while the plaintiff can be fully
compensated for such damages
as he may suffer. The defendant,
in this case, must file a bond in an
amount fixed by the judge
conditioned that he will pay all
damages which plaintiff may
suffer by the refusal or the
dissolution of the injunction.
(3) On the other grounds upon
affidavits on the part of the
defendant which may be opposed
by the plaintiff also affidavits.
Modification of the injunction
may also be ordered by the court
if it appears that the extent of the
preliminary injunction granted is
too great. (3 Martin, Rules of
Court, 1986 ed., p. 99;
Francisco, supra, at p. 268.)
In view of the explicit representation of
petitioners in the complaint that they are not
engaged in business in the Philippines, it
inevitably follows that no conceivable damage can
be suffered by them not to mention the foremost
consideration heretofore discussed on the absence
of their "right" to be protected. At any rate, and
assuming in gratia argumenti that respondent
court erroneously lifted the writ it previously
issued, the same may be cured by appeal and not
in the form of a petition for certiorari (Clark vs.
Philippine Ready Mix Concrete Co., 88 Phil. 460
[1951]). Verily, and mindful of the rule that a writ
of preliminary injunction is an interlocutory order
which is always under the control of the court
before final judgment, petitioners' criticism must
fall flat on the ground, so to speak, more so when
extinction of the previously issued writ can even
be made without previous notice to the adverse
party and without a hearing (Caluya vs. Ramos, 79
Phil. 640 [1974]; 3 Moran, Rules of Court, 1970
ed., p. 81).
WHEREFORE, the petition is hereby DISMISSED
and the Resolutions of the Court of Appeals dated
September 14, 1989 and November 29, 1989 are
hereby AFFIRMED.
SO ORDERED.
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Bidin, J., concurs.

Davide, Jr., concurs in the result.

Romero, J. took no part.

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United States of America, is, per Certificate of
Republic of the Philippines Registration No. 18723 issued on April 26, 1973
SUPREME COURT by the Philippine Patents Office (PPO), the
Manila registered owner of the trademark "MARK VII" for
cigarettes. Similarly, petitioner Benson & Hedges
G.R. No. 158589             June 27, 2006 (Canada), Inc., a subsidiary of Philip Morris, Inc., is
the registered owner of the trademark "MARK
TEN" for cigarettes as evidenced by PPO
PHILIP MORRIS, INC., BENSON & HEDGES Certificate of Registration No. 11147. And as can
(CANADA), INC., and FABRIQUES DE TABAC be seen in Trademark Certificate of Registration
REUNIES, S.A., (now known as PHILIP MORRIS No. 19053, another subsidiary of Philip Morris,
PRODUCTS S.A.), Petitioners, Inc., the Swiss company Fabriques de Tabac
vs. Reunies, S.A., is the assignee of the trademark
FORTUNE TOBACCO "LARK," which was originally registered in 1964
CORPORATION, Respondent. by Ligget and Myers Tobacco Company. On the
other hand, respondent Fortune Tobacco
DECISION Corporation, a company organized in the
Philippines, manufactures and sells cigarettes
GARCIA, J.: using the trademark "MARK."
Via this petition for review under Rule 45 of the The legal dispute between the parties started
Rules of Court, herein petitioners Philip Morris, when the herein petitioners, on the claim that an
Inc., Benson & Hedges (Canada) Inc., and infringement of their respective trademarks had
Fabriques de Tabac Reunies, S.A. (now Philip been committed, filed, on August 18, 1982, a
Morris Products S.A.) seek the reversal and setting Complaint for Infringement of Trademark and
aside of the following issuances of the Court of Damages against respondent Fortune Tobacco
Appeals (CA) in CA-G.R. CV No. 66619, to wit: Corporation, docketed as Civil Case No. 47374 of
the Regional Trial Court of Pasig, Branch 166.
1. Decision dated January 21,
20031 affirming an earlier decision of the The decision under review summarized what
Regional Trial Court of Pasig City, Branch happened next, as follows:
166, in its Civil Case No. 47374, which
dismissed the complaint for trademark In the Complaint xxx with prayer for the issuance
infringement and damages thereat of a preliminary injunction, [petitioners] alleged
commenced by the petitioners against that they are foreign corporations not doing
respondent Fortune Tobacco business in the Philippines and are suing on an
Corporation; and isolated transaction. xxx they averred that the
countries in which they are domiciled grant xxx to
2. Resolution dated May 30, corporate or juristic persons of the Philippines the
20032 denying petitioners’ motion for privilege to bring action for infringement, xxx
reconsideration. without need of a license to do business in those
countries. [Petitioners] likewise manifested [being
Petitioner Philip Morris, Inc., a corporation registered owners of the trademark "MARK VII"
organized under the laws of the State of Virginia, and "MARK TEN" for cigarettes as evidenced by
the corresponding certificates of registration and
an applicant for the registration of the trademark
"LARK MILDS"]. xxx. [Petitioners] claimed that
they have registered the aforementioned
trademarks in their respective countries of origin
and that, by virtue of the long and extensive usage
of the same, these trademarks have already gained
international fame and acceptance. Imputing bad
faith on the part of the [respondent], petitioners
claimed that the [respondent], without any
previous consent from any of the [petitioners],
manufactured and sold cigarettes bearing the
identical and/or confusingly similar trademark
"MARK" xxx Accordingly, they argued that
[respondent’s] use of the trademark "MARK" in its
cigarette products have caused and is likely to
cause confusion or mistake, or would deceive
purchasers and the public in general into buying
these products under the impression and
mistaken belief that they are buying [petitioners’]
products.
Invoking the provisions of the Paris Convention
for the Protection of Industrial and Intellectual
Property (Paris Convention, for brevity), to which
the Philippines is a signatory xxx, [petitioners]
pointed out that upon the request of an interested
party, a country of the Union may prohibit the use
of a trademark which constitutes a reproduction,
imitation, or translation of a mark already
belonging to a person entitled to the benefits of
the said Convention. They likewise argued that, in
accordance with Section 21-A in relation to
Section 23 of Republic Act 166, as amended, they
are entitled to relief in the form of damages xxx
[and] the issuance of a writ of preliminary
injunction which should be made permanent to
enjoin perpetually the [respondent] from violating
[petitioners’] right to the exclusive use of their
aforementioned trademarks.
[Respondent] filed its Answer xxx denying
[petitioners’] material allegations and xxx averred
[among other things] xxx that "MARK" is a
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common word, which cannot particularly identify
a product to be the product of the [petitioners] xxx
xxx xxx xxx.
lawphil.net
Meanwhile, after the [respondent] filed its
Opposition (Records, Vo. I, p. 26), the matter of the
[petitioners’] prayer for the issuance of a writ of
preliminary injunction was negatively resolved by
the court in an Order xxx dated March 28, 1973.
[The incidental issue of the propriety of an
injunction would eventually be elevated to the CA
and would finally be resolved by the Supreme
Court in its Decision dated July 16, 1993 in G.R.
No. 91332]. xxx.
xxx xxx xxx
After the termination of the trial on the merits xxx
trial court rendered its Decision xxx dated
November 3, 1999 dismissing the complaint and
counterclaim after making a finding that the
[respondent] did not commit trademark
infringement against the [petitioners]. Resolving
first the issue of whether or not [petitioners] have
capacity to institute the instant action, the trial
court opined that [petitioners’] failure to present
evidence to support their allegation that their
respective countries indeed grant Philippine
corporations reciprocal or similar privileges by
law xxx justifies the dismissal of the complaint
xxx. It added that the testimonies of [petitioners’]
witnesses xxx essentially declared that
[petitioners] are in fact doing business in the
Philippines, but [petitioners] failed to establish
that they are doing so in accordance with the legal
requirement of first securing a license. Hence, the
court declared that [petitioners] are barred from
maintaining any action in Philippine courts
pursuant to Section 133 of the Corporation Code.
The issue of whether or not there was
infringement of the [petitioners’] trademarks by
the [respondent] was likewise answered xxx in
the negative. It expounded that "in order for a
name, symbol or device to constitute a trademark,
it must, either by itself or by association, point
distinctly to the origin or ownership of the article
to which it is applied and be of such nature as to
permit an exclusive appropriation by one person".
Applying such principle to the instant case, the
trial court was of the opinion that the words
"MARK", "TEN", "LARK" and the Roman Numerals
"VII", either alone or in combination of each other
do not by themselves or by association point
distinctly to the origin or ownership of the
cigarettes to which they refer, such that the
buying public could not be deceived into believing
that [respondent’s] "MARK" cigarettes originated
either from the USA, Canada, or Switzerland.
Emphasizing that the test in an infringement case
is the likelihood of confusion or deception, the
trial court stated that the general rule is that an
infringement exists if the resemblance is so close
that it deceives or is likely to deceive a customer
exercising ordinary caution in his dealings and
induces him to purchase the goods of one
manufacturer in the belief that they are those of
another. xxx. The trial court ruled that the
[petitioners] failed to pass these tests as it neither
presented witnesses or purchasers attesting that
they have bought [respondent’s] product believing
that they bought [petitioners’] "MARK VII", "MARK
TEN" or "LARK", and have also failed to introduce
in evidence a specific magazine or periodical
circulated locally, which promotes and
popularizes their products in the Philippines. It,
moreover, elucidated that the words consisting of
the trademarks allegedly infringed by
[respondent] failed to show that they have
acquired a secondary meaning as to identify them
as [petitioners’] products. Hence, the court ruled
that the [petitioners] cannot avail themselves of
the doctrine of secondary meaning.
As to the issue of damages, the trial court deemed
it just not to award any to either party stating that,
since the [petitioners] filed the action in the belief
that they were aggrieved by what they perceived
to be an infringement of their trademark, no
wrongful act or omission can be attributed to
them. xxx.3 (Words in brackets supplied)
Maintaining to have the standing to sue in the
local forum and that respondent has committed
trademark infringement, petitioners went on
appeal to the CA whereat their appellate recourse
was docketed as CA-G.R. CV No. 66619.
Eventually, the CA, in its Decision dated January
21, 2003, while ruling for petitioners on the
matter of their legal capacity to sue in this country
for trademark infringement, nevertheless affirmed
the trial court’s decision on the underlying issue of
respondent’s liability for infringement as it found
that:
xxx the appellants’ [petitioners’] trademarks, i.e.,
"MARK VII", "MARK TEN" and "LARK", do not
qualify as well-known marks entitled to
protection even without the benefit of actual use
in the local market and that the similarities in the
trademarks in question are insufficient as to cause
deception or confusion tantamount to
infringement. Consequently, as regards the third
issue, there is likewise no basis for the award of
damages prayed for by the appellants
herein.4 (Word in bracket supplied)
With their motion for reconsideration having been
denied by the CA in its equally challenged
Resolution of May 30, 2003, petitioners are now
with this Court via this petition for review
essentially raising the following issues: (1)
whether or not petitioners, as Philippine
registrants of trademarks, are entitled to enforce
trademark rights in this country; and (2) whether
or not respondent has committed trademark
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infringement against petitioners by its use of the
mark "MARK" for its cigarettes, hence liable for
damages.
In its Comment,5 respondent, aside from asserting
the correctness of the CA’s finding on its liability
for trademark infringement and damages, also
puts in issue the propriety of the petition as it
allegedly raises questions of fact.
The petition is bereft of merit.
Dealing first with the procedural matter
interposed by respondent, we find that the
petition raises both questions of fact and law
contrary to the prescription against raising factual
questions in a petition for review on certiorari
filed before the Court. A question of law exists
when the doubt or difference arises as to what the
law is on a certain state of facts; there is a
question of fact when the doubt or difference
arises as to the truth or falsity of alleged facts.6
Indeed, the Court is not the proper venue to
consider factual issues as it is not a trier of
facts.7 Unless the factual findings of the appellate
court are mistaken, absurd, speculative,
conflicting, tainted with grave abuse of discretion,
or contrary to the findings culled by the court of
origin,8 we will not disturb them.
It is petitioners’ posture, however, that their
contentions should
be treated as purely legal since they are assailing
erroneous conclusions deduced from a set of
undisputed facts.
Concededly, when the facts are undisputed, the
question of whether or not the conclusion drawn
therefrom by the CA is correct is one of law.9 But,
even if we consider and accept as pure questions
of law the issues raised in this petition, still, the
Court is not inclined to disturb the conclusions
reached by the appellate court, the established
rule being that all doubts shall be resolved in favor
of the correctness of such conclusions.10
Be that as it may, we shall deal with the issues
tendered and determine whether the CA ruled in
accordance with law and established
jurisprudence in arriving at its assailed decision.
A "trademark" is any distinctive word, name,
symbol, emblem, sign, or device, or any
combination thereof adopted and used by a
manufacturer or merchant on his goods to identify
and distinguish them from those manufactured,
sold, or dealt in by others.11 Inarguably, a
trademark deserves protection. For, as Mr. Justice
Frankfurter observed in Mishawaka Mfg. Co. v.
Kresge Co.:12
The protection of trademarks is the law’s
recognition of the psychological function of
symbols. If it is true that we live by symbols, it is
no less true that we purchase goods by them. A
trade-mark is a merchandising short-cut which
induces a purchaser to select what he wants, or
what he has been led to believe what he wants.
The owner of a mark exploits this human
propensity by making every effort to impregnate
the atmosphere of the market with the drawing
power of a congenial symbol. Whatever the means
employed, the aim is the same - to convey through
the mark, in the minds of potential customers, the
desirability of the commodity upon which it
appears. Once this is attained, the trade-mark
owner has something of value. If another poaches
upon the commercial magnetism of the symbol he
has created, the owner can obtain legal redress.
It is thus understandable for petitioners to invoke
in this recourse their entitlement to enforce
trademark rights in this country, specifically, the
right to sue for trademark infringement in
Philippine courts and be accorded protection
against unauthorized use of their Philippine-
registered trademarks.
In support of their contention respecting their
right of action, petitioners assert that, as
corporate nationals of member-countries of the
Paris Union, they can sue before Philippine courts
for infringement of trademarks, or for unfair
competition, without need of obtaining
registration or a license to do business in the
Philippines, and without necessity of actually
doing business in the Philippines. To petitioners,
these grievance right and mechanism are
accorded not only by Section 21-A of Republic Act
(R.A.) No. 166, as amended, or the Trademark
Law, but also by Article 2 of the Paris Convention
for the Protection of Industrial Property,
otherwise known as the Paris Convention.
In any event, petitioners point out that there is
actual use of their trademarks in the Philippines
as evidenced by the certificates of registration of
their trademarks. The marks "MARK TEN" and
"LARK" were registered on the basis of actual use
in accordance with Sections 2-A13 and 5(a)14 of
R.A. No. 166, as amended, providing for a 2-month
pre-registration use in local commerce and trade
while the registration of "MARK VII" was on the
basis of registration in the foreign country of
origin pursuant to Section 37 of the same law
wherein it is explicitly provided that prior use in
commerce need not be alleged.15
Besides, petitioners argue that their not doing
business in the Philippines, if that be the case,
does not mean that cigarettes bearing their
trademarks are not available and sold locally.
Citing Converse Rubber Corporation v. Universal
Rubber Products, Inc.,16 petitioners state that such
availability and sale may be effected through the
acts of importers and distributors.
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Finally, petitioners would press on their
entitlement to protection even in the absence of
actual use of trademarks in the country in view of
the Philippines’ adherence to the Trade Related
Aspects of Intellectual Property Rights or the
TRIPS Agreement and the enactment of R.A. No.
8293, or the Intellectual Property Code
(hereinafter the "IP Code"), both of which provide
that the fame of a trademark may be acquired
through promotion or advertising with no explicit
requirement of actual use in local trade or
commerce.
Before discussing petitioners’ claimed entitlement
to enforce trademark rights in the Philippines, it
must be emphasized that their standing to sue in
Philippine courts had been recognized, and rightly
so, by the CA. It ought to be pointed out, however,
that the appellate court qualified its holding with a
statement, following G.R. No. 91332, entitled
Philip Morris, Inc., et al. v. The Court of Appeals
and Fortune Tobacco Corporation,17 that such
right to sue does not necessarily mean protection
of their registered marks in the absence of actual
use in the Philippines.
Thus clarified, what petitioners now harp about is
their entitlement to protection on the strength of
registration of their trademarks in the Philippines.
As we ruled in G.R. No. 91332, 18 supra, so it must
be here.
Admittedly, the registration of a trademark gives
the registrant, such as petitioners, advantages
denied non-registrants or ordinary users, like
respondent. But while petitioners enjoy the
statutory presumptions arising from such
registration,19 i.e., as to the validity of the
registration, ownership and the exclusive right to
use the registered marks, they may not
successfully sue on the basis alone of their
respective certificates of registration of
trademarks. For, petitioners are still foreign
corporations. As such, they ought, as a condition
to availment of the rights and privileges vis-à -vis
their trademarks in this country, to show proof
that, on top of Philippine registration, their
country grants substantially similar rights and
privileges to Filipino citizens pursuant to Section
21-A20 of R.A. No. 166.
In Leviton Industries v. Salvador,21 the Court
further held that the aforementioned reciprocity
requirement is a condition sine qua non to filing a
suit by a foreign corporation which, unless alleged
in the complaint, would justify dismissal thereof, a
mere allegation that the suit is being pursued
under Section 21-A of R.A. No. 166 not being
sufficient. In a subsequent case,22 however, the
Court held that where the complainant is a
national of a Paris Convention- adhering country,
its allegation that it is suing under said Section 21-
A would suffice, because the reciprocal agreement
between the two countries is embodied and
supplied by the Paris Convention which, being
considered part of Philippine municipal laws, can
be taken judicial notice of in infringement suits.23
As well, the fact that their respective home
countries, namely, the United States, Switzerland
and Canada, are, together with the Philippines,
members of the Paris Union does not
automatically entitle petitioners to the protection
of their trademarks in this country absent actual
use of the marks in local commerce and trade.
True, the Philippines’ adherence to the Paris
Convention24 effectively obligates the country to
honor and enforce its provisions25 as regards the
protection of industrial property of foreign
nationals in this country. However, any protection
accorded has to be made subject to the limitations
of Philippine laws.26 Hence, despite Article 2 of the
Paris Convention which substantially provides
that (1) nationals of member-countries shall have
in this country rights specially provided by the
Convention as are consistent with Philippine laws,
and enjoy the privileges that Philippine laws now
grant or may hereafter grant to its nationals, and
(2) while no domicile requirement in the country
where protection is claimed shall be required of
persons entitled to the benefits of the Union for
the enjoyment of any industrial property
rights,27 foreign nationals must still observe and
comply with the conditions imposed by Philippine
law on its nationals.
Considering that R.A. No. 166, as amended,
specifically Sections 228 and 2-A29 thereof,
mandates actual use of the marks and/or emblems
in local commerce and trade before they may be
registered and ownership thereof acquired, the
petitioners cannot, therefore, dispense with the
element of actual use. Their being nationals of
member-countries of the Paris Union does not
alter the legal situation.
In Emerald Garment Mfg. Corporation v. Court of
Appeals,30 the Court reiterated its rulings in
Sterling Products International, Inc. v.
Farbenfabriken Bayer
Aktiengesellschaft,31 Kabushi Kaisha Isetan v.
Intermediate Appellate Court,32 and Philip Morris
v. Court of Appeals and Fortune Tobacco
Corporation33 on the importance of actual
commercial use of a trademark in the Philippines
notwithstanding the Paris Convention:
The provisions of the 1965 Paris Convention …
relied upon by private respondent and Sec. 21-A
of the Trademark Law were sufficiently
expounded upon and qualified in the recent case
of Philip Morris, Inc., et. al. vs. Court of Appeals:
xxx xxx xxx
Following universal acquiescence and comity, our
municipal law on trademarks regarding the
requirements of actual use in the Philippines must
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subordinate an international agreement inasmuch
as the apparent clash is being decided by a
municipal tribunal. Xxx. Withal, the fact that
international law has been made part of the law of
the land does not by any means imply the primacy
of international law over national law in the
municipal sphere. Under the doctrine of
incorporation as applied in most countries, rules
of International Law are given a standing equal,
not superior, to national legislative enactments.
xxx xxx xxx
In other words, (a foreign corporation) may have
the capacity to sue for infringement … but the
question of whether they have an exclusive right
over their symbol as to justify issuance of the
controversial writ will depend on actual use of
their trademarks in the Philippines in line with
Sections 2 and 2-A of the same law. It is thus
incongruous for petitioners to claim that when a
foreign corporation not licensed to do business in
the Philippines files a complaint for infringement,
the entity need not be actually using its trademark
in commerce in the Philippines. Such a foreign
corporation may have the personality to file a suit
for infringement but it may not necessarily be
entitled to protection due to absence of actual use
of the emblem in the local market.
Contrary to what petitioners suggest, the
registration of trademark cannot be deemed
conclusive as to the actual use of such trademark
in local commerce. As it were, registration does
not confer upon the registrant an absolute right to
the registered mark. The certificate of registration
merely constitutes prima facie evidence that the
registrant is the owner of the registered mark.
Evidence of non-usage of the mark rebuts the
presumption of trademark ownership,34 as what
happened here when petitioners no less admitted
not doing business in this country.35
Most importantly, we stress that registration in
the Philippines of trademarks does not ipso facto
convey an absolute right or exclusive ownership
thereof. To borrow from Shangri-La International
Hotel Management, Ltd. v. Development Group of
Companies, Inc.36 trademark is a creation of use
and, therefore, actual use is a pre-requisite to
exclusive ownership; registration is only an
administrative confirmation of the existence of the
right of ownership of the mark, but does not
perfect such right; actual use thereof is the
perfecting ingredient.37
Petitioners’ reliance on Converse Rubber
Corporation38 is quite misplaced, that case being
cast in a different factual milieu. There, we ruled
that a foreign owner of a Philippine trademark,
albeit not licensed to do, and not so engaged in,
business in the Philippines, may actually earn
reputation or goodwill for its goods in the country.
But unlike in the instant case, evidence of actual
sales of Converse rubber shoes, such as sales
invoices, receipts and the testimony of a legitimate
trader, was presented in Converse.
This Court also finds the IP Code and the TRIPS
Agreement to be inapplicable, the infringement
complaint herein having been filed in August 1982
and tried under the aegis of R.A. No. 166, as
amended. The IP Code, however, took effect only
on January 1, 1998 without a provision as to its
retroactivity.39 In the same vein, the TRIPS
Agreement was inexistent when the suit for
infringement was filed, the Philippines having
adhered thereto only on December 16, 1994.
With the foregoing perspective, it may be stated
right off that the registration of a trademark
unaccompanied by actual use thereof in the
country accords the registrant only the standing
to sue for infringement in Philippine courts.
Entitlement to protection of such trademark in the
country is entirely a different matter.
This brings us to the principal issue of
infringement.
Section 22 of R.A. No. 166, as amended, defines
what constitutes trademark infringement, as
follows:
Sec. 22. 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
tradename in connection with the sale, offering for
sale, or advertising of any goods, business or
services on or in connection with which such use
is likely to cause confusion or mistake or to
deceive purchasers or others as to the source or
origin of such goods or services, or identity of such
business; or reproduce, counterfeit, copy of color
ably imitate any such mark or tradename and
apply such reproduction, counterfeit, copy or
colorable imitation to labels, signs, prints,
packages, wrappers, receptacles or
advertisements intended to be used upon or in
connection with such goods, business, or services,
shall be liable to a civil action by the registrant for
any or all of the remedies herein provided.
Petitioners would insist on their thesis of
infringement since respondent’s mark "MARK" for
cigarettes is confusingly or deceptively similar
with their duly registered "MARK VII," "MARK
TEN" and "LARK" marks likewise for cigarettes. To
them, the word "MARK" would likely cause
confusion in the trade, or deceive purchasers,
particularly as to the source or origin of
respondent’s cigarettes.
The "likelihood of confusion" is the gravamen of
trademark infringement.40 But likelihood of
confusion is a relative concept, the particular, and
sometimes peculiar, circumstances of each case
being determinative of its existence. Thus, in
trademark infringement cases, more than in other
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kinds of litigation, precedents must be evaluated
in the light of each particular case.41
In determining similarity and likelihood of
confusion, jurisprudence has developed two tests:
the dominancy test and the holistic test.42 The
dominancy test43 sets sight on the similarity of the
prevalent features of the competing trademarks
that might cause confusion and deception, thus
constitutes infringement. Under this norm, the
question at issue turns on whether the use of the
marks involved would be likely to cause confusion
or mistake in the mind of the public or deceive
purchasers.44
In contrast, the holistic test45 entails a
consideration of the entirety of the marks as
applied to the products, including the labels and
packaging, in determining confusing similarity.
Upon consideration of the foregoing in the light of
the peculiarity of this case, we rule against the
likelihood of confusion resulting in infringement
arising from the respondent’s use of the
trademark "MARK" for its particular cigarette
product.
For one, as rightly concluded by the CA after
comparing the trademarks involved in their
entirety as they appear on the products,46 the
striking dissimilarities are significant enough to
warn any purchaser that one is different from the
other. Indeed, although the perceived offending
word "MARK" is itself prominent in petitioners’
trademarks "MARK VII" and "MARK TEN," the
entire marking system should be considered as a
whole and not dissected, because a discerning eye
would focus not only on the predominant word
but also on the other features appearing in the
labels. Only then would such discerning observer
draw his conclusion whether one mark would be
confusingly similar to the other and whether or
not sufficient differences existed between the
marks.47
This said, the CA then, in finding that respondent’s
goods cannot be mistaken as any of the three
cigarette brands of the petitioners, correctly relied
on the holistic test.
But, even if the dominancy test were to be used, as
urged by the petitioners, but bearing in mind that
a trademark serves as a tool to point out distinctly
the origin or ownership of the goods to which it is
affixed,48 the likelihood of confusion tantamount
to infringement appears to be farfetched. The
reason for the origin and/or ownership angle is
that unless the words or devices do so point out
the origin or ownership, the person who first
adopted them cannot be injured by any
appropriation or imitation of them by others, nor
can the public be deceived.49
Since the word "MARK," be it alone or in
combination with the word "TEN" and the Roman
numeral "VII," does not point to the origin or
ownership of the cigarettes to which they apply,
the local buying public could not possibly be
confused or deceived that respondent’s "MARK" is
the product of petitioners and/or originated from
the U.S.A., Canada or Switzerland. And lest it be
overlooked, no actual commercial use of
petitioners’ marks in local commerce was proven.
There can thus be no occasion for the public in
this country, unfamiliar in the first place with
petitioners’ marks, to be confused.
For another, a comparison of the trademarks as
they appear on the goods is just one of the
appreciable circumstances in determining
likelihood of confusion. Del Monte Corp. v.
CA50 dealt with another, where we instructed to
give due regard to the "ordinary purchaser," thus:
The question is not whether the two articles are
distinguishable by their label when set side by
side but whether the general confusion made by
the article upon the eye of the casual purchaser
who is unsuspicious and off his guard, is such as to
likely result in his confounding it with the original.
As observed in several cases, the general
impression of the ordinary purchaser, buying
under the normally prevalent conditions in trade
and giving the attention such purchasers usually
give in buying that class of goods is the
touchstone.
When we spoke of an "ordinary purchaser," the
reference was not to the "completely unwary
customer" but to the "ordinarily intelligent buyer"
considering the type of product involved.51
It cannot be over-emphasized that the products
involved are addicting cigarettes purchased
mainly by those who are already predisposed to a
certain brand. Accordingly, the ordinary buyer
thereof would be all too familiar with his brand
and discriminating as well. We, thus, concur with
the CA when it held, citing a definition found in Dy
Buncio v. Tan Tiao Bok,52 that the "ordinary
purchaser" in this case means "one accustomed to
buy, and therefore to some extent familiar with,
the goods in question."
Pressing on with their contention respecting the
commission of trademark infringement,
petitioners finally point to Section 22 of R.A. No.
166, as amended. As argued, actual use of
trademarks in local commerce is, under said
section, not a requisite before an aggrieved
trademark owner can restrain the use of his
trademark upon goods manufactured or dealt in
by another, it being sufficient that he had
registered the trademark or trade-name with the
IP Office. In fine, petitioners submit that
respondent is liable for infringement, having
manufactured and sold cigarettes with the
trademark "MARK" which, as it were, are identical
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (How are marks acquired?)
and/or confusingly similar with their duly
registered trademarks "MARK VII," "MARK TEN"
and "LARK".
This Court is not persuaded.
In Mighty Corporation v. E & J Gallo Winery,53 the
Court held that the following constitute the
elements of trademark infringement in
accordance not only with Section 22 of R.A. No.
166, as amended, but also Sections 2, 2-A, 9-
A54 and 20 thereof:
(a) a trademark actually used in
commerce in the Philippines and
registered in the principal register of the
Philippine Patent Office,
(b) 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
(d) such act is done without the consent
of the trademark registrant or
assignee.lawphil.net
As already found herein, while petitioners have
registered the trademarks "MARK VII," "MARK
TEN" and "LARK" for cigarettes in the Philippines,
prior actual commercial use thereof had not been
proven. In fact, petitioners’ judicial admission of
not doing business in this country effectively
belies any pretension to the contrary.
Likewise, we note that petitioners even failed to
support their claim that their respective marks are
well-known and/or have acquired goodwill in the
Philippines so as to be entitled to protection even
without actual use in this country in accordance
with Article 6bis55 of the Paris Convention. As
correctly found by the CA, affirming that of the
trial court:
xxx the records are bereft of evidence to establish
that the appellants’ [petitioners’] products are
indeed well-known in the Philippines, either
through actual sale of the product or through
different forms of advertising. This finding is
supported by the fact that appellants admit in
their Complaint that they are not doing business
in the Philippines, hence, admitting that their
products are not being sold in the local market.
We likewise see no cogent reason to disturb the
trial court’s finding that the appellants failed to
establish that their products are widely known by
local purchasers as "(n)o specific magazine or
periodical published in the Philippines, or in other
countries but circulated locally" have been
presented by the appellants during trial. The
appellants also were not able to show the length of
time or the extent of the promotion or
advertisement made to popularize their products
in the Philippines.56
Last, but not least, we must reiterate that the issue
of trademark infringement is factual, with both the
trial and appellate courts having peremptorily
found allegations of infringement on the part of
respondent to be without basis. As we said time
and time again, factual determinations of the trial
court, concurred in by the CA, are final and
binding on this Court.57
For lack of convincing proof on the part of the
petitioners of actual use of their registered
trademarks prior to respondent’s use of its mark
and for petitioners’ failure to demonstrate
confusing similarity between said trademarks, the
dismissal of their basic complaint for infringement
and the concomitant plea for damages must be
affirmed. The law, the surrounding circumstances
and the equities of the situation call for this
disposition.
WHEREFORE, the petition is hereby DENIED.
Accordingly, the assailed decision and resolution
of the Court of Appeals are AFFIRMED.
Costs against the petitioners.
SO ORDERED.
CANCIO C. GARCIA
Associate Justice
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (How are marks acquired?)
SECOND DIVISION
G.R. No. 159938             March 31, 2006
SHANGRI-LA INTERNATIONAL HOTEL
MANAGEMENT, LTD., SHANGRI-LA
PROPERTIES, INC., MAKATI SHANGRI-LA
HOTEL & RESORT, INC., AND KUOK
PHILIPPINES PROPERTIES, INC., Petitioners,
vs.
DEVELOPERS GROUP OF COMPANIES,
INC., Respondent.
DECISION
GARCIA, J.:
In this petition for review under Rule 45 of the
Rules of Court, petitioners Shangri-La
International Hotel Management, Ltd. (SLIHM), et
al. assail and seek to set aside the Decision dated
May 15, 20031 of the Court of Appeals (CA) in CA-
G.R. CV No. 53351 and its Resolution2 of
September 15, 2003 which effectively affirmed
with modification an earlier decision of the
Regional Trial Court (RTC) of Quezon City in Civil
Case No. Q-91-8476, an action for infringement
and damages, thereat commenced by respondent
Developers Group of Companies, Inc. (DGCI)
against the herein petitioners.
The facts:
At the core of the controversy are the "Shangri-La"
mark and "S" logo. Respondent DGCI claims
ownership of said mark and logo in the
Philippines on the strength of its prior use thereof
within the country. As DGCI stresses at every turn,
it filed on October 18, 1982 with the Bureau of
Patents, Trademarks and Technology Transfer
(BPTTT) pursuant to Sections 2 and 4 of Republic
Act (RA) No. 166,3 as amended, an application for
registration covering the subject mark and logo.
On May 31, 1983, the BPTTT issued in favor of
DGCI the corresponding certificate of registration
therefor, i.e., Registration No. 31904. Since then,
DGCI started using the "Shangri-La" mark and "S"
logo in its restaurant business.
On the other hand, the Kuok family owns and
operates a chain of hotels with interest in hotels
and hotel-related transactions since 1969. As far
back as 1962, it adopted the name "Shangri-La" as
part of the corporate names of all companies
organized under the aegis of the Kuok Group of
Companies (the Kuok Group). The Kuok Group has
used the name "Shangri-La" in all Shangri-La
hotels and hotel-related establishments around
the world which the Kuok Family owned.
To centralize the operations of all Shangri-la
hotels and the ownership of the "Shangri-La" mark
and "S" logo, the Kuok Group had incorporated in
Hong Kong and Singapore, among other places,
several companies that form part of the Shangri-
La International Hotel Management Ltd. Group of
Companies. EDSA Shangri-La Hotel and Resort,
Inc., and Makati Shangri-La Hotel and Resort, Inc.
were incorporated in the Philippines beginning
1987 to own and operate the two (2) hotels put up
by the Kuok Group in Mandaluyong and Makati,
Metro Manila.
All hotels owned, operated and managed by the
aforesaid SLIHM Group of Companies adopted and
used the distinctive lettering of the name
"Shangri-La" as part of their trade names.
From the records, it appears that Shangri-La Hotel
Singapore commissioned a Singaporean design
artist, a certain Mr. William Lee, to conceptualize
and design the logo of the Shangri-La hotels.
During the launching of the stylized "S" Logo in
February 1975, Mr. Lee gave the following
explanation for the logo, to wit:
The logo which is shaped like a "S" represents the
uniquely Asean architectural structures as well as
keep to the legendary Shangri-la theme with the
mountains on top being reflected on waters below
and the connecting centre [sic] line serving as the
horizon. This logo, which is a bold, striking
definitive design, embodies both modernity and
sophistication in balance and thought.
Since 1975 and up to the present, the "Shangri-La"
mark and "S" logo have been used consistently
and continuously by all Shangri-La hotels and
companies in their paraphernalia, such as
stationeries, envelopes, business forms, menus,
displays and receipts.
The Kuok Group and/or petitioner SLIHM caused
the registration of, and in fact registered, the
"Shangri-La" mark and "S" logo in the patent
offices in different countries around the world.
On June 21, 1988, the petitioners filed with the
BPTTT a petition, docketed as Inter Partes Case
No. 3145, praying for the cancellation of the
registration of the "Shangri-La" mark and "S" logo
issued to respondent DGCI on the ground that the
same were illegally and fraudulently obtained and
appropriated for the latter's restaurant business.
They also filed in the same office Inter Partes Case
No. 3529, praying for the registration of the same
mark and logo in their own names.
Until 1987 or 1988, the petitioners did not
operate any establishment in the Philippines,
albeit they advertised their hotels abroad since
1972 in numerous business, news, and/or travel
magazines widely circulated around the world, all
readily available in Philippine magazines and
newsstands. They, too, maintained reservations
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (How are marks acquired?)
and booking agents in airline companies, hotel
organizations, tour operators, tour promotion
organizations, and in other allied fields in the
Philippines.
It is principally upon the foregoing factual
backdrop that respondent DGCI filed a complaint
for Infringement and Damages with the RTC of
Quezon City against the herein petitioners SLIHM,
Shangri-La Properties, Inc., Makati Shangri-La
Hotel & Resort, Inc., and Kuok Philippine
Properties, Inc., docketed as Civil Case No. Q-91-
8476 and eventually raffled to Branch 99 of said
court. The complaint with prayer for injunctive
relief and damages alleged that DGCI has, for the
last eight (8) years, been the prior exclusive user
in the Philippines of the mark and logo in question
and the registered owner thereof for its restaurant
and allied services. As DGCI alleged in its
complaint, SLIHM, et al., in promoting and
advertising their hotel and other allied projects
then under construction in the country, had been
using a mark and logo confusingly similar, if not
identical, with its mark and "S" logo. Accordingly,
DGCI sought to prohibit the petitioners, as
defendants a quo, from using the "Shangri-La"
mark and "S" logo in their hotels in the
Philippines.
In their Answer with Counterclaim, the petitioners
accused DGCI of appropriating and illegally using
the "Shangri-La" mark and "S" logo, adding that
the legal and beneficial ownership thereof
pertained to SLIHM and that the Kuok Group and
its related companies had been using this mark
and logo since March 1962 for all their corporate
names and affairs. In this regard, they point to the
Paris Convention for the Protection of Industrial
Property as affording security and protection to
SLIHM's exclusive right to said mark and logo.
They further claimed having used, since late 1975,
the internationally-known and specially-designed
"Shangri-La" mark and "S" logo for all the hotels in
their hotel chain.
Pending trial on the merits of Civil Case No. Q-91-
8476, the trial court issued a Writ of Preliminary
Injunction enjoining the petitioners from using the
subject mark and logo. The preliminary injunction
issue ultimately reached the Court in G.R. No.
104583 entitled Developers Group of Companies,
Inc. vs. Court of Appeals, et al. In a decision4 dated
March 8, 1993, the Court nullified the writ of
preliminary injunction issued by the trial court
and directed it to proceed with the main case and
decide it with deliberate dispatch.
While trial was in progress, the petitioners filed
with the court a motion to suspend proceedings
on account of the pendency before the BPTTT of
Inter Partes Case No. 3145 for the cancellation of
DGCI's certificate of registration. For its part,
respondent DGCI filed a similar motion in that
case, invoking in this respect the pendency of its
infringement case before the trial court. The
parties' respective motions to suspend
proceedings also reached the Court via their
respective petitions in G.R. No. 114802, entitled
Developers Group of Companies, Inc. vs. Court of
Appeals, et al. and G.R. No. 111580, entitled
Shangri-La International Hotel Management LTD.,
et al. vs. Court of Appeals, et al., which were
accordingly consolidated.
In a consolidated decision5 dated June 21, 2001,
the Court, limiting itself to the core issue of
whether, despite the petitioners' institution of
Inter Partes Case No. 3145 before the BPTTT,
herein respondent DGCI "can file a subsequent
action for infringement with the regular courts of
justice in connection with the same registered
mark," ruled in the affirmative, but nonetheless
ordered the BPTTT to suspend further
proceedings in said inter partes case and to await
the final outcome of the main case.
Meanwhile, trial on the merits of the infringement
case proceeded. Presented as DGCI's lone witness
was Ramon Syhunliong, President and Chairman
of DGCI's Board of Directors. Among other things,
this witness testified that:
1. He is a businessman, with interest in
lumber, hotel, hospital, trading and
restaurant businesses but only the
restaurant business bears the name
"Shangri-La" and uses the same and the
"S-logo" as service marks. The restaurant
now known as "Shangri-La Finest Chinese
Cuisine" was formerly known as the
"Carvajal Restaurant" until December
1982, when respondent took over said
restaurant business.
2. He had traveled widely around Asia
prior to 1982, and admitted knowing the
Shangri-La Hotel in Hong Kong as early as
August 1982.
3. The "S-logo" was one of two (2) designs
given to him in December 1982, scribbled
on a piece of paper by a jeepney
signboard artist with an office
somewhere in Balintawak. The unnamed
artist supposedly produced the two
designs after about two or three days
from the time he (Syhunliong) gave the
idea of the design he had in mind.
4. On October 15, 1982, or before the
unknown signboard artist supposedly
created the "Shangri-La" and "S" designs,
DGCI was incorporated with the primary
purpose of "owning or operating, or both,
of hotels and restaurants".
5. On October 18, 1982, again prior to the
alleged creation date of the mark and
logo, DGCI filed an application for
trademark registration of the mark
"SHANGRI-LA FINEST CHINESE CUISINE
& S. Logo" with the BPTTT. On said date,
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (How are marks acquired?)
respondent DGCI amended its Articles of
Incorporation to reflect the name of its
restaurant, known and operating under
the style and name of "SHANGRI-LA
FINEST CHINESE CUISINE." Respondent
DGCI obtained Certificate of Registration
No. 31904 for the "Shangri-La" mark and
"S" logo.
Eventually, the trial court, on the postulate that
petitioners', more particularly petitioner SLIHM's,
use of the mark and logo in dispute constitutes an
infringement of DGCI's right thereto, came out
with its decision6 on March 8, 1996 rendering
judgment for DGCI, as follows:
WHEREFORE, judgment is hereby rendered in
favor of [respondent DGCI] and against [SLIHM, et
al.] -
a) Upholding the validity of the
registration of the service mark "Shangri-
la" and "S-Logo" in the name of
[respondent];
b) Declaring [petitioners'] use of said
mark and logo as infringement of
[respondent's] right thereto;
c) Ordering [petitioners], their
representatives, agents, licensees,
assignees and other persons acting under
their authority and with their permission,
to permanently cease and desist from
using and/or continuing to use said mark
and logo, or any copy, reproduction or
colorable imitation
thereof, in the promotion, advertisement,
rendition of their hotel and allied projects
and services or in any other manner
whatsoever;
d) Ordering [petitioners] to remove said
mark and logo from any premises, objects,
materials and paraphernalia used by
them and/or destroy any and all prints,
signs, advertisements or other materials
bearing said mark and logo in their
possession and/or under their control;
and
e) Ordering [petitioners], jointly and
severally, to indemnify [respondent] in
the amounts of P2,000,000.00 as actual
and compensatory damages, P500,000.00
as attorney's fee and expenses of
litigation.
Let a copy of this Decision be certified to the
Director, Bureau of Patents, Trademarks and
Technology Transfer for his information and
appropriate action in accordance with the
provisions of Section 25, Republic Act No. 166
Costs against [petitioners].
SO ORDERED. [Words in brackets added.]
Therefrom, the petitioners went on appeal to the
CA whereat their recourse was docketed as CA
G.R. SP No. 53351.
As stated at the threshold hereof, the CA, in its
assailed Decision of May 15, 2003,7 affirmed that
of the lower court with the modification of
deleting the award of attorney's fees. The
appellate court predicated its affirmatory action
on the strength or interplay of the following
premises:
1. Albeit the Kuok Group used the mark
and logo since 1962, the evidence
presented shows that the bulk use of the
tradename was abroad and not in the
Philippines (until 1987). Since the Kuok
Group does not have proof of actual use in
commerce in the Philippines (in
accordance with Section 2 of R.A. No.
166), it cannot claim ownership of the
mark and logo in accordance with the
holding in Kabushi Kaisha Isetan v. IAC8,
as reiterated in Philip Morris, Inc. v. Court
of Appeals.9
2. On the other hand, respondent has a
right to the mark and logo by virtue of its
prior use in the Philippines and the
issuance of Certificate of Registration No.
31904.
3. The use of the mark or logo in
commerce through the bookings made by
travel agencies is unavailing since the
Kuok Group did not establish any branch
or regional office in the Philippines. As it
were, the Kuok Group was not engaged in
commerce in the Philippines inasmuch as
the bookings were made through travel
agents not owned, controlled or managed
by the Kuok Group.
4. While the Paris Convention protects
internationally known marks, R.A. No.
166 still requires use in commerce in the
Philippines. Accordingly, and on the
premise that international agreements,
such as Paris Convention, must yield to a
municipal law, the question on the
exclusive right over the mark and logo
would still depend on actual use in
commerce in the Philippines.
Petitioners then moved for a reconsideration,
which motion was denied by the CA in its equally
assailed Resolution of September 15, 2003.10
As formulated by the petitioners, the issues upon
which this case hinges are:
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (How are marks acquired?)
1. Whether the CA erred in finding that
respondent had the right to file an
application for registration of the
"Shangri-La" mark and "S" logo although
respondent never had any prior actual
commercial use thereof;
2. Whether the CA erred in finding that
respondent's supposed use of the
identical "Shangri-La" mark and "S" logo
of the petitioners was not evident bad
faith and can actually ripen into
ownership, much less registration;
3. Whether the CA erred in overlooking
petitioners' widespread prior use of the
"Shangri-La" mark and "S" logo in their
operations;
4. Whether the CA erred in refusing to
consider that petitioners are entitled to
protection under both R.A. No. 166, the
old trademark law, and the Paris
Convention for the Protection of
Industrial Property;
5. Whether the CA erred in holding that
SLIHM did not have the right to legally
own the "Shangri-La" mark and "S" logo
by virtue of and despite their ownership
by the Kuok Group;
6. Whether the CA erred in ruling that
petitioners' use of the mark and logo
constitutes actionable infringement;
7. Whether the CA erred in awarding
damages in favor of respondent despite
the absence of any evidence to support
the same, and in failing to award relief in
favor of the petitioners; and
8. Whether petitioners should be
prohibited from continuing their use of
the mark and logo in question.
There are two preliminary issues, however, that
respondent DGCI calls our attention to, namely:
1. Whether the certification against
forum-shopping submitted on behalf of
the petitioners is sufficient;
2. Whether the issues posed by
petitioners are purely factual in nature
hence improper for resolution in the
instant petition for review on certiorari.
DGCI claims that the present petition for review
should be dismissed outright for certain
procedural defects, to wit: an insufficient
certification against forum shopping and raising
pure questions of fact. On both counts, we find the
instant petition formally and substantially sound.
In its Comment, respondent alleged that the
certification against forum shopping signed by
Atty. Lee Benjamin Z. Lerma on behalf and as
counsel of the petitioners was insufficient, and
that he was not duly authorized to execute such
document. Respondent further alleged that since
petitioner SLIHM is a foreign entity based in Hong
Kong, the Director's Certificate executed by Mr.
Madhu Rama Chandra Rao, embodying the board
resolution which authorizes Atty. Lerma to act for
SLIHM and execute the certification against forum
shopping, should contain the authentication by a
consular officer of the Philippines in Hong Kong.
In National Steel Corporation v. CA,11 the Court has
ruled that the certification on non-forum shopping
may be signed, for and in behalf of a corporation,
by a specifically authorized lawyer who has
personal knowledge of the facts required to be
disclosed in such document. The reason for this is
that a corporation can only exercise its powers
through its board of directors and/or its duly
authorized officers and agents. Physical acts, like
the signing of documents, can be performed only
by natural persons duly authorized for the
purpose.12
Moreover, Rule 7, Section 5 of the Rules of Court
concerning the certification against forum
shopping does not require any consular
certification if the petitioner is a foreign entity.
Nonetheless, to banish any lingering doubt,
petitioner SLIHM furnished this Court with a
consular certification dated October 29, 2003
authenticating the Director's Certificate
authorizing Atty. Lerma to execute the
certification against forum shopping, together
with petitioners' manifestation of February 9,
2004.
Respondent also attacks the present petition as
one that raises pure questions of fact. It points out
that in a petition for review under Rule 45 of the
Rules of Court, the questions that may properly be
inquired into are strictly circumscribed by the
express limitation that "the petition shall raise
only questions of law which must be distinctly set
forth."13 We do not, however, find that the issues
involved in this petition consist purely of
questions of fact. These issues will be dealt with as
we go through the questions raised by the
petitioners one by one.
Petitioners' first argument is that the respondent
had no right to file an application for registration
of the "Shangri-La" mark and "S" logo because it
did not have prior actual commercial use thereof.
To respondent, such an argument raises a
question of fact that was already resolved by the
RTC and concurred in by the CA.
First off, all that the RTC found was that
respondent was the prior user and registrant of
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (How are marks acquired?)
the subject mark and logo in the Philippines.
Taken in proper context, the trial court's finding
on "prior use" can only be interpreted to mean
that respondent used the subject mark and logo in
the country before the petitioners did. It cannot be
construed as being a factual finding that there was
prior use of the mark and logo before registration.
Secondly, the question raised is not purely factual
in nature. In the context of this case, it involves
resolving whether a certificate of registration of a
mark, and the presumption of regularity in the
performance of official functions in the issuance
thereof, are sufficient to establish prior actual use
by the registrant. It further entails answering the
question of whether prior actual use is required
before there may be a valid registration of a mark.
Under the provisions of the former trademark law,
R.A. No. 166, as amended, which was in effect up
to December 31, 1997, hence, the law in force at
the time of respondent's application for
registration of trademark, the root of ownership
of a trademark is actual use in commerce. Section
2 of said law requires that before a trademark can
be registered, it must have been actually used in
commerce and service for not less than two
months in the Philippines prior to the filing of an
application for its registration.
Registration, without more, does not confer upon
the registrant an absolute right to the registered
mark. The certificate of registration is merely
a prima facie proof that the registrant is the owner
of the registered mark or trade name. Evidence of
prior and continuous use of the mark or trade
name by another can overcome the presumptive
ownership of the registrant and may very well
entitle the former to be declared owner in an
appropriate case.14
Among the effects of registration of a mark, as
catalogued by the Court in Lorenzana v.
Macagba,15 are:
1. Registration in the Principal Register
gives rise to a presumption of the
validity of the registration, the
registrant's ownership of the mark, and
his right to the exclusive use thereof. x x x
2. Registration in the Principal Register
is limited to the actual owner of the
trademark and proceedings therein pass
on the issue of ownership, which may be
contested through opposition or
interference proceedings, or, after
registration, in a petition for
cancellation. xxx
[Emphasis supplied]1avvphil.ñet
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.16
While the present law on trademarks17 has
dispensed with the requirement of prior actual
use at the time of registration, the law in force at
the time of registration must be applied, and
thereunder it was held that as a condition
precedent to registration of trademark, trade
name or service mark, the same must have been in
actual use in the Philippines before the filing of the
application for registration.18 Trademark is a
creation of use and therefore actual use is a pre-
requisite to exclusive ownership and its
registration with the Philippine Patent Office is a
mere administrative confirmation of the existence
of such right.19
By itself, registration is not a mode of acquiring
ownership. When the applicant is not the owner of
the trademark being applied for, he has no right to
apply for registration of the same. Registration
merely creates a prima facie presumption of the
validity of the registration, of the registrant's
ownership of the trademark and of the exclusive
right to the use thereof.20 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, respondent's own witness, Ramon
Syhunliong, testified that a jeepney signboard
artist allegedly commissioned to create the mark
and logo submitted his designs only in December
1982.21 This was two-and-a-half months after the
filing of the respondent's trademark application
on October 18, 1982 with the BPTTT. It was also
only in December 1982 when the respondent's
restaurant was opened for business.22 Respondent
cannot now claim before the Court that the
certificate of registration itself is proof that the
two-month prior use requirement was complied
with, what with the fact that its very own witness
testified otherwise in the trial court. And because
at the time (October 18, 1982) the respondent
filed its application for trademark registration of
the "Shangri-La" mark and "S" logo, respondent
was not using these in the Philippines
commercially, the registration is void.
Petitioners also argue that the respondent's use of
the "Shangri-La" mark and "S" logo was in evident
bad faith and cannot therefore ripen into
ownership, much less registration. While the
respondent is correct in saying that a finding of
bad faith is factual, not legal,23 hence beyond the
scope of a petition for review, there are, however,
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (How are marks acquired?)
noted exceptions thereto. Among these exceptions
are:
1. When the inference made is manifestly
mistaken, absurd or impossible;24
2. When there is grave abuse of
discretion;25
3. When the judgment is based on a
misapprehension of facts;26
4. When the findings of fact are
conflicting;27 and
5. When the facts set forth in the petition
as well as in the petitioner's main and
reply briefs are not disputed by the
respondent.28
And these are naming but a few of the recognized
exceptions to the rule.
The CA itself, in its Decision of May 15, 2003,
found that the respondent's president and
chairman of the board, Ramon Syhunliong, had
been a guest at the petitioners' hotel before he
caused the registration of the mark and logo, and
surmised that he must have copied the idea there:
Did Mr. Ramon Syhunliong, [respondent's]
President copy the mark and devise from one of
[petitioners'] hotel (Kowloon Shangri-la) abroad?
The mere fact that he was a visitor of [petitioners']
hotel abroad at one time (September 27, 1982)
establishes [petitioners'] allegation that he got the
idea there.29
Yet, in the very next paragraph, despite the
preceding admission that the mark and logo must
have been copied, the CA tries to make it appear
that the adoption of the same mark and logo could
have been coincidental:
The word or name "Shangri-la" and the S-logo, are
not uncommon. The word "Shangri-la" refers to a
(a) remote beautiful imaginary place where life
approaches perfection or (b) imaginary mountain
land depicted as a utopia in the novel Lost Horizon
by James Hilton. The Lost Horizon was a well-read
and popular novel written in 1976. It is not
impossible that the parties, inspired by the novel,
both adopted the mark for their business to
conjure [a] place of beauty and pleasure.
The S-logo is, likewise, not unusual. The devise
looks like a modified Old English print.30
To jump from a recognition of the fact that the
mark and logo must have been copied to a
rationalization for the possibility that both the
petitioners and the respondent coincidentally
chose the same name and logo is not only
contradictory, but also manifestly mistaken or
absurd. Furthermore, the "S" logo appears nothing
like the "Old English" print that the CA makes it
out to be, but is obviously a symbol with oriental
or Asian overtones. At any rate, it is ludicrous to
believe that the parties would come up with the
exact same lettering for the word "Shangri-La"
and the exact same logo to boot. As correctly
observed by the petitioners, to which we are in
full accord:
x x x When a trademark copycat adopts the word
portion of another's trademark as his own, there
may still be some doubt that the adoption is
intentional. But if he copies not only the word but
also the word's exact font and lettering style and
in addition, he copies also the logo portion of the
trademark, the slightest doubt vanishes. It is then
replaced by the certainty that the adoption was
deliberate, malicious and in bad faith.31
It is truly difficult to understand why, of the
millions of terms and combination of letters and
designs available, the respondent had to choose
exactly the same mark and logo as that of the
petitioners, if there was no intent to take
advantage of the goodwill of petitioners' mark and
logo.32
One who has imitated the trademark of another
cannot bring an action for infringement,
particularly against the true owner of the mark,
because he would be coming to court with unclean
hands.33 Priority is of no avail to the bad faith
plaintiff. Good faith is required in order to ensure
that a second user may not merely take advantage
of the goodwill established by the true owner.
This point is further bolstered by the fact that
under either Section 17 of R.A. No. 166, or Section
151 of R.A. No. 8293, or Article 6bis(3) of the Paris
Convention, no time limit is fixed for the
cancellation of marks registered or used in bad
faith.34 This is precisely why petitioners had filed
an inter partes case before the BPTTT for the
cancellation of respondent's registration, the
proceedings on which were suspended pending
resolution of the instant case.
Respondent DGCI also rebukes the next issue
raised by the petitioners as being purely factual in
nature, namely, whether the CA erred in
overlooking petitioners' widespread prior use of
the "Shangri-La" mark and "S" logo in their
operations. The question, however, is not whether
there had been widespread prior use, which
would have been factual, but whether that prior
use entitles the petitioners to use the mark and
logo in the Philippines. This is clearly a question
which is legal in nature.
It has already been established in the two courts
below, and admitted by the respondent's president
himself, that petitioners had prior widespread use
of the mark and logo abroad:
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There is, to be sure, an impressive mass of
proof that petitioner SLIHM and its related
companies abroad used the name and logo for one
purpose or another x x x.35 [Emphasis supplied]
In respondent's own words, "[T]he Court of
Appeals did note petitioners' use of the mark and
logo but held that such use did not confer to them
ownership or exclusive right to use them in the
Philippines."36 To petitioners' mind, it was error
for the CA to rule that their worldwide use of the
mark and logo in dispute could not have conferred
upon them any right thereto. Again, this is a legal
question which is well worth delving into.
R.A. No. 166, as amended, under which this case
was heard and decided provides:
Section 2. What are registrable. - Trademarks,
trade names and service marks owned by
persons, corporations, partnerships or
associations domiciled in the Philippines and by
persons, corporations, partnerships or
associations domiciled in any foreign country may
be registered in accordance with the provisions of
this Act: Provided, That said trademarks trade
names, or service marks are actually in use in
commerce and services not less than two
months in the Philippines before the time the
applications for registration are filed: And
provided, further, That the country of which the
applicant for registration is a citizen grants by law
substantially similar privileges to citizens of the
Philippines, and such fact is officially certified,
with a certified true copy of the foreign law
translated into the English language, by the
government of the foreign country to the
Government of the Republic of the Philippines.
Section 2-A. Ownership of trademarks, trade
names and service marks; how acquired. - Anyone
who lawfully produces or deals in merchandise of
any kind or who engages in any lawful business, or
who renders any lawful service in commerce,
by actual use thereof in manufacture or trade, in
business, and in the service rendered, may
appropriate to his exclusive use a trademark, a
trade name, or a servicemark not so
appropriated by another, to distinguish his
merchandise, business or service from the
merchandise, business or services of others. The
ownership or possession of a trademark, trade
name, service mark, heretofore or hereafter
appropriated, as in this section provided, shall be
recognized and protected in the same manner and
to the same extent as are other property rights
known to this law. [Emphasis supplied]
Admittedly, the CA was not amiss in saying that
the law requires the actual use in commerce of the
said trade name and "S" logo in the
Philippines. Hence, consistent with its finding that
the bulk of the petitioners' evidence shows that
the alleged use of the Shangri-La trade name was
done abroad and not in the Philippines, it is
understandable for that court to rule in
respondent's favor. Unfortunately, however, what
the CA failed to perceive is that there is a crucial
difference between the aforequoted Section 2 and
Section 2-A of R.A. No. 166. For, while Section 2
provides for what is registrable, Section 2-A, on
the other hand, sets out how ownership  is
acquired. These are two distinct concepts.
Under Section 2, 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 2 months prior to the application
for registration. Since "ownership" of the
trademark is required for registration, Section 2-A
of the same law sets out to define how one goes
about acquiring ownership thereof. Under Section
2-A, 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. Additionally, it
is significant to note that Section 2-A does not
require that the actual use of a trademark must be
within the Philippines. Hence, under R.A. No. 166,
as amended, one may be an owner of a mark due
to actual use thereof but not yet have the right to
register such ownership here due to failure to use
it within the Philippines for two months.
While the petitioners may not have qualified
under Section 2 of R.A. No. 166 as a registrant,
neither did respondent DGCI, since the latter also
failed to fulfill the 2-month actual use
requirement. What is worse, DGCI was not even
the owner of the mark. For it to have been the
owner, the mark must not have been already
appropriated (i.e., used) by someone else. At the
time of respondent DGCI's registration of the
mark, the same was already being used by the
petitioners, albeit abroad, of which DGCI's
president was fully aware.
It is respondent's contention that since the
petitioners adopted the "Shangri-La" mark and "S"
logo as a mere corporate name or as the name of
their hotels, instead of using them as a trademark
or service mark, then such name and logo are not
trademarks. The two concepts of corporate name
or business name and trademark or service mark,
are not mutually exclusive. It is common, indeed
likely, that the name of a corporation or business
is also a trade name, trademark or service mark.
Section 38 of R.A. No. 166 defines the terms as
follows:
Sec. 38. Words and terms defined and construed -
In the construction of this Act, unless the contrary
is plainly apparent from the context - The term
"trade name" includes individual names and
surnames, firm names, trade names, devices or
words used by manufacturers, industrialists,
merchants, agriculturists, and others to identify
their business, vocations or occupations;
the names or titles lawfully adopted and used
by natural or juridical persons, unions, and any
manufacturing, industrial, commercial,
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (How are marks acquired?)
agricultural or other organizations engaged in
trade or commerce.
The term "trade mark" includes any word, name,
symbol, emblem, sign or device or any
combination thereof adopted and used by a
manufacturer or merchant to identify his goods
and distinguish them from those manufactured,
sold or dealt in by others.
The term "service mark" means a mark used in the
sale or advertising of services to identify the
services of one person and distinguish them
from the services of others and includes
without limitation the marks, names, symbols,
titles, designations, slogans, character names,
and distinctive features of radio or other
advertising. [Emphasis supplied]
Clearly, from the broad definitions quoted above,
the petitioners can be considered as having used
the "Shangri-La" name and "S" logo as a
tradename and service mark.
The new Intellectual Property Code (IPC),
Republic Act No. 8293, undoubtedly shows the
firm resolve of the Philippines to observe and
follow the Paris Convention by incorporating the
relevant portions of the Convention such that
persons who may question a mark (that is, oppose
registration, petition for the cancellation thereof,
sue for unfair competition) include persons whose
internationally well-known mark, whether or not
registered, is
identical with or confusingly similar to or
constitutes a translation of a mark that is sought
to be registered or is actually registered.37
However, while the Philippines was already a
signatory to the Paris Convention, the IPC only
took effect on January 1, 1988, and in the absence
of a retroactivity clause, R.A. No. 166 still
applies.38 Under the prevailing law and when they are actually the originator and creator
jurisprudence at the time, the CA had not erred in thereof.
ruling that:
Nor can the petitioners' separate personalities
The Paris Convention mandates that protection from their mother corporation be an obstacle in
should be afforded to internationally known the enforcement of their rights as part of the Kuok
marks as signatory to the Paris Convention, Group of Companies and as official repository,
without regard as to whether the foreign manager and operator of the subject mark and
corporation is registered, licensed or doing logo. Besides, R.A. No. 166 did not require the
business in the Philippines. It goes without saying party seeking relief to be the owner of the mark
that the same runs afoul to Republic Act No. 166, but "any person who believes that he is or will be
which requires the actual use in commerce in the damaged by the registration of a mark or trade
Philippines of the subject mark or devise. The name."40
apparent conflict between the two (2) was settled
by the Supreme Court in this wise - WHEREFORE, the instant petition is GRANTED.
The assailed Decision and Resolution of the Court
"Following universal acquiescence and of Appeals dated May 15, 2003 and September 15,
comity, our municipal law on trademarks 2003, respectively, and the Decision of the
regarding the requirement of actual use in the Regional Trial Court of Quezon City dated March 8,
Philippines must subordinate an international 1996 are hereby SET ASIDE. Accordingly, the
agreement inasmuch as the apparent clash is complaint for infringement in Civil Case No. Q-91-
being decided by a municipal tribunal (Mortensen 8476 is ordered DISMISSED.
vs. Peters, Great Britain, High Court of Judiciary of
Scotland, 1906, 8 Sessions 93; Paras, International SO ORDERED.
Law and World Organization, 1971 Ed., p. 20).
Withal, the fact that international law has been CANCIO C. GARCIA
made part of the law of the land does not by any Associate Justice
means imply the primacy of international law over
national law in the municipal sphere. Under the
doctrine of incorporation as applied in most
countries, rules of international law are given a
standing equal, not superior, to national legislative
enactments (Salonga and Yap, Public International
Law, Fourth ed., 1974, p. 16)."39 [Emphasis
supplied]
Consequently, the petitioners cannot claim
protection under the Paris Convention.
Nevertheless, with the double infirmity of lack of
two-month prior use, as well as bad faith in the
respondent's registration of the mark, it is evident
that the petitioners cannot be guilty of
infringement. It would be a great injustice to
adjudge the petitioners guilty of infringing a mark
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (How are marks acquired?)
1. The certification of non-forum
Republic of the Philippines shopping submitted by petitioners is
SUPREME COURT insufficient;
Manila
2. The word "Shangri-La" and "S" logo
FIRST DIVISION were adopted and used by the Kuok
Group as part of their corporate names
and the names of their hotels;
G.R. No. 159938             January 22, 2007
3. Petitioners' claim of legal and beneficial
SHANGRI-LA INTERNATIONAL HOTEL
MANAGEMENT, LTD., SHANGRI-LA ownership of mark and logo is baseless
and unwarranted;
PROPERTIES, INC., MAKATI SHANGRI-LA
HOTEL & RESORT, INC., AND KUOK
4. Change of theory from owner to one
PHILIPPINES PROPERTIES, INC., Petitioners,
who may be damaged as entitled to relief
vs.
is not allowable;
DEVELOPERS GROUP OF COMPANIES,
INC., Respondent.
5. Finding of registration in patent offices
RESOLUTION in different countries around the world is
inaccurate;
GARCIA, J.:
6. DGCI's registration of the "Shangri-La"
Before the Court is this Motion for mark and the "S" logo is valid because
Reconsideration filed by respondent Developers there was at least two months’ use
Group of Companies, Inc. (DGCI) praying for the thereof prior to application;
reversal of this Court's Decision1 of March 31,
2006, the dispositive portion of which reads: 7. Section 2-A of R.A. No. 166 requires the
actual commercial use of trademarks in
WHEREFORE, the instant petition is GRANTED. the Philippines pursuant to the principle
The assailed Decision and Resolution of the Court of territoriality applicable to trademarks.
of Appeals dated May 15, 2003 and September 15, Hence, petitioners' use of subject marks
2003, respectively, and the Decision of the outside of Philippine territory did not
Regional Trial Court of Quezon City dated March 8, confer on them any ownership rights
1996 are hereby SET ASIDE. Accordingly, the thereto under Philippine laws;
complaint for infringement in Civil Case No. Q-91-
8476 is ordered DISMISSED. 8. The Regional Trial Court and the Court
of Appeals' failure to find any bad faith on
In its motion, respondent-movant DGCI raises the the part of DGCI is conclusive on the
following grounds: Supreme Court;
9. DGCI's use of the subject marks in the
Philippines is entitled to protection under
the territoriality principle of trademarks.2
The bulk of the aforementioned grounds is a mere
rehash of movant’s previous arguments. While
DGCI is correct in stating that a motion for
reconsideration, by its very nature, may tend to
dwell on issues already resolved in the decision
sought to be reconsidered and that this should not
be an obstacle for a reconsideration,3 the hard
reality is that movant has failed to raise matters
substantially plausible or compellingly persuasive
to warrant the desired course of action.
Considering that the grounds presently raised
have been sufficiently considered, if not squarely
addressed, in the subject Decision, it behooves
movant to convince the Court that certain findings
or conclusions in the Decision are contrary to law.
As it is, however, the instant motion does not raise
any new or substantial legitimate ground or
reason to justify the reconsideration
sought.1avvphi1.net
Movant DGCI would make capital on the alleged
danger the subject Decision might wreak upon
Philippine trademark law, claiming that the
decision in question would render nugatory the
protection intended by the trademark law to all
Philippine trademark registrants. This assertion is
a baseless and sweeping statement. The
interpretation of Republic Act No. 166 in the
Decision does not in any way diminish the
protection afforded to valid trademark
registrations made under said law. It was glaringly
obvious, however, from the testimony of movant’s
own witness that DGCI’s registration of the subject
mark and logo was void due to the existence of
bad faith and the absence of the requisite 2-month
prior use. Despite movant's melodramatic
imputation of an abandonment of the territoriality
principle, the Decision actually upholds the
principle but found that respondent DGCI was not
entitled to protection thereunder due to the
double infirmity which attended its registration of
the subject mark and logo.
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (How are marks acquired?)
Anent DGCI's assertion of a change of theory on
the part of the petitioners, suffice it to say that the
latter have never budged from seeking relief
as rightful, legal and/or beneficial owners of the
mark and logo in dispute. The Decision ruled
favorably on the veracity of the petitioners' claim:

xxx It would be a great injustice to adjudge the

petitioners guilty of infringing a mark when they
are actually the originator and creator thereof.

Nor can the petitioners' separate personalities

from their mother corporation be an obstacle in
the enforcement of their rights as part of the Kuok
Group of Companies and as official repository,
manager and operator of the subject mark and
logo. Besides, R.A. No. 166 did not require the
party seeking relief to be the owner of the mark
but "any person who believes that he is or will be
damaged by the registration of a mark or trade
name."4 [Emphasis supplied]

Clearly, from the word "Besides" used in the

context of the aforequoted paragraph, all that the
Decision says is that even if petitioners were not
the owners, they would still have a right of action
under the law. There was never an attempt on
their part at an eleventh-hour change of theory, as
movant DGCI wishes to portray.

WHEREFORE, the instant motion for

reconsideration is DENIED for lack of merit.

SO ORDERED.

CANCIO C. GARCIA
Associate Justice

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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (How are marks acquired?)
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 184850               October 20, 2010
E.Y. INDUSTRIAL SALES, INC. and ENGRACIO
YAP, Petitioners,
vs.
SHEN DAR ELECTRICITY AND MACHINERY CO.,
LTD., Respondent.
DECISION
VELASCO, JR., J.:
The Case
This Petition for Review on Certiorari under Rule
45 seeks to nullify and reverse the February 21,
2008 Decision1 and the October 6, 2008
Resolution2 rendered by the Court of Appeals (CA)
in CA-G.R. SP No. 99356 entitled Shen Dar
Electricity and Machinery Co., Ltd. v. E.Y.
Industrial Sales, Inc. and Engracio Yap.
The assailed decision reversed the Decision dated
May 25, 20073 issued by the Director General of
the Intellectual Property Office (IPO) in Inter
Partes Case No. 14-2004-00084. The IPO Director
General upheld Certificate of Registration (COR)
No. 4-1999-005393 issued by the IPO for the
trademark "VESPA" in favor of petitioner E.Y.
Industrial Sales, Inc. (EYIS), but ordered the
cancellation of COR No. 4-1997-121492, also for
the trademark "VESPA," issued in favor of
respondent Shen Dar Electricity and Machinery
Co., Ltd. (Shen Dar). The Decision of the IPO
Director General, in effect, affirmed the Decision
dated May 29, 20064 issued by the Director of the
Bureau of Legal Affairs (BLA) of the IPO.
The Facts
EYIS is a domestic corporation engaged in the
production, distribution and sale of air
compressors and other industrial tools and
equipment.5 Petitioner Engracio Yap is the
Chairman of the Board of Directors of EYIS.6
Respondent Shen Dar is a Taiwan-based foreign
corporation engaged in the manufacture of air
compressors.7
Both companies claimed to have the right to
register the trademark "VESPA" for air
compressors.
From 1997 to 2004, EYIS imported air
compressors from Shen Dar through sales
contracts. In the Sales Contract dated April 20,
2002,8 for example, Shen Dar would supply EYIS in
one (1) year with 24 to 30 units of 40-ft.
containers worth of air compressors identified in
the Packing/Weight Lists simply as SD-23, SD-29,
SD-31, SD-32, SD-39, SD-67 and SD-68. In the
corresponding Bill of Ladings, the items were
described merely as air compressors.9 There is no
documentary evidence to show that such air
compressors were marked "VESPA."
On June 9, 1997, Shen Dar filed Trademark
Application Serial No. 4-1997-121492 with the
IPO for the mark "VESPA, Chinese Characters and
Device" for use on air compressors and welding
machines.10
On July 28, 1999, EYIS filed Trademark
Application Serial No. 4-1999-005393, also for the
mark "VESPA," for use on air compressors.11 On
January 18, 2004, the IPO issued COR No. 4-1999-
005393 in favor of EYIS.12 Thereafter, on February
8, 2007, Shen Dar was also issued COR No. 4-
1997-121492.13
In the meantime, on June 21, 2004, Shen Dar filed
a Petition for Cancellation of EYIS’ COR with the
BLA.14 In the Petition, Shen Dar primarily argued
that the issuance of the COR in favor of EYIS
violated Section 123.1 paragraphs (d), (e) and (f)
of Republic Act No. (RA) 8293, otherwise known
as the Intellectual Property Code (IP Code), having
first filed an application for the mark. Shen Dar
further alleged that EYIS was a mere distributor of
air compressors bearing the mark "VESPA" which
it imported from Shen Dar. Shen Dar also argued
that it had prior and exclusive right to the use and
registration of the mark "VESPA" in the
Philippines under the provisions of the Paris
Convention.15
In its Answer, EYIS and Yap denied the claim of
Shen Dar to be the true owners of the mark
"VESPA" being the sole assembler and fabricator
of air compressors since the early 1990s. They
further alleged that the air compressors that Shen
Dar allegedly supplied them bore the mark "SD"
for Shen Dar and not "VESPA." Moreover, EYIS
argued that Shen Dar, not being the owner of the
mark, could not seek protection from the
provisions of the Paris Convention or the IP
Code.16
Thereafter, the Director of the BLA issued its
Decision dated May 29, 2006 in favor of EYIS and
against Shen Dar, the dispositive portion of which
reads:
WHEREFORE, premises considered, the Petition
for Cancellation is, as it is hereby, DENIED.
Consequently, Certificate of Registration No. 4-
1999-[005393] for the mark "VESPA" granted in
the name of E.Y. Industrial Sales, Inc. on 9 January
2007 is hereby upheld.
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (How are marks acquired?)
Let the filewrapper of VESPA subject matter of
this case be forwarded to the Administrative,
Financial and Human Resource Development
Services Bureau for issuance and appropriate
action in accordance with this DECISION and a
copy thereof furnished to the Bureau of
Trademarks for information and update of its
records.
SO ORDERED.17
Shen Dar appealed the decision of the BLA
Director to the Director General of the IPO. In the
appeal, Shen Dar raised the following issues:
1. Whether the BLA Director erred in
ruling that Shen Dar failed to present
evidence;
2. Whether the registration of EYIS’
application was proper considering that
Shen Dar was the first to file an
application for the mark; and
3. Whether the BLA Director correctly
ruled that EYIS is the true owner of the
mark.18
Later, the IPO Director General issued a Decision
dated May 25, 2007 upholding the COR issued in
favor of EYIS while cancelling the COR of Shen Dar,
the dispositive portion of which reads:
WHEREFORE, premises considered, the appeal is
DENIED. Certificate of Registration No. 4-1999-
005393 for the mark VESPA for air compressor
issued in favor of Appellee is hereby upheld.
Consequently, Certificate of Registration No. 4-
1997-121492 for the mark VESPA, Chinese
Characters & Device for goods air compressor and
spot welding machine issued in favor of Appellant
is hereby ordered cancelled.
Let a copy of this Decision as well as the records of
this case be furnished and returned to the Director
of Bureau of Legal Affairs for appropriate action.
Further, let also the Directors of the Bureau of
Trademarks, the Administrative, Financial and
Human Resources Development Services Bureau,
and the Documentation, Information and
Technology Transfer Bureau be furnished a copy
of this Decision for information, guidance, and
records purposes.19
Shen Dar appealed the above decision of the IPO
Director General to the CA where Shen Dar raised
the following issues:
1. Whether Shen Dar is guilty of forum
shopping;
2. Whether the first-to-file rule applies to
the instant case;
3. Whether Shen Dar presented evidence
of actual use;
4. Whether EYIS is the true owner of the
mark "VESPA";
5. Whether the IPO Director General erred
in cancelling Shen Dar’s COR No. 4-1997-
121492 without a petition for
cancellation; and
6. Whether Shen Dar sustained
damages.20
In the assailed decision, the CA reversed the IPO
Director General and ruled in favor of Shen Dar.
The dispositive portion states:
WHEREFORE, premises considered, the petition is
GRANTED. Consequently, the assailed decision of
the Director General of the Intellectual Property
Office dated May 25, 2007 is hereby REVERSED
and SET ASIDE. In lieu thereof, a new one is
entered: a) ordering the cancellation of Certificate
of Registration No. 4-1999-005393 issued on
January 19, 2004 for the trademark VESPA in
favor of E.Y. Industrial Sales, Inc.; b) ordering the
restoration of the validity of Certificate of
Registration No. 4-1997-121492 for the
trademark VESPA in favor of Shen Dar Electricity
and Machinery Co., Ltd. No pronouncement as to
costs.
SO ORDERED.21
In ruling for Shen Dar, the CA ruled that, despite
the fact that Shen Dar did not formally offer its
evidence before the BLA, such evidence was
properly attached to the Petition for Cancellation.
As such, Shen Dar’s evidence may be properly
considered. The CA also enunciated that the IPO
failed to properly apply the provisions of Sec.
123.1(d) of RA 8293, which prohibits the
registration of a trademark in favor of a party
when there is an earlier filed application for the
same mark. The CA further ruled that Shen Dar
should be considered to have prior use of the
mark based on the statements made by the parties
in their respective Declarations of Actual Use. The
CA added that EYIS is a mere importer of the air
compressors with the mark "VESPA" as may be
gleaned from its receipts which indicated that
EYIS is an importer, wholesaler and retailer, and
therefore, cannot be considered an owner of the
mark.22
EYIS filed a motion for reconsideration of the
assailed decision which the CA denied in the
assailed resolution.
Hence, the instant appeal.
Issues
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (How are marks acquired?)
EYIS and Yap raise the following issues in their
petition:
A. Whether the Director General of the
IPO correctly upheld the rights of
Petitioners over the trademark VESPA.
B. Whether the Director General of the
IPO can, under the circumstances, order
the cancellation of Respondent’s
certificate of registration for VESPA,
which has been fraudulently obtained and
erroneously issued.
C. Whether the Honorable Court of
Appeals was justified in reversing the
findings of fact of the IPO, which affirm
the rights of Petitioner EYIS over the
trademark VESPA and when such findings
are supported by the evidence on record.
D. Whether this Honorable Court may
review questions of fact considering that
the findings of the Court of Appeals and
the IPO are in conflict and the conclusions
of the appellee court are contradicted by
the evidence on record.23
The Ruling of the Court
The appeal is meritorious.
First Issue:
Whether this Court may review the questions
of fact presented
Petitioners raise the factual issue of who the true
owner of the mark is. As a general rule, this Court
is not a trier of facts. However, such rule is subject
to exceptions.
In New City Builders, Inc. v. National Labor
Relations Commission,24 the Court ruled that:
We are very much aware that the rule to the effect
that this Court is not a trier of facts admits of
exceptions. As we have stated in Insular Life
Assurance Company, Ltd. vs. CA:
[i]t is a settled rule that in the exercise of the
Supreme Court’s power of review, the Court is not
a trier of facts and does not normally undertake
the re-examination of the evidence presented by
the contending parties during the trial of the case
considering that the findings of facts of the CA are
conclusive and binding on the Court. However, the
Court had recognized several exceptions to this
rule, to wit: (1) when the findings are grounded
entirely on speculation, surmises or conjectures;
(2) when the inference made is manifestly
mistaken, absurd or impossible; (3) when there is
grave abuse of discretion; (4) when the judgment
is based on a misapprehension of facts; (5) when
the findings of facts are conflicting; (6) when in
making its findings the Court of Appeals went
beyond the issues of the case, or its findings are
contrary to the admissions of both the appellant
and the appellee; (7) when the findings are
contrary to the trial court; (8) when the findings
are conclusions without citation of specific
evidence on which they are based; (9) when the
facts set forth in the petition as well as in the
petitioner’s main and reply briefs are not disputed
by the respondent; (10) when the findings of fact
are premised on the supposed absence of
evidence and contradicted by the evidence on
record; and (11) when the Court of Appeals
manifestly overlooked certain relevant facts not
disputed by the parties, which, if properly
considered, would justify a different conclusion.
(Emphasis supplied.)
In the instant case, the records will show that the
IPO and the CA made differing conclusions on the
issue of ownership based on the evidence
presented by the parties. Hence, this issue may be
the subject of this Court’s review.
Second Issue:
Whether evidence presented before the BLA
must be formally offered
Preliminarily, it must be noted that the BLA ruled
that Shen Dar failed to adduce evidence in support
of its allegations as required under Office Order
No. 79, Series of 2005, Amendments to the
Regulations on Inter Partes Proceedings, having
failed to formally offer its evidence during the
proceedings before it. The BLA ruled:
At the outset, we note petitioner’s failure to
adduce any evidence in support of its allegations
in the Petition for Cancellation. Petitioner did not
file nor submit its marked evidence as required in
this Bureau’s Order No. 2006-157 dated 25
January 2006 in compliance with Office Order No.
79, Series of 2005, Amendments to the
Regulations on Inter Partes Proceedings.25 x x x
In reversing such finding, the CA cited Sec. 2.4 of
BLA Memorandum Circular No. 03, Series of 2005,
which states:
Section 2.4. In all cases, failure to file the
documentary evidences in accordance with
Sections 7 and 8 of the rules on summary
proceedings shall be construed as a waiver on the
part of the parties. In such a case, the original
petition, opposition, answer and the supporting
documents therein shall constitute the entire
evidence for the parties subject to applicable
rules.
The CA concluded that Shen Dar needed not
formally offer its evidence but merely needed to
attach its evidence to its position paper with the
proper markings,26 which it did in this case.
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The IP Code provides under its Sec. 10.3 that the
Director General of the IPO shall establish the
procedure for the application for the registration
of a trademark, as well as the opposition to it:
Section 10. The Bureau of Legal Affairs.¾The
Bureau of Legal Affairs shall have the following
functions:
xxxx
10.3. The Director General may by Regulations
establish the procedure to govern the
implementation of this Section.
Thus, the Director General issued Office Order No.
79, Series of 2005 amending the regulations on
Inter Partes Proceedings, Sec. 12.1 of which
provides:
Section 12. Evidence for the Parties¾
12.1. The verified petition or opposition, reply if
any, duly marked affidavits of the witnesses, and
the documents submitted, shall constitute the
entire evidence for the petitioner or opposer. The
verified answer, rejoinder if any, and the duly
marked affidavits and documents submitted shall
constitute the evidence for the respondent.
Affidavits, documents and other evidence not
submitted and duly marked in accordance with
the preceding sections shall not be admitted as
evidence.
The preceding sections referred to in the above
provision refer to Secs. 7.1, 8.1 and 9 which, in
turn, provide:
Section 7. Filing of Petition or Opposition¾
7.1. The petition or opposition, together with the
affidavits of witnesses and originals of the
documents and other requirements, shall be filed
with the Bureau, provided, that in case of public
documents, certified copies shall be allowed in
lieu of the originals. The Bureau shall check if the
petition or opposition is in due form as provided
in the Regulations particularly Rule 3, Section 3;
Rule 4, Section 2; Rule 5, Section 3; Rule 6, Section
9; Rule 7, Sections 3 and 5; Rule 8, Sections 3 and
4. For petition for cancellation of layout design
(topography) of integrated circuits, Rule 3, Section
3 applies as to the form and requirements. The
affidavits, documents and other evidence shall be
marked consecutively as "Exhibits" beginning
with the letter "A".
Section 8. Answer¾
8.1. Within three (3) working days from receipt of
the petition or opposition, the Bureau shall issue
an order for the respondent to file an answer
together with the affidavits of witnesses and
originals of documents, and at the same time shall
notify all parties required to be notified in the IP
Code and these Regulations, provided, that in case
of public documents, certified true copies may be
submitted in lieu of the originals. The affidavits
and documents shall be marked consecutively as
"Exhibits" beginning with the number "1".
Section 9. Petition or Opposition and Answer must
be verified¾ Subject to Rules 7 and 8 of these
regulations, the petition or opposition and the
answer must be verified. Otherwise, the same
shall not be considered as having been filed.
In other words, as long as the petition is verified
and the pieces of evidence consisting of the
affidavits of the witnesses and the original of other
documentary evidence are attached to the petition
and properly marked in accordance with Secs. 7.1
and 8.1 abovementioned, these shall be
considered as the evidence of the petitioner. There
is no requirement under the abovementioned
rules that the evidence of the parties must be
formally offered to the BLA.
In any case, as a quasi-judicial agency and as
stated in Rule 2, Sec. 5 of the Regulations on Inter
Partes Proceedings, the BLA is not bound by
technical rules of procedure. The evidence
attached to the petition may, therefore, be
properly considered in the resolution of the case.
Third Issue:
Whether the IPO Director General can
validly cancel Shen Dar’s Certificate of
Registration
In his Decision, the IPO Director General stated
that, despite the fact that the instant case was for
the cancellation of the COR issued in favor of EYIS,
the interests of justice dictate, and in view of its
findings, that the COR of Shen Dar must be
cancelled. The Director General explained:
Accordingly, while the instant case involves a
petition to cancel the registration of the Appellee’s
trademark VESPA, the interest of justice requires
that Certificate of Registration No. 4-1997-121492
be cancelled. While the normal course of
proceedings should have been the filing of a
petition for cancellation of Certificate of
Registration No. 4-1997-121492, that would
involve critical facts and issues that have already
been resolved in this case. To allow the Applicant
to still maintain in the Trademark Registry
Certificate of Registration No. 4-1997-121492
would nullify the exclusive rights of Appellee as
the true and registered owner of the mark VESPA
and defeat the purpose of the trademark
registration system.27
Shen Dar challenges the propriety of such
cancellation on the ground that there was no
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petition for cancellation as required under Sec.
151 of RA 8293.
Office Order No. 79, Series of 2005, provides
under its Sec. 5 that:
Section 5. Rules of Procedure to be followed in the
conduct of hearing of Inter Partes cases.¾The
rules of procedure herein contained primarily
apply in the conduct of hearing of Inter Partes
cases. The Rules of Court may be applied
suppletorily. The Bureau shall not be bound by
strict technical rules of procedure and evidence
but may adopt, in the absence of any applicable
rule herein, such mode of proceedings which is
consistent with the requirements of fair play and
conducive to the just, speedy and inexpensive
disposition of cases, and which will give the
Bureau the greatest possibility to focus on the
contentious issues before it. (Emphasis supplied.)
The above rule reflects the oft-repeated legal
principle that quasi-judicial and administrative
bodies are not bound by technical rules of
procedure. Such principle, however, is tempered
by fundamental evidentiary rules, including due
process. Thus, we ruled in Aya-ay, Sr. v. Arpaphil
Shipping Corp.:28
That administrative quasi-judicial bodies like the
NLRC are not bound by technical rules of
procedure in the adjudication of cases does not
mean that the basic rules on proving allegations
should be entirely dispensed with. A party alleging
a critical fact must still support his allegation with
substantial evidence. Any decision based on
unsubstantiated allegation cannot stand as it will
offend due process.
x x x The liberality of procedure in administrative
actions is subject to limitations imposed by basic
requirements of due process. As this Court said in
Ang Tibay v. CIR, the provision for flexibility in
administrative procedure "does not go so far as to
justify orders without a basis in evidence having
rational probative value." More specifically, as
held in Uichico v. NLRC:
It is true that administrative and quasi-judicial
bodies like the NLRC are not bound by the
technical rules of procedure in the adjudication of
cases. However, this procedural rule should not be
construed as a license to disregard certain
fundamental evidentiary rules.
This was later reiterated in Lepanto Consolidated
Mining Company v. Dumapis:29
While it is true that administrative or quasi-
judicial bodies like the NLRC are not bound by the
technical rules of procedure in the adjudication of
cases, this procedural rule should not be
construed as a license to disregard certain
fundamental evidentiary rules. The evidence
presented must at least have a modicum of
admissibility for it to have probative value. Not
only must there be some evidence to support a
finding or conclusion, but the evidence must be
substantial. Substantial evidence is more than a
mere scintilla. It means such relevant evidence as
a reasonable mind might accept as adequate to
support a conclusion. Thus, even though technical
rules of evidence are not strictly complied with
before the LA and the NLRC, their decision must
be based on evidence that must, at the very least,
be substantial.
The fact that no petition for cancellation was filed
against the COR issued to Shen Dar does not
preclude the cancellation of Shen Dar’s COR. It
must be emphasized that, during the hearing for
the cancellation of EYIS’ COR before the BLA, Shen
Dar tried to establish that it, not EYIS, was the true
owner of the mark "VESPA" and, thus, entitled to
have it registered. Shen Dar had more than
sufficient opportunity to present its evidence and
argue its case, and it did. It was given its day in
court and its right to due process was respected.
The IPO Director General’s disregard of the
procedure for the cancellation of a registered
mark was a valid exercise of his discretion.
Fourth Issue:
Whether the factual findings of the IPO are
binding on the CA
Next, petitioners challenge the CA’s reversal of the
factual findings of the BLA that Shen Dar and not
EYIS is the prior user and, therefore, true owner of
the mark. In arguing its position, petitioners cite
numerous rulings of this Court where it was
enunciated that the factual findings of
administrative bodies are given great weight if not
conclusive upon the courts when supported by
substantial evidence.
We agree with petitioners that the general rule in
this jurisdiction is that the factual findings of
administrative bodies deserve utmost respect
when supported by evidence. However, such
general rule is subject to exceptions.
In Fuentes v. Court of Appeals,30 the Court
established the rule of conclusiveness of factual
findings of the CA as follows:
Jurisprudence teaches us that "(a)s a rule, the
jurisdiction of this Court in cases brought to it
from the Court of Appeals x x x is limited to the
review and revision of errors of law allegedly
committed by the appellate court, as its findings of
fact are deemed conclusive. As such this Court is
not duty-bound to analyze and weigh all over
again the evidence already considered in the
proceedings below. This rule, however, is not
without exceptions." The findings of fact of the
Court of Appeals, which are as a general rule
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (How are marks acquired?)
deemed conclusive, may admit of review by this
Court:
(1) when the factual findings of the Court
of Appeals and the trial court are
contradictory;
(2) when the findings are grounded
entirely on speculation, surmises, or
conjectures;
(3) when the inference made by the Court
of Appeals from its findings of fact is
manifestly mistaken, absurd, or
impossible;
(4) when there is grave abuse of
discretion in the appreciation of facts;
(5) when the appellate court, in making
its findings, goes beyond the issues of the
case, and such findings are contrary to the
admissions of both appellant and
appellee;
(6) when the judgment of the Court of
Appeals is premised on a To begin with, when respondents-appellees filed
misapprehension of facts;
(7) when the Court of Appeals fails to
notice certain relevant facts which, if
properly considered, will justify a
different conclusion;
(8) when the findings of fact are
themselves conflicting;
(9) when the findings of fact are
conclusions without citation of the
specific evidence on which they are
based; and
(10) when the findings of fact of the Court
of Appeals are premised on the absence of
evidence but such findings are
contradicted by the evidence on record.
(Emphasis supplied.)
Thereafter, in Villaflor v. Court of Appeals,31 this
Court applied the above principle to factual
findings of quasi-judicial bodies, to wit:
Proceeding by analogy, the exceptions to the rule
on conclusiveness of factual findings of the Court
of Appeals, enumerated in Fuentes vs. Court of
Appeals, can also be applied to those of quasi-
judicial bodies x x x. (Emphasis supplied.)
Here, the CA identified certain material facts that
were allegedly overlooked by the BLA and the IPO
Director General which it opined, when correctly
appreciated, would alter the result of the case. An
examination of the IPO Decisions, however, would
show that no such evidence was overlooked.
First, as to the date of first use of the mark by the
parties, the CA stated:
its application for registration of the VESPA
trademark on July 28, 1999, they stated under
oath, as found in their DECLARATION OF ACTUAL
USE, that their first use of the mark was on
December 22, 1998. On the other hand, [Shen Dar]
in its application dated June 09, 1997 stated,
likewise under oath in their DECLARATION OF
ACTUAL USE, that its first use of the mark was in
June 1996. This cannot be made any clearer. [Shen
Dar] was not only the first to file an application for
registration but likewise first to use said
registrable mark.32
Evidently, the CA anchors its finding that Shen Dar
was the first to use the mark on the statements of
the parties in their respective Declarations of
Actual Use. Such conclusion is premature at best.
While a Declaration of Actual Use is a notarized
document, hence, a public document, it is not
conclusive as to the fact of first use of a mark. The
declaration must be accompanied by proof of
actual use as of the date claimed. In a declaration
of actual use, the applicant must, therefore,
present evidence of such actual use.
The BLA ruled on the same issue, as follows:
More importantly, the private respondent’s prior
adoption and continuous use of the mark ‘VESPA’
on air compressors is bolstered by numerous
documentary evidence consisting of sales invoices
issued in the name of E.Y. Industrial and Bill of
Lading (Exhibits ‘4’ to ‘375’). Sales Invoice No.
12075 dated March 27, 1995 antedates
petitioner’s date of first use on January 1, 1997
indicated in its trademark application filed on
June 9, 1997 as well as the date of first use in June
of 1996 as indicated in the Declaration of Actual
Use submitted on December 3, 2001 (Exhibit
‘385’). The use by respondent registrant in the
concept of owner is shown by commercial
documents, sales invoices unambiguously
describing the goods as "VESPA" air compressors.
Private respondents have sold the air
compressors bearing the "VESPA" to various
locations in the Philippines, as far as Mindanao
and the Visayas since the early 1990’s. We
carefully inspected the evidence consisting of
three hundred seventy-one (371) invoices and
shipment documents which show that VESPA air
compressors were sold not only in Manila, but to
locations such as Iloilo City, Cebu City, Dumaguete
City, Zamboanga City, Cagayan de Oro City, Davao
City, to name a few. There is no doubt that it is
through private respondents’ efforts that the mark
"VESPA" used on air compressors has gained
business goodwill and reputation in the
Philippines for which it has validly acquired
trademark rights. Respondent E.Y. Industrial’s
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right has been preserved until the passage of RA
8293 which entitles it to register the same.33
Comparatively, the BLA’s findings were founded
upon the evidence presented by the parties. An
example of such evidence is Invoice No. 12075
dated March 29, 199534 where EYIS sold four units
of VESPA air compressors to Veteran Paint Trade
Center. Shen Dar failed to rebut such evidence.
The truth, as supported by the evidence on record,
is that EYIS was first to use the mark.
Moreover, the discrepancy in the date provided in
the Declaration of Actual Use filed by EYIS and the
proof submitted was appropriately considered by
the BLA, ruling as follows:
On the contrary, respondent EY Industrial was
able to prove the use of the mark "VESPA" on the
concept of an owner as early as 1991. Although
Respondent E.Y. indicated in its trademark
application that its first use was in December 22,
1998, it was able to prove by clear and positive
evidence of use prior to such date.
In Chuang Te v. Ng Kian-Guiab and Director of
Patents, L-23791, 23 November 1966, the High
Court clarified: Where an applicant for
registration of a trademark states under oath the
date of his earliest use, and later on he wishes to
carry back his first date of use to an earlier date,
he then takes on the greater burden of presenting
"clear and convincing evidence" of adoption and
use as of that earlier date. (B.R. Baker Co. vs.
Lebrow Bros., 150 F. 2d 580.)35
The CA further found that EYIS is not a
manufacturer of air compressors but merely
imports and sells them as a wholesaler and
retailer. The CA reasoned:
Conversely, a careful perusal of appellees’ own
submitted receipts shows that it is not
manufacturer but an importer, wholesaler and
retailer. This fact is corroborated by the testimony
of a former employee of appellees. Admittedly too,
appellees are importing air compressors from
[Shen Dar] from 1997 to 2004. These matters,
lend credence to [Shen Dar’s] claim that the letters
SD followed by a number inscribed in the air
compressor is only to describe its type,
manufacturer business name and capacity. The
VESPA mark is in the sticker which is attached to
the air compressors. The ruling of the Supreme
Court, in the case of UNNO Commercial
Enterprises, Inc. vs. General Milling Corporation et
al., is quite enlightening, thus We quote:
"The term owner does not include the importer of
the goods bearing the trademark, trade name,
service mark, or other mark of ownership, unless
such importer is actually the owner thereof in the
country from which the goods are imported. Thus,
this Court, has on several occasions ruled that
where the applicant’s alleged ownership is not
shown in any notarial document and the applicant
appears to be merely an importer or distributor of
the merchandise covered by said trademark, its
application cannot be granted."36
This is a non sequitur. It does not follow. The fact
that EYIS described itself in its sales invoice as an
importer, wholesaler and retailer does not
preclude its being a manufacturer. Sec. 237 of the
National Internal Revenue Code states:
Section 237. Issuance of Receipts or Sales or
Commercial Invoices.¾All persons subject to an
internal revenue tax shall, for each sale and
transfer of merchandise or for services rendered
valued at Twenty-five pesos (P25.00) or more,
issue duly registered receipts or sale or
commercial invoices, prepared at least in
duplicate, showing the date of transaction,
quantity, unit cost and description of merchandise
or nature of service: Provided, however, That
where the receipt is issued to cover payment
made as rentals, commissions, compensation or
fees, receipts or invoices shall be issued which
shall show the name, business style, if any, and
address of the purchaser, customer or client.
The original of each receipt or invoice shall be
issued to the purchaser, customer or client at the
time the transaction is effected, who, if engaged in
business or in the exercise of profession, shall
keep and preserve the same in his place of
business for a period of three (3) years from the
close of the taxable year in which such invoice or
receipt was issued, while the duplicate shall be
kept and preserved by the issuer, also in his place
of business, for a like period.
The Commissioner may, in meritorious cases,
exempt any person subject to an internal revenue
tax from compliance with the provisions of this
Section. (Emphasis supplied.)
Correlatively, in Revenue Memorandum No. 16-
2003 dated May 20, 2003, the Bureau of Internal
Revenue defined a Sales Invoice and identified its
required information as follows:
Sales Invoices (SI)/Cash Invoice (CI) – is written
account of goods sold or services rendered and
the prices charged therefor used in the ordinary
course of business evidencing sale and transfer or
agreement to sell or transfer of goods and
services. It contains the same information found in
the Official Receipt.
Official Receipt (OR) – is a receipt issued for the
payment of services rendered or goods sold. It
contains the following information:
a. Business name and address;
b. Taxpayer Identification Number;
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (How are marks acquired?)
c. Name of printer (BIR Permit No.) with
inclusive serial number of booklets and
date of issuance of receipts.
There is no requirement that a sales invoice
should accurately state the nature of all the
businesses of the seller. There is no legal ground
to state that EYIS’ "declaration" in its sales
invoices that it is an importer, wholesaler and
retailer is restrictive and would preclude its being
a manufacturer.
From the above findings, there was no justifiable
reason for the CA to disregard the factual findings
of the IPO. The rulings of the IPO Director General
and the BLA Director were supported by clear and
convincing evidence. The facts cited by the CA and
Shen Dar do not justify a different conclusion from
that of the IPO. Hence, the findings of the BLA
Director and the IPO Director General must be
deemed as conclusive on the CA.
Fifth Issue:
Whether EYIS is the true owner of the mark
"VESPA"
In any event, given the length of time already
invested by the parties in the instant case, this
Court must write finis to the instant controversy
by determining, once and for all, the true owner of
the mark "VESPA" based on the evidence
presented.
RA 8293 espouses the "first-to-file" rule as stated
under Sec. 123.1(d) which states:
Section 123. Registrability. - 123.1. A mark cannot
be registered if it:
xxxx
(d) Is identical with a registered mark belonging
to a different proprietor or a mark with an earlier
filing or priority date, in respect of:
(i) The same goods or services, or
(ii) Closely related goods or services, or
(iii) If it nearly resembles such a mark as
to be likely to deceive or cause confusion.
(Emphasis supplied.)
Under this provision, the registration of a mark is
prevented with the filing of an earlier application
for registration. This must not, however, be
interpreted to mean that ownership should be
based upon an earlier filing date. While RA 8293
removed the previous requirement of proof of
actual use prior to the filing of an application for
registration of a mark, proof of prior and
continuous use is necessary to establish
ownership of a mark. Such ownership constitutes
sufficient evidence to oppose the registration of a
mark.
Sec. 134 of the IP Code provides that "any person
who believes that he would be damaged by the
registration of a mark x x x" may file an opposition
to the application. The term "any person"
encompasses the true owner of the mark¾the
prior and continuous user.
Notably, the Court has ruled that the prior and
continuous use of a mark may even overcome the
presumptive ownership of the registrant and be
held as the owner of the mark. As aptly stated by
the Court in Shangri-la International Hotel
Management, Ltd. v. Developers Group of
Companies, Inc.:37
Registration, without more, does not confer upon
the registrant an absolute right to the registered
mark. The certificate of registration is merely
a prima facie proof that the registrant is the owner
of the registered mark or trade name. Evidence of
prior and continuous use of the mark or trade
name by another can overcome the presumptive
ownership of the registrant and may very well
entitle the former to be declared owner in an
appropriate case.
xxxx
Ownership of a mark or trade name may be
acquired not necessarily by registration but by
adoption and use in trade or commerce. As
between actual use of a mark without registration,
and registration of the mark without actual use
thereof, the former prevails over the latter. For a
rule widely accepted and firmly entrenched,
because it has come down through the years, is
that actual use in commerce or business is a pre-
requisite to the acquisition of the right of
ownership.
xxxx
By itself, registration is not a mode of acquiring
ownership. When the applicant is not the owner of
the trademark being applied for, he has no right to
apply for registration of the same. Registration
merely creates a prima facie presumption of the
validity of the registration, of the registrant’s
ownership of the trademark and of the exclusive
right to the use thereof. Such presumption, just
like the presumptive regularity in the
performance of official functions, is rebuttable and
must give way to evidence to the contrary.
Here, the incontrovertible truth, as established by
the evidence submitted by the parties, is that EYIS
is the prior user of the mark. The exhaustive
discussion on the matter made by the BLA
sufficiently addresses the issue:
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Based on the evidence, Respondent E.Y. Industrial
is a legitimate corporation engaged in buying,
importing, selling, industrial machineries and
tools, manufacturing, among others since its
incorporation in 1988. (Exhibit "1"). Indeed
private respondents have submitted photographs
(Exhibit "376", "377", "378", "379") showing an
assembly line of its manufacturing or assembly
process.1avvphi1
More importantly, the private respondent’s prior
adoption and continuous use of the mark "VESPA"
on air compressors is bolstered by numerous
documentary evidence consisting of sales invoices
issued in the name of respondent EY Industrial
and Bills of Lading. (Exhibits "4" to "375"). Sales
Invoice No. 12075 dated March 27, 1995
antedates petitioner’s date of first use in January
1, 1997 indicated in its trademark application filed
in June 9, 1997 as well as the date of first use in
June of 1996 as indicated in the Declaration of
Actual Use submitted on December 3, 2001
(Exhibit "385"). The use by respondent-registrant
in the concept of owner is shown by commercial
documents, sales invoices unambiguously
describing the goods as "VESPA" air compressors.
Private respondents have sold the air
compressors bearing the "VESPA" to various
locations in the Philippines, as far as Mindanao
and the Visayas since the early 1990’s. We
carefully inspected the evidence consisting of
three hundred seventy one (371) invoices and
shipment documents which show that "VESPA" air
compressors were sold not only in Manila, but to
locations such as Iloilo City, Cebu City, Dumaguete
City, Zamboanga City, Cagayan de Oro City, Davao
City to name a few. There is no doubt that it is
through private respondents’ efforts that the mark
"VESPA" used on air compressors has gained
business goodwill and reputation in the
Philippines for which it has validly acquired
trademark rights. Respondent EY Industrial’s right
has been preserved until the passage of RA 8293
which entitles it to register the same. x x x38
On the other hand, Shen Dar failed to refute the of the mark VESPA prior to its filing of a
evidence cited by the BLA in its decision. More trademark application in 9 June 1997.39
importantly, Shen Dar failed to present sufficient
evidence to prove its own prior use of the mark As such, EYIS must be considered as the prior and
"VESPA." We cite with approval the ruling of the continuous user of the mark "VESPA" and its true
BLA: owner. Hence, EYIS is entitled to the registration
of the mark in its name.
[Shen Dar] avers that it is the true and rightful
owner of the trademark "VESPA" used on air WHEREFORE, the petition is hereby GRANTED.
compressors. The thrust of [Shen Dar’s] argument The CA’s February 21, 2008 Decision and October
is that respondent E.Y. Industrial Sales, Inc. is a 6, 2008 Resolution in CA-G.R. SP No. 99356 are
mere distributor of the "VESPA" air compressors. hereby REVERSED and SET ASIDE. The Decision
We disagree. dated May 25, 2007 issued by the IPO Director
General in Inter Partes Case No. 14-2004-00084
This conclusion is belied by the evidence. We have and the Decision dated May 29, 2006 of the BLA
gone over each and every document attached as Director of the IPO are hereby REINSTATED.
Annexes "A", "A" 1-48 which consist of Bill of
Lading and Packing Weight List. Not one of these No costs.
documents referred to a "VESPA" air compressor.
Instead, it simply describes the goods plainly as SO ORDERED.
air compressors which is type "SD" and not
"VESPA". More importantly, the earliest date
PRESBITERO J. VELASCO, JR.
reflected on the Bill of Lading was on May 5, 1997.
Associate Justice
(Annex – "A"-1). [Shen Dar] also attached as
Annex "B" a purported Sales Contract with
respondent EY Industrial Sales dated April 20,
2002. Surprisingly, nowhere in the document does
it state that respondent EY Industrial agreed to
sell "VESPA" air compressors. The document only
mentions air compressors which if genuine merely
bolsters respondent Engracio Yap’s contention
that [Shen Dar] approached them if it could sell
the "Shen Dar" or "SD" air compressor. (Exhibit
"386") In its position paper, [Shen Dar] merely
mentions of Bill of Lading constituting respondent
as consignee in 1993 but never submitted the
same for consideration of this Bureau. The
document is also not signed by [Shen Dar]. The
agreement was not even drafted in the letterhead
of either [Shen Dar] nor [sic] respondent –
registrant. Our only conclusion is that [Shen Dar]
was not able to prove to be the owner of the
VESPA mark by appropriation. Neither was it able
to prove actual commercial use in the Philippines
79 | I P L P a r t I
THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (How are marks acquired?)
AND REPRESENTATION OF A FOOT, CROSS AND
Republic of the Philippines SUNBEA M" under TASN 4-1994-091509 for
SUPREME COURT goods falling under Class 25 of the Nice
Manila Classification with filing date of March 11, 1994;
and (c) "BIRKENSTOCK BAD HONNEF-RHEIN &
SECOND DIVISION DEVICE COMPRISING OF ROUND COMPANY SEAL
AND REPRESENTATION OF A FOOT, CROSS AND
SUNBEAM" under TASN 4-1994-095043 for goods
G.R. No. 194307               November 20, 2013 falling under Class 10 of the Nice Classification
with filing date of September 5, 1994 (subject
BIRKENSTOCK ORTHOPAEDIE GMBH AND CO. applications).5
KG (formerly BIRKENSTOCK ORTHOPAEDIE
GMBH), Petitioner,
However, registration proceedings of the subject
vs.
applications were suspended in view of an
PHILIPPINE SHOE EXPO MARKETING
existing registration of the mark "BIRKENSTOCK
CORPORATION, Respondent.
AND DEVICE" under Registration No. 56334 dated
October 21, 1993 (Registration No. 56334) in the
DECISION name of Shoe Town International and Industrial
Corporation, the predecessor-in-interest of
PERLAS-BERNABE, J.: respondent Philippine Shoe Expo Marketing
Corporation.6 In this regard, on May 27, 1997
Assailed in this Petition for Review on petitioner filed a petition for cancellation of
Certiorari1 are the Court of Appeals (CA) Registration No. 56334 on the ground that it is the
Decision2 dated June 25, 2010 and lawful and rightful owner of the Birkenstock
Resolution3 dated October 27, 2010 in CA-G.R. SP marks (Cancellation Case).7 During its pendency,
No. 112278 which reversed and set aside the however, respondent and/or its predecessor-in-
Intellectual Property Office (IPO) Director interest failed to file the required 10th Year
General’s Decision4 dated December 22, 2009 that Declaration of Actual Use (10th Year DAU) for
allowed the registration of various trademarks in Registration No. 56334 on or before October 21,
favor of petitioner Birkenstock Orthopaedie GmbH 2004,8 thereby resulting in the cancellation of
& Co. KG. such mark.9 Accordingly, the cancellation case was
dismissed for being moot and academic.10
The Facts
The aforesaid cancellation of Registration No.
Petitioner, a corporation duly organized and 56334 paved the way for the publication of the
existing under the laws of Germany, applied for subject applications in the IPO e-Gazette on
various trademark registrations before the IPO, February 2, 2007.11 In response, respondent filed
namely: (a) "BIRKENSTOCK" under Trademark three (3) separate verified notices of oppositions
Application Serial No. (TASN) 4-1994-091508 for to the subject applications docketed as Inter
goods falling under Class 25 of the International Partes Case Nos. 14-2007-00108, 14-2007-00115,
Classification of Goods and Services (Nice and 14-2007-00116,12 claiming, inter alia, that: (a)
Classification) with filing date of March 11, 1994; it, together with its predecessor-in-interest, has
(b) "BIRKENSTOCK BAD HONNEF -RHEIN & been using Birkenstock marks in the Philippines
DEVICE COMPRISING OF ROUND COMPANY SEAL 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 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 Yea r 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. 56334.13 On
November 13, 2007, the Bureau of Legal Affairs
(BLA) of the IPO issued Order No. 2007-2051
consolidating the aforesaid inter partes cases
(Consolidated Opposition Cases).14
The Ruling of the BLA
In its Decision15 dated May 28, 2008, the BLA of
the IPO 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. It opined that while
Registration No. 56334 was cancelled, it does not
follow that prior right over the mark was lost, as
proof of continuous and uninterrupted use in
trade and business in the Philippines was
presented. The BLA likewise opined that
petitioner’s marks are not well -known in the
Philippines and internationally and that the
various certificates of registration submitted by
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (How are marks acquired?)
petitioners were all photocopies and, therefore,
not admissible as evidence.16
Aggrieved, petitioner appealed to the IPO Director
General.
The Ruling of the IPO Director General
In his Decision17 dated December 22, 2009, 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.18 More importantly, he found
that the evidence presented proved that petitioner
is the true and lawful owner and prior user of
"BIRKENSTOCK" marks and thus, entitled to the
registration of the marks covered by the subject
applications.19 The IPO Director General further
held that respondent’s copyright for the word
"BIRKENSTOCK" is of no moment since copyright
and trademark are different forms of intellectual
property that cannot be interchanged.20
Finding the IPO Director General’s reversal of the
BLA unacceptable, respondent filed a petition for
review with the CA.
Ruling of the CA
In its Decision21 dated June 25, 2010, 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.22 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
substantial evidence showing its continued use,
promotion and advertisement thereof up to the
present."23 It opined that when respondent’s
predecessor-in-interest adopted and started its
actual use of "BIRKENSTOCK," there is neither an
existing registration nor a pending application for
the same and thus, it cannot be said that it acted in
bad faith in adopting and starting the use of such
mark.24 Finally, the CA agreed with respondent
that petitioner’s documentary evidence, being
mere photocopies, were submitted in violation of
Section 8.1 of Office Order No. 79, Series of 2005
(Rules on Inter Partes Proceedings).
Dissatisfied, petitioner filed a Motion for
Reconsideration25 dated July 20, 2010, which was,
however, denied in a Resolution26 dated October
27, 2010. Hence, this petition.27
Issues Before the Court
The primordial issue raised for the Court’s
resolution is whether or not the subject marks
should be allowed registration in the name of
petitioner.
The Court’s Ruling
The petition is meritorious.
A. Admissibility of Petitioner’s Documentary
Evidence.
In its Comment28 dated April 29, 2011, respondent
asserts that the documentary evidence submitted
by petitioner in the Consolidated Opposition
Cases, which are mere photocopies, are violative
of Section 8.1 of the Rules on Inter Partes
Proceedings, which requires certified true copies
of documents and evidence presented by parties
in lieu of originals.29 As such, they should be
deemed inadmissible.
The Court is not convinced.
It is well-settled that "the rules of procedure are
mere tools aimed at facilitating the attainment of
justice, rather than its frustration. A strict and
rigid application of the rules must always be
eschewed when it would subvert the primary
objective of the rules, that is, to enhance fair trials
and expedite justice. Technicalities should never
be used to defeat the substantive rights of the
other party. Every party-litigant must be afforded
the amplest opportunity for the proper and just
determination of his cause, free from the
constraints of technicalities."30 "Indeed, the
primordial policy is a faithful observance of
[procedural rules], and their relaxation or
suspension should only be for persuasive reasons
and only in meritorious cases, to relieve a litigant
of an injustice not commensurate with the degree
of his thoughtlessness in not complying with the
procedure prescribed."31 This is especially true
with quasi-judicial and administrative bodies,
such as the IPO, which are not bound by technical
rules of procedure.32 On this score, Section 5 of the
Rules on Inter Partes Proceedings provides:
Sec. 5. Rules of Procedure to be followed in the
conduct of hearing of Inter Partes cases. – The
rules of procedure herein contained primarily
apply in the conduct of hearing of Inter Partes
cases. The Rules of Court may be applied
suppletorily. The Bureau shall not be bound by
strict technical rules of procedure and evidence
but may adopt, in the absence of any applicable
rule herein, such mode of proceedings which is
consistent with the requirements of fair play and
conducive to the just, speedy and inexpensive
disposition of cases, and which will give the
Bureau the greatest possibility to focus on the
contentious issues before it. (Emphasis and
underscoring supplied)
In the case at bar, while petitioner submitted mere
photocopies as documentary evidence in the
81 | I P L P a r t I
THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (How are marks acquired?)
Consolidated Opposition Cases, it should be noted
that the IPO had already obtained the originals of
such documentary evidence in the related
Cancellation Case earlier filed before it. Under this
circumstance and the merits of the instant case as
will be subsequently discussed, the Court holds
that the IPO Director General’s relaxation of
procedure was a valid exercise of his discretion in
the interest of substantial justice.33
Having settled the foregoing procedural matter,
the Court now proceeds to resolve the substantive
issues.
B. Registration and ownership of "BIRKENSTOCK."
Republic Act No. (RA) 166,34 the governing law for
Registration No. 56334, requires the filing of a
DAU on specified periods,35 to wit:
Section 12. Duration. – Each certificate of
registration shall remain in force for twenty years:
Provided, That registrations under the provisions
of this Act shall be cancelled by the Director,
unless within one year following the fifth, tenth
and fifteenth anniversaries of the date of issue of
the certificate of registration, the registrant shall
file in the Patent Office an affidavit showing that
the mark or trade-name is still in use or showing
that its non-use is due to special circumstance
which excuse such non-use and is not due to any
intention to abandon the same, and pay the
required fee.
The Director shall notify the registrant who files
the above- prescribed affidavits of his acceptance
or refusal thereof and, if a refusal, the reasons
therefor. (Emphasis and underscoring supplied)
The aforementioned provision clearly reveals that
failure to file the DAU within the requisite period
results in the automatic cancellation of
registration of a trademark. In turn, such failure is
tantamount to the abandonment or withdrawal of
any right or interest the registrant has over his
trademark.36
In this case, respondent admitted that it failed to
file the 10th Year DAU for Registration No. 56334
within the requisite period, or on or before
October 21, 2004. As a consequence, it was
deemed to have abandoned or withdrawn any
right or interest over the mark "BIRKENSTOCK."
Neither can it invoke Section 23637 of the IP Code
which pertains to intellectual property rights
obtained under previous intellectual property
laws, e.g., RA 166, precisely because it already lost
any right or interest over the said mark.
Besides, petitioner has duly established its true
and lawful ownership of the mark
"BIRKENSTOCK."
Under Section 238 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-
A39 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.40
It must be emphasized that registration of a
trademark, by itself, is not a mode of acquiring
ownership.1âwphi1 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 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.41
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.
The Court’s pronouncement in Berris Agricultural
Co., Inc. v. Abyadang42 is instructive on this point:
The ownership of a trademark is acquired by its
registration and its actual use by the manufacturer
or distributor of the goods made available to the
purchasing public. x x x A certificate of
registration of a mark, once issued, constitutes
prima facie evidence of the validity of the
registration, of the registrant’s ownership of the
mark, and of the registrant’s exclusive right to use
the same in connection with the goods or services
and those that are related thereto specified in the
certificate. x x x In other words, the prima facie
presumption brought about by the registration of
a mark may be challenged and overcome in an
appropriate action, x x x by evidence of prior use
by another person, i.e. , it will controvert a claim of
legal appropriation or of ownership based on
82 | I P L P a r t I
THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (How are marks acquired?)
registration by a subsequent user. This is because
a trademark is a creation of use and belongs to
one who first used it in trade or
commerce.43 (Emphasis and underscoring
supplied)
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.44
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
evidence of its claim of ownership of the mark
"BIRKENSTOCK" as these merely show the
transactions made by respondent involving the
same.45
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. In this
regard, the Court quotes with approval the words
of the IPO Director General, viz.:
The facts and evidence fail to show that
[respondent] was in good faith in using and in
registering the mark BIRKENSTOCK.
BIRKENSTOCK, obviously of German origin, is a
highly distinct and arbitrary mark. It is very
remote that two persons did coin the same or
identical marks. To come up with a highly distinct
and uncommon mark previously appropriated by
another, for use in the same line of business, and
without any plausible explanation, is incredible.
The field from which a person may select a
trademark is practically unlimited. As in all other
cases of colorable imitations, the unanswered
riddle is why, of the millions of terms and
combinations of letters and designs available,
[respondent] had to come up with a mark
identical or so closely similar to the [petitioner’s]
if there was no intent to take advantage of the
goodwill generated by the [petitioner’s] mark.
Being on the same line of business, it is highly
probable that the [respondent] knew of the
existence of BIRKENSTOCK and its use by the
[petitioner], before [respondent] appropriated the
same mark and had it registered in its name.46
WHEREFORE, the petition is GRANTED. The
Decision dated June 25, 2010 and Resolution
dated October 27, 2010 of the Court of Appeals in
CA-G.R. SP No. 112278 are REVERSED and SET
ASIDE. Accordingly, the Decision dated December
22, 2009 of the IPO Director General is hereby
REINSTATED.
SO ORDERED.
ESTELA M. PERLAS-BERNABE
Associate Justice
83 | I P L P a r t I
THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
Republic Act No. 8293             June 6, 1997
AN ACT PRESCRIBING THE INTELLECTUAL
PROPERTY CODE AND ESTABLISHING THE
INTELLECTUAL PROPERTY OFFICE,
PROVIDING FOR ITS POWERS AND FUNCTIONS,
AND FOR OTHER PURPOSES
Section 123. Registrability. - 123.1. A mark cannot
be registered if it:
(a) Consists of immoral, deceptive or
scandalous matter, or matter which may
disparage or falsely suggest a connection
with persons, living or dead, institutions,
beliefs, or national symbols, or bring them
into contempt or disrepute;
(b) Consists of the flag or coat of arms or
other insignia of the Philippines or any of
its political subdivisions, or of any foreign
nation, or any simulation thereof;
(c) Consists of a name, portrait or
signature identifying a particular living
individual except by his written consent,
or the name, signature, or portrait of a
deceased President of the Philippines,
during the life of his widow, if any, except
by written consent of the widow;
(d) Is identical with a registered mark
belonging to a different proprietor or a
mark with an earlier filing or priority
date, in respect of:
(i) The same goods or services, or
(ii) Closely related goods or
services, or
(iii) If it nearly resembles such a
mark as to be likely to deceive or
cause confusion;
(e) Is identical with, or confusingly
similar to, or constitutes a translation of a
mark which is considered by the
competent authority of the Philippines to
be well-known internationally and in the
Philippines, whether or not it is
registered here, as being already the mark
of a person other than the applicant for
registration, and used for identical or
similar goods or services: Provided, That
in determining whether a mark is well-
known, account shall be taken of the
knowledge of the relevant sector of the
public, rather than of the public at large,
including knowledge in the Philippines
which has been obtained as a result of the
promotion of the mark;
(f) Is identical with, or confusingly similar
to, or constitutes a translation of a mark
considered well-known in accordance
with the preceding paragraph, which is
registered in the Philippines with respect
to goods or services which are not similar
to those with respect to which
registration is applied for: Provided, That
use of the mark in relation to those goods
or services would indicate a connection
between those goods or services, and the
owner of the registered mark: Provided
further, That the interests of the owner of
the registered mark are likely to be
damaged by such use;
(g) Is likely to mislead the public,
particularly as to the nature, quality,
characteristics or geographical origin of
the goods or services;
(h) Consists exclusively of signs that are
generic for the goods or services that they
seek to identify;
(i) Consists exclusively of signs or of
indications that have become customary
or usual to designate the goods or
services in everyday language or in bona
fide and established trade practice;
(j) Consists exclusively of signs or of
indications that may serve in trade to
designate the kind, quality, quantity,
intended purpose, value, geographical
origin, time or production of the goods or
rendering of the services, or other
characteristics of the goods or services;
(k) Consists of shapes that may be
necessitated by technical factors or by the
nature of the goods themselves or factors
that affect their intrinsic value;
(l) Consists of color alone, unless defined
by a given form; or
(m) Is contrary to public order or
morality.
123.2. As regards signs or devices mentioned in
paragraphs (j), (k), and (l), nothing shall prevent
the registration of any such sign or device which
has become distinctive in relation to the goods for
which registration is requested as a result of the
use that have been made of it in commerce in the
Philippines. The Office may accept as prima facie
evidence that the mark has become distinctive, as
used in connection with the applicant's goods or
services in commerce, proof of substantially
exclusive and continuous use thereof by the
applicant in commerce in the Philippines for five
(5) years before the date on which the claim of
distinctiveness is made.
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
123.3. The nature of the goods to which the mark
is applied will not constitute an obstacle to
registration. (Sec. 4, R.A. No. 166a)

85 | I P L P a r t I
THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
Fredco alleged that Registration No. 56561 was where Harvard University has registered its name
Republic of the Philippines issued to Harvard University on 25 November and mark "Harvard" are:
SUPREME COURT 1993 for the mark "Harvard Veritas Shield
Manila Symbol" for decals, tote bags, serving trays,
1. Argentina 26. South Korea
sweatshirts, t-shirts, hats and flying discs under
SECOND DIVISION Classes 16, 18, 21, 25 and 28 of the Nice 2. Benelux 4
27. Malaysia
International Classification of Goods and Services.
Fredco alleged that the mark "Harvard" for t- 3. Brazil 28. Mexico
G.R. No. 185917               June 1, 2011 shirts, polo shirts, sandos, briefs, jackets and 4. Canada 29. New Zealand
slacks was first used in the Philippines on 2
FREDCO MANUFACTURING January 1982 by New York Garments 5. Chile 30. Norway
CORPORATION Petitioner, Manufacturing & Export Co., Inc. (New York
vs. Garments), a domestic corporation and Fredco’s 6. China P.R. 31. Peru
PRESIDENT AND FELLOWS OF HARVARD predecessor-in-interest. On 24 January 1985, New 7. Colombia 32. Philippines
COLLEGE (HARVARD York Garments filed for trademark registration of
UNIVERSITY), Respondents. the mark "Harvard" for goods under Class 25. The 8. Costa Rica 33. Poland
application matured into a registration and a
DECISION Certificate of Registration was issued on 12 9. Cyprus 34. Portugal
December 1988, with a 20-year term subject to 10. Czech
CARPIO, J.: renewal at the end of the term. The registration 35. Russia
Republic
was later assigned to Romeo Chuateco, a member
of the family that owned New York Garments. 11. Denmark 36. South Africa
The Case
12. Ecuador 37. Switzerland
Before the Court is a petition for review1 assailing Fredco alleged that it was formed and registered
the 24 October 2008 Decision2 and 8 January 2009 with the Securities and Exchange Commission on 13. Egypt 38. Singapore
Resolution3 of the Court of Appeals in CA-G.R. SP 9 November 1995 and had since then handled the
manufacture, promotion and marketing of 14. Finland 39. Slovak Republic
No. 103394.
"Harvard" clothing articles. Fredco alleged that at 15. France 40. Spain
the time of issuance of Registration No. 56561 to
The Antecedent Facts 16. Great
Harvard University, New York Garments had 41. Sweden
already registered the mark "Harvard" for goods Britain
On 10 August 2005, petitioner Fredco under Class 25. Fredco alleged that the
Manufacturing Corporation (Fredco), a 17. Germany 42. Taiwan
registration was cancelled on 30 July 1998 when
corporation organized and existing under the laws New York Garments inadvertently failed to file an 18. Greece 43. Thailand
of the Philippines, filed a Petition for Cancellation affidavit of use/non-use on the fifth anniversary of
of Registration No. 56561 before the Bureau of the registration but the right to the mark 19. Hong Kong 44. Turkey
Legal Affairs of the Intellectual Property Office "Harvard" remained with its predecessor New
(IPO) against respondents President and Fellows 45. United Arab
York Garments and now with Fredco. 20. India
of Harvard College (Harvard University), a Emirates
corporation organized and existing under the laws 21. Indonesia 46. Uruguay
Harvard University, on the other hand, alleged
of Massachusetts, United States of America. The
that it is the lawful owner of the name and mark
case was docketed as Inter Partes Case No. 14- 47. United States of
"Harvard" in numerous countries worldwide, 22. Ireland
2005-00094. America
including the Philippines. Among the countries

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23. Israel 48. Venezuela
24. Italy 49. Zimbabwe
50. European
25. Japan
Community5
The name and mark "Harvard" was adopted in
1639 as the name of Harvard College6 of
Cambridge, Massachusetts, U.S.A. The name and
mark "Harvard" was allegedly used in commerce
as early as 1872. Harvard University is over 350
years old and is a highly regarded institution of
higher learning in the United States and
throughout the world. Harvard University
promotes, uses, and advertises its name "Harvard"
through various publications, services, and
products in foreign countries, including the
Philippines. Harvard University further alleged
that the name and the mark have been rated as
one of the most famous brands in the world,
valued between US $750,000,000 and US
$1,000,000,000.
Harvard University alleged that in March 2002, it
discovered, through its international trademark
watch program, Fredco’s website www.harvard-
usa.com. The website advertises and promotes the
brand name "Harvard Jeans USA" without Harvard
University’s consent. The website’s main page
shows an oblong logo bearing the mark "Harvard
Jeans USA®," "Established 1936," and
"Cambridge, Massachusetts." On 20 April 2004,
Harvard University filed an administrative
complaint against Fredco before the IPO for
trademark infringement and/or unfair
competition with damages.lawphi1
Harvard University alleged that its valid and
existing certificates of trademark registration in
the Philippines are:
1. Trademark Registration No. 56561
issued on 25 November 1993 for
"Harvard Veritas Shield Design" for goods
and services in Classes 16, 18, 21, 25 and
28 (decals, tote bags, serving trays,
sweatshirts, t-shirts, hats and flying discs)
of the Nice International Classification of
Goods and Services;
2. Trademark Registration No. 57526
issued on 24 March 1994 for "Harvard
Veritas Shield Symbol" for services in
Class 41; Trademark Registration No.
56539 issued on 25 November 1998 for
"Harvard" for services in Class 41; and
3. Trademark Registration No. 66677
issued on 8 December 1998 for "Harvard
Graphics" for goods in Class 9. Harvard
University further alleged that it filed the
requisite affidavits of use for the mark
"Harvard Veritas Shield Symbol" with the
IPO.
Further, on 7 May 2003 Harvard University filed
Trademark Application No. 4-2003-04090 for
"Harvard Medical International & Shield Design"
for services in Classes 41 and 44. 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.
In a Decision7 dated 22 December 2006, Director
Estrellita Beltran-Abelardo of the Bureau of Legal
Affairs, IPO cancelled Harvard University’s
registration of the mark "Harvard" under Class 25,
as follows:
WHEREFORE, premises considered, the Petition
for Cancellation is hereby GRANTED.
Consequently, Trademark Registration Number
56561 for the trademark "HARVARD VE RI TAS
‘SHIELD’ SYMBOL" issued on November 25, 1993
to PRESIDENT AND FELLOWS OF HARVARD
COLLEGE (HARVARD UNIVERSITY) should be
CANCELLED only with respect to goods falling
under Class 25. On the other hand, considering
that the goods of Respondent-Registrant falling
under Classes 16, 18, 21 and 28 are not
confusingly similar with the Petitioner’s goods,
the Respondent-Registrant has acquired vested
right over the same and therefore, should not be
cancelled.
Let the filewrapper of the Trademark Registration
No. 56561 issued on November 25, 1993 for the
trademark "HARVARD VE RI TAS ‘SHIELD’
SYMBOL", subject matter of this case together
with a copy of this Decision be forwarded to the
Bureau of Trademarks (BOT) for appropriate
action.
SO ORDERED.8
Harvard University filed an appeal before the
Office of the Director General of the IPO. In a
Decision9 dated 21 April 2008, the Office of the
Director General, IPO reversed the decision of the
Bureau of Legal Affairs, IPO.
The Director General ruled that more than the use
of the trademark in the Philippines, the applicant
must be the owner of the mark sought to be
registered. The Director General ruled that the
right to register a trademark is based on
ownership and when the applicant is not the
owner, he has no right to register the mark. The
Director General noted that the mark covered by
Harvard University’s Registration No. 56561 is not
only the word "Harvard" but also the logo,
emblem or symbol of Harvard University. The
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Director General ruled that Fredco failed to
explain how its predecessor New York Garments
came up with the mark "Harvard." In addition,
there was no evidence that Fredco or New York
Garments was licensed or authorized by Harvard
University to use its name in commerce or for any
other use.
The dispositive portion of the decision of the
Office of the Director General, IPO reads:
WHEREFORE, premises considered, the instant
appeal is GRANTED. The appealed decision is
hereby REVERSED and SET ASIDE. Let a copy of
this Decision as well as the trademark application
and records be furnished and returned to the
Director of Bureau of Legal Affairs for appropriate
action. Further, let also the Directors of the
Bureau of Trademarks and the Administrative,
Financial and Human Resources Development
Services Bureau, and the library of the
Documentation, Information and Technology
Transfer Bureau be furnished a copy of this
Decision for information, guidance, and records
purposes.
SO ORDERED.10
Fredco filed a petition for review before the Court
of Appeals assailing the decision of the Director
General.
The Decision of the Court of Appeals
In its assailed decision, the Court of Appeals
affirmed the decision of the Office of the Director
General of the IPO.
The Court of Appeals adopted the findings of the
Office of the Director General and ruled that the
latter correctly set aside the cancellation by the
Director of the Bureau of Legal Affairs of Harvard
University’s trademark registration under Class
25. The Court of Appeals ruled that Harvard
University was able to substantiate that it
appropriated and used the marks "Harvard" and
"Harvard Veritas Shield Symbol" in Class 25 way
ahead of Fredco and its predecessor New York
Garments. The Court of Appeals also ruled that the
records failed to disclose any explanation for
Fredco’s use of the name and mark "Harvard" and
the words "USA," "Established 1936," and
"Cambridge, Massachusetts" within an oblong
device, "US Legend" and "Europe’s No. 1 Brand."
Citing Shangri-La International Hotel
Management, Ltd. v. Developers Group of
Companies, Inc.,11 the Court of Appeals ruled:
One who has imitated the trademark of another
cannot bring an action for infringement,
particularly against the true owner of the mark,
because he would be coming to court with unclean
hands. Priority is of no avail to the bad faith
plaintiff. Good faith is required in order to ensure
that a second user may not merely take advantage
of the goodwill established by the true owner.12
The dispositive portion of the decision of the
Court of Appeals reads:
WHEREFORE, premises considered, the petition
for review is DENIED. The Decision dated April 21,
2008 of the Director General of the IPO in Appeal
No. 14-07-09 Inter Partes Case No. 14-2005-
00094 is hereby AFFIRMED.
SO ORDERED.13
Fredco filed a motion for reconsideration.
In its Resolution promulgated on 8 January 2009,
the Court of Appeals denied the motion for lack of
merit.
Hence, this petition before the Court.
The Issue
The issue in this case is whether the Court of
Appeals committed a reversible error in affirming
the decision of the Office of the Director General of
the IPO.
The Ruling of this Court
The petition has no merit.
There is no dispute that the mark "Harvard" used
by Fredco is the same as the mark "Harvard" in
the "Harvard Veritas Shield Symbol" of Harvard
University. It is also not disputed that Harvard
University was named Harvard College in 1639
and that then, as now, Harvard University is
located in Cambridge, Massachusetts, U.S.A. It is
also unrefuted that Harvard University has been
using the mark "Harvard" in commerce since
1872. It is also established that Harvard
University has been using the marks "Harvard"
and "Harvard Veritas Shield Symbol" for Class 25
goods in the United States since 1953. Further,
there is no dispute that Harvard University has
registered the name and mark "Harvard" in at
least 50 countries.
On the other hand, Fredco’s predecessor-in-
interest, New York Garments, started using the
mark "Harvard" in the Philippines only in 1982.
New York Garments filed an application with the
Philippine Patent Office in 1985 to register the
mark "Harvard," which application was approved
in 1988. Fredco insists that the date of actual use
in the Philippines should prevail on the issue of
who has the better right to register the marks.
Under Section 2 of Republic Act No. 166,14 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
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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, Harvard University’s
registration of the name "Harvard" is based on
home registration which is allowed under Section
37 of R.A. No. 166.15 As pointed out by Harvard
University in its Comment:
Although Section 2 of the Trademark law (R.A.
166) requires for the registration of trademark
that the applicant thereof must prove that the
same has been actually in use in commerce or
services for not less than two (2) months in the
Philippines before the application for registration
is filed, 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.16
Indeed, in its Petition for Cancellation of
Registration No. 56561, Fredco alleged that
Harvard University’s registration "is based on
‘home registration’ for the mark ‘Harvard Veritas
Shield’ for Class 25."17
In any event, under Section 239.2 of Republic Act
No. 8293 (R.A. No. 8293),18 "[m]arks 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 239.2.19 In addition, Fredco’s registration
was already cancelled on 30 July 1998 when it
failed to file the required affidavit of use/non-use
for the fifth anniversary of the mark’s registration.
Hence, at the time of Fredco’s filing of the Petition
for Cancellation before the Bureau of Legal Affairs
of the IPO, Fredco was no longer the registrant or
presumptive owner of the mark "Harvard."
There are two compelling reasons why Fredco’s
petition must fail.
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 a 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 alone, Fredco’s
registration of the mark "Harvard" should have
been disallowed.
Indisputably, Fredco does not have any affiliation
or connection with Harvard University, or even
with Cambridge, Massachusetts. Fredco or its
predecessor New York Garments was not
established in 1936, or in the U.S.A. as indicated by
Fredco in its oblong logo. Fredco offered no
explanation to the Court of Appeals or to the IPO
why it used the mark "Harvard" on its oblong logo
with the words "Cambridge, Massachusetts,"
"Established in 1936," and "USA." Fredco now
claims before this Court that it used these words
"to evoke a ‘lifestyle’ or suggest a ‘desirable aura’
of petitioner’s clothing lines." Fredco’s belated
justification merely confirms that it sought to
connect or associate its products with Harvard
University, riding on the prestige and popularity
of Harvard University, and thus appropriating part
of Harvard University’s goodwill without the
latter’s consent.
Section 4(a) of R.A. No. 166 is identical to Section
2(a) of the Lanham Act,20 the trademark law of the
United States. These provisions are intended to
protect the right of publicity of famous individuals
and institutions from commercial exploitation of
their goodwill by others.21 What Fredco has done
in using the mark "Harvard" and the words
"Cambridge, Massachusetts," "USA" to evoke a
"desirable aura" to its products is precisely to
exploit commercially the goodwill of Harvard
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University without the latter’s consent. This is a
clear violation of Section 4(a) of R.A. No. 166.
Under Section 17(c)22 of R.A. No. 166, such
violation is a ground for cancellation of Fredco’s
registration of the mark "Harvard" because the
registration was obtained in violation of Section 4
of R.A. No. 166.
Second, the Philippines and the United States of
America are both signatories to the Paris
Convention for the Protection of Industrial
Property (Paris Convention). The Philippines
became a signatory to the Paris Convention on 27
September 1965. Articles 6bis and 8 of the Paris
Convention state:
ARTICLE 6bis
(i) The countries of the Union undertake either
administratively if their legislation so permits, or
at the request of an interested party, to refuse or
to cancel the registration and to prohibit the use
of a trademark which constitutes a reproduction,
imitation or translation, liable to create confusion
or a mark considered by the competent authority
of the country as being already the mark of a
person entitled to the benefits of the present
Convention and used for identical or similar
goods. These provisions shall also apply when
the essential part of the mark constitutes a
reproduction of any such well-known mark or
an imitation liable to create confusion
therewith.
ARTICLE 8
A trade name shall be protected in all the
countries of the Union without the obligation of
filing or registration, whether or not it forms
part of a trademark. (Emphasis supplied)
Thus, 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.23
Article 8 of the Paris Convention has been
incorporated in Section 37 of R.A. No. 166, as
follows:
Section 37. Rights of foreign registrants. —
Persons who are nationals of, domiciled in, or
have a bona fide or effective business or
commercial establishment in any foreign country,
which is a party to any international convention or
treaty relating to marks or trade-names, or the
repression of unfair competition to which the
Philippines may be a party, shall be entitled to the
benefits and subject to the provisions of this Act to
the extent and under the conditions essential to
give effect to any such convention and treaties so
long as the Philippines shall continue to be a party
thereto, except as provided in the following
paragraphs of this section.
xxxx
Trade-names of persons described in the first
paragraph of this section shall be protected
without the obligation of filing or registration
whether or not they form parts of marks.24
x x x x (Emphasis supplied)
Thus, under Philippine law, a trade name of a
national of a State that is a party to the Paris
Convention, whether or not the trade name forms
part of a trademark, is protected "without the
obligation of filing or registration."
"Harvard" is the trade name of the world famous
Harvard University, and it is also a trademark of
Harvard University. Under Article 8 of the Paris
Convention, as well as Section 37 of R.A. No. 166,
Harvard University is entitled to protection in the
Philippines of its trade name "Harvard" even
without registration of such trade name in the
Philippines. This means that no educational entity
in the Philippines can use the trade name
"Harvard" without the consent of Harvard
University. Likewise, no entity in the Philippines
can claim, expressly or impliedly through the use
of the name and mark "Harvard," that its products
or services are authorized, approved, or licensed
by, or sourced from, Harvard University without
the latter’s consent.
Article 6bis of the Paris Convention has been
administratively implemented in the Philippines
through two directives of the then Ministry (now
Department) of Trade, which directives were
upheld by this Court in several cases.25 On 20
November 1980, then Minister of Trade Secretary
Luis Villafuerte issued a Memorandum directing
the Director of Patents to reject, pursuant to the
Paris Convention, all pending applications for
Philippine registration of signature and other
world-famous trademarks by applicants other
than their original owners.26 The Memorandum
states:
Pursuant to the Paris Convention for the
Protection of Industrial Property to which the
Philippines is a signatory, you are hereby directed
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,
Jordache, Vanderbilt, Sasson, Fila, Pierre Cardin,
Gucci, Christian Dior, Oscar de la Renta, Calvin
Klein, Givenchy, Ralph Lauren, Geoffrey Beene,
Lanvin and Ted Lapidus.
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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
damages and other legal action by the trademarks’
foreign or local owners or original users.
You are also required to submit to the
undersigned a progress report on the matter.
For immediate compliance.27
In a Memorandum dated 25 October 1983, then
Minister of Trade and Industry Roberto Ongpin
affirmed the earlier Memorandum of Minister
Villafuerte. Minister Ongpin directed the Director
of Patents to implement measures necessary to
comply with the Philippines’ obligations under the
Paris Convention, thus:
1. Whether the trademark under
consideration is well-known in the
Philippines or is a mark already belonging
to a person entitled to the benefits of the
CONVENTION, this should be established,
pursuant to Philippine Patent Office
procedures in inter partes and ex parte
cases, according to any of the following
criteria or any combination thereof:
(a) a declaration by the Minister
of Trade and Industry that the
trademark being considered is
already well-known in the
Philippines such that permission
for its use by other than its
original owner will constitute a
reproduction, imitation,
translation or other
infringement;
(b) that the trademark is used in
commerce internationally,
supported by proof that goods
bearing the trademark are sold
on an international scale,
advertisements, the
establishment of factories, sales
offices, distributorships, and the
like, in different countries,
including volume or other
measure of international trade
and commerce;
(c) that the trademark is duly
registered in the industrial
property office(s) of another
country or countries, taking
into consideration the dates of
such registration;
(d) that the trademark has been
long established and obtained
goodwill and general
international consumer
recognition as belonging to one
owner or source;
(e) that the trademark actually
belongs to a party claiming
ownership and has the right to
registration under the provisions
of the aforestated PARIS
CONVENTION.
2. The word trademark, as used in this
MEMORANDUM, shall include
tradenames, service marks, logos,
signs, emblems, insignia or other
similar devices used for identification
and recognition by consumers.
3. The Philippine Patent Office shall
refuse all applications for, or cancel the
registration of, trademarks which
constitute a reproduction, translation or
imitation of a trademark owned by a
person, natural or corporate, who is a
citizen of a country signatory to the PARIS
CONVENTION FOR THE PROTECTION OF
INDUSTRIAL PROPERTY.
x x x x28 (Emphasis supplied)
In Mirpuri, the Court ruled that the essential
requirement under Article 6bis of the Paris
Convention is that the trademark to be protected
must be "well-known" in the country where
protection is sought.29 The Court declared that the
power to determine whether a trademark is well-
known lies in the competent authority of the
country of registration or use.30 The Court then
stated that the competent authority would either
be the registering authority if it has the power to
decide this, or the courts of the country in
question if the issue comes before the courts.31
To be protected under the two directives of the
Ministry of Trade, an internationally well-known
mark need not be registered or used in the
Philippines.32 All that is required is that the mark
is well-known internationally and in the
Philippines for identical or similar goods, whether
or not the mark is registered or used in the
Philippines. The Court ruled in Sehwani,
Incorporated v. In-N-Out Burger, Inc.:33
The fact that respondent’s marks are neither
registered nor used in the Philippines is of no
moment. The scope of protection initially
afforded by Article 6bis of the Paris Convention
has been expanded in the 1999 Joint
Recommendation Concerning Provisions on the
Protection of Well-Known Marks, wherein the
World Intellectual Property Organization (WIPO)
General Assembly and the Paris Union agreed to a
nonbinding recommendation that a well-known
mark should be protected in a country even if
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the mark is neither registered nor used in that
country. Part I, Article 2(3) thereof provides:
(3) [Factors Which Shall Not Be Required] (a) A
Member State shall not require, as a condition for
determining whether a mark is a well-known
mark:
(i) that the mark has been used in, or that
the mark has been registered or that an
application for registration of the mark
has been filed in or in respect of, the
Member State:
(ii) that the mark is well known in, or that
the mark has been registered or that an
application for registration of the mark
has been filed in or in respect of, any
jurisdiction other than the Member State;
or
(iii) that the mark is well known by the
public at large in the Member
State.34 (Italics in the original decision;
boldface supplied)
Indeed, 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 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. Moreover, Rule
102 of the Rules and Regulations on Trademarks,
Service Marks, Trade Names and Marked or
Stamped Containers, which implement R.A. No.
8293, provides:
Rule 102. Criteria for determining whether a mark
is well-known. In determining whether a mark is
well-known, the following criteria or any
combination thereof may be taken into account:
(a) the duration, extent and geographical
area of any use of the mark, in particular,
the duration, extent and geographical
area of any promotion of the mark,
including advertising or publicity and the
presentation, at fairs or exhibitions, of the
goods and/or services to which the mark
applies;
(b) the market share, in the Philippines
and in other countries, of the goods
and/or services to which the mark
applies;
(c) the degree of the inherent or acquired
distinction of the mark;
(d) the quality-image or reputation
acquired by the mark;
(e) the extent to which the mark has been
registered in the world;
(f) the exclusivity of registration attained
by the mark in the world;
(g) the extent to which the mark has been
used in the world;
(h) the exclusivity of use attained by the
mark in the world;
(i) the commercial value attributed to the
mark in the world;
(j) the record of successful protection of
the rights in the mark;
(k) the outcome of litigations dealing with
the issue of whether the mark is a well-
known mark; and
(l) the presence or absence of identical or
similar marks validly registered for or
used on identical or similar goods or
services and owned by persons other
than the person claiming that his mark is
a well-known mark. (Emphasis supplied)
Since "any combination" of the foregoing criteria
is sufficient to determine that a mark is well-
known, it is clearly not necessary that the mark be
used in commerce in the Philippines. Thus, 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.
In the assailed Decision of the Office of the
Director General dated 21 April 2008, the Director
General found that:
Traced to its roots or origin, HARVARD is not an
ordinary word. It refers to no other than Harvard
University, a recognized and respected institution
of higher learning located in Cambridge,
Massachusetts, U.S.A. Initially referred to simply
as "the new college," the institution was named
"Harvard College" on 13 March 1639, after its first
principal donor, a young clergyman named John
Harvard. A graduate of Emmanuel College,
Cambridge in England, John Harvard bequeathed
about four hundred books in his will to form the
basis of the college library collection, along with
half his personal wealth worth several hundred
pounds. The earliest known official reference to
Harvard as a "university" rather than "college"
occurred in the new Massachusetts Constitution of
1780.
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Records also show that the first use of the name
HARVARD was in 1638 for educational services,
policy courses of instructions and training at the
university level. It has a Charter. Its first
commercial use of the name or mark HARVARD
for Class 25 was on 31 December 1953 covered by
UPTON Reg. No. 2,119,339 and 2,101,295.
Assuming in arguendo, that the Appellate may
have used the mark HARVARD in the Philippines
ahead of the Appellant, it still cannot be denied
that the Appellant’s use thereof was decades, even
centuries, ahead of the Appellee’s. More
importantly, the name HARVARD was the name of
a person whose deeds were considered to be a
cornerstone of the university. The Appellant’s
logos, emblems or symbols are owned by Harvard
University. The name HARVARD and the logos,
emblems or symbols are endemic and cannot be
separated from the institution.35
Finally, in its assailed Decision, the Court of
Appeals ruled:
Records show that Harvard University is the
oldest and one of the foremost educational
institutions in the United States, it being
established in 1636. It is located primarily in
Cambridge, Massachusetts and was named after
John Harvard, a puritan minister who left to the
college his books and half of his estate.
The mark "Harvard College" was first used in
commerce in the United States in 1638 for
educational services, specifically, providing
courses of instruction and training at the
university level (Class 41). Its application for
registration with the United States Patent and
Trademark Office was filed on September 20,
2000 and it was registered on October 16, 2001.
The marks "Harvard" and "Harvard Ve ri tas
‘Shield’ Symbol" were first used in commerce in
the the United States on December 31, 1953 for
athletic uniforms, boxer shorts, briefs, caps, coats,
leather coats, sports coats, gym shorts, infant
jackets, leather jackets, night shirts, shirts, socks, WHEREFORE, we DENY the petition.
sweat pants, sweatshirts, sweaters and underwear We AFFIRM the 24 October 2008 Decision and 8
(Class 25). The applications for registration with January 2009 Resolution of the Court of Appeals in
the USPTO were filed on September 9, 1996, the CA-G.R. SP No. 103394.
mark "Harvard" was registered on December 9,
1997 and the mark "Harvard Ve ri tas ‘Shield’ SO ORDERED.
Symbol" was registered on September 30, 1997.36
ANTONIO T. CARPIO
We also note that in a Decision37 dated 18 Associate Justice
December 2008 involving a separate case between
Harvard University and Streetward International,
Inc.,38 the Bureau of Legal Affairs of the IPO ruled
that the mark "Harvard" is a "well-known mark."
This Decision, which cites among others the
numerous trademark registrations of Harvard
University in various countries, has become final
and executory.
There is no question then, and this Court so
declares, that "Harvard" is a well-known name
and mark not only in the United States but also
internationally, including the Philippines. The
mark "Harvard" is rated as one of the most famous
marks in the world. It has been registered in at
least 50 countries. It has been used and promoted
extensively in numerous publications worldwide.
It has established a considerable goodwill
worldwide since the founding of Harvard
University more than 350 years ago. It is easily
recognizable as the trade name and mark of
Harvard University of Cambridge, Massachusetts,
U.S.A., internationally known as one of the leading
educational institutions in the world. As such,
even before Harvard University applied for
registration of the mark "Harvard" in the
Philippines, the mark was already protected under
Article 6bis and Article 8 of the Paris Convention.
Again, even without applying the Paris
Convention, Harvard University can invoke
Section 4(a) of R.A. No. 166 which prohibits the
registration of a mark "which may disparage
or falsely suggest a connection with persons,
living or dead, institutions, beliefs x x x."
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-29971 August 31, 1982
ESSO STANDARD EASTERN, INC., petitioner,
vs.
THE HONORABLE COURT OF APPEALS ** and
UNITED CIGARETTE
CORPORATION, respondents.
& such an extent that the buying public had always
TEEHANKEE, J.:1äwphï1.ñët
The Court affirms on the basis of controlling
doctrine the appealed decision of the Court of
Appeals reversing that of the Court of First
Instance of Manila and dismissing the complaint
filed by herein petitioner against private
respondent for trade infringement for using
petitioner's trademark ESSO, since it clearly
appears that the goods on which the trademark
ESSO is used by respondent is non-competing and
entirely unrelated to the products of petitioner so
that there is no likelihood of confusion or
deception on the part of the purchasing public as
to the origin or source of the goods.
Petitioner Esso Standard Eastern, Inc., 1 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 (which as successor of the
defunct Standard Vacuum Oil Co. it registered as a
business name with the Bureaus of Commerce and
Internal Revenue in April and May, 1962). Private
respondent in turn 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.
Barely had respondent as such successor started
manufacturing cigarettes with the trademark
ESSO, when petitioner commenced a case for
trademark infringement in the Court of First
Instance of Manila. The complaint alleged that the
petitioner had been for many years engaged in the
sale of petroleum products and its trademark
ESSO had acquired a considerable goodwill to
taken the trademark ESSO as equivalent to high
quality petroleum products. Petitioner asserted
that the continued use by private respondent 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.
In its answer, respondent admitted that it used the
trademark ESSO on its own product of cigarettes,
which was not Identical to those produced and
sold by petitioner and therefore did not in any
way infringe on or imitate petitioner's trademark.
Respondent contended 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.
The trial court, relying on the old cases of Ang vs.
Teodoro 2 and Arce & Sons, Inc. vs. Selecta Biscuit
Company, 3 referring to related products, decided
in favor of petitioner and ruled that respondent
was guilty of infringement of trademark.
On appeal, respondent Court of Appeals found that
there was no trademark infringement and
dismissed the complaint. Reconsideration of the
decision having been denied, petitioner appealed
to this Court by way of certiorari to reverse the
decision of the Court of Appeals and to reinstate
the decision of the Court of First Instance of
Manila. The Court finds no ground for granting the
petition.
The law defines infringement as the use without
consent of the trademark owner of any
"reproduction, counterfeit, copy or colorable
limitation of any registered mark or tradename in
connection with the sale, offering for sale, or
advertising of any goods, business or services on
or in connection with which such use is likely to
cause confusion or mistake or to deceive
purchasers or others as to the source or origin of
such goods or services, or Identity of such
business; or reproduce, counterfeit, copy or
colorably imitate any such mark or tradename and
apply such reproduction, counterfeit, copy or
colorable limitation to labels, signs, prints,
packages, wrappers, receptacles or
advertisements intended to be used upon or in
connection with such goods, business or
services." 4 Implicit in this definition is the concept
that the goods must be so related that there is a
likelihood either of confusion of goods or
business. 5 But likelihood of confusion is a relative
concept; to be determined only according to the
particular, and sometimes peculiar, circumstances
of each case. 6 It is unquestionably true that, as
stated in Coburn vs. Puritan Mills, Inc. 7 "In
trademark cases, even more than in other
litigation, precedent must be studied in the light of
the facts of the particular case.
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
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
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, confusion of business could arise out of the
use of similar marks; in the latter case of non-
related goods, it could not. 8 The vast majority of
courts today follow the modern theory or concept
of "related goods" 9 which the Court has likewise
adopted and uniformly recognized and applied. 10
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. 11 Thus,
biscuits were held related to milk because they
are both food products. 12 Soap and perfume,
lipstick and nail polish are similarly related
because they are common household items now a
days. 13 The trademark "Ang Tibay" for shoes and
slippers was disallowed to be used for shirts and
pants because they belong to the same general
class of goods. 14 Soap and pomade although non-
competitive, were held to be similar or to belong
to the same class, since both are toilet
articles. 15 But no confusion or deception can
possibly result or arise when the name
"Wellington" which is the trademark for shirts,
pants, drawers and other articles of wear for men,
women and children is used as a name of a
department store. 16
Thus, in Acoje Mining Co., Inc. vs. Director of
Patents, 17 the Court, through now Chief Justice
Fernando, reversed the patent director's decision
on the question of "May petitioner Acoje Mining
Company register for the purpose of advertising
its product, soy sauce, the trademark LOTUS, there
being already in existence one such registered in
favor of the Philippine Refining Company for its
product, edible oil, it being further shown that the
trademark applied for is in smaller type, colored
differently, set on a background which is
dissimilar as to yield a distinct appearance?" and
ordered the granting of petitioner's application for
registration ruling that "there is quite a difference
between soy sauce and edible oil. If one is in the
market for the former, he is not likely to purchase
the latter just because of the trademark LOTUS"
and "when regard is had for the principle that the
two trademarks in their entirety as they appear in
their respective labels should be considered in
relation to the goods advertised before
registration could be denied, the conclusion is
inescapable that respondent Director ought to
have reached a different conclusion. "
By the same token, in the recent case of Philippine
Refining Co., Inc. vs. Ng Sam and Director of
Patents, 18 the Court upheld the patent director's
registration of the same trademark CAMIA for
therein respondent's product of ham
notwithstanding its already being used by therein
petitioner for a wide range of products: lard
butter, cooking oil, abrasive detergents, polishing
materials and soap of all kinds. The Court, after
noting that the same CAMIA trademark had been
registered by two other companies, Everbright
Development Company and F. E. Zuellig, Inc. for
their respective products of thread and yarn (for
the former) and textiles, embroideries and laces
(for the latter) ruled that "while ham and some of
the products of petitioner are classified under
Class 47 (Foods and Ingredients of Food), this
alone cannot serve as the decisive factor in the
resolution of whether or not they are related
goods. 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 Court,
therefore, concluded that "In fine, We hold that
the businesses of the parties are non-competitive
and their products so unrelated that the use of
Identical trademarks is not likely to give rise to
confusion, much less cause damage to petitioner."
In the situation before us, the goods are obviously
different from each other with "absolutely no iota
of similitude" 19 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.ït¢@lFº The mere fact that one person has
adopted and used a trademark on his goods does
not prevent the adoption and use of the same
trademark by others on unrelated articles of a
different kind. 20
Petitioner uses the trademark ESSO and holds
certificate of registration of the trademark for
petroleum products, including aviation gasoline,
grease, cigarette lighter fluid and other various
products such as plastics, chemicals, synthetics,
gasoline solvents, kerosene, automotive and
industrial fuel, bunker fuel, lubricating oil,
fertilizers, gas, alcohol, insecticides and the ESSO
Gasul" burner, while respondent's business is
solely for the manufacture and sale of the
unrelated product of cigarettes. The public knows
too well that petitioner deals solely with
petroleum products that there is no possibility
that cigarettes with ESSO brand will be associated
with whatever good name petitioner's ESSO
trademark may have generated. Although
petitioner's products are numerous, they are of
the same class or line of merchandise which are
non-competing with respondent's product of
cigarettes, which as pointed out in the appealed
judgment is beyond petitioner's "zone of potential
or natural and logical expansion" 21 When a
trademark is used by a party for a product in
which the other party does not deal, the use of the
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
same trademark on the latter's product cannot be
validly objected to. 22
Another factor that shows that the goods involved
are non-competitive and non-related is the
appellate court's finding that they flow through
different channels of trade, thus: "The products of
each party move along and are disposed through
different channels of distribution. The
(petitioner's) products are distributed principally
through gasoline service and lubrication stations,
automotive shops and hardware stores. On the
other hand, the (respondent's) cigarettes are sold
in sari-sari stores, grocery stores, and other small
distributor outlets. (Respondent's) cigarettes are
even peddled in the streets while (petitioner's)
'gasul' burners are not. Finally, there is a marked
distinction between oil and tobacco, as well as
between petroleum and cigarettes. Evidently, in
kind and nature the products of (respondent) and
of (petitioner) are poles apart." 23
Respondent court correctly ruled that 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 the trademarks used. As
pointed out by respondent court in its appealed
decision, "(A) witness for the plaintiff, Mr. Buhay,
admitted that the color of the "ESSO" used by the
plaintiff for the oval design where the blue word
ESSO is contained is the distinct and unique kind
of blue. In his answer to the trial court's question,
Mr. Buhay informed the court that the plaintiff
never used its trademark on any product where
the combination of colors is similar to the label of
the Esso cigarettes," and "Another witness for the
plaintiff, Mr. Tengco, testified that generally, the
plaintiff's trademark comes all in either red, white,
blue or any combination of the three colors. It is to
be pointed out that not even a shade of these
colors appears on the trademark of the appellant's
cigarette. The only color that the appellant uses in ACCORDINGLY, the petition is dismissed and the
its trademark is green." 24 decision of respondent Court of Appeals is hereby
affirmed.
Even the lower court, which ruled initially for
petitioner, found that a "noticeable difference Melencio-Herrera, Plana, Relova and Gutierrez, Jr.,
between the brand ESSO being used by the JJ., concur.1äwphï1.ñët
defendants and the trademark ESSO of the
plaintiff is that the former has a rectangular Makasiar, J., is on leave.
background, while in that of the plaintiff the word
ESSO is enclosed in an oval background." Vasquez, J., took no part.
In point of fact and time, the Court's dismissal of
the petition at bar was presaged by its Resolution
of May 21, 1979 dismissing by minute resolution
the petition for review for lack of merit in the
Identical case of Shell Company of the Philippines,
Ltd vs. Court of Appeals  25, wherein the Court
thereby affirmed the patent office's registration of
the trademark SHELL as used in the cigarettes
manufactured by therein respondent Fortune
Tobacco Corporation notwithstanding the therein
petitioner Shell Company's opposition thereto as
the prior registrant of the same trademark for its
gasoline and other petroleum trademarks, on the
strength of the controlling authority of Acoje
Mining Co. vs. Director of Patents, Supra, and the
same rationale that "(I)n the Philippines, where
buyers of appellee's (Fortune Corp.'s) cigarettes,
which are low cost articles, can be more numerous
compared to buyers of the higher priced
petroleum and chemical products of appellant
(Shell Co.) and where appellant (Shell) is known to
be in the business of selling petroleum and
petroleum-based chemical products, and no
others, it is difficult to conceive of confusion in the
minds of the buying public in the sense it can be
thought that appellant (Shell) is the manufacturer
of appellee's (Fortune's) cigarettes, or that
appellee (Fortune) is the manufacturer or
processor of appellant's (Shell's) petroleum and
chemical products." 26
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
THIRD DIVISION
G.R. No. 120900             July 20, 2000
CANON KABUSHIKI KAISHA, petitioner,
vs.
COURT OF APPEALS and NSR RUBBER
CORPORATION, respondents.
GONZAGA-REYES, J.:
Before us is a petition for review that seeks to set
aside the Decision1 dated February 21, 1995 of the
Court of Appeals in CA-GR SP No. 30203, entitled
"Canon Kabushiki Kaisha vs. NSR Rubber
Corporation" and its Resolution dated June 27,
1995 denying the motion for reconsideration of
herein petitioner Canon Kabushiki Kaisha
(petitioner).
On January 15, 1985, private respondent NSR
Rubber Corporation (private respondent) filed an
application for registration of the mark CANON for
sandals in the Bureau of Patents, Trademarks, and
Technology Transfer (BPTTT). A Verified Notice of
Opposition was filed by petitioner, a foreign
corporation duly organized and existing under the
laws of Japan, alleging that it will be damaged by
the registration of the trademark CANON in the
name of private respondent. The case was
docketed as Inter Partes Case No. 3043.
Petitioner moved to declare private respondent in
default for its failure to file its answer within the
prescribed period. The BPTTT then declared
private respondent in default and allowed
petitioner to present its evidence ex-parte.
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 also under class 2.
On November 10, 1992, the BPTTT issued its
decision dismissing the opposition of petitioner
and giving due course to private respondent's
application for the registration of the trademark
CANON. On February 16, 1993, petitioner
appealed the decision of the BPTTT with public
respondent Court of Appeals that eventually
affirmed the decision of BPTTT. Hence, this
petition for review.
Petitioner anchors this instant petition on these
grounds:
A) PETITIONER IS ENTITLED TO
EXCLUSIVE USE OF THE MARK CANON
BECAUSE IT IS ITS TRADEMARK AND IS
USED ALSO FOR FOOTWEAR.
B) TO ALLOW PRIVATE RESPONDENT TO
REGISTER CANON FOR FOOTWEAR IS TO
PREVENT PETITIONER FROM USING
CANON FOR VARIOUS KINDS OF
FOOTWEAR, WHEN IN FACT,
PETITIONER HAS EARLIER USED SAID
MARK FOR SAID GOODS.
C) PETITIONER IS ALSO ENTITLED TO
THE RIGHT TO EXCLUSIVELY USE CANON
TO PREVENT CONFUSION OF BUSINESS.
D) PETITIONER IS ALSO ENTITLED TO
THE EXCLUSIVE USE OF CANON
BECAUSE IT FORMS PART OF ITS
CORPORATE NAME, PROTECTED BY THE
PARIS CONVENTION.2
The BPTTT and the Court of Appeals share the
opinion that the trademark "CANON" as used by
petitioner for its paints, chemical products, toner,
and dyestuff, can be used by private respondent
for its sandals because the products of these two
parties are dissimilar. Petitioner protests the
appropriation of the mark CANON by private
respondent on the ground that petitioner has used
and continues to use the trademark CANON on its
wide range of goods worldwide. Allegedly, the
corporate name or tradename of petitioner is also
used as its trademark on diverse goods including
footwear and other related products like shoe
polisher and polishing agents. To lend credence to
its claim, petitioner points out that it has branched
out in its business based on the various goods
carrying its trademark CANON3 , including
footwear which petitioner contends covers
sandals, the goods for which private respondent
sought to register the mark CANON. For
petitioner, the fact alone that its trademark
CANON is carried by its other products like
footwear, shoe polisher and polishing agents
should have precluded the BPTTT from giving due
course to the application of private respondent.
We find the arguments of petitioner to be
unmeritorious. Ordinarily, the ownership of a
trademark or tradename is a property right that
the owner is entitled to protect4 as mandated by
the Trademark Law.5 However, when a trademark
is used by a party for a product in which the other
party does not deal, the use of the same trademark
on the latter's product cannot be validly objected
to.6
A review of the records shows that with the order
of the BPTTT declaring private respondent in
default for failure to file its answer, petitioner had
every opportunity to present ex-parte all of its
evidence to prove that its certificates of
registration for the trademark CANON cover
footwear. The certificates of registration for the
trademark CANON in other countries and in the
97 | I P L P a r t I
THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
Philippines as presented by petitioner, clearly
showed that said certificates of registration cover
goods belonging to class 2 (paints, chemical
products, toner, dyestuff). On this basis, the
BPTTT correctly ruled that since the certificate of
registration of petitioner for the trademark
CANON covers class 2 (paints, chemical products,
toner, dyestuff), 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.
Petitioner counters that notwithstanding the
dissimilarity of the products of the parties, the
trademark owner is entitled to protection when
the use of by the junior user "forestalls the normal
expansion of his business".7 Petitioner's
opposition to the registration of its trademark
CANON by private respondent rests upon
petitioner's insistence that it would be precluded
from using the mark CANON for various kinds of
footwear, when in fact it has earlier used said
mark for said goods. Stretching this argument,
petitioner claims that it is possible that the public
could presume that petitioner would also produce
a wide variety of footwear considering the
diversity of its products marketed worldwide.
We do not agree. Even in this instant petition,
except for its bare assertions, petitioner failed to
attach evidence that would convince this Court
that petitioner has also embarked in the
production of footwear products. We quote with
approval the observation of the Court of Appeals
that:
"The herein petitioner has not made
known that it intends to venture into the
business of producing sandals. This is
clearly shown in its Trademark Principal
Register (Exhibit "U") where the products
of the said petitioner had been clearly and
specifically described as "Chemical
products, dyestuffs, pigments, toner
developing preparation, shoe polisher,
polishing agent". It would be taxing one's
credibility to aver at this point that the
production of sandals could be
considered as a possible "natural or
normal expansion" of its business
operation".8
In Faberge, Incorporated vs. Intermediate
Appellate Court,9 the Director of patents allowed
the junior user to use the trademark of the senior
user on the ground that the briefs manufactured
by the junior user, the product for which the
trademark BRUTE was sought to be registered,
was unrelated and non-competing with the
products of the senior user consisting of after
shave lotion, shaving cream, deodorant, talcum
powder, and toilet soap. The senior user
vehemently objected and claimed that it was
expanding its trademark to briefs and argued that
permitting the junior user to register the same
trademark would allow the latter to invade the
senior user's exclusive domain. In sustaining the
Director of Patents, this Court said that since "(the
senior user) has not ventured in the production of
briefs, an item which is not listed in its certificate
of registration, (the senior user), cannot and
should not be allowed to feign that (the junior
user) had invaded (the senior user's) exclusive
domain."10 We reiterated the principle that the
certificate of registration confers upon the
trademark owner the exclusive right to use its
own symbol only to those goods specified in the
certificate, subject to the conditions and
limitations stated therein.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.
Petitioner further argues that the alleged diversity
of its products all over the world makes it
plausible that the public might be misled into
thinking that there is some supposed connection
between private respondent's goods and
petitioner. Petitioner is apprehensive that there
could be confusion as to the origin of the goods, as
well as confusion of business, if private
respondent is allowed to register the mark
CANON. In such a case, petitioner would allegedly
be immensely prejudiced if private respondent
would be permitted to take "a free ride on, and
reap the advantages of, the goodwill and
reputation of petitioner Canon".12 In support of the
foregoing arguments, petitioner invokes the
rulings in Sta. Ana vs. Maliwat13 , Ang vs.
Teodoro14 and Converse Rubber Corporation vs.
Universal Rubber Products, Inc.15 .
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.16 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.17 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 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.18 Goods are related when they belong to
the same class or have the same descriptive
properties; when they possess the same physical
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
attributes or essential characteristics with
reference to their form, composition, texture or
quality.19 They may also be related because they
serve the same purpose or are sold in grocery
stores.20
Thus, in Esso Standard Eastern, Inc. vs. Court of
Appeals, this Court ruled that the petroleum
products on which the petitioner therein used the
trademark ESSO, and the product of respondent,
cigarettes are "so foreign to each other as to make
it unlikely that purchasers would think that
petitioner is the manufacturer of respondent's
goods"21 . Moreover, the fact that the goods
involved therein flow through different channels
of trade highlighted their dissimilarity, a factor
explained in this wise:
"The products of each party move along
and are disposed through different
channels of distribution. The
(petitioner's) products are distributed
principally through gasoline service and
lubrication stations, automotive shops
and hardware stores. On the other hand,
the (respondent's) cigarettes are sold in
sari-sari stores, grocery store, and other
small distributor outlets. (Respondnet's)
cigarettes are even peddled in the streets
while (petitioner's) 'gasul' burners are
not. Finally, there is a marked distinction
between oil and tobacco, as well as
between petroleum and cigarettes.
Evidently, in kind and nature the products
of (respondent) and of (petitioner) are
poles apart."22
Undoubtedly, the paints, chemical products, toner
and dyestuff of petitioner that carry the
trademark CANON are unrelated to sandals, the
product of private respondent. We agree with the
BPTTT, following the Esso doctrine, when it noted
that the two classes of products in this case flow
through different trade channels. The products of
petitioner are sold through special chemical stores
or distributors while the products of private
respondent are sold in grocery stores, sari-sari
stores and department stores.23 Thus, the evident
disparity of the products of the parties in the case
at bar renders unfounded the apprehension of
petitioner that confusion of business or origin
might occur if private respondent is allowed to
use the mark CANON.
In its bid to bar the registration of private
respondent of the mark CANON, petitioner
invokes the protective mantle of the Paris
Convention. Petitioner asserts that it has the
exclusive right to the mark CANON because it
forms part of its corporate name or tradename,
protected by Article 8 of the Paris Convention, to
wit:
"A tradename shall be protected in all the
countries of the Union without the
obligation of filing or registration,
whether or not it forms part of a
trademark."
Public respondents BPTTT and the Court of
Appeals allegedly committed an oversight when
they required petitioner to prove that its mark is a
well-known mark at the time the application of
private respondent was filed. Petitioner questions
the applicability of the guidelines embodied in the
Memorandum of then Minister of Trade and
Industry Roberto Ongpin (Ongpin) dated October
25, 1983 which according to petitioner
implements Article 6bis of the Paris Convention,
the provision referring to the protection of
trademarks. The memorandum reads:
"a) the mark must be internationally
known;
b) the subject of the right must be a
trademark, not a patent or copyright or
anything else;
c) the mark must be for use in the same or
similar class of goods;
d) the person claiming must be the owner
of the mark."
According to petitioner, it should not be required
to prove that its trademark is well-known and that
the products are not similar as required by the
quoted memorandum. Petitioner emphasizes that
the guidelines in the memorandum of Ongpin
implement Article 6bis of the Paris Convention,
the provision for the protection of trademarks, not
tradenames. Article 6bis of the Paris Convention
states:
(1) The countries of the Union undertake,
either administratively if their legislation
so permits, or at the request of an
interested party, to refuse or to cancel the
registration and to prohibit the use of a
trademark which constitutes a
reproduction, imitation or translation,
liable to create confusion, of a mark
considered by the competent authority of
the country of registration or use to be
well-known in that country as being
already the mark of a person entitled to
the benefits of the present Convention
and used for identical or similar goods.
These provisions shall also apply when
the essential part of the mark constitutes
a reproduction of any such well-known
mark or an imitation liable to create
confusion therewith.
(2) A period of at least five years from the
date of registration shall be allowed for
seeking the cancellation of such a mark.
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The countries of the Union may provide
for a period within which the prohibition
of use must be sought.
(3) No time limit shall be fixed for seeking
the cancellation or the prohibition of the
use of marks or used in bad faith."
Petitioner insists that what it seeks is the
protection of Article 8 of the Paris Convention, the
provision that pertains to the protection of
tradenames. Petitioner believes that the
appropriate memorandum to consider is that
issued by the then Minister of Trade and Industry,
Luis Villafuerte, directing the Director of patents
to:
"reject all pending applications for
Philippine registration of signature and
other world famous trademarks by
applicants other than the original owners
or users."
As far as petitioner is concerned, the fact that its
tradename is at risk would call for the protection
granted by Article 8 of the Paris Convention.
Petitioner calls attention to the fact that Article 8,
even as embodied in par. 6, sec. 37 of RA 166,
mentions no requirement of similarity of goods.
Petitioner claims that the reason there is no
mention of such a requirement, is "because there
is a difference between the referent of the name
and that of the mark"24 and that "since Art. 8
protects the tradename in the countries of the
Union, such as Japan and the Philippines,
Petitioner's tradename should be protected
here."25
We cannot uphold petitioner's position.
The term "trademark" is defined by RA 166, the
Trademark Law, as including "any word, name,
symbol, emblem, sign or device or any
combination thereof adopted and used by a
manufacturer or merchant to identify his goods
and distinguish them for those manufactured, sold
or dealt in by others."26 Tradename is defined by
the same law as including "individual names and
surnames, firm names, tradenames, devices or
words used by manufacturers, industrialists,
merchants, agriculturists, and others to identify
their business, vocations, or occupations; the
names or titles lawfully adopted and used by
natural or juridical persons, unions, and any
manufacturing, industrial, commercial,
agricultural or other organizations engaged in
trade or commerce."27 Simply put, a trade name
refers to the business and its goodwill; a
trademark refers to the goods.28
The Convention of Paris for the Protection of
Industrial Property, otherwise known as the Paris
Convention, of which both the Philippines and
Japan, the country of petitioner, are signatories29 ,
is a multilateral treaty that seeks to protect
industrial property consisting of patents, utility
models, industrial designs, trademarks, service
marks, trade names and indications of source or
appellations of origin, and at the same time aims
to repress unfair competition.30 We agree with
public respondents that the controlling doctrine
with respect to the applicability of Article 8 of the
Paris Convention is that established in Kabushi
Kaisha Isetan vs. Intermediate Appellate Court.31 As
pointed out by the BPTTT:
"Regarding the applicability of Article 8 of
the Paris Convention, this Office believes
that there is no automatic protection
afforded an entity whose tradename is
alleged to have been infringed through
the use of that name as a trademark by a
local entity.
In Kabushiki Kaisha Isetan vs. The
Intermediate Appellate Court, et. al., G.R.
No. 75420, 15 November 1991, the
Honorable Supreme Court held that:
'The Paris Convention for the
Protection of Industrial Property
does not automatically exclude
all countries of the world which
have signed it from using a
tradename which happens to be
used in one country. To illustrate
– if a taxicab or bus company in a
town in the United Kingdom or
India happens to use the
tradename "Rapid
Transportation", it does not
necessarily follow that "Rapid"
can no longer be registered in
Uganda, Fiji, or the Philippines.
This office is not unmindful that in the
Treaty of Paris for the Protection of
Intellectual Property regarding well-
known marks and possible application
thereof in this case. Petitioner, as this
office sees it, is trying to seek refuge
under its protective mantle, claiming that
the subject mark is well known in this
country at the time the then application of
NSR Rubber was filed.
However, the then Minister of Trade and
Industry, the Hon. Roberto V. Ongpin,
issued a memorandum dated 25 October
1983 to the Director of Patents, a set of
guidelines in the implementation of
Article 6bis (sic) of the Treaty of Paris.
These conditions are:
a) the mark must be
internationally known;
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b) the subject of the right must be
a trademark, not a patent or
copyright or anything else;
c) the mark must be for use in the
same or similar kinds of goods;
and
d) the person claiming must be
the owner of the mark (The
Parties Convention Commentary
on the Paris Convention. Article
by Dr. Bogsch, Director General
of the World Intellectual
Property Organization, Geneva,
Switzerland, 1985)'
case of Kabushi Kaisha Isetan vs. Intermediate
Appellate Court that Article 8 of the Paris
Convention does not automatically extend
protection to a tradename that is in danger of
being infringed in a country that is also a signatory
to said treaty. This contention deserves scant
consideration. Suffice it to say that the just quoted
pronouncement in the case of Kabushi Kaisha
Isetan vs. Intermediate Appellate Court, was made
independent of the factual finding that petitioner
in said case had not conducted its business in this
country.
WHEREFORE, in view of the foregoing, the instant
petition for review on certiorari is DENIED for
lack of merit.

From the set of facts found in the records, SO ORDERED.

it is ruled that the Petitioner failed to
comply with the third requirement of the Melo, (Chairman), Vitug, Panganiban, and Pursima,
said memorandum that is the mark must JJ., concur.
be for use in the same or similar kinds of
goods. The Petitioner is using the mark
"CANON" for products belonging to class
2 (paints, chemical products) while the
Respondent is using the same mark for
sandals (class 25). Hence, Petitioner's
contention that its mark is well-known at
the time the Respondent filed its
application for the same mark should fail.
"32

Petitioner assails the application of the case

of Kabushi Kaisha Isetan vs. Intermediate Appellate
Court to this case. Petitioner points out that in the
case of Kabushi Kaisha Isetan vs. Intermediate
Appellate Court, petitioner therein was found to
have never at all conducted its business in the
Philippines unlike herein petitioner who has
extensively conducted its business here and also
had its trademark registered in this country.
Hence, petitioner submits that this factual
difference renders inapplicable our ruling in the

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Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
 
G.R. No. 71189 November 4, 1992
FABERGE, INCORPORATED, petitioner,
vs.
THE INTERMEDIATE APPELLATE COURT and
CO BENG KAY, respondents.
MELO, J.:
The Director of Patents authorized herein private
respondent Co Beng Kay to register the trademark
"BRUTE" for the briefs manufactured and sold by
his Corporation in the domestic market vis-a-
vis petitioner's opposition grounded on similarity
of said trademark with petitioner's own symbol
"BRUT" which it previously registered for after
shave lotion, shaving cream, deodorant, talcum
powder, and toilet soap. Thereafter, respondent
court, through Justice Gopengco with Justices
Patajo and Racela, Jr. concurring, was initially
persuaded by petitioner's plea for reversal
directed against the permission granted by the
Director of Patents, but the decision of the Second
Special Cases Division handed down on April 29,
1983 was later reconsidered in favor of herein
private respondent (pp. 46-54; pp. 34-36, Rollo).
Hence, the petition at bar assailing the action of
respondent court in affirming the ruling of the
Director of Patents (Page 7, Petition; Page
16, Rollo).
In essence, it appears that in the course of
marketing petitioner's "BRUT" products and
during the pendency of its application for
registration of the trademark "BRUT 33 and
DEVICE" for antiperspirant, personal deodorant,
cream shave, after shave/shower lotion, hair
spray, and hair shampoo (page 236, Rollo),
respondent Co Beng Kay of Webengton Garments
Manufacturing applied for registration of the
disputed emblem "BRUTE" for briefs. Opposition
raised by petitioner anchored on similarity with
its own symbol and irreparable injury to the
business reputation of the first user was to no
avail. When the legal tussle was elevated to
respondent court, Justice Gopengco remarked
that:
Indeed, a look at the marks
"BRUT," "BRUT 33" and "BRUTE"
shows that such marks are not
only similar in appearance but
they are even similar in sound
and in the style of presentation. It
is reasonable to believe that this
similarity is sufficient to cause
confusion and even mistake and
deception in the buying public as
to the origin for source of the
goods bearing such trademarks.
It should be considered that,
although the mark "BRUTE" was
applied for, only for briefs, yet
such product has the same outlet
— such as department stores and
haberdashery stores in the
Philippines — as the goods
covered by the trademarks
"BRUT" and "BRUTE 33" so that
such confusion, mistake or
deception is not unlikely to occur.
The argument of appellee, that in
modern marketing, goods of
similar use are grouped in one
section of the supermarket and
thus it is unlikely that cosmetics
be mixed with textile or wearing
apparel, is hardly convincing
enough, for a look at the modern
department stores shows that
merchandise intended for the use
of men are now placed in a
section which is then labelled
"Men's Accessories." It is not
unlikely, therefore, that in said
section, appellant's products,
which are cosmetics for men's
use, be placed beside appellee's
product, and cause such
confusion or mistake as to the
source of the goods displayed in
the section. To avoid this, the
Director of Patents held:
The marks KEYSTON (on
shirts) and KEYSTONE (on
shoes and slippers), the
latter having been previously
registered are clearly similar
in sound and appearance
that confusion or mistake, or
deception among purchasers
as to origin and source of
goods is likely to occur.
Shirts and shoes are both
wearing apparel and there is
no gainsaying the truth that
these items are ordinarily
displayed in the same
manner and sold through the
same retail outlets such as
department and
haberdashery stores in the
Philippines. (Ex-
Parte Keystone Garment
Manufacturing Co., Decision
No. 245 of the Director of
Patents, January 25, 1963.)
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It is also not disputed that on
account of the considerable
length of time that appellant has
marketed its products bearing
the trademarks "BRUT" and
"BRUT 33," and its maintenance
of high quality of its products
through the years, appellant has
earned and established immense
goodwill among its customers.
We agree with appellant that
should appellee be allowed to use
the trademark "BRUTE" on the
briefs manufactured by him,
appellee would be cashing in on
the goodwill already established
by appellant, because, as already
stated above, appellant's
cosmetics and appellee's briefs
are not entirely unrelated since
both are directed to the fashion
trade and in the marketing
process, they may find
themselves side by side in the
"Men's Accessories Section" of
the market, thus easily leading
the buying public to believe that
such briefs come from the same
source as appellant's cosmetics,
and be induced to buy said briefs,
to the undue advantage of
appellee. Again, if after
purchasing such briefs, the public
finds them to be of non-
competitive quality, or not of the
high quality expected of
appellant's products, then
appellant's reputation and
goodwill will be ruined, to its
damage and prejudice. Thus, for
the protection of the goodwill
already established by a party,
the Supreme Court held:
When one applies for the
registration of a trademark or
label which is almost the same or
very closely resembles one
already used and registered by
another, the application should
be rejected and dismissed
outright, even without any
opposition on the part of the
owner and user of a previously
registered label or trademark,
this not only to avoid confusion
on the part of the public, but also
to protect an already used and
registered trademark and an
established goodwill.
(Chuanchow Soy & Canning Co.
vs. Dir. of Patents and Villapanta,
108 Phil. 833, 836.)
The test of confusing similarity
which would preclude the
registration of a trademark is not
whether the challenged mark
would actually cause confusion
or deception of the purchasers
but whether the use of such mark
would likely cause confusion or
mistake on the part of the buying
public. In short, the law does not
require that the competing marks
must be so identical as to
produce actual error or mistakes.
It would be sufficient, for
purposes of the law, that the
similarity between the two labels
be such that there is a possibility
or likelihood of the purchaser of
the older brand mistaking the
newer brand for it. (Gopengco,
Mercantile Law Compendium,
1983 ed., p. 684; Acoje Mining
Co., Inc. vs. Director of Patents,
38 SCRA 480). (pp. 3-6, Decision;
pp. 48-51, Rollo).
On June 5, 1984, respondent's Motion for
Reconsideration merited the nod of approval of
the appellate court brought about by private
respondent's suggestion that the controlling
ruling is that laid down in Philippine Refining Co.,
Inc. vs. Ng Sam (115 SCRA 472 [1982]), ESSO
Standard Eastern, Inc. vs. Court of Appeals (116
SCRA 336 [1982]); Hickok Manufacturing Co.,
Inc. vs. CA (116 SCRA 378 [1982]), and Acoje
Mining Co., Inc. vs. Director of Patents (38 SCRA
480 [1971], to the effect that the identical
trademark can be used by different manufacturers
for products that are non-competing and
unrelated. (pp. 34-36, Rollo)
Petitioner is of the impression that respondent
court could not have relied on the rulings of this
Court in the ESSO and the PRC cases when the
original decision was reconsidered since
respondent court already expressed the opinion in
the text of the previous discourse that the facts in
said cases "are not found in the case at bar" (Page
12, Brief for the Petitioner, Page 202, Rollo).
Petitioner likewise emphasis American
jurisprudential doctrines to the effect that sale of
cosmetics and wearing apparel under similar
marks is likely to cause confusion. Instead of
applying the ESSO, PRC and Hickok cases,
petitioner continues to asseverate, the rule as
announced in Ang vs. Teodoro (74 Phil. 50 [1942])
as reiterated in Sta. Ana vs. Maliwat and
Evalle (24 SCRA (1968) 101) should be applied.
In additional, it seems that petitioner would want
this Court to appreciate petitioner's alleged
application for registration of the trademark
"BRUT 33 DEVICE" for briefs as an explicit proof
that petitioner intended to expand its mark
"BRUT" to other goods, following the sentiment
expressed by Justice J.B.L. Reyes in
the Sta. Ana case (supra, at page 1025) that relief
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is available where the junior user's goods are not
remote from any product that the senior user
would be likely to make or sell (Pages 26-27, Brief
for the Petitioner).
Besides, petitioner insists that in view of the
repeal of Republic Act No. 166 (which advocated
the related goods theory) by Republic Act No. 666
which deleted the phrase found in the old law that
the merchandise must be substantially the same
descriptive properties, respondent Court should
have heeded the pronouncement in the Ang case
that there can be unfair competition even if the
goods are noncompeting (supra, at page 54).
On the other hand, private respondent echoes the
glaring difference in physical appearance of its
products with petitioner's own goods by stressing
the observations of the Director of Patents on May
3, 1978:
Considered in their entireties as
depicted in the parties' sample
box and can containers, the
involved trademarks are grossly
different in their overall
appearance that even at a
distance a would-be purchaser
could easily distinguish what is
BRUTE brief and what is BRUT
after shave lotion, lotion and the
like. Opposer's mark BRUT or
BRUT 33, as shown in Exhibit "6",
is predominantly colored green
with a blue and white band at the
middle portion of the container.
Also appearing therein in bold
letters is opposer's name
"FABERGE" and a notation
"Creme Shave". On the other
hand, respondent's mark as
shown in Exh. "4-A" prominently
displays the representation of a
muscular man, underneath of
which appears the trademark
BRUTE with a notation "Bikini
Brief" . . . Equally visible at the
other portions of respondent's
labels are the pictorial
representation of "briefs" which
unmistakably suggest that the
product contained in the box
container is that of a man's brief.
The fact therefore is obvious that
the goods upon which the
conflicting trademarks are used
are clearly different and the
intended purpose of such goods
are likewise not the same.
Accordingly, a purchaser who is
out in the market for the purpose
of buying respondent's BRUTE
brief would definitely be not
mistaken or misled into buying
instead opposer's BRUT after
shave lotion or deodorant.
Additional, the meaning or
connotation of the bare word
marks of opposer, BRUT, and
BRUTE of respondent, are clearly
different and not likely to be
confused with each other. BRUT
simply means "dry", and also, "to
browse"; while BRUTE means
"ferocious, sensual", and in Latin,
it signifies "heavy". Gleaned from
the respective meanings of the
two marks in question, they both
suggest the resultant effects of
the application of the products,
upon which the said trademarks
are employed, which fact all the
more renders confusion or
deception of purchasers a remote
possibility.
The products covered by
petitioner's trademarks "BRUT"
and "BRUT 33 & Device" enjoying
its so-called "goodwill" are after-
shave lotion, shaving cream,
deodorant, talcum powder, toilet
soap, anti-perspirant, personal
deodorant, cream shave, after
shave/shower lotion, hair spray
and hair shampoo. Petitioner has
never applied for, registered nor
used its trademarks for briefs in
commerce or trade in the
Philippines. Private respondent
seeks to register his trademark
"BRUTE" only for briefs which is
a product non-competitive to and
entirely unrelated with
petitioner's aforementioned
products. (pp. 3-4, Brief for the
Respondent)
in order to impress upon Us that the controlling
norm is the comparison of the trademarks in their
entirely as they appear in their labels to determine
whether there is confusing similarity.
Moreover, private respondent asserts that briefs
and cosmetics do not belong to the same class nor
do they have the same descriptive properties such
that the use of a trademark on one's goods does
not prevent the adoption and use of the same
trademark by others on unrelated articles of a
different nature in line with the ruling of this
Court in Hickok Manufacturing Co., Inc. vs. Court of
Appeals (116 SCRA 387 [1982]). Furthermore,
respondent belies petitioner's claim that the latter
had applied for registration of the trademark
"BRUT 33 DEVICE" for briefs since the documents
on file with the Director of Patents attached to
respondent's legal Brief does not include the so-
called application by petitioner of the alleged
trademark for briefs.
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To the legal query of whether private respondent
may appropriate the trademark "BRUTE" for the
briefs it manufactures and sells to the public albeit
petitioner had previously registered the symbol
"BRUT" and "BRUT 33" for its own line of times, it
is but apropos to shift Our attention to the
pertinent provisions of the new Civil Code vis-a-
vis Republic Act No. 166, as amended, the special
law patterned after the United States Trademark
Act of 1946 (Director of Patents, Circular Release
No. 36, 45 O.G. 3704; Martin, Commentaries and
Jurisprudence on the Philippine Commercial Laws,
1986 Revised Edition, Volume 2, page 489), thus:
Art. 520. A trade-mark or trade-
name duly registered in the
proper government bureau or
office is owned by and pertains to
the person, corporation, or firm
registering the same, subject to
the provisions of special laws.
Art. 521. The goodwill of a
business is property, and may be
transferred together with the
right to use the name under
which the business is conducted.
Art. 522. Trade-marks and trade-
names are governed by special
laws.
xxx xxx xxx
Sec. 2. What are registrable. —
Trade-marks, trade-names, and
service-marks owned by persons,
corporations, partnerships or
associations domiciled in the
Philippines and by persons,
corporations, partnerships or
associations domiciled in any
foreign country may be
registered in accordance with the
provisions of this Act; Provided,
That said trade-marks, trade-
names, or service-marks, are
actually in use in commerce and
services not less than two
months in the Philippines before
the time the applications for
registration are filed: And
provided, further, That the
country of which the applicant
for registration is a citizen grants
by law substantially similar
privileges to citizens of the
Philippines, and such fact is
officially certified, with a certified
true copy of the foreign law
translated into the English
language, by the government of
the Republic of the Philippines.
(As amended by Rep. Act No.
865).
Sec. 2-A. Ownership of trade-
marks, trade-names and service-
marks; how acquired. — Anyone
who lawfully produces or deals in
merchandise of any kind or who
engages in any lawful business or
who renders any lawful service in
commerce, by actual use thereof
in manufacture or trade, in
business, and in the service
rendered, may appropriate to his
exclusive use a trade-mark, a
trade-name, or a service-mark
not so appropriated by another,
to distinguish his merchandise,
business or service from the
merchandise, business or
services of others. The ownership
or possession of a trade-mark,
trade-name, service-mark,
heretofore or hereafter
appropriated, as in this section
provided, shall be recognized and
protected in the same manner
and to the same extent as are
other property rights known to
the law. (As inserted by Sec. 1 of
Rep. Act 638).
xxx xxx xxx
Sec. 4. Registration of trade-
marks, trade-names and service-
marks on the principal register. —
. . . The owner of trademark,
trade-name or service-mark used
to distinguish his goods, business
or services from the goods,
business or services of others
shall have right to register the
same on the principal register,
unless it:
xxx xxx xxx
4(d) Consists of or comprises a
mark or trade-name which so
resembles a mark or trade-name
registered in the Philippines or a
mark or trade-name previously
used in the Philippines by
another and not abandoned, as to
be likely, when applied to or used
in connection with the goods,
business or services of the
applicant, to cause confusion or
mistake or to deceive purchasers.
xxx xxx xxx
Sec. 11. Issuance and contents of
the certificate. — Certificates of
registration shall be issued in the
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name of the Republic of the
Philippines under the seal of the
Patent Office, and shall be signed
by the Director, and a record
thereof together with a copy of
the specimen or facsimile and the
statement of the applicant, shall
be kept in books for that purpose.
The certificate shall reproduce
the specimen or facsimile of the
mark or trade-name, contain the
statement of the applicant and
state that the mark or trade-
name is registered under this Act,
the date of the first use in
commerce or business, the
particular goods or services for
which it is registered, the number
and date of the registration, the
term thereof, the date on which
the application for registration
was received in the Patent Office,
a statement of the requirement
that in order to maintain the
registration, periodical affidavits
of use within the specified times
hereinafter in section twelve
provided, shall be filed, and such
other data as the rules and
regulations may from time to
time prescribe.
xxx xxx xxx
Sec. 20. Certificate of registration
prima facie evidence of
validity. — A certificate of
registration of a mark or trade-
name shall be prima
facie evidence of the validity of
the registration, the registrant's
ownership of the mark or trade-
name, and of the registrant's
exclusive right to use the same in
connection with the goods,
business or services specified in
the certificate, subject to any
conditions and limitations stated
therein.
Having thus reviewed the laws applicable to the
case before Us, it is not difficult to discern from
the foregoing statutory enactments that private
respondent may be permitted to register the
trademark "BRUTE" for briefs produced by it
notwithstanding petitioner's vehement
protestations of unfair dealings in marketing its
own set of items which are limited to: after-shave
lotion, shaving cream, deodorant, talcum powder
and toilet soap. In as much as petitioner has not
ventured in the production of briefs, an item
which is not listed in its certificate of registration,
petitioner can not and should not be allowed to
feign that private respondent had invaded
petitioner's exclusive domain. To be sure, it is
significant that petitioner failed to annex in its
Brief the so-called "eloquent proof that petitioner
indeed intended to expand its mark "BRUT" to
other goods" (Page 27, Brief for the Petitioner;
Page 202, Rollo). Even then, a mere application by
petitioner in this aspect does not suffice and may
not vest an exclusive right in its favor that can
ordinarily be protected by the Trademark Law. In
short, paraphrasing Section 20 of the Trademark
Law as applied to the documentary evidence
adduced by petitioner, the certificate of
registration issued by the Director of Patents can
confer upon petitioner the exclusive right to use
its own symbol only to those goods specified in
the certificate, subject to any conditions and
limitations stated therein. This basic point is
perhaps the unwritten rationale  of Justice Escolin
in Philippine Refining Co., Inc. vs.  Ng Lam (115
SCRA 472 [1982]), when he stressed the principle
enunciated by the United States Supreme Court in
American Foundries vs. Robertson (269 U.S. 372,
381, 70 L ed 317, 46 Sct. 160) that one who has
adopted and used a trademark on his goods does
not prevent the adoption and use of the same
trademark by other for products which are of
different description. Verily, this Court had the
occasion to observe in the 1966 case of George
W. Luft Co., Inc. vs. Ngo Guan (18 SCRA 944
[1966]) that no serious objection was posed by
the petitioner therein since the applicant utilized
the emblem "Tango" for no other product than
hair pomade in which petitioner does not deal.
This brings Us back to the incidental issue raised
by petitioner which private respondent sought to
belie as regards petitioner's alleged expansion of
its business. It may be recalled that petitioner
claimed that it has a pending application for
registration of the emblem "BRUT 33" for briefs
(page 25, Brief for the Petitioner; page 202, Rollo)
to impress upon Us the Solomonic wisdom
imparted by Justice JBL Reyes in Sta. Ana
vs. Maliwat (24 SCRA 1018 [1968]), to the effect
that dissimilarity of goods will not preclude relief
if the junior user's goods are not remote from any
other product which the first user would be likely
to make or sell (vide, at page 1025). Commenting
on the former provision of the Trademark Law
now embodied substantially under Section 4(d) of
Republic Act No. 166, as amended, the erudite
jurist opined that the law in point "does not
require that the articles of manufacture of the
previous user and late user of the mark should
possess the same descriptive properties or should
fall into the same categories as to bar the latter
from registering his mark in the principal
register." (supra at page 1026).
Yet, it is equally true that as aforesaid, the
protective mantle of the Trademark Law extends
only to the goods used by the first user as
specified in the certificate of registration following
the clear message conveyed by section 20.
How do We now reconcile the apparent conflict
between Section 4(d) which was relied upon by
Justice JBL Reyes in the Sta. Ana case and Section
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
20? It would seem that Section 4(d) does not "ESSO for cigarettes inspite previous
require that the goods manufactured by the appropriation of the same mark "ESSO" for
second user be related to the goods produced by petroleum products, then Justice, later Chief
the senior user while Section 20 limits the Justices Teehankee in Esso Standard Eastern,
exclusive right of the senior user only to those Inc. vs. Court of Appeals (116 SCRA 336 [1982]
goods specified in the certificate of registration. said:
But the rule has been laid down that the clause
which comes later shall be given paramount The Court affirms on the basis of
significance over an anterior proviso upon the controlling doctrine the appealed
presumption that it expresses the latest and decision of the Court of Appeals
dominant purpose. (Graham Paper reversing that of the Court of
Co. vs. National Newspaper Asso. (Mo. App.) 193 First Instance of Manila and
S.W. 1003; Barnett vs. Merchant's L.  Ins. Co., 87 dismissing the complaint filed by
Okl. 42; State ex nel Atty. Gen.  vs.  Toledo,  26 N.E., herein petitioner against private
p. 1061; cited by Martin, Statutory Construction respondent for trade
Sixth ed., 1980 Reprinted, p. 144). It ineluctably infringement for using
follows that Section 20 is controlling and, petitioner's trademark ESSO,
therefore, private respondent can appropriate its since it clearly appears that the
symbol for the briefs it manufactures because as goods on which the trademark
aptly remarked by Justice Sanchez in Sterling ESSO is used by respondent is
Products International Inc. vs. Farbenfabriken non-competing and entirely
Bayer (27 SCRA 1214 [1969]): unrelated to the products of
petitioner so that there is no
Really, if the certificate of likelihood of confusion or
registration were to be deemed deception on the part of the
as including goods not specified purchasing public as to the origin
therein, then a situation may or source of the goods.
arise whereby an applicant may
be tempted to register a xxx xxx xxx
trademark on any and all goods
which his mind may conceive The trial court, relying on the old
even if he had never intended to cases of Ang vs. Teodoro and Arce
use the trademark for the said & Sons, Inc. vs. Selecta Biscuit
goods. We believe that such Company, referring to related
omnibus registration is not products, decided in favor of
contemplated by our Trademark petitioner and ruled that
Law. (1226) respondent was guilty of
infringement of trademark.
Withal, judging from the physical attributes of
petitioner's and private respondent's products,
On appeal, respondent Court of
there can be no doubt that confusion or the
Appeals found that there was no
likelihood of deception to the average purchaser is
trademark infringement and
unlikely since the goods are non-competing and
dismissed the complaint.
unrelated. In upholding registration of the brand
Reconsideration of the decision
having been denied, petitioner
appealed to this court by way
of certiorari to reverse the
decision of the Court of Appeals
and to reinstate the decision of
the Court of First Instance of
Manila. The Court finds no
ground for granting the petition.
The law defines infringement as
the use without consent of the
trademark owner of any
"reproduction, counterfeit, copy
or colorable imitation of any
registered mark or tradename in
connection with the sale, offering
for sale, or advertising of any
goods, business or services 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
colorable imitate any director's
decision on the question of "May
petitioner Acoje Mining Company
register for the purpose of
advertising its product, soy
sauce, the trademark LOTUS,
there being already in existence
one such registered in favor of
the Philippine Refining Company
for its product, edible oil, it being
further shown that the
trademark applied for is in
smaller type, colored differently,
set on a background which is
dissimilar as to yield a distinct
appearance?" and ordered the
granting of petitioner's
application for registration ruling
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
that "there is quite a difference
between soy sauce and edible oil.
If one is in the market for the
former, he is not likely to
purchase the latter just because
of the trademarks LOTUS" and
"when regard is had for the
principle that the two trademark
in their entirely as they appear in
their respective labels should be
considered in relation to the
goods advertised before
registration could be denied, the
conclusion is inescapable that
respondent Director ought to
have reached a different
conclusion."
By the same token, in the recent
case of Philippine Refining Co.,
Inc. v. Ng Sam and Director of
Patents, the Court upheld the
patent director's registration of
the same trademark CAMIA for
therein respondent's product of
ham notwithstanding its already
being used by therein petitioner
for a wide range of products:
lard; butter, cooking oil, abrasive
detergents, polishing material
and soap of all kinds. The Court,
after noting that the same CAMIA
trademark had been registered
by two other companies,
Everbright Development
Company and F.E. Zuellig, Inc. for
their respective products of
thread and yarn (for the former)
and textiles, embroideries and
laces (for the latter) ruled that
"while ham and some of the
products of petitioner are
classified under Class 47 (Foods
and Ingredients of Food), this
alone cannot serve as the
decisive factor in the resolution
of whether or not they are
related goods. Emphasis should
be on the similarity of the
arbitrary classification or general
description of their properties or
characteristics. The Court,
therefore, concluded that "In fine,
We hold that the businesses of
the parties are noncompetitive
and their products so unrelated
that the use of identical
trademarks is not likely to give
rise to confusion, much less cause
damage to petitioner.
In the situation before us, 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' goods. The mere fact
that one person has adopted and
used a trademark on his goods
does not prevent the adoption
and use of the same trademark
by others on unrelated articles of
a different kind.
Petitioner uses the trademark
ESSO and holds certificate
registration of the trademark for
petroleum products, including
aviation gasoline, grease,
cigarette lighter fluid and other
various products such as plastics,
chemicals, synthetics, gasoline
solvents, kerosene, automotive
and industrial fuel, bunker fuel,
lubricating oil, fertilizers, gas
alcohol, insecticides and the
"ESSO Gasul" burner, while
respondent's business is solely
for the manufacture and sale of
the unrelated product of
cigarettes. The public knows too
well that petitioner deals solely
with petroleum products that
there is no possibility that
cigarettes with ESSO brand will
be associated with whatever
good name petitioner's ESSO
trademark may have generated.
Although petitioner's products
are numerous, they are of the
same class or line of merchandise
which are non-competing with
respondent's product of
cigarettes, which as pointed out
in the appealed judgment is
beyond petitioner's "zone of
potential or natural and logical
expansion." 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.
xxx xxx xxx
Respondent court correctly ruled
that 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 the
trademark used. As pointed out
by respondent court in its
appealed decision, "(A) witness
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
for the plaintiff, Mr. Buhay,
admitted that the color of the
"ESSO" used by the plaintiff for
the oval design where the blue
word ESSO is contained is the
distinct and unique kind of blue.
In his answer to the trial court's
question, Mr. Buhay informed the
court that the plaintiff never used
its trademark on any product
where the combination of colors
is similar to the label of the Esso
cigarettes," and "Another witness
for the plaintiff, Mr. Tengco,
testified that generally, the
plaintiff's trademark comes all in
either red, white, blue or any
combination of the three colors.
It is to be pointed out that not
even a shade of these colors
appears on the trademark of the
appellant's cigarette. The only
color that the appellant uses in its
trademark is green. (339; 341-
346)
The glaring discrepancies between the two
products had been amply portrayed to such an
extent that indeed, "a purchaser who is out in the
market for the purpose of buying respondent's
BRUTE brief would definitely be not mistaken or
misled into buying BRUT after shave lotion or
deodorant" as categorically opined in the decision
of the Director of Patents relative to the inter-
partes case. (supra, at page 7).
Petitioner's bid to persuade Us into accepting the
doctrines announced in the aforementioned cases
of Sta. Ana vs. Maliwat and Ang vs. Teodoro  hardly
inspire belief. In Sta Ana, it was admitted that the
marks were confusingly similar which is not so in
the case at bar. In the 1942 case of Ang
vs. Teodoro, Justice Ozaeta noted that pants and
shirts are similar to shoes and slippers within the
meaning of Sections 3, 7, 11, 13 and 20 of Act No. SO ORDERED.
666 which was the old Trademark Law enacted on
March 6, 1903 prior to the present law. Obviously, Gutierrez, Jr., Bidin, Davide, Jr., and Romero, JJ.,
the conclusion reached by the  ponente in concur.
the Ang case may not now be utilized by analogy
to the case at bar due to variance in the factual
and legal milieu. Neither can we agree with
petitioner that the ruling in La Chemise Lacoste,
S.A.  vs. Fernandez (129 SCRA 373 [1984]) is
applicable to the controversy at hand. The case
adverted to by petitioner involved the same mark
for the same class of shirts manufactured by the
parties therein.
It would appear that as a consequence of this
discourse, there still remains hanging in mid-air
the unanswered puzzle as to why an aspiring
commercial enterprise, given the infinite choices
available to it of names for the intend product,
would select a trademark or tradename which
somewhat resembles an existing emblem that had
established goodwill. Our opinion hereinbefore
expressed could even open the floodgates to
similar incursions in the future when we
interpreted Section 20 of the Trademark Law as
an implicit permission to a manufacturer to
venture into the production of goods and allow
that producer to appropriate the brand name of
the senior registrant on goods other than those
stated in the certificate of registration.
But these nagging and disturbing points cannot
win the day for petitioner, although We must
hasten to add that in the final denouement, Our
apprehensions in this regard are not entirely
irreversible since Section 4(d) and 20 of the law in
question may still be subjected to legislative
modification in order to protect the original user
of the symbol.
WHEREFORE, the petition is hereby DISMISSED
without pronouncement as to costs.
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-48226         December 14, 1942
ANA L. ANG, petitioner,
vs.
TORIBIO TEODORO, respondent.
Cirilo Lim for petitioner.
Marcial P. Lichauco and Manuel M. Mejia for
respondent.
OZAETA, J.:
Petitioner has appealed to this Court by certiorari
to reverse the judgment of the Court of Appeals
reversing that of the Court of First Instance of
Manila and directing the Director of Commerce to
cancel the registration of the trade-mark "Ang
Tibay" in favor of said petitioner, and perpetually
enjoining the latter from using said trade-mark on
goods manufactured and sold by her.
Respondent Toribio Teodoro, at first in
partnership with Juan Katindig and later as sole
proprietor, has continuously used "Ang Tibay,"
both as a trade-mark and as a trade-name, in the
manufacture and sale of slippers, shoes, and
indoor baseballs since 1910. He formally
registered it as trade-mark on September 29,
1915, and as trade-name on January 3, 1933. The
growth of his business is a thrilling epic of Filipino
industry and business capacity. Starting in an
obscure shop in 1910 with a modest capital of
P210 but with tireless industry and unlimited
perseverance, Toribio Teodoro, then an unknown
young man making slippers with his own hands
but now a prominent business magnate and
manufacturer with a large factory operated with
modern machinery by a great number of
employees, has steadily grown with his business
to which he has dedicated the best years of his life
and which he has expanded to such proportions
that his gross sales from 1918 to 1938 aggregated
P8,787,025.65. His sales in 1937 amounted to
P1,299,343.10 and in 1938, P1,133,165.77. His
expenses for advertisement from 1919 to 1938
aggregated P210,641.56.
Petitioner (defendant below) registered the same
trade-mark "Ang Tibay" for pants and shirts on
April 11, 1932, and established a factory for the
manufacture of said articles in the year 1937. In
the following year (1938) her gross sales
amounted to P422,682.09. Neither the decision of
the trial court nor that of the Court of Appeals
shows how much petitioner has spent or
advertisement. But respondent in his brief says
that petitioner "was unable to prove that she had
spent a single centavo advertising "Ang Tibay"
shirts and pants prior to 1938. In that year she
advertised the factory which she had just built and
it was when this was brought to the attention of
the appellee that he consulted his attorneys and
eventually brought the present suit."
The trial court (Judge Quirico Abeto) presiding
absolved the defendant from the complaint, with
costs against the plaintiff, on the grounds that the
two trademarks are dissimilar and are used on
different and non-competing goods; that there had
been no exclusive use of the trade-mark by the
plaintiff; and that there had been no fraud in the
use of the said trade-mark by the defendant
because the goods on which it is used are
essentially different from those of the plaintiff.
The second division of the Court of Appeals,
composed of Justices Bengson, Padilla, Lopez Vito,
Tuason, and Alex Reyes, with Justice Padilla
as ponente, reversed that judgment, holding that
by uninterrupted an exclusive use since 191 in the
manufacture of slippers and shoes, respondent's
trade-mark has acquired a secondary meaning;
that the goods or articles on which the two trade-
marks are used are similar or belong to the same
class; and that the use by petitioner of said trade-
mark constitutes a violation of sections 3 and 7 of
Act No. 666. The defendant Director of Commerce
did not appeal from the decision of the Court of
Appeals.
First. Counsel for the petitioner, in a well-written
brief, makes a frontal sledge-hammer attack on
the validity of respondent's trade-mark "Ang
Tibay." He contends that the phrase "Ang Tibay"
as employed by the respondent on the articles
manufactured by him is a descriptive term
because, "freely translate in English," it means
"strong, durable, lasting." He invokes section 2 of
Act No. 666, which provides that words or devices
which related only to the name, quality, or
description of the merchandise cannot be the
subject of a trade-mark. He cites among others the
case of Baxter vs. Zuazua (5 Phil., 16), which
involved the trade-mark "Agua de Kananga" used
on toilet water, and in which this Court held that
the word "Kananga," which is the name of a well-
known Philippine tree or its flower, could not be
appropriated as a trade-mark any more than could
the words "sugar," "tobacco," or "coffee." On the
other hand, counsel for the respondent, in an
equally well-prepared and exhaustive brief,
contend that the words "Ang Tibay" are not
descriptive but merely suggestive and may
properly be regarded as fanciful or arbitrary in the
legal sense. The cite several cases in which similar
words have been sustained as valid trade-marks,
such as "Holeproof" for hosiery, 1 "ideal for tooth
brushes, 2 and "Fashionknit" for neckties and
sweaters. 3
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We find it necessary to go into the etymology and
meaning of the Tagalog words "Ang Tibay" to
determine whether they are a descriptive term,
i.e., whether they relate to the quality or
description of the merchandise to which
respondent has applied them as a trade-mark. The
word "ang" is a definite article meaning "the" in
English. It is also used as an adverb, a contraction
of the word "anong" (what or how). For instance,
instead of saying, "Anong ganda!" ("How
beautiful!"), we ordinarily say, "Ang
ganda!" Tibay is a root word from which are
derived the verb magpatibay (to strenghten; the
nouns pagkamatibay (strength,
durability), katibayan (proof, support,
strength), katibay-tibayan (superior strength);
and the adjectives matibay (strong, durable,
lasting), napakatibay (very strong), kasintibay or
magkasintibay (as strong as, or of equal strength).
The phrase "Ang Tibay" is an exclamation
denoting administration of strength or durability.
For instance, one who tries hard but fails to break
an object exclaims, "Ang tibay!" (How strong!") It
may also be used in a sentence thus, "Ang tibay ng
sapatos mo!" (How durable your shoes are!") The
phrase "ang tibay" is never used adjectively to
define or describe an object. One does not say,
"ang tibay sapatos" or "sapatos ang tibay" is never
used adjectively to define or describe an object.
One does not say, "ang tibay sapatos" or "sapatos
ang tibay" to mean "durable shoes," but "matibay
na sapatos" or "sapatos na matibay."
From all of this we deduce that "Ang Tibay" is not
a descriptive term within the meaning of the
Trade-Mark Law but rather a fanciful or coined
phrase which may properly and legally be
appropriated as a trade-mark or trade-name. In
this connection we do not fail to note that when
the petitioner herself took the trouble and
expense of securing the registration of these same
words as a trademark of her products she or her
attorney as well as the Director of Commerce was
undoubtedly convinced that said words (Ang
Tibay) were not a descriptive term and hence
could be legally used and validly registered as a
trade-mark. It seems stultifying and puerile for
her now to contend otherwise, suggestive of the
story of sour grapes. Counsel for the petitioner
says that the function of a trade-mark is to point
distinctively, either by its own meaning or by
association, to the origin or ownership of the
wares to which it is applied. That is correct, and
we find that "Ang Tibay," as used by the
respondent to designate his wares, had exactly
performed that function for twenty-two years
before the petitioner adopted it as a trade-mark in
her own business. Ang Tibay shoes and slippers
are, by association, known throughout the
Philippines as products of the Ang Tibay factory
owned and operated by the respondent Toribio
Teodoro.
Second. In her second assignment of error
petitioner contends that the Court of Appeals
erred in holding that the words "Ang Tibay" had
acquired a secondary meaning. In view of the
conclusion we have reached upon the first
assignment of error, it is unnecessary to apply
here the doctrine of "secondary meaning" in
trade-mark parlance. This doctrine is to the effect
that a word or phrase originally incapable of
exclusive appropriation with reference to an
article of the market, because geographically or
otherwise descriptive, might nevertheless have
been used so long and so exclusively by one
producer with reference to his article that, in that
trade and to that branch of the purchasing public,
the word or phrase has come to mean that the
article was his product. (G. & C. Merriam Co. vs.
Salfield, 198 F., 369, 373.) We have said that the
phrase "Ang Tibay," being neither geographic nor
descriptive, was originally capable of exclusive
appropriation as a trade-mark. But were it not so,
the application of the doctrine of secondary
meaning made by the Court of Appeals could
nevertheless be fully sustained because, in any
event, by respondent's long and exclusive use of
said phrase with reference to his products and his
business, it has acquired a proprietary
connotation. (Landers, Frary, and Clark vs.
Universal Cooler Corporation, 85 F. [2d], 46.)
Third. Petitioner's third assignment of error is,
that the Court of Appeals erred in holding that
pants and shirts are goods similar to shoes and
slippers within the meaning of sections 3 and 7 of
Act No. 666. She also contends under her fourth
assignment of error (which we deem convenient
to pass upon together with the third) that there
can neither be infringement of trade-mark under
section 3 nor unfair competition under section 7
through her use of the words "Ang Tibay" in
connection with pants and shirts, because those
articles do not belong to the same class of
merchandise as shoes and slippers.
The question raised by petitioner involve the
scope and application of sections 3,7, 11, 13, and
20 of the Trade-Mark Law (Act No. 666.) Section 3
provides that "any person entitled to the exclusive
use of a trade-mark to designate the origin or
ownership of goods he has made or deals in, may
recover damages in a civil actions from any person
who has sold goods of a similar kind, bearing such
trade-mark . . . The complaining party . . . may have
a preliminary injunction, . . . and such injunction
upon final hearing, if the complainant's property
in the trade-mark and the defendant's violation
thereof shall be fully established, shall be made
perpetual, and this injunction shall be part of the
judgment for damages to be rendered in the same
cause." Section 7 provides that any person who, in
selling his goods, shall give them the general
appearance of the goods of another either in the
wrapping of the packages, or in 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 the complainant, shall be guilty of unfair
competition, and shall be liable to an action for
damages and to an injunction, as in the cases of
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
trade-mark infringement under section 3. Section
11 requires the applicant for registration of a
trade-mark to state, among others, "the general
class of merchandise to which the trade-mark
claimed has been appropriated." Section 13
provides that no alleged trade-mark or trade
name shall be registered which is identical with a
registered or known trade-mark owned by
another and appropriate to the same class of
merchandise, or which to nearly resembles
another person's lawful trade-mark or trade-name
as to be likely to cause confusion or mistake in the
mind of the public, or to deceive purchasers. And
section 2 authorizes the Director of Commerce to
establish classes of merchandise for the purpose of
the registration of trade-marks and to determine
the particular description of articles included in
each class; it also provides that "an application for
registration of a trade-mark shall be registered
only for one class of articles and only for the
particular description of articles mentioned in
said application."
We have underlined the key words used in the
statute: "goods of a similar kin," "general class of
merchandise," "same class of merchandise,"
"classes of merchandise," and "class of articles,"
because it is upon their implications that the
result of the case hinges. These phrases, which
refer to the same thing, have the same meaning as
the phrase "merchandise of the same descriptive
properties" used in the statutes and jurisprudence
of other jurisdictions.
The burden of petitioner's argument is that under
sections 11 and 20 the registration by respondent
of the trade-mark "Ang Tibay" for shoes and
slippers is no safe-guard against its being used by
petitioner for pants and shirts because the latter
do not belong to the same class of merchandise or
articles as the former; that she cannot be held
guilty of infringement of trade-mark under section
3 because respondent's mark is not a valid trade-
mark, nor has it acquired a secondary meaning;
that pants and shirts do not possess the same
descriptive properties as shoes and slippers; that
neither can she be held guilty of unfair
competition under section 7 because the use by
her of the trade-mark "Ang Tibay" upon pants and
shirts is not likely to mislead the general public as
to their origin or ownership; and that there is now
showing that she in unfairly or fraudulently using
that mark "Ang Tibay" against the respondent. If
we were interpreting the statute for the first time
and in the first decade of the twentieth century,
when it was enacted, and were to construe it
strictly and literally, we might uphold petitioner's
contentions. But law and jurisprudence must keep
abreast with the progress of mankind, and the
courts must breathe life into the statutes if they
are to serve their purpose. Our Trade-mark Law,
enacted nearly forty years ago, has grown in its
implications and practical application, like a
constitution, in virtue of the life continually
breathed into it. It is not of merely local
application; it has its counterpart in other
jurisdictions of the civilized world from whose
jurisprudence it has also received vitalizing
nourishment. We have to apply this law as it has
grown and not as it was born. Its growth or
development abreast with that of sister statutes
and jurisprudence in other jurisdictions is
reflected in the following observation of a well-
known author:
This fundamental change in attitude first
manifested itself in the year 1915-1917.
Until about then, the courts had
proceeded on the theory that the same
trade-mark, used on un-like goods, could
not cause confusion in trade and that,
therefore, there could be no objection to
the use and registration of a well-known
mark by a third party for a different class
of goods. Since 1916 however, a growing
sentiment began to arise that in the
selection of a famous mark by a third
party, there was generally the hidden
intention to "have a free ride" on the
trade-mark owner's reputation and good
will. (Derenberg, Trade-Mark Protection
& Unfair Trading, 1936 edition, p. 409.)
In the present state of development of the law on
Trade-Marks, Unfair Competition, and Unfair
Trading, the test employed by the courts to
determine whether noncompeting goods are or
are not of the same class is confusion as to the
origin of the goods of the second user. Although
two noncompeting articles may be classified
under two different classes by the Patent Office
because they are deemed not to possess the same
descriptive properties, they would, nevertheless,
be held by the courts to belong to the same class if
the simultaneous use on them of identical or
closely similar trade-marks would be likely to
cause confusion as to the origin, or personal
source, of the second user's goods. They would be
considered as not falling under the same class
only if they are so dissimilar or so foreign to each
other as to make it unlikely that the purchaser
would think the first user made the second user's
goods.
Such construction of the law is induced by cogent
reasons of equity and fair dealing. The courts have
come to realize that there can be unfair
competition or unfair trading even if the goods are
non-competing, and that such unfair trading can
cause injury or damage to the first user of a given
trade-mark, first, by prevention of the natural
expansion of his business and, second, by having
his business reputation confused with and put at
the mercy of the second user. Then
noncompetitive products are sold under the same
mark, the gradual whittling away or dispersion of
the identity and hold upon the public mind of the
mark created by its first user, inevitably results.
The original owner is entitled to the preservation
of the valuable link between him and the public
that has been created by his ingenuity and the
merit of his wares or services. Experience has
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demonstrated that when a well-known trade-
mark is adopted by another even for a totally
different class of goods, it is done to get the benefit
of the reputation and advertisements of the
originator of said mark, to convey to the public a
false impression of some supposed connection
between the manufacturer of the article sold
under the original mark and the new articles being
tendered to the public under the same or similar
mark. As trade has developed and commercial
changes have come about, the law of unfair
competition has expanded to keep pace with the
times and the element of strict competition in
itself has ceased to be the determining factor. The
owner of a trade-mark or trade-name has a
property right in which he is entitled to
protection, since there is damage to him from
confusion of reputation or goodwill in the mind of
the public as well as from confusion of goods. The
modern trend is to give emphasis to the
unfairness of the acts and to classify and treat the
issue as a fraud.
A few of the numerous cases in which the
foregoing doctrines have been laid down in one
form or another will now be cited: (1) In Teodoro
Kalaw Ng Khe vs. Level Brothers Company (G.R. No.
46817), decided by this Court on April 18, 1941,
the respondent company (plaintiff below) was
granted injunctive relief against the use by the
petitioner of the trade-mark "Lux" and "Lifebuoy"
for hair pomade, they having been originally used
by the respondent for soap; The Court held in
effect that although said articles are
noncompetitive, they are similar or belong to the
same class. (2) In Lincoln Motor Co. vs. Lincoln
Automobile Co. (44 F. [2d], 812), the manufacturer
of the well-known Lincoln automobile was
granted injunctive relief against the use of the
word "Lincoln" by another company as part of its
firm name. (3) The case of Aunt Jemima Mills Co.
vs. Rigney & Co. (247 F., 407), involved the trade-
mark "Aunt Jemima," originally used on flour,
which the defendant attempted to use on syrup,
and there the court held that the goods, though
different, are so related as to fall within the
mischief which equity should prevent. (4)
In Tiffany & Co., vs. Tiffany Productions, Inc. (264
N.Y.S., 459; 23 Trade-mark Reporter, 183), the
plaintiff, a jewelry concern, was granted injunctive
relief against the defendant, a manufacturer of
motion pictures, from using the name "Tiffany."
Other famous cases cited on the margin, wherein
the courts granted injunctive relief, involved the
following trade-marks or trade-names: "Kodak,"
for cameras and photographic supplies, against its
use for bicycles. 4 "Penslar," for medicines and
toilet articles, against its use for cigars; 5 "Rolls-
Royce," for automobiles. against its use for radio
tubes; 6 "Vogue," as the name of a magazine,
against its use for hats; 7 "Kotex," for sanitary
napkins, against the use of "Rotex" for vaginal
syringes; 8 "Sun-Maid," for raisins, against its use
for flour; 9 "Yale," for locks and keys, against its use
for electric flashlights; 10 and "Waterman," for
fountain pens, against its use for razor
blades. 11lawphil.net
Against this array of famous cases, the industry of
counsel for the petitioner has enabled him to cite
on this point only the following cases: (1) Mohawk
Milk Products vs. General Distilleries
Corporation  (95 F. [2d], 334), wherein the court
held that gin and canned milk and cream do not
belong to the same class; (2) Fawcett Publications,
Inc. vs. Popular Mechanics Co. (80 F. [2d], 194),
wherein the court held that the words "Popular
Mechanics" used as the title of a magazine and
duly registered as a trade-mark were not infringed
by defendant's use of the words "Modern
Mechanics and Inventions" on a competitive
magazine, because the word "mechanics" is
merely a descriptive name; and (3) Oxford Book
Co. vs. College Entrance Book Co. (98 F. [2d], 688),
wherein the plaintiff unsuccessfully attempted to
enjoin the defendant from using the word
"Visualized" in connection with history books, the
court holding that said word is merely descriptive.
These cases cites and relied upon by petitioner are
obviously of no decisive application to the case at
bar.
We think reasonable men may not disagree that
shoes and shirts are not as unrelated as fountain
pens and razor blades, for instance. The mere
relation or association of the articles is not
controlling. As may readily be noted from what we
have heretofore said, the proprietary connotation
that a trade-mark or trade-name has acquired is of
more paramount consideration. The Court of
Appeals found in this case that by uninterrupted
and exclusive use since 1910 of respondent's
registered trade-mark on slippers and shoes
manufactured by him, it has come to indicate the
origin and ownership of said goods. It is certainly
not farfetched to surmise that the selection by
petitioner of the same trade-mark for pants and
shirts was motivated by a desire to get a free ride
on the reputation and selling power it has
acquired at the hands of the respondent. As
observed in another case, 12 the field from which a
person may select a trade-mark is practically
unlimited, and hence there is no excuse for
impinging upon or even closely approaching the
mark of a business rival. In the unlimited field of
choice, what could have been petitioner's purpose
in selecting "Ang Tibay" if not for its fame?
Lastly, in her fifth assignment of error petitioner
seems to make a frantic effort to retain the use of
the mark "Ang Tibay." Her counsel suggests that
instead of enjoining her from using it, she may be
required to state in her labels affixed to her
products the inscription: "Not manufactured by
Toribio Teodoro." We think such practice would
be unethical and unworthy of a reputable
businessman. To the suggestion of petitioner,
respondent may say, not without justice though
with a tinge of bitterness: "Why offer a perpetual
apology or explanation as to the origin of your
products in order to use my trade-mark instead of
creating one of your own?" On our part may we
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add, without meaning to be harsh, that a self-
respecting person does not remain in the shelter
of another but builds one of his own.

The judgment of the Court of Appeals is affirmed,

with costs against the petitioner in the three
instances. So ordered.

Yulo, C.J., Moran, Paras and Bocobo, JJ., concur.

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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
 
G.R. No. 103543 July 5, 1993
ASIA BREWERY, INC., petitioner,
vs.
THE HON. COURT OF APPEALS and SAN
MIGUEL CORPORATION, respondents.
Abad Santos & Associates and Sycip, Salazar,
Hernandez & Gatmaitan for petitioner.
Roco, Bunag, Kapunan Law Office for private
respondent.
GRIÑO-AQUINO, J.:
On September 15, 1988, 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. (San Miguel
Corporation vs. Asia Brewery Inc., Civ. Case. No.
56390, RTC Branch 166, Pasig, Metro Manila.).
On August 27, 1990, a decision was rendered by
the trial Court, presided over by Judge Jesus O.
Bersamira, dismissing SMC's complaint because
ABI "has not committed trademark infringement
or unfair competition against" SMC (p. 189, Rollo).
SMC appealed to the Court of Appeals (C.A.-G.R. CV
No. 28104). On September 30, 1991, the Court of
Appeals (Sixth Division composed of Justice Jose C.
Campos, Jr., chairman and ponente, and Justices
Venancio D. Aldecoa Jr. and Filemon H. Mendoza,
as members) reversed the trial court. The
dispositive part of the decision reads as follows:
In the light of the foregoing
analysis and under the plain
language of the applicable rule
and principle on the matter, We
find the defendant Asia Brewery
Incorporated GUILTY of
infringement of trademark and
unfair competition. The decision
of the trial court is hereby
REVERSED, and a new judgment
entered in favor of the plaintiff
and against the defendant as
follows:
(1) The defendant Asia Brewery
Inc. its officers, agents, servants
and employees are hereby
permanently enjoined and
restrained from manufacturing,
putting up, selling, advertising,
offering or announcing for sale,
or supplying Beer Pale Pilsen, or
any similar preparation,
manufacture or beer in bottles
and under labels substantially
identical with or like the said
bottles and labels of plaintiff San
Miguel Corporation employed for
that purpose, or substantially
identical with or like the bottles
and labels now employed by the
defendant for that purpose, or in
bottles or under labels which are
calculated to deceive purchasers
and consumers into the belief
that the beer is the product of the
plaintiff or which will enable
others to substitute, sell or palm
off the said beer of the defendant
as and for the beer of the
plaintiff-complainant.
(2) The defendant Asia Brewery
Inc. is hereby ordered to render
an accounting and pay the San
Miguel Corporation double any
and all the payments derived by
defendant from operations of its
business and the sale of goods
bearing the mark "Beer Pale
Pilsen" estimated at
approximately Five Million Pesos
(P5,000,000.00); to recall all its
products bearing the mark "Beer
Pale Pilsen" from its retailers and
deliver these as well as all labels,
signs, prints, packages, wrappers,
receptacles and advertisements
bearing the infringing mark and
all plates, molds, materials and
other means of making the same
to the Court authorized to
execute this judgment for
destruction.
(3) The defendant is hereby
ordered to pay plaintiff the sum
of Two Million Pesos
(P2,000,000.00) as moral
damages and Half a Million Pesos
(P5,000,000.00) by way of
exemplary damages.
(4) The defendant is further
ordered to pay the plaintiff
attorney's fees in the amount of
P250,000.00 plus costs to this
suit. (p. 90, Rollo.)
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Upon a motion for reconsideration filed by ABI,
the above dispositive part of the decision, was
modified by the separate opinions of the Special
Sixth Division 1 so that it should read thus:
In the light of the foregoing
analysis and under the plain
language of the applicable rule
and principle on the matter, We
find the defendant Asia Brewery
Incorporated GUILTY of
infringement of trademark and
unfair competition. The decision
of the trial court is hereby
REVERSED, and a new judgment
entered in favor of the plaintiff
and against the defendant as
follows:
(1) The defendant Asia Brewery
Inc., its officers, agents, servants
and employees are hereby
permanently enjoined and
restrained from manufacturing,
putting up, selling, advertising,
offering or announcing for sale,
or supplying Beer Pale Pilsen, or
any similar preparation,
manufacture or beer in bottles
and under labels substantially
identical with or like the said
bottles and labels of plaintiff San
Miguel Corporation employed for
that purpose, or substantially
identical with or like the bottles
and labels now employed by the
defendant for that purpose, or in
bottles or under labels which are
calculated to deceive purchasers
and consumers into the belief
that the beer if the product of the
plaintiff or which will enable
others to substitute, sell or palm
off the said beer of the defendant
as and for the beer of the
plaintiff-complainant.
(2) The defendant Asia Brewery
Inc. is hereby ordered 2 to recall
all its products bearing the mark
Beer Pale Pilsen from its retailers
and deliver these as well as all
labels, signs, prints, packages,
wrappers, receptacles and
advertisements bearing the
infringing mark and all plates,
molds, materials and other
means of making the same to the
Court authorized to execute this
judgment for destruction.
(3) The defendant is hereby
ordered to pay plaintiff the sum
of Two Million Pesos
(P2,000,000.00) as moral
damages and Half a Million Pesos
(P500,000.00) by way of
exemplary damages.
(4) The defendant is further
ordered to pay the plaintiff
attorney's fees in the amount of
P250,000.00 plus costs of this
suit.
In due time, ABI appealed to this Court by a
petition for certiorari under Rule 45 of the Rules
of Court. The lone issue in this appeal is whether
ABI infringes SMC's trademark: San Miguel Pale
Pilsen with Rectangular Hops and Malt Design, and
thereby commits unfair competition against the
latter. It is a factual issue (Phil. Nut Industry Inc. v.
Standard Brands Inc., 65 SCRA 575) and as a
general rule, the findings of the Court of Appeals
upon factual questions are conclusive and ought
not to be disturbed by us. However, there are
exceptions to this general rule, and they are:
(1) When the conclusion is
grounded entirely on speculation,
surmises and conjectures;
(2) When the inference of the
Court of Appeals from its findings
of fact is manifestly mistaken,
absurd and impossible;
(3) Where there is grave abuse of
discretion;
(4) When the judgment is based
on a misapprehension of facts;
(5) When the appellate court, in
making its findings, went beyond
the issues of the case, and the
same are contrary to the
admissions of both the appellant
and the appellee;
(6) When the findings of said
court are contrary to those of the
trial court;
(7) When the findings are
without citation of specific
evidence on which they are
based;
(8) When the facts set forth in the
petition as well as in the
petitioner's main and reply briefs
are not disputed by the
respondents; and
(9) When the findings of facts of
the Court of Appeals are
premised on the absence of
evidence and are contradicted on
record. (Reynolds Philippine
Corporation vs. Court of Appeals,
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169 SCRA 220, 223 citing,
Mendoza vs. Court of Appeals,
156 SCRA 597; Manlapaz vs.
Court of Appeals, 147 SCRA 238;
Sacay vs. Sandiganbayan, 142
SCRA 593, 609; Guita vs. CA, 139
SCRA 576; Casanayan vs. Court of
Appeals, 198 SCRA 333, 336; also
Apex Investment and Financing
Corp. vs. IAC, 166 SCRA 458
[citing Tolentino vs. De Jesus, 56
SCRA 167; Carolina Industries,
Inc. vs. CMS Stock Brokerage, Inc.,
97 SCRA 734; Manero vs. CA, 102
SCRA 817; and Moran, Jr. vs. CA,
133 SCRA 88].)
Under any of these exceptions, the Court has to
review the evidence in order to arrive at the
correct findings based on the record (Roman
Catholic Bishop of Malolos, Inc. vs. IAC, 191 SCRA
411, 420.) Where findings of the Court of Appeals
and trial court are contrary to each other, the
Supreme Court may scrutinize the evidence on
record. (Cruz vs. CA, 129 SCRA 222, 227.)
The present case is one of the exceptions because
there is no concurrence between the trial court
and the Court of Appeals on the lone factual issue
of whether ABI, by manufacturing and selling its
BEER PALE PILSEN in amber colored steinie
bottles of 320 ml. capacity with a white painted
rectangular label has committed trademark
infringement and unfair competition against SMC.
Infringement of trademark is a form of unfair
competition (Clarke vs. Manila Candy Co., 36 Phil.
100, 106). Sec. 22 of Republic Act No. 166,
otherwise known as the Trademark Law, defines
what constitutes infringement:
Sec. 22. 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.
(Emphasis supplied.)
This definition implies that only registered trade
marks, trade names and service marks are
protected against infringement or unauthorized
use by another or others. The use of someone
else's registered trademark, trade name or service
mark is unauthorized, hence, actionable, if it is
done "without the consent of the registrant."
(Ibid.)
The registered trademark of SMC for its pale
pilsen beer is:
San Miguel Pale Pilsen With
Rectangular Hops and Malt
Design. (Philippine Bureau of
Patents, Trademarks and
Technology Transfer Trademark
Certificate of Registration No.
36103, dated 23 Oct. 1986,
(p. 174, Rollo.)
As described by the trial court in its decision (Page
177, Rollo):
. . . . a rectangular design [is]
bordered by what appears to
be minute grains arranged in
rows of three in which there
appear in each corner hop
designs. At the top is a phrase
written in small print "Reg. Phil.
Pat. Off." and at the bottom "Net
Contents: 320 Ml." The dominant
feature is the phrase "San Miguel"
written horizontally at the upper
portion. Below are the words
"Pale Pilsen" written diagonally
across the middle of the
rectangular design. In between is
a coat of arms and the phrase
"Expertly Brewed." The "S" in
"San" and the "M" of "Miguel," "P"
of "Pale" and "Pilsen" are written
in Gothic letters with fine strokes
of serifs, the kind that first
appeared in the 1780s in England
and used for printing German as
distinguished from Roman and
Italic. Below "Pale Pilsen" is the
statement "And Bottled by" (first
line, "San Miguel Brewery"
(second line), and "Philippines"
(third line). (p. 177, Rollo;
Emphasis supplied.)
On the other hand, ABI's trademark, as described
by the trial court, consists of:
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
. . . a rectangular design bordered
by what appear to
be buds of flowers with leaves.
The dominant feature is "Beer"
written across the upper portion
of the rectangular design. The
phrase "Pale Pilsen" appears
immediately below in smaller
block letters. To the left is a hop
design and to the right, written in
small prints, is the phrase "Net
Contents 320 ml." Immediately
below "Pale Pilsen" is the
statement written in three lines
"Especially brewed and bottled
by" (first line), "Asia Brewery
Incorporated" (second line), and
"Philippines" (third line), (p.
177, Rollo; Emphasis supplied.)
Does ABI's BEER PALE PILSEN label or "design"
infringe upon SMC's SAN MIGUEL PALE PILSEN
WITH RECTANGULAR MALT AND HOPS DESIGN?
The answer is "No."
Infringement is determined by the "test of
dominancy" rather than by differences or
variations in the details of one trademark and of
another. The rule was formulated in Co Tiong Sa
vs. Director of Patents, 95 Phil. 1, 4 (1954);
reiterated in Lim Hoa vs. Director of Patents, 100
Phil. 214, 216-217 (1956), thus:
It has been consistently held that
the question of infringement of a
trademark is to be determined by
the test of dominancy. Similarity
in size, form and color, while
relevant, is not conclusive. If the
competing trademark contains
the main or essential or
dominant features of another,
and confusion and deception is
likely to result, infringement
takes place. Duplication or
imitation is not necessary; nor it
is necessary that the infringing
label should suggest an effort to
imitate. [C. Neilman Brewing Co.
vs. Independent Brewing Co., 191
F., 489, 495, citing Eagle White
Lead Co., vs. Pflugh (CC) 180 Fed.
579]. The question at issue in
cases of infringement of
trademarks is whether the use of
the marks involved would be
likely to cause confusion or
mistakes in the mind of the public
or deceive purchasers. (Auburn
Rubber Corporation vs. Honover
Rubber Co., 107 F. 2d 588; . . . .)
(Emphasis supplied.)
In Forbes, Munn & Co. (Ltd.) vs. Ang San To, 40 Phil.
272, 275, the test was similarity or "resemblance
between the two (trademarks) such as would be
likely to cause the one mark to be mistaken for the
other. . . . [But] this is not such similitude as
amounts to identity."
In Phil. Nut Industry Inc. vs. Standard Brands Inc.,
65 SCRA 575, the court was more specific: the test
is "similarity in the dominant features of the
trademarks."
What are the dominant features of the competing
trademarks before us?
There is hardly any dispute that the dominant
feature of SMC's trademark is the name of the
product: SAN MIGUEL PALE PILSEN, written in
white Gothic letters with elaborate serifs at the
beginning and end of the letters "S" and "M" on an
amber background across the upper portion of the
rectangular design.
On the other hand, the dominant feature of ABI's
trademark is the name: BEER PALE PILSEN, with
the word "Beer" written in large amber letters,
larger than any of the letters found in the SMC
label.
The trial court perceptively observed that the
word "BEER" does not appear in SMC's trademark,
just as the words "SAN MIGUEL" do not appear in
ABI's trademark. Hence, there is absolutely no
similarity in the dominant features of both
trademarks.
Neither in sound, spelling or appearance can BEER
PALE PILSEN be said to be confusingly similar to
SAN MIGUEL PALE PILSEN. No one who purchases
BEER PALE PILSEN can possibly be deceived that
it is SAN MIGUEL PALE PILSEN. No evidence
whatsoever was presented by SMC proving
otherwise.
Besides the dissimilarity in their names, the
following other dissimilarities in the trade dress
or appearance of the competing products abound:
(1) The SAN MIGUEL PALE PILSEN bottle has a
slender tapered neck.
The BEER PALE PILSEN bottle has a fat, bulging
neck.
(2) The words "pale pilsen" on SMC's label are
printed in bold and laced letters along
a diagonal band, whereas the words "pale pilsen"
on ABI's bottle are half the size and printed in
slender block letters on a straight horizontal band.
(See Exhibit "8-a".).
(3) The names of the manufacturers are
prominently printed on their respective bottles.
SAN MIGUEL PALE PILSEN is "Bottled by the San
Miguel Brewery, Philippines," whereas BEER
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PALE PILSEN is "Especially brewed and bottled by
Asia Brewery Incorporated, Philippines."
(4) On the back of ABI's bottle is printed in big,
bold letters, under a row of flower buds and
leaves, its copyrighted slogan:
"BEER NA BEER!"
Whereas SMC's bottle carries no slogan.
(5) The back of the SAN MIGUEL PALE PILSEN
bottle carries the SMC logo, whereas the BEER
PALE PILSEN bottle has no logo.
(6) The SAN MIGUEL PALE PILSEN bottle cap is
stamped with a coat of arms and the words "San
Miguel Brewery Philippines" encircling the same.
The BEER PALE PILSEN bottle cap is stamped with
the name "BEER" in the center, surrounded by the
words "Asia Brewery Incorporated Philippines."
(7) Finally, there is a substantial price difference
between BEER PALE PILSEN (currently at P4.25
per bottle) and SAN MIGUEL PALE PILSEN
(currently at P7.00 per bottle). One who pays only
P4.25 for a bottle of beer cannot expect to receive
San Miguel Pale Pilsen from the storekeeper or
bartender.
The fact that the words pale pilsen are part of
ABI's trademark does not constitute an
infringement of SMC's trademark: SAN MIGUEL
PALE PILSEN, for "pale pilsen" are generic words
descriptive of the color ("pale"), of a type of beer
("pilsen"), which is a light bohemian beer with a
strong hops flavor that originated in the City of
Pilsen in Czechoslovakia and became famous in
the Middle Ages. (Webster's Third New
International Dictionary of the English Language,
Unabridged. Edited by Philip Babcock Gove.
Springfield, Mass.: G & C Merriam Co., [c] 1976,
page 1716.) "Pilsen" is a "primarily geographically
descriptive word," (Sec. 4, subpar. [e] Republic Act
No. 166, as inserted by Sec. 2 of R.A. No. 638)
hence, non-registerable and not appropriable by
any beer manufacturer. The Trademark Law
provides:
Sec. 4. . . .. The owner of trade-
mark, 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:
xxx xxx xxx
(e) Consists of a mark or trade-
name which, when applied to or
used in connection with the
goods, business or services of the
applicant is merely descriptive or
deceptively misdescriptive of
them, or when applied to or used
in connection with the goods,
business or services of the
applicant is primarily
geographically descriptive or
deceptively misdescriptive of
them, or is primarily merely a
surname." (Emphasis supplied.)
The words "pale pilsen" may not be appropriated
by SMC for its exclusive use even if they are part of
its registered trademark: SAN MIGUEL PALE
PILSEN, any more than such descriptive words as
"evaporated milk," "tomato ketchup," "cheddar
cheese," "corn flakes" and "cooking oil" may be
appropriated by any single manufacturer of these
food products, for no other reason than that he
was the first to use them in his registered
trademark. In Masso Hermanos, S.A. vs. Director of
Patents, 94 Phil. 136, 139 (1953), it was held that
a dealer in shoes cannot register "Leather Shoes"
as his trademark because that would be merely
descriptive and it would be unjust to deprive
other dealers in leather shoes of the right to use
the same words with reference to their
merchandise. No one may appropriate generic or
descriptive words. They belong to the public
domain (Ong Ai Gui vs. Director of Patents, 96 Phil.
673, 676 [1955]):
A word or a combination of
words which is merely
descriptive of an article of trade,
or of its composition,
characteristics, or qualities,
cannot be appropriated and
protected as a trademark to the
exclusion of its use by others. . . .
inasmuch as all persons have an
equal right to produce and vend
similar articles, they also have
the right to describe them
properly and to use any
appropriate language or words
for that purpose, and 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. This rule excluding
descriptive terms has also been
held to apply to trade-names. As
to whether words employed fall
within this prohibition, it is said
that the true test is not whether
they are exhaustively descriptive
of the article designated, but
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whether in themselves, and as
they are commonly used by those
who understand their meaning,
they are reasonably indicative
and descriptive of the thing
intended. If they are thus
descriptive, and not arbitrary,
they cannot be appropriated
from general use and become the
exclusive property of anyone. (52
Am. Jur. 542-543.)
. . . . Others may use the same or
similar descriptive word in
connection with their own wares,
provided they take proper steps
to prevent the public being
deceived. (Richmond Remedies
Co. vs. Dr. Miles Medical Co., 16 E.
[2d] 598.)
. . . . A descriptive word may be
admittedly distinctive, especially
if the user is the first creator of
the article. It will, however, be
denied protection, not because it
lacks distinctiveness, but rather
because others are equally
entitled to its use. (2 Callman.
Unfair Competition and
Trademarks, pp. 869-870.)"
(Emphasis supplied.)
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 fact that BEER PALE PILSEN like SAN MIGUEL
PALE PILSEN is bottled in amber-colored steinie
bottles of 320 ml. capacity and is also advertised
in print, broadcast, and television media, does not
necessarily constitute unfair competition.
Unfair competition is the employment of
deception or any other means contrary to good
faith by which a person shall pass off the goods
manufactured by him or in which he deals, or his
business, or services, for those of another who has
already established goodwill for his similar goods,
business or services, or any acts calculated to
produce the same result. (Sec. 29, Republic Act No.
166, as amended.) The law further enumerates the
more common ways of committing unfair
competition, thus:
Sec. 29. . . .
In particular, and without in any
way limiting the scope of unfair
competition, the following shall
be deemed guilty of unfair
competition:
(a) 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.
(b) Any person who by any
artifice, or device, or who
employs any other means
calculated to induce the false
belief that such person is offering
the services of another who has
identified such services in the
mind of the public; or
(c) Any person who shall make
any false statement in the course
of trade or who shall commit any
other act contrary to good faith of
a nature calculated to discredit
the goods, business or services of
another.
In this case, the question to be determined is
whether ABI is using a name or mark for its beer
that has previously come to designate SMC's beer,
or whether ABI is passing off its BEER PALE
PILSEN as SMC's SAN MIGUEL PALE PILSEN.
. . ..The universal test question is
whether the public is likely to be
deceived. Nothing less than
conduct tending to pass off one
man's goods or business as that
of another will constitute unfair
competition. Actual or probable
deception and confusion on the
part of the customers by reason
of defendant's practices must
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always appear. (Shell Co., of the
Philippines, Ltd. vs. Insular
Petroleum Refining Co. Ltd. et al.,
120 Phil. 434, 439.)
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. (See rollo, page 55.) The
Cerveza Especial and the Efes Pale Pilsen use the
"steinie" bottle. (See Exhibits 57-D, 57-E.) The trial
court found no infringement of SMC's bottle —
The court agrees with defendant
that there is no infringement of
plaintiff's bottle, firstly, because
according to plaintiff's witness
Deogracias Villadolid, it is a
standard type of bottle called
steinie, and to witness Jose
Antonio Garcia, it is not a San
Miguel Corporation design but a
design originally developed in
the United States by the Glass
Container Manufacturer's
Institute and therefore lacks
exclusivity. Secondly, the shape
was never registered as a
trademark. Exhibit "C" is not a
registration of a beer bottle
design required under Rep. Act
165 but the registration of the
name and other marks of
ownership stamped on
containers as required by Rep.
Act 623. Thirdly, the neck of
defendant's bottle is much larger
and has a distinct bulge in its
uppermost part. (p. 186, Rollo.)
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. Nobody can acquire any exclusive right
to market articles supplying simple human needs
in containers or wrappers of the general form, size
and character commonly and immediately used in
marketing such articles (Dy Buncio vs. Tan Tiao
Bok, 42 Phil. 190, 194-195.)
. . . protection against imitation
should be properly confined to
nonfunctional features. Even if
purely functional elements are
slavishly copied, the resemblance
will not support an action for
unfair competition, and the first
user cannot claim secondary
meaning protection. Nor can the
first user predicate his claim to
protection on the argument that
his business was established in
reliance on any such unpatented
nonfunctional feature, even "at
large expenditure of money."
(Callman Unfair Competition,
Trademarks and Monopolies, Sec.
19.33 [4th Ed.].) (Petition for
Review, p. 28.)
ABI does not use SMC's steinie bottle. Neither did
ABI copy it. ABI makes its own steinie bottle which
has a fat bulging neck to differentiate it from
SMC's bottle. The amber color is a functional
feature of the beer bottle. As pointed out by ABI,
all bottled beer produced in the Philippines is
contained and sold in amber-colored bottles
because amber is the most effective color in
preventing transmission of light and provides the
maximum protection to beer. As was ruled
in California Crushed Fruit Corporation vs. Taylor
B. and Candy Co., 38 F2d 885, a merchant cannot
be enjoined from using a type or color of bottle
where the same has the useful purpose of
protecting the contents from the deleterious
effects of light rays. Moreover, no one may have a
monopoly of any color. Not only beer, but most
medicines, whether in liquid or tablet form, are
sold in amber-colored bottles.
That the ABI bottle has a 320 ml. capacity is not
due to a desire to imitate SMC's bottle because
that bottle capacity is the standard prescribed
under Metrication Circular No. 778, dated 4
December 1979, of the Department of Trade,
Metric System Board.
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 (p. 16, TSN of
September 20, 1988). 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.
Needless to say, the shape of the bottle and of the
label is unimportant. What is all important is the
name of the product written on the label of the
bottle for that is how one beer may be
distinguished form the others.
In Dy Buncio v. Tan Tiao Bok, 42 Phil. 190, 196-
197, where two competing tea products were both
labelled as Formosan tea, both sold in 5-ounce
packages made of ordinary wrapping paper of
conventional color, both with labels containing
designs drawn in green ink and Chinese
characters written in red ink, one label showing a
double-decked jar in the center, the other, a flower
pot, this court found that the resemblances
between the designs were not sufficient to mislead
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
the ordinary intelligent buyer, hence, there was no
unfair competition. The Court held:
. . . . In order that there may be
deception of the buying public in
the sense necessary to constitute
unfair competition, it is
necessary to suppose a public
accustomed to buy, and therefore
to some extent familiar with, the
goods in question. The test of
fraudulent simulation is to be
found in the likelihood of the
deception of persons in some
measure acquainted with an
established design and desirous
of purchasing the commodity
with which that design has been
associated. The test is not found
in the deception, or possibility of
the deception, of the person who
knows nothing about the design
which has been counterfeited,
and who must be indifferent as
between that and the other. The
simulation, in order to be
objectionable, must be such as
appears likely to mislead the
ordinarily intelligent buyer who
has a need to supply and is
familiar with the article that he
seeks to purchase.
The main thrust of SMC's complaint if not
infringement of its trademark, but unfair
competition arising form the allegedly "confusing
similarity" in the general appearance or trade
dress of ABI's BEER PALE PILSEN beside SMC's
SAN MIGUEL PALE PILSEN (p. 209, Rollo)
SMC claims that the "trade dress" of BEER PALE
PILSEN is "confusingly similar" to its SAN MIGUEL
PALE PILSEN because both are bottled in 320 ml.
steinie type, amber-colored bottles with white
rectangular labels.
However, when as in this case, the names of the
competing products are clearly different and their
respective sources are prominently printed on the
label and on other parts of the bottle, mere
similarity in the shape and size of the container
and label, does not constitute unfair competition.
The steinie bottle is a standard bottle for beer and
is universally used. SMC did not invent it nor
patent it. The fact that SMC's bottle is registered
under R.A. No. 623 (as amended by RA 5700, An
Act to Regulate the Use of Duly Stamped or
Marked Bottles, Boxes, Casks, Kegs, Barrels and
Other Similar Containers) simply prohibits
manufacturers of other foodstuffs from the
unauthorized use of SMC's bottles by refilling
these with their products. It was not uncommon
then for products such as patis (fish sauce)
and toyo (soy sauce) to be sold in recycled SAN
MIGUEL PALE PILSEN bottles. Registration of
SMC's beer bottles did not give SMC a patent on
the steinie or on bottles of similar size, shape or
color.
Most containers are standardized because they
are usually made by the same manufacturer. Milk,
whether in powdered or liquid form, is sold in
uniform tin cans. The same can be said of the
standard ketchup or vinegar bottle with its
familiar elongated neck. Many other grocery items
such as coffee, mayonnaise, pickles and peanut
butter are sold in standard glass jars. The
manufacturers of these foodstuffs have equal right
to use these standards tins, bottles and jars for
their products. Only their respective labels
distinguish them from each other. Just as no milk
producer may sue the others for unfair
competition because they sell their milk in the
same size and shape of milk can which he uses,
neither may SMC claim unfair competition arising
from the fact that ABI's BEER PALE PILSEN is sold,
like SMC's SAN MIGUEL PALE PILSEN in amber
steinie bottles.
The record does not bear out SMC's apprehension
that BEER PALE PILSEN is being passed off as SAN
MIGUEL PALE PILSEN. This is unlikely to happen
for consumers or buyers of beer generally order
their beer by brand. As pointed out by ABI's
counsel, in supermarkets and tiendas, beer is
ordered by brand, and the customer surrenders
his empty replacement bottles or pays a deposit to
guarantee the return of the empties. If his empties
are SAN MIGUEL PALE PILSEN, he will get SAN
MIGUEL PALE PILSEN as replacement. In sari-sari
stores, beer is also ordered from the tindera by
brand. The same is true in restaurants, pubs and
beer gardens — beer is ordered from the waiters
by brand. (Op. cit. page 50.)
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.
Our decision in this case will not diminish our
ruling in "Del Monte Corporation vs. Court of
Appeals and Sunshine Sauce Manufacturing
Industries," 181 SCRA 410, 419, 3 that:
. . . to determine whether a
trademark has been infringed, we
must consider the mark as a
whole and not as dissected. If the
buyer is deceived, it is
attributable to the marks as a
totality, not usually to any part of
it.
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That ruling may not apply to all kinds of products. MIGUEL" while the competitor is plain "BEER" and
The Court itself cautioned that in resolving cases the points of dissimilarity between the two
of infringement and unfair competition, the courts outnumber their points of similarity.
should "take into consideration several factors
which would affect its conclusion, to wit: the age, Petitioner ABI has neither infringed SMC's
training and education of the usual purchaser, the trademark nor committed unfair competition with
nature and cost of the article, whether the article the latter's SAN MIGUEL PALE PILSEN product.
is bought for immediate consumption and also the While its BEER PALE PILSEN admittedly competes
conditions under which it is usually purchased" with the latter in the open market, that
(181 SCRA 410, 418-419). competition is neither unfair nor fraudulent.
Hence, we must deny SMC's prayer to suppress it.
The Del Monte case involved catsup, a common
household item which is bought off the store WHEREFORE, finding the petition for review
shelves by housewives and house help who, if they meritorious, the same is hereby granted. The
are illiterate and cannot identify the product by decision and resolution of the Court of Appeals in
name or brand, would very likely identify it by CA-G.R. CV No. 28104 are hereby set aside and
mere recollection of its appearance. Since the that of the trial court is REINSTATED and
competitor, Sunshine Sauce Mfg. Industries, not AFFIRMED. Costs against the private respondent.
only used recycled Del Monte bottles for its catsup
(despite the warning embossed on the bottles: SO ORDERED.
"Del Monte Corporation. Not to be refilled.") but
also used labels which were "a colorable
Narvasa, C.J., Bidin, Regalado, Romero, Nocon,
imitation" of Del Monte's label, we held that there
Bellosillo and Melo, JJ., concur.
was infringement of Del Monte's trademark and
unfair competition by Sunshine.
Feliciano, J., took no part.
Our ruling in Del Monte would not apply to beer
which is not usually picked from a store shelf but
ordered by brand by the beer drinker himself
from the storekeeper or waiter in a pub or
restaurant.

Moreover, SMC's brand or trademark: "SAN

MIGUEL PALE PILSEN" is not infringed by ABI's
mark: "BEER NA BEER" or "BEER PALE PILSEN."
ABI makes its own bottle with a bulging neck to
differentiate it from SMC's bottle, and prints ABI's
name in three (3) places on said bottle (front, back
and bottle cap) to prove that it has no intention to
pass of its "BEER" as "SAN MIGUEL."

There is no confusing similarity between the

competing beers for the name of one is "SAN

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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-78325               January 25, 1990
DEL MONTE CORPORATION and PHILIPPINE
PACKING CORPORATION, petitioners,
vs.
COURT OF APPEALS and SUNSHINE SAUCE
MANUFACTURING INDUSTRIES, respondents.
Bito, Misa & Lozada for petitioners.
Reynaldo F. Singson for private respondent.
CRUZ, J.:
The petitioners are questioning the decision of the
respondent court upholding the dismissal by the
trial court of their complaint against the private
respondent for infringement of trademark and
unfair competition.
Petitioner Del Monte Corporation is a foreign
company organized under the laws of the United
States and not engaged in business in the
Philippines. Both the Philippines and the United
States are signatories to the Convention of Paris of
September 27, 1965, which grants to the nationals
of the parties rights and advantages which their
own nationals enjoy for the repression of acts of
infringement and unfair competition.
Petitioner Philippine Packing Corporation
(Philpack) is a domestic corporation duly
organized under the laws of the Philippines. On
April 11, 1969, Del Monte granted Philpack the
right to manufacture, distribute and sell in the
Philippines various agricultural products,
including catsup, under the Del Monte trademark
and logo.
On October 27,1965, Del Monte authorized
Philpack to register with the Philippine Patent
Office the Del Monte catsup bottle configuration,
for which it was granted Certificate of Trademark
Registration No. SR-913 by the Philippine Patent
Office under the Supplemental Register. 1 On
November 20, 1972, Del Monte also obtained two
registration certificates for its trademark "DEL
MONTE" and its logo. 2
Respondent Sunshine Sauce Manufacturing
Industries was issued a Certificate of Registration
by the Bureau of Domestic Trade on April
17,1980, to engage in the manufacture, packing,
distribution and sale of various kinds of sauce,
identified by the logo Sunshine Fruit Catsup.3
This logo was registered in the Supplemental
Register on September 20, 1983. 4
The product itself was contained in various kinds
of bottles, including the Del Monte bottle, which
the private respondent bought from the junk
shops for recycling.
Having received reports that the private
respondent was using its exclusively designed
bottles and a logo confusingly similar to Del
Monte's, Philpack warned it to desist from doing
so on pain of legal action. Thereafter, claiming that
the demand had been ignored, Philpack and Del
Monte filed a complaint against the private
respondent for infringement of trademark and
unfair competition, with a prayer for damages and
the issuance of a writ of preliminary injunction. 5
In its answer, Sunshine alleged that it had long
ceased to use the Del Monte bottle and that its
logo was substantially different from the Del
Monte logo and would not confuse the buying
public to the detriment of the petitioners. 6
After trial, the Regional Trial Court of Makati
dismissed the complaint. It held that there were
substantial differences between the logos or
trademarks of the parties; that the defendant had
ceased using the petitioners' bottles; and that in
any case the defendant became the owner of the
said bottles upon its purchase thereof from the
junk yards. Furthermore, the complainants had
failed to establish the defendant's malice or bad
faith, which was an essential element of
infringement of trademark or unfair competition. 7
This decision was affirmed in toto by the
respondent court, which is now faulted in this
petition for certiorari under Rule 45 of the Rules
of Court.
Section 22 of R.A. No. 166, otherwise known as the
Trademark Law, provides in part as follows:
Sec. 22. 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,
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
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.
Sec. 29 of the same law states as follows:
Sec. 29. Unfair competition, rights and
remedies. — A person who has identified
in the mind of the public the goods he
manufactures or deals in, his business or
services from those of others, whether or
not a mark or tradename is employed, has
a property right in the goodwill of the
said goods, business or services so
identified, which will be protected in the
same manner as other property rights.
Such a person shall have the remedies
provided in section twenty- three,
Chapter V hereof.
Any person who shall employ deception
or any other means contrary to good faith
by which he shall pass off the goods
manufactured by him or in which he
deals, or his business, or services for
those of the one having established such
goodwill, or who shall commit any acts
calculated to produce said result, shall be
guilty of unfair competition, and shall be
subject to an action therefor.
In particular, and without in any way
limiting the scope of unfair competition,
the following shall be deemed guilty of
unfair competition:
(a) 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 likely
influence purchasers to believe
that the goods offered are those
of a manufacturer or dealer other
than the actual manufacturer or
dealer, or who otherwise clothes
the goods with such appearance
as shall deceive the public and
defraud another of his legitimate
trade, or any subsequent vendor
of such goods or any agent of any
vendor engaged in selling such
goods with a like purpose;
(b) Any person who by any
artifice, or device, or who
employs ally other means
calculated to induce the false
belief that such person is offering
the services of another who has
identified such services in the
mind of the public; or
(c) Any person who shall make
any false statement in the course
of trade or who shall commit any
other act contrary to good faith of
a nature calculated to discredit
the goods, business or services of
another.
To arrive at a proper resolution of this
case, it is important to bear in mind the
following distinctions between
infringement of trademark and unfair
competition.
(1) Infringement of trademark is
the unauthorized use of a
trademark, whereas unfair
competition is the passing off of
one's goods as those of another.
(2) In infringement of trademark
fraudulent intent is unnecessary
whereas in unfair competition
fraudulent intent is essential.
(3) In infringement of trademark
the prior registration of the
trademark is a prerequisite to the
action, whereas in unfair
competition registration is not
necessary. 8
In the challenged decision, the
respondent court cited the following test
laid down by this Court in a number of
cases:
In determining whether two
trademarks are confusingly
similar, the two marks in their
entirety as they appear in the
respective labels must be
considered in relation to the
goods to which they are attached;
the discerning eye of the
observer must focus not only on
the predorninant words but also
on the other features appearing
on both labels. 9
and applying the same, held that there
was no colorable imitation of the
petitioners' trademark and logo by the
private respondent. The respondent court
agreed with the findings of the trial court
that:
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In order to resolve the said issue, the Court now
attempts to make a comparison of the two
products, to wit:
1. As to the shape of label or make:
Del Monte: Semi-rectangular with
a crown or tomato shape design
on top of the rectangle.
Sunshine: Regular rectangle.
2. As to brand printed on label:
Del Monte: Tomato catsup mark.
Sunshine: Fruit catsup.
3. As to the words or lettering on label or
mark:
Del Monte: Clearly indicated
words packed by Sysu
International, Inc., Q.C.,
Philippines.
Sunshine: Sunshine fruit catsup is
clearly indicated "made in the
Philippines by Sunshine Sauce
Manufacturing Industries" No. 1
Del Monte Avenue, Malabon,
Metro Manila.
4. As to color of logo:
Del Monte: Combination of
yellow and dark red, with words
"Del Monte Quality" in white.
Sunshine: White, light green and
light red, with words "Sunshine
Brand" in yellow.
5. As to shape of logo:
Del Monte: In the shape of a
tomato.
Sunshine: Entirely different in
shape.
6. As to label below the cap:
Del Monte: Seal covering the cap
down to the neck of the bottle,
with picture of tomatoes with
words "made from real
tomatoes."
Sunshine: There is a label below
the cap which says "Sunshine
Brand."
7. As to the color of the products:
Del Monte: Darker red.
Sunshine: Lighter than Del
Monte.
While the Court does recognize these distinctions,
it does not agree with the conclusion that there
was no infringement or unfair competition. It
seems to us that the lower courts have been so
pre-occupied with the details that they have not
seen the total picture.
It has been correctly held that side-by-side
comparison is not the final test of
similarity. 10 Such comparison requires a careful
scrutiny to determine in what points the labels of
the products differ, as was done by the trial judge.
The ordinary buyer does not usually make such
scrutiny nor does he usually have the time to do
so. The average shopper is usually in a hurry and
does not inspect every product on the shelf as if he
were browsing in a library. Where the housewife
has to return home as soon as possible to her baby
or the working woman has to make quick
purchases during her off hours, she is apt to be
confused by similar labels even if they do have
minute differences. The male shopper is worse as
he usually does not bother about such distinctions.
The question is not whether the two articles are
distinguishable by their label when set side by
side but whether the general confusion made by
the article upon the eye of the casual purchaser
who is unsuspicious and off his guard, is such as to
likely result in his confounding it with the
original. 11 As observed in several cases, the
general impression of the ordinary purchaser,
buying under the normally prevalent conditions in
trade and giving the attention such purchasers
usually give in buying that class of goods is the
touchstone. 12
It has been held that in making purchases, the
consumer must depend upon his recollection of
the appearance of the product which he intends to
purchase. 13 The buyer having in mind the
mark/label of the respondent must rely upon his
memory of the petitioner's mark. 14 Unlike the
judge who has ample time to minutely examine
the labels in question in the comfort of his sala, the
ordinary shopper does not enjoy the same
opportunity.
A number of courts have held that to determine
whether a trademark has been infringed, we must
consider the mark as a whole and not as dissected.
If the buyer is deceived, it is attributable to the
marks as a totality, not usually to any part of
it. 15 The court therefore should be guided by its
first impression, 16 for a buyer acts quickly and is
governed by a casual glance, the value of which
may be dissipated as soon as the court assumes to
analyze carefully the respective features of the
mark. 17
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It has also been held that it is not the function of
the court in cases of infringement and unfair
competition to educate purchasers but rather to
take their carelessness for granted, and to be ever
conscious of the fact that marks need not be
identical. A confusing similarity will justify the
intervention of equity. 18 The judge must also be
aware of the fact that usually a defendant in cases
of infringement does not normally copy but makes
only colorable changes. 19 Well has it been said
that the most successful form of copying is to
employ enough points of similarity to confuse the
public with enough points of difference to confuse
the courts. 20
We also note that the respondent court failed to
take into consideration several factors which
should have affected its conclusion, to wit: 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 Among these, what essentially
determines the attitude of the purchaser,
specifically his inclination to be cautious, is the
cost of the goods. To be sure, a person who buys a
box of candies will not exercise as much care as
one who buys an expensive watch. As a general
rule, an ordinary buyer does not exercise as much
prudence in buying an article for which he pays a
few centavos as he does in purchasing a more
valuable thing. 22 Expensive and valuable items are
normally bought only after deliberate,
comparative and analytical investigation. But
mass products, low priced articles in wide use,
and matters of everyday purchase requiring
frequent replacement are bought by the casual
consumer without great care. 23 In this latter
category is catsup.
At that, even if the labels were analyzed together it
is not difficult to see that the Sunshine label is a
colorable imitation of the Del Monte trademark.
The predominant colors used in the Del Monte
label are green and red-orange, the same with
Sunshine. The word "catsup" in both bottles is
printed in white and the style of the print/letter is
the same. Although the logo of Sunshine is not a
tomato, the figure nevertheless approximates that
of a tomato.
As previously stated, the person who infringes a
trade mark does not normally copy out but only
makes colorable changes, employing enough
points of similarity to confuse the public with
enough points of differences to confuse the courts.
What is undeniable is the fact that when a
manufacturer prepares to package his product, he
has before him a boundless choice of words,
phrases, colors and symbols sufficient to
distinguish his product from the others. When as
in this case, Sunshine chose, without a reasonable
explanation, to use the same colors and letters as
those used by Del Monte though the field of its
selection was so broad, the inevitable conclusion
is that it was done deliberately to deceive .24
It has been aptly observed that the ultimate ratio
in cases of grave doubt is the rule that as between
a newcomer who by the confusion has nothing to
lose and everything to gain and one who by honest
dealing has already achieved favor with the public,
any doubt should be resolved against the
newcomer inasmuch as the field from which he
can select a desirable trademark to indicate the
origin of his product is obviously a large one. 25
Coming now to the second issue, we find that the
private respondent is not guilty of infringement
for having used the Del Monte bottle. The reason
is that the configuration of the said bottle was
merely registered in the Supplemental Register. In
the case of Lorenzana v. Macagba, 26 we declared
that:
(1) Registration in the Principal Register
gives rise to a presumption of the validity
of the registration, the registrant's
ownership of the mark and his right to the
exclusive use thereof. There is no such
presumption in the registration in the
Supplemental Register.
(2) Registration in the Principal Register
is limited to the actual owner of the
trademark and proceedings therein on
the issue of ownership which may be
contested through opposition or
interference proceedings or, after
registration, in a petition for cancellation.
Registration in the Principal Register is
constructive notice of the registrant's
claim of ownership, while registration in
the Supplemental Register is merely proof
of actual use of the trademark and notice
that the registrant has used or
appropriated it. It is not subject to
opposition although it may be cancelled
after the issuance. Corollarily, registration
in the Principal Register is a basis for an
action for infringement while registration
in the Supplemental Register is not.
(3) In applications for registration in the
Principal Register, publication of the
application is necessary. This is not so in
applications for registrations in the
Supplemental Register.
It can be inferred from the foregoing that although
Del Monte has actual use of the bottle's
configuration, the petitioners cannot claim
exclusive use thereof because it has not been
registered in the Principal Register. However, we
find that Sunshine, despite the many choices
available to it and notwithstanding that the
caution "Del Monte Corporation, Not to be
Refilled" was embossed on the bottle, still opted to
use the petitioners' bottle to market a product
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
which Philpack also produces. This clearly shows
the private respondent's bad faith and its
intention to capitalize on the latter's reputation
and goodwill and pass off its own product as that
of Del Monte.
The Court observes that the reasons given by the
respondent court in resolving the case in favor of
Sunshine are untenable. First, it declared that the
registration of the Sunshine label belied the
company's malicious intent to imitate petitioner's
product. Second, it held that the Sunshine label
was not improper because the Bureau of Patent
presumably considered other trademarks before
approving it. Third, it cited the case of Shell Co. v.
Insular Petroleum, 27 where this Court declared
that selling oil in containers of another with
markings erased, without intent to deceive, was
not unfair competition.
Regarding the fact of registration, it is to be noted
that the Sunshine label was registered not in the
Principal Register but only in the Supplemental
Register where the presumption of the validity of
the trademark, the registrant's ownership of the
mark and his right to its exclusive use are all
absent.
Anent the assumption that the Bureau of Patent
had considered other existing patents, it is
reiterated that since registration was only in the
Supplemental Register, this did not vest the
registrant with the exclusive right to use the label
nor did it give rise to the presumption of the
validity of the registration.
On the argument that no unfair competition was
committed, the Shell Case is not on all fours with
the case at bar because:
(1) In Shell, the absence of intent to
deceive was supported by the fact that the
respondent therein, before marketing its
product, totally obliterated and erased
the brands/mark of the different
companies stenciled on the containers
thereof, except for a single isolated
transaction. The respondent in the
present case made no similar effort.
(2) In Shell, what was involved was a
single isolated transaction. Of the many
drums used, there was only one container
where the Shell label was not erased,
while in the case at hand, the respondent
admitted that it made use of several Del
Monte bottles and without obliterating
the embossed warning.
(3) In Shell, the product of respondent
was sold to dealers, not to ultimate
consumers. As a general rule, dealers are
well acquainted with the manufacturer
from whom they make their purchases
and since they are more experienced, they
cannot be so easily deceived like the
inexperienced public. There may well be
similarities and imitations which deceive
all, but generally the interests of the
dealers are not regarded with the same
solicitude as are the interests of the
ordinary consumer. For it is the form in
which the wares come to the final buyer
that is of significance. 28
As Sunshine's label is an infringement of the Del
Monte's trademark, law and equity call for the
cancellation of the private respondent's
registration and withdrawal of all its products
bearing the questioned label from the market.
With regard to the use of Del Monte's bottle, the
same constitutes unfair competition; hence, the
respondent should be permanently enjoined from
the use of such bottles.
The court must rule, however, that the damage
prayed for cannot be granted because the
petitioner has not presented evidence to prove the
amount thereof. Section 23 of R.A. No. 166
provides:
Sec. 23. Actions and damages and
injunction for infringement. — Any person
entitled to the exclusive use of a
registered mark or trade name may
recover damages in a civil action from any
person who infringes his rights, and the
measure of the damages suffered shall be
either the reasonable profit which the
complaining party would have made, had
the defendant not infringed his said rights
or the profit which the defendant actually
made out of the infringement, or in the
event such measure of damages cannot be
readily ascertained with reasonable
certainty the court may award as
damages reasonable percentage based
upon the amount of gross sales of the
defendant or the value of the services in
connection with which the mark or trade
name was used in the infringement of the
rights of the complaining party. In cases
where actual intent to mislead the public
or to defraud the complaining party shall
be shown, in the discretion of the court,
the damages may be doubled.
The complaining party, upon proper
showing may also be granted
injunction.1âwphi1
Fortunately for the petitioners, they may still find
some small comfort in Art. 2222 of the Civil Code,
which provides:
Art. 2222. The court may award nominal
damages in every obligation arising from
any source enumerated in Art. 1157, or in
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
every case where any property right has
been invaded.

Accordingly, the Court can only award to the

petitioners, as it hereby does award, nominal
damages in the amount of Pl,000.00.

WHEREFORE, the petition is GRANTED. The

decision of the Court of Appeals dated December
24, 1986 and the Resolution dated April 27,1987,
are REVERSED and SET ASIDE and a new
judgment is hereby rendered:

(1) Canceling the private respondent's

Certificate of Register No. SR-6310 and
permanently enjoining the private
respondent from using a label similar to
that of the petitioners.

(2) Prohibiting the private respondent

from using the empty bottles of the
petitioners as containers for its own
products.

(3) Ordering the private respondent to

pay the petitioners nominal damages in
the amount of Pl,000.00, and the costs of
the suit.

SO ORDERED.

Narvasa Gancayco, Griño-Aquino and Medialdea,

JJ., concur.

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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
FIRST DIVISION
March 22, 2017
G.R. No. 186088
WILTON DY and/or PHILITES ELECTRONIC &
LIGHTING PRODUCTS, Petitioner
vs
KONINKLIJKE PHILIPS ELECTRONICS, N.V.,
Respondent
DECISION
SERENO, CJ.:
This Petition for Review on Certiorari1 filed by
petitioner Wilton Dy and/or Philites Electronic &
Lighting Products ("PHILITES") assails the
Decision2 and Resolution3 of the Court of Appeals
(CA) in CA-G.R. SP No. 103350. The appellate court
reversed and set aside the Decision4 of the IPP
Office of the Director General (IPP-DG), which
affirmed the Decision5 of the Intellectual Property
Philippines Bureau of Legal Affairs (IPP-BLA)
upholding petitioner's trademark application.
THE ANTECEDENT FACTS
On 12 April 2000, petitioner PHILITES filed a
trademark application (Application Serial Number
4-2000-002937) covering its fluorescent bulb,
incandescent light, starter and ballast. After
publication, respondent Koninklijke Philips
Electronics, N .V. ("PHILIPS") filed a Verified
Notice of Opposition on 17 March 2006, alleging
the following:
(a) The approval of Application Serial No. 4-2000-
002937 is contrary to the following provisions of
Republic Act No. [RAJ 8293 or the Intellectual
Property Code of the Philippines (IP Code): Opposer's trademark, in violation of Opposer's
Sections 123.l(d), (i) and (iii), 123.l(e), 147, and proprietary rights.6
168.
(b) The approval of Application Serial No. 4-2000-
002937 will cause grave and irreparable damage
and injury to oppose.
(c) The use and registration of the applied for
On 8 August 2006, petitioner filed a Verified
mark by [petitioner] will mislead the public as to
Answer, stating that its PHILITES & LETTER P
the origin, nature, quality, and characteristic of the
DEVICE trademark and respondent's PHILIPS
goods on which it is affixed;
have vast dissimilarities in terms of spelling,
sound and meaning.7
(d) [Petitioner's] application for registration is
tantamount to fraud as it seeks to register and
At the conclusion of the hearing, on 9 November
obtain legal protection for an identical or
2006, IPP-BLA Director Estrellita Beltran-
confusingly similar mark that clearly infringes
Abelardo rendered a Decision8 denying the
upon the established rights of the [respondent]
Opposition filed by respondent PHILIPS. The
over its registered and internationally well-known
dispositive portion of the Decision reads:
mark.
WHEREFORE, premises considered
(e) The registration of the trademark PHILITES &
the OPPOSITION filed by Koninklijke Philips
LETTER P DEVICE in the name of the [petitioner]
Electronics, N.V. is hereby DENIED. Accordingly,
will violate the proprietary rights and interests,
Application Serial no. 4-2000-002937 filed by
business reputation and goodwill of the
Respondent-Applicant, Wilton Dy and/or Philites
[respondent] over its trademark, considering that
Electronic & Lighting Products on 12 April 2000
the distinctiveness of the trademark PHILIPS will
for the mark "PHILITES & LETTER P DEVICE"
be diluted.
used on fluorescent bulb, incandescent light
starter, ballast under class 11, is as it is,
(t) The registration of the applied for mark will hereby GRANTED.
not only prejudice the Opposer, but will also cause
[petitioner] to unfairly profit commercially from
Let the filewrapper of "PHILITES & LETTER P
the goodwill, fame and notoriety of Opposer's
DEVICE," subject matter of this case together with
trademark and reputation.
this Decision be forwarded to the Bureau of
Trademarks (BOT) for appropriate action.
(g) [Petitioner's] registration and use of the
applied for mark in connection with goods under
SO ORDERED.
Class 11 will weaken the unique and distinctive
significance of mark PHILIPS and will tarnish,
degrade or dilute the distinctive quality of In upholding petitioner's trademark application,
Opposer's trademark and will result in the gradual the IPP-BLA stated that assuming respondent's
attenuation or whittling away of the value of mark was well-known in the Philippines, there
should have been prior determination of whether
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
or not the mark under application for registration
was "identical with, or confusingly similar to, or
constitutes a translation of such well-known mark
in order that the owner of the well-known mark
can prevent its registration."9 From the evidence
presented, the IPP-BLA concluded that the
PHILIPS and PHILITES marks were so unlike, both
visually and aurally. It held that no confusion was
likely to occur, despite their contemporaneous
use, based on the following observations:
The Philips shield mark has four stars in different
sizes located at the north east and south west
portions inside a circle within the shield. There
are three wavy lines dissecting the middle of the
circle. None of these appear in the respondent's
mark.
[Respondent] declares that the word Philips is the
surname of the brothers who founded the Philips
company engaged in manufacturing and selling
lighting products. [Petitioner] on the other hand
has testified that the word Philites is coined from
the word 'Philippines' and 'lights,' hence 'Philites.'
This Bureau finds that there is no dictionary
meaning to the [petitioner's] mark. It is a coined
and arbitrary word capable of appropriation as a
trademark. x x x
Moreover, by mere pronouncing the two marks,
the phonetic sounds produced when each mark is
uttered are not the same. The last syllable of
respondent's mark is uttered in a long vowel
sound, while the last vowel of the opposer's mark
is not.
x x x. This Bureau believes that opposer has no
monopoly over the color or diameter or shape of a
light bulb or packaging shape unless registrations
were secured to protect the same. The images of
the packages are reproduced below for reference.
x x x. For one, respondent adopts a yellow to light
yellow dominant color while the oppose uses an
orange yellow hue. The mark "Philites" is printed
in yellow with light blue background as compared
to the "Philips" mark typed in white against a
black background.
It is fundamental in trademark jurisprudence that
color alone, unless displayed in an arbitrary
design docs not function as a trademark.
Secondly, there appears to be other advertising
slogans that appear in respondent's package such
as the words, "new", "prolong lite life", "E-coat
finished" and "with additional 35% more than
ordinary". These phrases are absent in opposer's
package. These phrases can be considered in the
nature of descriptive terms that can be
appropriated by anyone.10
Upon appeal, the IPP-DG rendered a Decision11 on
16 April 2008, affirming the ruling of the IPP-BLA
as follows:
WHEREFORE, premises considered, that instant
appeal is hereby DISMISSED for lack of merit.
Accordingly, Decision No. 2006-125 of the
Director of the Bureau of Legal Affairs dated 09
November 2006, is hereby AFFIRMED.
Let a copy of this Decision as well as the
trademark application and records be furnished
and returned to the Director of Bureau of Legal
Affairs for appropriate action. Further, let also the
Directors of the Bureau of Trademarks, the
Administrative, Pinancial and Human Resources
Development Services Bureau, and the library of
the Documentation, Information and Technology
Transfer Bureau be furnished a copy of this
Decision for information, guidance and records
purposes.
SO ORDERED.
In so ruling, the IPP-DG noted that "[t]he
dominant feature of the [respondent's] trademark
is 'PHILIPS' while that of the [petitioner's]
trademark is 'PHILITES.' While the first syllables
of the marks are identical - 'PHI' - the second
syllables are not. The differences in the last
syllable accounted for the variance of the
trademarks visually and aurally."12 Moreover,
there were "glaring differences and dissimilarities
in the design and general appearance of the
Philips shield emblem mark and the letter 'P' of
Philites mark."13 Thus, "even if the [petitioner's]
products bearing the trademark PHILIPS are
placed side by side with other brands, the
purchaser would not be confused to pick up the
[petitioner's] product if this is his choice or
preference, unless the resemblance in the
appearance of the trademarks is so glaring which
[it] is not in this case."14
As regards the issue of petitioner submitting a
trademark drawing different from that used in the
packaging, the IPP-DG noted that this case
involved an opposition to the registration of a
mark, while labels and packaging were technically
not a part thereof.15 At best, respondent
supposedly had the remedy of filing a case for
trademark infringement and/or unfair
competition.16
Upon intermediate appellate review, the CA
rendered a Decision 17 on 7 October 2008. The
dispositive portion herein reads:
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
WHEREFORE, premises considered, the Petition
for Review is GRANTED. The Decision dated 16
April 2008 of the Director General of the
Intellectual Property Office in Appeal No. 14-06-
28; IPC No. 14-2006- 00034 is REVERSED and SET
ASIDE. The application for trademark registration
(Application Serial Number 4-2000-002937) of
respondent Wilton Dy and/or Philites Electronic &
Lighting Products is DISMISSED. Costs against
respondent.
SO ORDERED.
In so ruling, the CA reasoned that the "drawing of
the trademark submitted by [petitioner] has a
different appearance from that of [petitioner's]
actual wrapper or packaging that contain the light
bulbs, which We find confusingly similar with that
of [respondent's] registered trademark and
packaging."18 Moreover, it found to be "self-
serving [petitioner's] asseveration that the mark
'PHILITES' is a coined or arbitrary mark from the
words 'Philippines' and 'lights.' Of all the marks
that [petitioner] could possibly think of for his
light bulbs, it is odd that [petitioner] chose a mark
with the letters 'PHILI,' which are the same
prevalent or dominant five letters found in
[respondent's] trademark 'PHILIPS' for the same
products, light bulbs."19 Hence, the appellate court
concluded that petitioner had intended to ride on
the long-established reputation and goodwill of
respondent's trademark.20
On 25 October 2008, petitioner filed a Motion for
Reconsideration, which was denied in a
Resolution21 issued by the CA on 18 December
2008.
Hence, this petition.
Respondent filed its Comment22 on 23 June 2009,
and petitioner filed its Reply23 on 10 November
2009.
THE ISSUES
From the foregoing, we reduce the issues to the
following:
1. Whether or not respondent's mark is a
registered and well-known mark in the
Philippines; and
2. Whether or not the mark applied for by
petitioner is identical or confusingly similar with
that of respondent.
OUR RULING
The Petition is bereft of merit.
A trademark is "any distinctive word, name,
symbol, emblem, sign, or device, or any
combination thereof, adopted and used by a
manufacturer or merchant on his goods to identify
and distinguish them from those manufactured,
sold, or dealt by othcrs."24 It is "intellectual
property deserving protection by law,"25 and
"susceptible to registration if it is crafted fancifully
or arbitrarily and is capable of identifying and
distinguishing the goods of one manufacturer or
seller from those of another."26
Section 122 of the Intellectual Property Code of
the Philippines (IPC) provides that rights to a
mark shall be acquired through registration
validly done in accordance with the provisions of
this law.27 Corollary to that rule, Section 123
provides which marks cannot be registered.
Respondent opposes petitioner's application on
the ground that PHILITES' registration will
mislead the public over an identical or confusingly
similar mark of PHILIPS, which is registered and
internationally well-known mark. Specifically,
respondent invokes the following provisions of
Section 123:
Section 123. Registrability. - 123 .1. A mark cannot
be registered if it:
xxx
(d) Is identical with a registered mark belonging
to a different proprietor or a mark with an earlier
filing or priority date, in respect of:
(i) The same goods or services, or
(ii) Closely related goods or services, or
(iii) If it nearly resembles such a mark as to be
likely to deceive or cause confusion;
(e) Is identical with, or confusingly similar to, or
constitutes a translation of a mark whid1 is
considered by the competent authority of the
Philippines to be well-known internationally and
in the Philippines, whether or not it is registered
here, as being already the mark of a person other
than the applicant for registration, and used for
identical or similar goods or services: Provided,
That in determining whether a mark is well-
known, account shall be taken of the knowledge of
the relevant sector of the public, rather than of the
public at large, including knowledge in the
Philipines which has been obtained as a result of
the promotion of the mark.28
Respondent's mark is a registered and well-known
mark in the
Philippines
There is no question that respondent's mark
PHILIPS is already a registered and well-known
mark in the Philippines.
As we have said in Fredco Manufacturing
Corporation v. Harvard University,29 "[i]ndeed,
Section 123.l(e) of R.A. No. 8293 now categorically
states that 'a mark which is considered by the
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
competent authority of the Philippines to be well-
known internationally and in the Philippines,
whether or not it is registered here,' cannot be
registered by another in the Ph iii ppines. "30
Rule l00(a) of the Rules and Regulations on
Trademarks, Service Marks, Tradenames and
Marked or Stamped Containers defines
"competent authority" in the following manner:
(c) "Competent authority" for purposes of
determining whether a mark is well-known,
means the Court, the Director General, the
Director of the Bureau of Legal Affairs, or any
administrative agency or office vested with quasi-
judicial or judicial jurisdiction to hear and
adjudicate any action to enforce the rights to a
mark.
We thus affirm the following findings of the CA,
inasmuch as the trademark of PHILIPS is a
registered and well-known mark, as held in the
Supreme Court Decision in Philips Export B. V, v.
CA:31
Petitioner (PHILIPS) is the registered owner in the
Philippines of the "PHILIPS" and "PHILIPS SHIELD
EMBLEM" trademarks, as shown by Certificates of
Registration Nos. 42271 and 42270. The
Philippine trademark registrations of petitioner's
"PHILIPS" and "PHILIPS SHIELD EMBLEM" are
also evidenced by Certificates of Registration Nos.
R- 1651, R-29134, R-1674, and R-28981. The said
registered trademarks "PHILIPS" and "PHILIPS
SHIELD EMBLEM" cover classes 7, 8, 9, 10, 11, 14,
and 16. The assailed Decision itself states that
"(T)he Appellant's trademark is already registered
and in use in the Philippines". It also appears that
worldwide, petitioner has thousands of trademark
registrations x x x in various countries. As found
by the High Court in Philips Export B.V. vs Court of
Appeals, PHILIPS is a trademark or trade name
which was registered as far back as 1922, and has
acquired the status of a well-known mark in the
Philippines and internationally as well.32
Petitioner seeks to register a mark
nearly resembling that of respondent,
which may likely to deceive or cause
confusion among consumers.
Despite respondent's diversification to numerous
and varied industries,33 the records show that
both parties are engaged in the same line of
business: selling identical or similar goods such as
fluorescent bulbs, incandescent lights, starters and
ballasts.
In determining similarity and likelihood of
confusion, jurisprudence has developed two tests:
the dominancy test, and the holistic or totality
test.34
On one hand, the dominancy test focuses on "the
similarity of the prevalent or dominant features of
the competing trademarks that might cause
confusion, mistake, and deception in the mind of
the purchasing public. Duplication or imitation is
not necessary; neither is it required that the mark
sought to be registered suggests an effort to
imitate. Given more consideration are the aural
and visual impressions created by the marks on
the buyers of goods, giving little weight to factors
like prices, quality, sales outlets, and market
segments. "35
On the other hand, the holistic or totality test
necessitates a "consideration of the entirety of the
marks as applied to the products, including the
labels and packaging, in determining confusing
similarity. The discerning eye of the observer
must focus not only on the predominant words,
but also on the other features appearing on both
labels so that the observer may draw conclusion
on whether one is confusingly similar to the
other."361âwphi1
Applying the dominancy test to this case requires
us to look only at the mark submitted by
petitioner in its application, while we give
importance to the aural and visual impressions
the mark is likely to create in the minds of the
buyers. We agree with the findings of the CA that
the mark "PHILITES" bears an uncanny
resemblance or confusing similarity with
respondent's mark "PHILIPS," to wit:
Applying the dominancy test in the instant case, it
shows the uncanny resemblance or confusing
similarity between the trademark applied for by
respondent with that of petitioner's registered
trademark. An examination of the trademarks
shows that their dominant or prevalent feature is
the five-letter "PHILI", "PHILIPS" for petitioner,
and "PHILITES" for respondent. The marks are
confusingly similar with each other such that an
ordinary purchaser can conclude an association or
relation between the marks. The consuming public
does not have the luxury of time to ruminate the
phonetic sounds of the trademarks, to find out
which one has a short or long vowel sound. At
bottom, the letters "PHILI'' visually catch the
attention of the consuming public and the use of
respondent's trademark will likely deceive or
cause confusion. Most importantly, both
trademarks are used in the sale of the same goods,
which are light bulbs.37
The confusing similarity becomes even more
prominent when we examine the entirety of the
marks used by petitioner and respondent,
including the way the products are packaged. In
using the holistic test, we find that there is a
confusing similarity between the registered marks
PHILIPS and PHILITES, and note that the mark
petitioner seeks to register is vastly different from
that which it actually uses in the packaging of its
products. We quote with approval the findings of
the CA as follows:
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Applying the holistic test, entails a consideration
of the entirety of the marks as applied to the
products, including the labels and packaging, in
determining confusing similarity. A comparison
between petitioner's registered trademark
"PHILIPS'' as used in the wrapper or packaging of
its light bulbs and that of respondent's applied for
trademark "PHILITES" as depicted in the
container or actual wrapper/packaging of the
latter's light bulbs will readily show that there is a
strong similitude and likeness between the two
trademarks that will likely cause deception or
confusion to the purchasing public. The fact that
the parties' wrapper or packaging reflects
negligible differences considering the use of a
slightly different font and hue of the yellow is of
no moment because taken in their entirety,
respondent's trademark "PHILITES" will likely
cause confusion or deception to the ordinary
purchaser with a modicum of intelligence.38

WHEREFORE, in view of the foregoing, the

Petition for Review on Certiorari is
hereby DENIED. The 7 October 2008 Decision and
18 December 2008 Resolution of the Court of
Appeals in CA-G.R. SP No. 103350 are
hereby AFFIRMED.

SO ORDERED.

MARIA LOURDES P.A. SERENO

Associate Justice

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Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
 
G.R. No. 100098 December 29, 1995
EMERALD GARMENT MANUFACTURING
CORPORATION, petitioner,
vs.
HON. COURT OF APPEALS, BUREAU OF
PATENTS, TRADEMARKS AND TECHNOLOGY
TRANSFER and H.D. LEE COMPANY,
INC., respondents.
KAPUNAN, J.:
In this petition for review on certiorari  under Rule
45 of the Revised Rules of Court, Emerald Garment
Manufacturing Corporation seeks to annul the
decision of the Court of Appeals dated 29
November 1990 in CA-G.R. SP No. 15266 declaring
petitioner's trademark to be confusingly similar to
that of private respondent and the resolution
dated 17 May 1991 denying petitioner's motion
for reconsideration.
The record reveals the following antecedent facts:
On 18 September 1981, private respondent H.D.
Lee Co., Inc., a foreign corporation organized
under the laws of Delaware, U.S.A., filed with the
Bureau of Patents, Trademarks & Technology
Transfer (BPTTT) a Petition for Cancellation of
Registration No. SR 5054 (Supplemental Register)
for the trademark "STYLISTIC MR. LEE" used on
skirts, jeans, blouses, socks, briefs, jackets, jogging
suits, dresses, shorts, shirts and lingerie under
Class 25, issued on 27 October 1980 in the name
of petitioner Emerald Garment Manufacturing
Corporation, a domestic corporation organized
and existing under Philippine laws. The petition
was docketed as Inter Partes Case No. 1558.1
Private respondent, invoking Sec. 37 of R.A. No.
166 (Trademark Law) and Art. VIII of the Paris
Convention for the Protection of Industrial
Property, averred that petitioner's trademark "so
closely resembled its own trademark, 'LEE' as
previously registered and used in the Philippines,
and not abandoned, as to be likely, when applied
to or used in connection with petitioner's goods,
to cause confusion, mistake and deception on the
part of the purchasing public as to the origin of the
goods."2
In its answer dated 23 March 1982, petitioner
contended that its trademark was entirely and
unmistakably different from that of private
respondent and that its certificate of registration
was legally and validly granted.3
On 20 February 1984, petitioner caused the
publication of its application for registration of the
trademark "STYLISTIC MR. LEE" in the Principal
Register."4
On 27 July 1984, private respondent filed a notice
of opposition to petitioner's application for
registration also on grounds that petitioner's
trademark was confusingly similar to its "LEE"
trademark.5 The case was docketed as Inter Partes
Case No. 1860.
On 21 June 1985, the Director of Patents, on
motion filed by private respondent dated 15 May
1985, issued an order consolidating Inter Partes
Cases Nos. 1558 and 1860 on grounds that a
common question of law was involved.6
On 19 July 1988, the Director of Patents rendered
a decision granting private respondent's petition
for cancellation and opposition to registration.
The Director of Patents found private respondent
to be the prior registrant of the trademark "LEE"
in the Philippines and that it had been using said
mark in the Philippines.7
Moreover, the Director of Patents, using the test of
dominancy, declared that petitioner's trademark
was confusingly similar to private respondent's
mark because "it is the word 'Lee' which draws
the attention of the buyer and leads him to
conclude that the goods originated from the same
manufacturer. It is undeniably the dominant
feature of the mark."8
On 3 August 1988, petitioner appealed to the
Court of Appeals and on 8 August 1988, it filed
with the BPTTT a Motion to Stay Execution of the
19 July 1988 decision of the Director of Patents on
grounds that the same would cause it great and
irreparable damage and injury. Private
respondent submitted its opposition on 22 August
1988.9
On 23 September 1988, the BPTTT issued
Resolution No. 88-33 granting petitioner's motion
to stay execution subject to the following terms
and conditions:
1. That under this resolution,
Respondent-Registrant is
authorized only to dispose of its
current stock using the mark
"STYLISTIC MR. LEE";
2. That Respondent-Registrant is
strictly prohibited from further
production, regardless of mode
and source, of the mark in
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question (STYLISTIC MR. LEE) in
addition to its current stock;
3. That this relief Order shall
automatically cease upon
resolution of the Appeal by the
Court of Appeals and, if the
Respondent's appeal loses, all
goods bearing the mark
"STYLISTIC MR. LEE" shall be
removed from the market,
otherwise such goods shall be
seized in accordance with the
law.
SO ORDERED.10
On 29 November 1990, the Court of Appeals
promulgated its decision affirming the decision of
the Director of Patents dated 19 July 1988 in all
respects.11
In said decision the Court of Appeals expounded,
thus:
xxx xxx xxx
Whether or not a trademark
causes confusion and is likely to
deceive the public is a question of
fact which is to be resolved by
applying the "test of dominancy",
meaning, if the competing
trademark contains the main or
essential or dominant features of
another by reason of which
confusion and deception are
likely to result, then infringement
takes place; that duplication or
imitation is not necessary, a
similarity in the dominant
features of the trademark would
be sufficient.
The word "LEE" is the most
prominent and distinctive feature
of the appellant's trademark and
all of the appellee's "LEE"
trademarks. It is the mark which
draws the attention of the buyer
and leads him to conclude that
the goods originated from the
same manufacturer. While it is
true that there are other words
such as "STYLISTIC", printed in
the appellant's label, such word is
printed in such small letters over
the word "LEE" that it is not
conspicuous enough to draw the
attention of ordinary buyers
whereas the word "LEE" is
printed across the label in big,
bold letters and of the same
color, style, type and size of
lettering as that of the trademark
of the appellee. The alleged
difference is too insubstantial to
be noticeable. Even
granting arguendo that the word
"STYLISTIC" is conspicuous
enough to draw attention, the
goods may easily be mistaken for
just another variation or line of
garments under the ap appelle's
"LEE" trademarks in view of the
fact that the appellee has
registered trademarks which use
other words in addition to the
principal mark "LEE" such as
"LEE RIDERS", "LEESURES" and
"LEE LEENS". The likelihood of
confusion is further made more
probable by the fact that both
parties are engaged in the same
line of business. It is well to
reiterate that the determinative
factor in ascertaining whether or
not the marks are confusingly
similar to each other is not
whether the challenged mark
would actually cause confusion
or deception of the purchasers
but whether the use of such mark
would likely cause confusion or
mistake on the part of the buying
public.
xxx xxx xxx
The appellee has sufficiently
established its right to prior use
and registration of the trademark
"LEE" in the Philippines and is
thus entitled to protection from
any infringement upon the same.
It is thus axiomatic that one who
has identified a peculiar symbol
or mark with his goods thereby
acquires a property right in such
symbol or mark, and if another
infringes the trademark, he
thereby invokes this property
right.
The merchandise or goods being
sold by the parties are not that
expensive as alleged to be by the
appellant and are quite ordinary
commodities purchased by the
average person and at times, by
the ignorant and the unlettered.
Ordinary purchasers will not as a
rule examine the small letterings
printed on the label but will
simply be guided by the presence
of the striking mark "LEE".
Whatever difference there may
be will pale in insignificance in
the face of an evident similarity
in the dominant features and
overall appearance of the labels
of the parties.12
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x x x           x x x          x x x
On 19 December 1990, petitioner filed a motion
for reconsideration of the above-mentioned
decision of the Court of Appeals.
Private respondent opposed said motion on 8
January 1991 on grounds that it involved an
impermissible change of theory on appeal.
Petitioner allegedly raised entirely new and
unrelated arguments and defenses not previously
raised in the proceedings below such as laches
and a claim that private respondent appropriated
the style and appearance of petitioner's trademark
when it registered its "LEE" mark under
Registration No. 44220.13
On 17 May 1991, the Court of Appeals issued a
resolution rejecting petitioner's motion for
reconsideration and ruled thus:
xxx xxx xxx
A defense not raised in the trial
court cannot be raised on appeal
for the first time. An issue raised
for the first time on appeal and
not raised timely in the
proceedings in the lower court is
barred by estoppel.
The object of requiring the
parties to present all questions
and issues to the lower court
before they can be presented to
this Court is to have the lower
court rule upon them, so that this
Court on appeal may determine
whether or not such ruling was
erroneous. The purpose is also in
furtherance of justice to require
the party to first present the
question he contends for in the
lower court so that the other
party may not be taken by
surprise and may present
evidence to properly meet the
issues raised.
Moreover, for a question to be
raised on appeal, the same must
also be within the issues raised
by the parties in their pleadings.
Consequently, when a party
deliberately adopts a certain
theory, and the case is tried and
decided based upon such theory
presented in the court below, he
will not be permitted to change
his theory on appeal. To permit
him to do so would be unfair to
the adverse party. A question
raised for the first time on
appeal, there having opportunity
to raise them in the court of
origin constitutes a change of
theory which is not permissible
on appeal.
In the instant case, appellant's
main defense pleaded in its
answer dated March 23, 1982
was that there was "no confusing
similarity between the competing
trademark involved. On appeal,
the appellant raised a single
issue, to wit:
The only issue
involved in this
case is whether
or not
respondent-
registrant's
trademark
"STYLISTIC MR.
LEE" is
confusingly
similar with the
petitioner's
trademarks
"LEE or
LEERIDERS,
LEE-LEENS and
LEE-SURES."
Appellant's main argument in
this motion for reconsideration
on the other hand is that the
appellee is estopped by laches
from asserting its right to its
trademark. Appellant claims
although belatedly that appellee
went to court with "unclean
hands" by changing the
appearance of its trademark to
make it identical to the
appellant's trademark.
Neither defenses were raised by
the appellant in the proceedings
before the Bureau of Patents.
Appellant cannot raise them now
for the first time on appeal, let
alone on a mere motion for
reconsideration of the decision of
this Court dismissing the
appellant's appeal.
While there may be instances and
situations justifying relaxation of
this rule, the circumstance of the
instant case, equity would be
better served by applying the
settled rule it appearing that
appellant has not given any
reason at all as to why the
defenses raised in its motion for
reconsideration was not invoked
earlier.14
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x x x           x x x          x x x
Twice rebuffed, petitioner presents its case before
this Court on the following assignment of errors:
I. THE COURT OF APPEALS
ERRED IN NOT FINDING THAT
PRIVATE RESPONDENT CAUSED
THE ISSUANCE OF A FOURTH
"LEE" TRADEMARK IMITATING
THAT OF THE PETITIONER'S
ON MAY 5, 1989 OR MORE THAN
EIGHT MONTHS AFTER THE
BUREAU OF PATENT'S DECISION
DATED JULY 19, 1988.
II. THE COURT OF APPEALS
ERRED IN RULING THAT THE
DEFENSE OF ESTOPPEL BY
LACHES MUST BE RAISED IN
THE PROCEEDINGS BEFORE THE
BUREAU OF PATENTS,
TRADEMARKS AND
TECHNOLOGY TRANSFER.
III. THE COURT OF APPEALS
ERRED WHEN IT CONSIDERED
PRIVATE RESPONDENT'S PRIOR
REGISTRATION OF ITS
TRADEMARK AND
DISREGARDED THE FACT THAT
PRIVATE RESPONDENT HAD
FAILED TO PROVE COMMERCIAL
USE THEREOF BEFORE FILING
OF APPLICATION FOR
REGISTRATION.15
In addition, petitioner reiterates the issues it
raised in the Court of Appeals:
I. THE ISSUE INVOLVED IN THIS
CASE IS WHETHER OR NOT
PETITIONER'S TRADEMARK
SYTLISTIC MR. LEE, IS
CONFUSINGLY SIMILAR WITH
THE PRIVATE RESPONDENT'S
TRADEMARK LEE OR LEE-
RIDER, LEE-LEENS AND LEE-
SURES.
II. PETITIONER'S EVIDENCES
ARE CLEAR AND SUFFICIENT TO
SHOW THAT IT IS THE PRIOR
USER AND ITS TRADEMARK IS
DIFFERENT FROM THAT OF THE
PRIVATE RESPONDENT.
III. PETITIONER'S TRADEMARK
IS ENTIRELY DIFFERENT FROM
THE PRIVATE RESPONDENT'S
AND THE REGISTRATION OF ITS
TRADEMARK IS PRIMA
FACIE EVIDENCE OF GOOD
FAITH.
IV. PETITIONER'S "STYLISTIC
MR. LEE" TRADEMARK CANNOT
BE CONFUSED WITH PRIVATE
RESPONDENT'S LEE
TRADEMARK.16
Petitioner contends that private respondent is
estopped from instituting an action for
infringement before the BPTTT under the
equitable principle of laches pursuant to Sec. 9-A
of R.A. No. 166, otherwise known as the Law on
Trade-marks, Trade-names and Unfair
Competition:
Sec. 9-A. Equitable principles to
govern proceedings. — In
opposition proceedings and in all
other inter partes proceedings in
the patent office under this act,
equitable principles of laches,
estoppel, and acquiescence,
where applicable, may be
considered and applied.
Petitioner alleges that it has been using its
trademark "STYLISTIC MR. LEE" since 1 May
1975, yet, it was only on 18 September 1981 that
private respondent filed a petition for cancellation
of petitioner's certificate of registration for the
said trademark. Similarly, private respondent's
notice of opposition to petitioner's application for
registration in the principal register was belatedly
filed on 27 July 1984.17
Private respondent counters by maintaining that
petitioner was barred from raising new issues on
appeal, the only contention in the proceedings
below being the presence or absence of confusing
similarity between the two trademarks in
question.18
We reject petitioner's contention.
Petitioner's trademark is registered in the
supplemental register. The Trademark Law (R.A.
No. 166) provides that "marks and tradenames for
the supplemental register shall not be published
for or be subject to opposition, but shall be
published on registration in the Official
Gazette."19 The reckoning point, therefore, should
not be 1 May 1975, the date of alleged use by
petitioner of its assailed trademark but 27
October 1980,20 the date the certificate of
registration SR No. 5054 was published in the
Official Gazette and issued to petitioner.
It was only on the date of publication and issuance
of the registration certificate that private
respondent may be considered "officially" put on
notice that petitioner has appropriated or is using
said mark, which, after all, is the function and
purpose of registration in the supplemental
register.21 The record is bereft of evidence that
private respondent was aware of petitioner's
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trademark before the date of said publication and
issuance. Hence, when private respondent
instituted cancellation proceedings on 18
September 1981, less than a year had passed.
Corollarily, private respondent could hardly be
accused of inexcusable delay in filing its notice of
opposition to petitioner's application for
registration in the principal register since said
application was published only on 20 February
1984.22 From the time of publication to the time of
filing the opposition on 27 July 1984 barely five
(5) months had elapsed. To be barred from
bringing suit on grounds of estoppel and laches,
the delay must be
lengthy.23
More crucial is the issue of confusing similarity
between the two trademarks. Petitioner
vehemently contends that its trademark
"STYLISTIC MR. LEE" is entirely different from and
not confusingly similar to private respondent's
"LEE" trademark.
Private respondent maintains otherwise. It asserts
that petitioner's trademark tends to mislead and
confuse the public and thus constitutes an
infringement of its own mark, since the dominant
feature therein is the word "LEE."
The pertinent provision of R.A. No. 166
(Trademark Law) states thus:
Sec. 22. 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 imitable 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.
Practical application, however, of the aforesaid
provision is easier said than done. In the history of
trademark cases in the Philippines, particularly in
ascertaining whether one trademark is
confusingly similar to or is a colorable imitation of
another, no set rules can be deduced. Each case
must be decided on its own merits.
In Esso Standard Eastern, Inc. v. Court of
Appeals,24 we held:
. . . But likelihood of confusion is a
relative concept; to be
determined only according to the
particular, and sometimes
peculiar, circumstances of each
case. It is unquestionably true
that, as stated in Coburn
vs. Puritan Mills, Inc.: "In
trademark cases, even more than
in other litigation, precedent
must be studied in the light of the
facts of the particular case."
x x x           x x x          x x x
Likewise, it has been observed that:
In determining whether a
particular name or mark is a
"colorable imitation" of another,
no all-embracing rule seems
possible in view of the great
number of factors which must
necessarily be considered in
resolving this question of fact,
such as the class of product or
business to which the article
belongs; the product's quality,
quantity, or size, including its
wrapper or container; the
dominant color, style, size, form,
meaning of letters, words,
designs and emblems used; the
nature of the package, wrapper
or container; the character of the
product's purchasers; location of
the business; the likelihood of
deception or the mark or name's
tendency to confuse;
etc.25
Proceeding to the task at hand, the essential
element of infringement is colorable imitation.
This term has been defined as "such a close or
ingenious imitation as to be calculated to deceive
ordinary purchasers, or such resemblance of the
infringing mark to the original as to deceive an
ordinary purchaser giving such attention as a
purchaser usually gives, and to cause him to
purchase the one supposing it to be the other."26
Colorable imitation does not
mean such similitude as amounts
to identity. Nor does it require
that all the details be literally
copied. Colorable imitation refers
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to such similarity in form,
content, words, sound, meaning,
special arrangement, or general
appearance of the trademark or
tradename with that of the other
mark or tradename in their over-
all presentation or in their
essential, substantive and
distinctive parts as would likely
mislead or confuse persons in the
ordinary course of purchasing
the genuine article.27
In determining whether colorable imitation exists,
jurisprudence has developed two kinds of tests —
the Dominancy Test applied in Asia Brewery,
Inc. v. Court of Appeals 28 and other cases 29 and the
Holistic Test developed in Del Monte Corporation
v. Court of Appeals 30 and its proponent cases.31
As its title implies, the test of dominancy focuses
on the similarity of the prevalent features of the
competing trademarks which might cause
confusion or deception and thus constitutes
infringement.
xxx xxx xxx
. . . If the competing trademark
contains the main or essential or
dominant features of another,
and confusion and deception is
likely to result, infringement
takes place. Duplication or
imitation is not necessary; nor it
is necessary that the infringing
label should suggest an effort to
imitate. [C. Neilman Brewing Co.
v. Independent Brewing Co., 191
F., 489, 495, citing Eagle White
Lead Co., vs. Pflugh (CC) 180 Fed.
579]. The question at issue in
cases of infringement of
trademarks is whether the use of
the marks involved would be
likely to cause confusion or
mistakes in the mind of the public
or deceive purchasers. (Auburn
Rubber Corporation vs. Honover
Rubber Co., 107 F. 2d 588; . . .)32
x x x           x x x          x x x
On the other side of the spectrum, the holistic test
mandates that the entirety of the marks in
question must be considered in determining
confusing similarity.
xxx xxx xxx
In determining whether the
trademarks are confusingly
similar, a comparison of the
words is not the only
determinant 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.33
x x x           x x x          x x x
Applying the foregoing tenets to the present
controversy and taking into account the factual
circumstances of this case, we considered the
trademarks involved as a whole and rule that
petitioner's "STYLISTIC MR. LEE" is not
confusingly similar to private respondent's "LEE"
trademark.
Petitioner's trademark is the whole "STYLISTIC
MR. LEE." Although on its label the word "LEE" is
prominent, the trademark should be considered as
a whole and not piecemeal. The dissimilarities
between the two marks become conspicuous,
noticeable and substantial enough to matter
especially in the light of the following variables
that must be factored in.
First, the products involved in the case at bar are,
in the main, various kinds of jeans. These are not
your ordinary household items like catsup,
soysauce or soap which are of minimal cost.
Maong pants or jeans are not inexpensive.
Accordingly, the casual buyer is predisposed to be
more cautious and discriminating in and would
prefer to mull over his purchase. Confusion and
deception, then, is less likely. In Del Monte
Corporation v. Court of Appeals, 34 we noted that:
. . . Among these, what essentially
determines the attitudes of the
purchaser, specifically his
inclination to be cautious, is the
cost of the goods. To be sure, a
person who buys a box of candies
will not exercise as much care as
one who buys an expensive
watch. As a general rule, an
ordinary buyer does not exercise
as much prudence in buying an
article for which he pays a few
centavos as he does in
purchasing a more valuable
thing. Expensive and valuable
items are normally bought only
after deliberate, comparative and
analytical investigation. But mass
products, low priced articles in
wide use, and matters of
everyday purchase requiring
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frequent replacement are bought
by the casual consumer without
great
care. . . .
Second, like his beer, the average Filipino
consumer generally buys his jeans by brand. He
does not ask the sales clerk for generic jeans but
for, say, a Levis, Guess, Wrangler or even an
Armani. He is, therefore, more or less
knowledgeable and familiar with his preference
and will not easily be distracted.
Finally, in line with the foregoing discussions,
more credit should be given to the "ordinary
purchaser." Cast in this particular controversy, the
ordinary purchaser is not the "completely unwary
consumer" but is the "ordinarily intelligent buyer"
considering the type of product involved.
The definition laid down in Dy Buncio v. Tan Tiao
Bok  35 is better suited to the present case. There,
the "ordinary purchaser" was defined as one
"accustomed to buy, and therefore to some extent
familiar with, the goods in question. The test of
fraudulent simulation is to be found in the
likelihood of the deception of some persons in
some measure acquainted with an established
design and desirous of purchasing the commodity
with which that design has been associated. The
test is not found in the deception, or the
possibility of deception, of the person who knows
nothing about the design which has been
counterfeited, and who must be indifferent
between that and the other. The simulation, in
order to be objectionable, must be such as appears
likely to mislead the ordinary intelligent buyer
who has a need to supply and is familiar with the
article that he seeks to purchase."
There is no cause for the Court of Appeal's
apprehension that petitioner's products might be
mistaken as "another variation or line of garments
under private respondent's 'LEE' trademark".36 As
one would readily observe, private respondent's
variation follows a standard format "LEERIDERS,"
"LEESURES" and "LEELEENS." It is, therefore,
improbable that the public would immediately
and naturally conclude that petitioner's
"STYLISTIC MR. LEE" is but another variation
under private respondent's "LEE" mark.
As we have previously intimated the issue of
confusing similarity between trademarks is
resolved by considering the distinct
characteristics of each case. In the present
controversy, taking into account these unique
factors, we conclude that the similarities in the
trademarks in question are not sufficient as to
likely cause deception and confusion tantamount
to infringement.
Another way of resolving the conflict is to
consider the marks involved from the point of
view of what marks are registrable pursuant to
Sec. 4 of R.A. No. 166, particularly paragraph 4 (e):
CHAPTER II-A.— The Principal
Register
(Inserted by Sec. 2, Rep. Act No.
638.)
Sec. 4. Registration of trade-
marks, trade-names and service-
marks on the principal register. —
There is hereby established a
register of trade-marks, trade-
names and service-marks which
shall be known as the principal
register. The owner of a trade-
mark, 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:
xxx xxx xxx
(e) Consists of a mark or trade-
name which, when applied to or
used in connection with the
goods, business or services of the
applicant is merely descriptive or
deceptively misdescriptive of
them, or when applied to or used
in connection with the goods,
business or services of the
applicant is primarily
geographically descriptive or
deceptively misdescriptive of
them, or is primarily merely a
surname; (Emphasis ours.)
x x x           x x x          x x x
"LEE" is primarily a surname. Private respondent
cannot, therefore, acquire exclusive ownership
over and singular use of said term.
. . . It has been held that a
personal name or surname may
not be monopolized as a
trademark or tradename as
against others of the same name
or surname. For in the absence of
contract, fraud, or estoppel, any
man may use his name or
surname in all legitimate ways.
Thus, "Wellington" is a surname,
and its first user has no cause of
action against the junior user of
"Wellington" as it is incapable of
exclusive appropriation.37
In addition to the foregoing, we are constrained to
agree with petitioner's contention that private
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respondent failed to prove prior actual
commercial use of its "LEE" trademark in the
Philippines before filing its application for
registration with the BPTTT and hence, has not
acquired ownership over said mark.
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) which explicitly provides that:
CHAPTER II. Registration of
Marks and Trade-names.
Sec. 2. What are registrable. —
Trade-marks, trade-names, and
service marks owned by persons,
corporations, partnerships or
associations domiciled in the
Philippines and by persons,
corporations, partnerships, or
associations domiciled in any
foreign country may be
registered in accordance with the
provisions of this
act: Provided, That said trade-
marks, trade-names,  or service
marks are actually in use in
commerce and services not less
than two months in the
Philippines before the time the
applications for registration are
filed: And Provided, further, That
the country of which the
applicant for registration is a
citizen grants by law
substantially similar privileges to
citizens of the Philippines, and
such fact is officially certified,
with a certified true copy of the
foreign law translated into the
English language, by the
government of the foreign
country to the Government of the
Republic of the Philippines. (As
amended.) (Emphasis ours.)
Sec. 2-A. Ownership of trade-
marks, trade-names and service-
marks; how acquired. — Anyone
who lawfully produces or deals in
merchandise of any kind or who
engages in lawful business, or who
renders any lawful service in
commerce, by actual use hereof in
manufacture or trade, in business,
and in the service rendered; may
appropriate to his exclusive use a
trade-mark, a trade-name, or a
service-mark not so appropriated
by another, to distinguish his
merchandise, business or
services from others. The
ownership or possession of
trade-mark, trade-name, service-
mark, heretofore or hereafter
appropriated, as in this section
provided, shall be recognized and
protected in the same manner
and to the same extent as are
other property rights to the law.
(As amended.) (Emphasis ours.)
The provisions of the 1965 Paris Convention for
the Protection of Industrial Property 38 relied upon
by private respondent and Sec. 21-A of the
Trademark Law (R.A. No. 166)39 were sufficiently
expounded upon and qualified in the recent case
of Philip Morris, Inc. v. Court of Appeals:40
xxx xxx xxx
Following universal acquiescence
and comity, our municipal law on
trademarks regarding the
requirement of actual use in the
Philippines must subordinate an
international agreement
inasmuch as the apparent clash is
being decided by a municipal
tribunal (Mortisen vs. Peters,
Great Britain, High Court of
Judiciary of Scotland, 1906, 8
Sessions, 93; Paras, International
Law and World Organization,
1971 Ed., p. 20). Withal, the fact
that international law has been
made part of the law of the land
does not by any means imply the
primacy of international law over
national law in the municipal
sphere. Under the doctrine of
incorporation as applied in most
countries, rules of international
law are given a standing equal,
not superior, to national
legislative enactments.
xxx xxx xxx
In other words, (a foreign
corporation) may have the
capacity to sue for infringement
irrespective of lack of business
activity in the Philippines on
account of Section 21-A of the
Trademark Law but the question
of whether they have an
exclusive right over their symbol
as to justify issuance of the
controversial writ will depend on
actual use of their trademarks in
the Philippines in line with
Sections 2 and 2-A of the same
law. It is thus incongruous for
petitioners to claim that when a
foreign corporation not licensed
to do business in the Philippines
files a complaint for
infringement, the entity need not
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be actually using its trademark in
commerce in the Philippines.
Such a foreign corporation may
have the personality to file a suit
for infringement but it may not
necessarily be entitled to
protection due to absence of
actual use of the emblem in the
local market.
x x x           x x x          x x x
Undisputably, private respondent is the senior
registrant, having obtained several registration
certificates for its various trademarks "LEE,"
"LEERIDERS," and "LEESURES" in both the
supplemental and principal registers, as early as
1969 to 1973.41 However, registration alone will
not suffice. In Sterling Products
International, Inc. v. Farbenfabriken Bayer
Aktiengesellschaft,42 we declared:
xxx xxx xxx
A rule widely accepted and firmly
entrenched because it has come
down through the years is that
actual use in commerce or
business is a prerequisite in the
acquisition of the right of
ownership over a trademark.
xxx xxx xxx
It would seem quite clear that
adoption alone of a trademark
would not give exclusive right
thereto. Such right "grows out of
their actual use." Adoption is not
use. One may make
advertisements, issue circulars,
give out price lists on certain
goods; but these alone would not
give exclusive right of use. For
trademark is a creation of use.
The underlying reason for all
these is that purchasers have
come to understand the mark as
indicating the origin of the wares.
Flowing from this is the trader's
right to protection in the trade he
has built up and the goodwill he
has accumulated from use of the
trademark. Registration of a
trademark, of course, has value: it
is an administrative act
declaratory of a pre-existing
right.  Registration does not,
however, perfect a trademark
right. (Emphasis ours.)
x x x           x x x          x x x
To augment its arguments that it was, not only the
prior registrant, but also the prior user, private
respondent invokes Sec. 20 of the Trademark Law,
thus:
Sec. 20. Certificate of
registration prima facie evidence
of validity. — A certificate of
registration of a mark or
tradename shall be a prima
facie evidence of the validity of
the registration, the registrant's
ownership of the mark or trade-
name, and of the registrant's
exclusive right to use the same in
connection with the goods,
business or services specified in
the certificate, subject to any
conditions and limitations stated
therein.
The credibility placed on a certificate of
registration of one's trademark, or its weight as
evidence of validity, ownership and exclusive use,
is qualified. A registration certificate serves
merely as prima facie evidence. It is not
conclusive but can and may be rebutted by
controverting evidence.
Moreover, the aforequoted provision applies only
to registrations in the principal
register.43 Registrations in the supplemental
register do not enjoy a similar privilege. A
supplemental register was created precisely for
the registration of marks which are not registrable
on the principal register due to some defects.44
The determination as to who is the prior user of
the trademark is a question of fact and it is this
Court's working principle not to disturb the
findings of the Director of Patents on this issue in
the absence of any showing of grave abuse of
discretion. The findings of facts of the Director of
Patents are conclusive upon the Supreme
Court provided they are supported by substantial
evidence.45
In the case at bench, however, we reverse the
findings of the Director of Patents and the Court of
Appeals. After a meticulous study of the records,
we observe that the Director of Patents and the
Court of Appeals relied mainly on the registration
certificates as proof of use by private respondent
of the trademark "LEE" which, as we have
previously discussed are not sufficient. We cannot
give credence to private respondent's claim that
its "LEE" mark first reached the Philippines in the
1960's through local sales by the Post Exchanges
of the U.S. Military Bases in the Philippines46 based
as it was solely on the self-serving statements of
Mr. Edward Poste, General Manager of Lee (Phils.),
Inc., a wholly owned subsidiary of the H.D. Lee,
Co., Inc., U.S.A., herein private
respondent. 47 Similarly, we give little weight to
the numerous
vouchers representing various advertising
expenses in the Philippines for "LEE"
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
products. 48 It is well to note that these expenses
were incurred only in 1981 and 1982 by LEE
(Phils.), Inc. after it entered into a licensing
agreement with private respondent on 11 May
1981.49
On the other hand, petitioner has sufficiently
shown that it has been in the business of selling
jeans and other garments adopting its "STYLISTIC
MR. LEE" trademark since 1975 as evidenced by
appropriate sales invoices to various stores and
retailers.50
Our rulings in Pagasa Industrial Corp. v. Court of
Appeals 51 and Converse Rubber Corp. v. Universal
Rubber Products, Inc.,52 respectively, are
instructive:
The Trademark Law is very clear.
It requires actual commercial use
of the mark prior to its
registration. There is no dispute
that respondent corporation was
the first registrant, yet it failed to
fully substantiate its claim that it
used in trade or business in the
Philippines the subject mark; it
did not present proof to invest it
with exclusive, continuous
adoption of the trademark which
should consist among others, of
considerable sales since its first
use. The invoices submitted by
respondent which were dated
way back in 1957 show that the
zippers sent to the Philippines
were to be used as "samples" and
"of no commercial value." The
evidence for respondent must be
clear, definite and free from
inconsistencies. "Samples" are
not for sale and therefore, the
fact of exporting them to the
Philippines cannot be considered
to be equivalent to the "use"
contemplated by law.
Respondent did not expect
income from such "samples."
There were no receipts to
establish sale, and no proof were
presented to show that they were
subsequently sold in the
Philippines.
xxx xxx xxx
The sales invoices provide the
best proof that there were actual
sales of petitioner's product in
the country and that there was
actual use for a protracted period
of petitioner's trademark or part
thereof through these sales.
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.
WHEREFORE, premises considered, the
questioned decision and resolution are hereby
REVERSED and SET ASIDE.
SO ORDERED.
Bellosillo and Hermosisima, Jr., JJ., concur.
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deceive purchasers of products stores at the Sta. Mesa Market and in Davao City,
Republic of the Philippines on which it is to be used to an testified that she had been selling CONVERSE
SUPREME COURT extent that said products may be rubber shoes in the local market since 1956 and
Manila mistaken by the unwary public to that sales of petitioner's rubber shoes in her
be manufactured by the stores averaged twelve to twenty pairs a month
SECOND DIVISION petitioner; and, purchased mostly by basketball players of local
private educational institutions like Ateneo, La
b] The registration of Salle and San Beda.
G.R. No. L-27906 January 8, 1987
respondent's trademark will
cause great and irreparable Mrs. Pacquing, further stated that she knew
CONVERSE RUBBER CORPORATION, petitioner, injury to the business reputation petitioner's rubber shoes came from the United
vs. and goodwill of petitioner in the States "because it says there in the trademark
UNIVERSAL RUBBER PRODUCTS, INC. and Philippines and would cause Converse Chuck Taylor with star red or blue and is
TIBURCIO S. EVALLE, DIRECTOR OF damage to said petitioner within a round figure and made in U.S.A. " 2 In the
PATENTS, respondents. the, meaning of Section 8, R.A. No. invoices issued by her store, the rubber shoes
166, as amended. were described as "Converse Chuck
Parades, Poblador, Nazareno, Azada & Tomacruz Taylor", 3 "Converse All Star," 4 "All Star Converse
for petitioner. Chuck Taylor," 5 or "Converse Shoes Chuck
Thereafter, respondent filed its answer and at the
pre-trial, the parties submitted the following Taylor." 6 She also affirmed that she had no
RESOLUTION partial stipulation of facts: business connection with the petitioner.

  1] The petitioner's corporate Respondent, on the other hand, presented as its

name is "CONVERSE RUBBER
FERNAN, J.: CORPORATION" and has been in
existence since July 31, 1946; it is
The undisputed facts of the case are as follows: duly organized under the laws of
Massachusetts, USA and doing
business at 392 Pearl St., Malden,
Respondent Universal Rubber Products, Inc. filed
County of Middle sex,
an application with the Philippine Patent office for
Massachusetts;
registration of the trademark "UNIVERSAL
CONVERSE AND DEVICE" used on rubber shoes
2] Petitioner is not licensed to do
and rubber slippers.
business in the Philippines and it
lone witness the secretary of said corporation who
testified that respondent has been selling on
wholesale basis "Universal Converse" sandals
since 1962 and "Universal Converse" rubber shoes
since 1963. Invoices were submitted as evidence
of such sales. The witness also testified that she
had no Idea why respondent chose "Universal
Converse" as a trademark and that she was
unaware of the name "Converse" prior to her
corporation's sale of "Universal Converse" rubber
shoes and rubber sandals.

Petitioner Converse Rubber Corporation filed its is not doing business on its own
in the Philippines; and, Eventually, the Director of Patents dismissed the
opposition to the application for registration on
opposition of the petitioner and gave due course
grounds that:
3] Petitioner manufacturers to respondent's application. His decision reads in
rubber shoes and uses thereon part:
a] The trademark sought to be
registered is confusingly similar the trademarks "CHUCK TAYLOR
"and "ALL STAR AND DEVICE". 1 ... the only question for
to the word "CONVERSE" which
determination is whether or not
is part of petitioner's corporate
At the trial, petitioner's lone witness, Mrs. Carmen the applicant's partial
name "CONVERSE RUBBER
B. Pacquing, a duly licensed private merchant with appropriation of the Opposer's
CORPORATION" as to likely
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
[petitioner'] corporate name is of
such character that in this
particular case, it is calculated to
deceive or confuse the public to
the injury of the corporation to
which the name belongs ...
I cannot find anything that will
prevent registration of the word
'UNIVERSAL CONVERSE' in favor
of the respondent. In arriving at
this conclusion, I am guided by
the fact that the opposer failed to
present proof that the single
word "CONVERSE' in its
corporate name has become so
Identified with the corporation
that whenever used, it designates
to the mind of the public that
particular corporation.
The proofs herein are sales made
by a single witness who had
never dealt with the petitioner . . .
the entry of Opposer's
[petitioner's] goods in the
Philippines were not only
effected in a very insignificant
quantity but without the opposer
[petitioner] having a direct or
indirect hand in the transaction
so as to be made the basis for
trademark pre- exemption.
Opposer's proof of its corporate
personality cannot establish the
use of the word "CONVERSE" in
any sense, as it is already
stipulated that it is not licensed
to do business in the Philippines,
and is not doing business of its
own in the Philippines. If so, it
will be futile for it to establish
that "CONVERSE" as part of its
corporate name Identifies its
rubber shoes. Besides, it was also
stipulated that opposer
[petitioner], in manufacturing
rubber shoes uses thereon the
trademark "CHUCK TAYLOR" and
"ALL STAR and DEVICE" and
none other.
Furthermore, inasmuch as the
Opposer never presented any
label herein, or specimen of its
shoes, whereon the label may be
seen, notwithstanding its
witness' testimony touching
upon her Identification of the
rubber shoes sold in her stores,
no determination can be made as
to whether the word 'CONVERSE'
appears thereon.
. . .the record is wanting in proof
to establish likelihood of
confusion so as to cause probable
damage to the Opposer. 7
Its motion for reconsideration having been denied
by the respondent Director of Patents, petitioner
instituted the instant petition for review.
As correctly phrased by public respondent
Director of Patents, the basic issue presented for
our consideration is whether or not the
respondent's partial appropriation of petitioner's
corporate name is of such character that it is
calculated to deceive or confuse the public to the
injury of the petitioner to which the name belongs.
A trade name is any individual
name or surname, firm name,
device or word used by
manufacturers, industrialists,
merchants and others to Identify
their businesses, vocations or
occupations. 8 As the trade name
refers to the business and its
goodwill ... the trademark refers
to the goods." 9 The ownership of
a trademark or tradename is a
property right which the owner
is entitled to protect "since there
is damage to him from confusion
or reputation or goodwill in the
mind of the public as well as from
confusion of goods. The modern
trend is to give emphasis to the
unfairness of the acts and to
classify and treat the issue as
fraud. 10
From a cursory appreciation of the petitioner's
corporate name "CONVERSE RUBBER
CORPORATION,' it is evident that the word
"CONVERSE" is the dominant word which
Identifies petitioner from other corporations
engaged in similar business. Respondent, in the
stipulation of facts, admitted petitioner's existence
since 1946 as a duly organized foreign
corporation engaged in the manufacture of rubber
shoes. This admission necessarily betrays its
knowledge of the reputation and business of
petitioner even before it applied for registration of
the trademark in question. Knowing, therefore,
that the word "CONVERSE" belongs to and is being
used by petitioner, and is in fact the dominant
word in petitioner's corporate name, respondent
has no right to appropriate the same for use on its
products which are similar to those being
produced by petitioner.
A corporation is entitled to the
cancellation of a mark that is
confusingly similar to its
corporate
name."11 "Appropriation by
another of the dominant part of a
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corporate name is an
infringement."12
Respondent's witness had no Idea why
respondent chose "UNIVERSAL CONVERSE" as
trademark and the record discloses no reasonable
explanation for respondent's use of the word
"CONVERSE" in its trademark. Such unexplained
use by respondent of the dominant word of
petitioner's corporate name lends itself open to
the suspicion of fraudulent motive to trade upon
petitioner's reputation, thus:
A boundless choice of words,
phrases and symbols is available
to one who wishes a trademark
sufficient unto itself to
distinguish his product from
those of others. When, however,
there is no reasonable
explanation for the defendant's
choice of such a mark though the
field for his selection was so
broad, the inference is inevitable
that it was chosen deliberately to
deceive. 13
The testimony of petitioner's witness, who is a
legitimate trader as well as the invoices
evidencing sales of petitioner's products in the
Philippines, give credence to petitioner's claim
that it has earned a business reputation and
goodwill in this country. The sales invoices
submitted by petitioner's lone witness show that
it is the word "CONVERSE" that mainly Identifies
petitioner's products, i.e. "CONVERSE CHUCK
TAYLOR, 14 "CONVERSE ALL STAR," 15 ALL STAR
CONVERSE CHUCK TAYLOR," 16 or "CONVERSE
SHOES CHUCK and TAYLOR." 17 Thus, contrary to
the determination of the respondent Director of
Patents, the word "CONVERSE" has grown to be
Identified with petitioner's products, and in this
sense, has acquired a second meaning within the
context of trademark and tradename laws.
Furthermore, said sales invoices provide the best
proof that there were actual sales of petitioner's
products in the country and that there was actual
use for a protracted period of petitioner's
trademark or part thereof through these sales.
"The most convincing proof of use of a mark in
commerce is testimony of such witnesses as
customers, or the orders of buyers during a
certain period. 18 Petitioner's witness, having
affirmed her lack of business connections with
petitioner, has testified as such customer,
supporting strongly petitioner's move for
trademark pre-emption.
The sales of 12 to 20 pairs a month of petitioner's
rubber shoes cannot be considered insignificant,
considering that they appear to be of high
expensive quality, which not too many basketball
players can afford to buy. Any sale made by a
legitimate trader from his store is a commercial
act establishing trademark rights since such sales
are made in due course of business to the general
public, not only to limited individuals. It is a
matter of public knowledge that all brands of
goods filter into the market, indiscriminately sold
by jobbers dealers and merchants not necessarily
with the knowledge or consent of the
manufacturer. Such actual sale of goods in the
local market establishes trademark use which
serves as the basis for any action aimed at
trademark pre- exemption. It is a corollary logical
deduction that while Converse Rubber
Corporation is not licensed to do business in the
country and is not actually doing business here, it
does not mean that its goods are not being sold
here or that it has not earned a reputation or
goodwill as regards its products. The Director of
Patents was, therefore, remiss in ruling that the
proofs of sales presented "was made by a single
witness who had never dealt with nor had never
known opposer [petitioner] x x x without Opposer
having a direct or indirect hand in the transaction
to be the basis of trademark pre- exemption."
Another factor why respondent's applications
should be denied is the confusing similarity
between its trademark "UNIVERSAL CONVERSE
AND DEVICE" and petitioner's corporate name
and/or its trademarks "CHUCK TAYLOR" and "ALL
STAR DEVICE" which could confuse the
purchasing public to the prejudice of petitioner,
The trademark of respondent "UNIVERSAL
CONVERSE and DEVICE" is imprinted in a circular
manner on the side of its rubber shoes. In the
same manner, the trademark of petitioner which
reads "CONVERSE CHUCK TAYLOR" is imprinted
on a circular base attached to the side of its rubber
shoes. The deteminative factor in ascertaining
whether or not marks are confusingly similar to
each other "is not whether the challenged mark
would actually cause confusion or deception of the
purchasers but whether the use of such mark
would likely cause confusion or mistake on the
part of the buying public. It would be sufficient, for
purposes of the law, that the similarity between
the two labels is such that there is a possibility or
likelihood of the purchaser of the older brand
mistaking the new brand for it." 19 Even if not an
the details just mentioned were identical, with the
general appearance alone of the two products, any
ordinary, or even perhaps even [sic] a not too
perceptive and discriminating customer could be
deceived ... "20
When the law speaks co-purchaser," the reference
is to ordinary average purchaser. 21 It is not
necessary in either case that the resemblance be
sufficient to deceive experts, dealers, or other
persons specially familiar with the trademark or
goods involve." 22
The similarity y in the general appearance of
respondent's trademark and that of petitioner
would evidently create a likelihood of confusion
among the purchasing public. But even assuming,
arguendo, that the trademark sought to be
registered by respondent is distinctively
147 | I P L P a r t I
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dissimilar from those of the petitioner, the appears that they have personal
likelihood of confusion would still subsists, not on knowledge of the existence of
the purchaser's perception of the goods but on the such a foreign corporation, and it
origins thereof. By appropriating the word is apparent that the purpose of
"CONVERSE," respondent's products are likely to the proposed domestic
be mistaken as having been produced by corporation is to deal and trade
petitioner. "The risk of damage is not limited to a in the same goods as those of the
possible confusion of goods but also includes foreign corporation.
confusion of reputation if the public could
reasonably assume that the goods of the parties We further held:
originated from the same source. 23
xxx xxx xxx
It is unfortunate that respondent Director of
Patents has concluded that since the petitioner is That company is not here seeking
not licensed to do business in the country and is to enforce any legal or control
actually not doing business on its own in the rights arising from or growing out
Philippines, it has no name to protect iN the forum of, any business which it has
and thus, it is futile for it to establish that transacted in the Philippine
"CONVERSE" as part of its corporate name Islands. The sole purpose of the
identifies its rubber shoes. That a foreign action:
corporation has a right to maintain an action in
the forum even if it is not licensed to do business
Is to protect its reputation, its
and is not actually doing business on its own
corporate name, its goodwill
therein has been enunciated many times by this
whenever that reputation,
Court. In La Chemise Lacoste, S.A. vs.
corporate name or goodwill have,
Fernandez, 129 SCRA 373, this Court,
through the natural development
reiterating Western Equipment and Supply Co. vs.
of its trade, established
Reyes, 51 Phil. 115, stated that:
themselves.' And it contends that
its rights to the use of its
... a foreign corporation which corporate and trade name:
has never done any business in
the Philippines and which is
Is a property right, a right in
unlicensed and unregistered to
recess which it may assert and
do business here, but is widely
protect against all the world, in
and favorably known in the
any of the courts of the world even
Philippines through the use
in jurisdictions where it does not
therein of its products bearing its
transact business-just the same as
corporate and tradename, has a
it may protect its tangible
legal right to maintain an action
property, real or personal against
in the Philippines to restrain the
trespass, or conversion. Citing sec.
residents and inhabitants thereof
10, Nims on Unfair Competition
from organizing a corporation
and Trademarks and cases cited;
therein bearing the same name as
secs. 21-22, Hopkins on
the foreign corporation, when it
Trademarks, Trade Names and
Unfair Competition and cases cited
That point is sustained by the
authorities, and is well stated
in Hanover Star Milling Co. vs.
Allen and Wheeler Co. [208 Fed.,
5131, in which the syllabus says:
Since it is the trade and not the
mark that is to be protected, a
trademark acknowledges no
territorial boundaries of
municipalities or states or nations,
but extends to every market
where the trader's goods have
become known and Identified by
the use of the mark.
The ruling in the aforecited case is in consonance
with the Convention of the Union of Paris for the
Protection of Industrial Property to which the
Philippines became a party on September 27,
1965. Article 8 thereof provides that "a trade
name [corporate name] shall be protected in all
the countries of the Union without the obligation
of filing or registration, whether or not it forms
part of the trademark. " [emphasis supplied]
The object of the Convention is to accord a
national of a member nation extensive protection
"against infringement and other types of unfair
competition" [Vanitary Fair Mills, Inc. vs. T. Eaton
Co., 234 F. 2d 6331.
The mandate of the aforementioned Convention
finds implementation in Sec. 37 of RA No. 166,
otherwise known as the Trademark Law:
Sec. 37. Rights of Foreign
Registrants-Persons who are
nationals of, domiciled or have a
bona fide or effective business or
commercial establishment in any
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
foreign country, which is a party
to an international convention or
treaty relating to marks or
tradenames on the repression of
unfair competition to which the
Philippines may be a party, shall
be entitled to the benefits and
subject to the provisions of this
Act . . . ...

Tradenames of persons described

in the first paragraph of this
section shall be protected without
the obligation of filing or
registration whether or not they
form parts of marks. [emphasis
supplied]

WHEREFORE, the decision of the Director of

Patents is hereby set aside and a new one entered
denying Respondent Universal Rubber Products,
Inc.'s application for registration of the trademark
"UNIVERSAL CONVERSE AND DEVICE" on its
rubber shoes and slippers.

SO ORDERED.

Feria (Chairman), Alampay, Gutierrez, Jr. and

Paras, JJ., concur.

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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
THIRD DIVISION
February 1, 2017
G.R. No. 188996
SERI SOMBOONSAKDIKUL, Petitioner
vs.
ORLANE S.A., Respondent
DECISION
JARDELEZA, J.:
Assailed in this petition is the Decision1 of the
Court of Appeals (CA) in CA-G.R. SP No. 105229
dated July 14, 2009 which affirmed the decision of
the Director General of the Intellectual Property
Office (IPO) denying the application for the mark
"LOLANE."
Facts
On September 23, 2003, petitioner Seri
Somboonsakdikul (petitioner) filed an application
for registration2 of the mark LOLANE with the IPO
for goods3 classified under Class 3 (personal care
products) of the International Classification of
Goods and Services for the Purposes of the
Registration of Marks (International Classification
of Goods).4 Orlane S.A. (respondent) filed an
opposition to petitioner's application, on the
ground that the mark LOLANE was similar to
ORLANE in presentation, general appearance and
pronunciation, and thus would amount to an
infringement of its mark.5 Respondent alleged
that: (1) it was the rightful owner of the ORLANE
mark which was first used in 1948; (2) the mark
was earlier registered in the Philippines on July
26, 1967 under Registration No. 129961 for the
following goods:6
x x x perfumes, toilet water, face powders, lotions,
essential oils, cosmetics, lotions for the hair,
dentrifices, eyebrow pencils, make-up creams,
cosmetics & toilet preparations under Registration
No. 12996.7
and (3) on September 5, 2003, it filed another
application for use of the trademark on its
additional products:
x x x toilet waters; revitalizing waters, perfumes,
deodorants and body deodorants, anti-
perspiration toiletries; men and women perfume
products for face care and body care; face, eye,
lips, nail, hand make-up products and make-up
removal products, towels impregnated with
cosmetic lotions; tanning and instant tanning
sunproducts, sunprotection products, (not for
medical use), after-suncosmetic products;
cosmetic products; slimming cosmetic aids;
toiletries; lotions, shampoos and hair care
products; shave and after shave products, shaving
and hair removing products; essential oils;
toothpastes; toiletry, cosmetic and shaving kits for
travel, filled or fitted vanity-cases[.]8
Respondent adds that by promotion, worldwide
registration, widespread and high standard use,
the mark had acquired distinction, goodwill,
superior quality image and reputation and was
now well-known.9 Imputing bad faith on the
petitioner, respondent claimed that LOLANE' s
first usage was only on August 19, 2003.10
In his answer,11 petitioner denied that the LOLANE
mark was confusingly similar to the mark
ORLANE. He averred that he was the lawful owner
of the mark LOLANE which he has used for
various personal care products sold worldwide.
He alleged that the first worldwide use of the
mark was in Vietnam on July 4, 1995. Petitioner
also alleged that he had continuously marketed
and advertised Class 3 products bearing LOLANE
mark in the Philippines and in different parts of
the world and that as a result, the public had come
to associate the mark with him as provider of
quality personal care products.12
Petitioner maintained that the marks were
distinct and not confusingly similar either under
the dominancy test or the holistic test. The mark
ORLANE was in plain block upper case letters
while the mark LOLANE was printed in stylized
word with the second letter L and the letter A co-
joined. Furthermore, the similarity in one syllable
would not automatically result in confusion even
if used in the same class of goods since his
products always appear with Thai characters
while those of ORLANE always had the name Paris
on it. The two marks are also pronounced
differently. Also, even if the two marks contained
the word LANE it would not make them
confusingly similar since the IPO had previously
allowed the co-existence of trademarks containing
the syllable "joy" or "book" and that he also had
existing registrations and pending applications for
registration in other countries.13
The Bureau of Legal Affairs (BLA) rejected
petitioner's application in a Decision14 dated
February 27, 2007, finding that respondent's
application was filed, and its mark registered,
much earlier.15 The BLA ruled that there was
likelihood of confusion based on the following
observations: (1) ORLANE and LOLANE both
consisted of six letters with the same last four
letters - LANE; (2) both were used as label for
similar products; (3) both marks were in two
syllables and that there was only a slight
difference in the first syllable; and (4) both marks
had the same last syllable so that if these marks
were read aloud, a sound of strong similarity
would be produced and such would likely deceive
or cause confusion to the public as to the two
trademarks.16
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Petitioner filed a motion for reconsideration but
this was denied by the Director of the BLA on May
7, 2007.17 The BLA ruled that the law did not
require the marks to be so identical as to produce
actual error or mistake as the likelihood of
confusion was enough. The BLA also found that
the dominant feature in both marks was the word
LANE; and that the marks had a strong visual and
aural resemblance that could cause confusion to
the buying public. This resemblance was amplified
by the relatedness of the goods.18
On appeal, the Director General of the IPO
affirmed the Decision of the BLA Director. Despite
the difference in the first syllable, there was a
strong visual and aural resemblance since the
marks had the same last four letters, i.e., LANE,
and such word is pronounced in this jurisdiction
as in "pedestrian lane."19 Also, the mark ORLANE
is a fanciful mark invented by the owner for the
sole purpose of functioning as a trademark and is
highly distinctive. Thus, the fact that two or more
entities would accidentally adopt an identical or
similar fanciful mark was too good to be true
especially when they dealt with the same goods or
services.20 The Director General also noted that
foreign judgments invoked by petitioner for the
grant of its application are not judicial
precedents.21
Thus, petitioner filed a petition for review22 before
the CA arguing that there is no confusing
similarity between the two marks. Petitioner
maintained that LANE is not the dominant feature
of the mark and that the dominancy test did not
apply since the trademarks are only plain word
marks and the dominancy test presupposes that
the marks involved are composite
marks.23 Petitioner pointed out that the IPO had
previously allowed the mark GIN LANE under
Registration No. 4-2004-006914 which also
involved products under Class 3.24 While
petitioner admitted that foreign judgments are not
judicial precedents, he argued that the IPO failed
to recognize relevant foreign judgments, i.e., the
Australian Registrar of Trademarks and the IPO of
Singapore which ruled that there was no
confusing similarity between the marks LOLANE
and ORLANE.25 Lastly, the Director General should
have deferred to the findings of the Trademark
Examiner who made a substantive examination of
the application for trademark registration, and
who is an expert in the field and is in the best
position to determine whether there already
exists a registered mark or mark for registration.
Since petitioner's application for registration of
the mark LOLANE proceeded to allowance and
publication without any adverse citation of a prior
confusingly similar mark, this meant that the
Trademark Examiner was of the view that LO
LANE was not confusingly similar to ORLANE.26
The CA Ruling
The CA denied the petition and held that there
exists colorable imitation of respondent's mark by
LOLANE.27
The CA accorded due respect to the Decision of the
Director General and ruled that there was
substantial evidence to support the IPO's findings
of fact. Applying the dominancy test, the CA ruled
that LOLANE' s mark is confusingly or deceptively
similar to ORLANE. There are predominantly
striking similarities in the two marks including
LANE, with only a slight difference in the first
letters, thus the two marks would likely cause
confusion to the eyes of the public. The similarity
is highlighted when the two marks are
pronounced considering that both are one word
consisting of two syllables. The CA ruled that
when pronounced, the two marks produce similar
sounds.28 The CA did not heed petitioner's
contention that since the mark ORLANE is of
French origin, the same is pronounced as
"ORLAN." Filipinos would invariably pronounce it
as "OR-LEYN."29 The CA also noted that the
trademark ORLANE is a fanciful name and
petitioner was not able to explain why he chose
the word LOLANE as trademark for his personal
care products. Thus, the only logical conclusion is
that he would want to benefit from the established
reputation and goodwill of the ORLANE mark.30
The CA rejected petitioner's assertion that his
products' cheaper price and low-income market
eliminates the likelihood of confusion. Low-
income groups, and even those who usually
purchased ORLANE products despite the higher
cost, may be led to believe that LOLANE products
are low-end personal care products also marketed
by respondent.31
The CA upheld the applicability of the dominancy
test in this case. According to the CA, the
dominancy test is already recognized and
incorporated in Section 155.1 of Republic Act No.
8293 (RA 8293), otherwise known as the
Intellectual Property Code of the
Philippines.32 Citing McDonald's Corporation v.
MacJoy Fastfood Corporation,33 the CA ruled that
the dominancy test is also preferred over the
holistic test. This is because the latter relies only
on the visual comparison between two
trademarks, whereas the dominancy test relies
not only on the visual, but also on their aural and
connotative comparisons, and their overall
impressions created.34 Nonetheless, the CA stated
that there is nothing in this jurisdiction dictating
that the dominancy test is applicable for
composite marks.35
The CA was not swayed by the alleged favorable
judgment by the IPO in the GIN LANE application,
ruling that in trademark cases, jurisprudential
precedents should be applied only to a case if they
are specifically in point.36 It also did not consider
the ruling of the IPOs in Australia, South Africa,
Thailand and Singapore which found no confusing
similarity between the marks LOLANE and
ORLANE, stating that foreign judgments do not
constitute judicial precedent in this jurisdiction.37
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Finally, the CA did not give merit to petitioner's
contention that the Director General should have
deferred to the findings of the Trademark
Examiner. According to the CA, the proceedings
before the Trademark Examiner are ex-
parte,38 and his findings are merely prima
facie. Whatever his decision may be is still subject
to review and/or appeal.39
The Petition40
Petitioner maintains that the CA erred in its
interpretation of the dominancy test, when it
ruled that the dominant feature of the contending
marks is the suffix "LANE."41 The CA failed to
consider that in determining the dominant portion
of a mark, significant weight must be given to
whether the buyer would be more likely to
remember and use one part of a mark as
indicating the origin of the goods.42 Thus, that part
which will likely make the most impression on the
ordinary viewer will be treated as the dominant
portion of conflicting marks and given greater
weight in the comparison.43
Petitioner argues that both LOLANE and ORLANE
are plain word marks which are devoid of features
that will likely make the most impression on the
ordinary viewer. If at all, the very word marks
themselves, LOLANE and ORLANE are each to be
regarded as dominant features.44 Moreover, the
suffix LANE is a weak mark, being "in common use
by many other sellers in the market. "45 Thus,
LANE is also used in the marks SHELLANE and
GIN LANE, the latter covering goods under Class 3.
Moreover, the two marks are aurally different
since respondent's products originate from France
and is read as "OR-LAN" and not "OR-LEYN."46
Petitioner also claims that the CA completely
disregarded the holistic test, thus ignoring the
dissimilarity of context between LOLANE and
ORLANE. Assuming that the two marks produce
similar sounds when pronounced, the differences
in marks in their entirety as they appear in their
respective product labels should still be the
controlling factor in determining confusing
similarity.47
Besides, there has been no explicit declaration
abandoning the holistic test.48 Thus, petitioner
urges us to go beyond the similarities in spelling
and instead consider how the marks appear in
their respective labels, the dissimilarities in the
size and shape of the containers, their color,
words appearing thereon and the general
appearance,49 hence: (1) the commonality of the
marks ORLANE and LOLANE starts from and ends
with the four-letter similarity-LANE and nothing
else;50 (2) ORLANE uses "safe" or conventional
colors while LOLANE uses loud or psychedelic
colors and designs with Thai characters;51 and (3)
ORLANE uses the term "Paris," indicating the
source of origin of its products.52
Petitioner likewise claims that consumers will be
more careful in their choice because the goods in
question are directly related to personal hygiene
and have direct effects on their well-being, health
and safety.53 Moreover, with the huge price
difference between ORLANE and LOLANE
products, relevant purchasers are less likely to be
confused.54
Finally, petitioner notes that respondent has
neither validly proven nor presented sufficient
evidence that the mark ORLANE is in actual
commercial use in the Philippines. Respondent
failed to allege in any of its pleadings submitted to
the IPO's BLA and the IPO Director General the
names of local outlets that products bearing the
mark ORLANE are being marketed or sold to the
general consuming public.55
Respondent's Comment56
Respondent reiterates the decisions of the CA and
the IPO.57 It maintains that ORLANE is entitled to
protection under RA 8293 since it is registered
with the IPO with proof of actual
use.58 Respondent posits that it has established in
the world59 and in the Philippines an image and
reputation for manufacturing and selling quality
beauty products. Its products have been sold in
the market for 61 years and have been used in the
Philippines since 1972.60 Thus, to allow
petitioner's application would unduly prejudice
respondent's right over its registered
trademark.61 Lastly, respondent argues that
decisions of administrative agencies such as the
IPO shall not be disturbed by the courts, absent
any showing that the former have acted without
or in excess of their jurisdiction, or with grave
abuse of discretion.62
Issue
We resolve the issue of whether there is confusing
similarity between ORLANE and LOLANE which
would bar the registration of LOLANE before the
IPO.
Our Ruling
We find that the CA erred when it affirmed the
Decision of the IPO.
While it is an established rule in administrative
law that the courts of justice should respect the
findings of fact of administrative agencies, the
courts may not be bound by such findings of fact
when there is absolutely no evidence in support
thereof or such evidence is clearly, manifestly and
patently insubstantial; and when there is a clear
showing that the administrative agency acted
arbitrarily or with grave abuse of discretion or in
a capricious and whimsical manner, such that its
action may amount to an excess or lack of
jurisdiction.63 Moreover, when there is a showing
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that the findings or conclusions, drawn from the
same pieces of evidence, were arrived at
arbitrarily or in disregard of the evidence on
record, they may be reviewed by the courts.64 Such
is the case here.
There is no colorable imitation between the marks
LOLANE and ORLANE which would lead to any
likelihood of confusion to the ordinary purchasers.
A trademark is defined under Section 121.1 of RA
8293 as any visible sign capable of distinguishing
the goods. It is susceptible to registration if it is
crafted fancifully or arbitrarily and is capable of
identifying and distinguishing the goods of one
manufacturer or seller from those of
another.65 Thus, the mark must be
distinctive.66 The registrability of a trademark is
governed by Section 123 of RA 8293. Section
123.1 provides:
Section 123. Registrability. -
123 .1. A mark cannot be registered if it:
xxx
d. Is identical with a registered mark belonging to
a different proprietor or a mark with an earlier
filing or priority date, in respect of:
i. The same goods or services, or
ii. Closely related goods or services, or
iii. If it nearly resembles such a mark as to be
likely to deceive or cause confusion;
e. Is identical with, or confusingly similar to, or
constitutes a translation of a mark which is
considered by the competent authority of the
Philippines to be well-known internationally and
in the Philippines, whether or not it is registered
here, as being already the mark of a person other
than the applicant for registration, and used for
identical or similar goods or services: Provided,
That in determining whether a mark is well-
known, account shall be taken of the knowledge of
the relevant sector of the public, rather than of the
public at large, including knowledge in the
Philippines which has been obtained as a result of
the promotion of the mark;
xxx
In Mighty Corporation v. E. & J Gallo Winery, 67 we
laid down the
requirements for a finding of likelihood of
confusion, thus:
There are two types of confusion in trademark
infringement. The first is "confusion of goods"
when an otherwise prudent purchaser is induced
to purchase one product in the belief that he is
purchasing another, in which case defendant's
goods are then bought as the plaintiffs and its
poor quality reflects badly on the plaintiffs
reputation. The other is "confusion of business"
wherein the goods of the parties are different but
the defendant's product can reasonably (though
mistakenly) be assumed to originate from the
plaintiff, thus deceiving the public into believing
that there is some connection between the
plaintiff and defendant which, in fact, does not
exist.
In determining the likelihood of confusion, the
Court must consider: [a] the resemblance
between the trademarks; [b] the similarity of
the goods to which the trademarks are
attached; [c] the likely effect on the purchaser
and [d] the registrant's express or implied
consent and other fair and equitable
considerations. (Citations omitted, emphasis
supplied.)68
While Mighty Corporation enumerates four
requirements, the most essential requirement, to
our mind, for the determination of likelihood of
confusion is the existence of resemblance between
the trademarks, i.e., colorable imitation. Absent
any finding of its existence, there can be no
likelihood of confusion. Thus we held:
Whether a trademark causes confusion and is
likely to deceive the public hinges on "colorable
imitation" which has been defined as "such
similarity in form, content, words, sound,
meaning, special arrangement or general
appearance of the trademark or trade name in
their overall presentation or in their essential and
substantive and distinctive parts as would likely
mislead or confuse persons in the ordinary course
of purchasing the genuine article." (Citations
omitted.)69
We had the same view in Emerald Garment
Manufacturing Corporation v. Court of
Appeals,70 where we stated:
Proceeding to the task at hand, the essential
element of infringement is colorable
imitation. This term has been defined as "such a
close or ingenious imitation as to be calculated to
deceive ordinary purchasers, or such resemblance
of the infringing mark to the original as to deceive
an ordinary purchaser giving such attention as a
purchaser usually gives, and to cause him to
purchase the one supposing it to be the other."
Colorable imitation does not mean such similitude
as amounts to identity. Nor does it require that all
the details be literally copied. x x x (Citation
omitted, emphasis supplied.)71
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In determining colorable imitation, we have used
either the dominancy test or the holistic or totality
test. The dominancy test considers the similarity
of the prevalent or dominant features of the
competing trademarks that might cause confusion,
mistake, and deception in the mind of the
purchasing public. More consideration is given on
the aural and visual impressions created by the
marks on the buyers of goods, giving little weight
to factors like process, quality, sales outlets, and
market segments.72 On the other hand, the holistic
test considers the entirety of the marks as applied
to the products, including the labels and
packaging, in determining confusing similarity.
The focus is not only on the predominant words
but also on the other features appearing on the
labels.73
The CA's use of the dominancy test is in accord
with our more recent ruling in UFC Philippines,
Inc. (now merged with Nutria-Asia, Inc. as the
surviving entity) v. Barrio Fiesta Manufacturing
Corporation.74 In UFC Philippines, Inc., we relied on
our declarations in McDonald's Corporation v. L.C.
Big Mak Burger, Inc.,75 Co Tiong Sa v. Director of
Patents,76 and Societe Des Produits Nestle, S.A. v.
Court of Appeals77 that the dominancy test is more
in line with the basic rule in trademarks that
confusing similarity is determined by the aural,
visual and connotative and overall impressions
created by the marks. Thus, based on the
dominancy test, we ruled that there is no
confusing similarity between "PAPA BOY &
DEVICE" mark, and "PAPA KETSARAP" and "PAPA
BANANA CATSUP."
While there are no set rules as what constitutes a
dominant feature with respect to trademarks
applied for registration, usually, what are taken
into account are signs, color, design, peculiar
shape or name, or some special, easily
remembered earmarks of the brand that readily
attracts and catches the attention of the ordinary
consumer.78 In UFC Philippines, Inc., what we
considered as the dominant feature of the mark is
the first word/figure that catches the eyes or that
part which appears prominently to the eyes and
ears.79
However, while we agree with the CA's use of the
dominancy test, we arrive at a different
conclusion. Based on the distinct visual and aural
differences between LOLANE and ORLANE, we
find that there is no confusing similarity between
the two marks.
The suffix LANE is not the dominant feature of
petitioner's mark. Neither can it be considered as
the dominant feature of ORLANE which would
make the two marks confusingly similar.
First, an examination of the appearance of the
marks would show that there are noticeable
differences in the way they are written or printed
as shown below:80
As correctly argued by petitioner in his answer
before the BLA, there are visual differences
between LOLANE and ORLANE since the mark
ORLANE is in plain block upper case letters while
the mark LOLANE was rendered in stylized word
with the second letter L and the letter A co-
joined.81
Second, as to the aural aspect of the marks,
LOLANE and ORLANE do not sound alike. Etepha
v. Director of Patents, et al. 82 finds application in
this case. In Etepha, we ruled that there is no
confusing similarity between PERTUSSIN and
ATUSSIN. The Court considered among other
factors the aural differences between the two
marks as follows:
5. As we take up Pertussin and Atussin once again,
we cannot escape notice of the fact that the two
words do not sound alike-when pronounced.
There is not much phonetic similarity between the
two. The Solicitor General well-observed that in
Pertussin the pronunciation of tbe prefix "Per",
whether correct or incorrect, includes a
combination of three letters
P, e and r; whereas, in Atussin the whole starts
with the single letter A added to suffix
"tussin".1âwphi1 Appeals to the ear are dissimilar.
And this, because in a word combination, the part
that comes first is the most pronounced. An
expositor of the applicable rule here is the
decision in the Syrocol-Cheracol controversy.
There, the ruling is that trademark Syrocol (a
cough medicine preparation) is not confusedly
similar to trademark Cheracol (also a cough
medicine preparation). Reason: the two words "do
not look or sound enough alike to justify a holding
of trademark infringement", and the "only
similarity is in the last syllable, and that is not
uncommon in names given drug compounds".
(Citation omitted, emphasis supplied.)83
Similar to Etepha, appeals to the ear in
pronouncing ORLANE and LOLANE are dissimilar.
The first syllables of each mark, i.e., OR and LO do
not sound alike, while the proper pronunciation of
the last syllable LANE-"LEYN" for LOLANE and
"LAN" for ORLANE, being of French origin, also
differ. We take exception to the generalizing
statement of the Director General, which was
affirmed by the CA, that Filipinos would invariably
pronounce ORLANE as "ORLEYN." This is another
finding of fact which has no basis, and thus,
justifies our reversal of the decisions of the IPO
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
Director General and the CA. While there is
possible aural similarity when certain sectors of
the market would pronounce ORLANE as
"ORLEYN," it is not also impossible that some
would also be aware of the proper pronunciation--
especially since, as respondent claims, its
trademark ORLANE has been sold in the market
for more than 60 years and in the Philippines, for
more than 40 years.84
Respondent failed to show proof that the suffix
LANE has registered in the mind of consumers
that such suffix is exclusively or even
predominantly associated with ORLANE products.
Notably and as correctly argued by petitioner, the
IPO previously allowed the registration of the
mark GIN LANE for goods also falling under Class
3, i.e., perfume, cologne, skin care preparations,
hair care preparations and toiletries.85
Finding that LOLANE is not a colorable imitation
of ORLANE due to distinct visual and aural
differences using the dominancy test, we no
longer find it necessary to discuss the contentions
of the petitioner as to the appearance of the marks
together with the packaging, nature of the goods
represented by the marks and the price difference,
as well as the applicability of foreign judgments.
We rule that the mark LOLANE is entitled to
registration.
WHEREFORE, the petition is GRANTED. The
Decision of the Court of Appeals dated July 14,
2009 is REVERSED and SET ASIDE. Petitioner's
application of the mark LOLANE for goods
classified under Class 3 of the International
Classification of Goods is GRANTED.
SO ORDERED.

We are mindful that in the earlier cases of Mighty FRANCIS H. JARDELEZA

Corporation and Emerald, despite a finding that Associate Justice
there is no colorable imitation, we still discussed
the nature of the goods using the trademark and
whether the goods are identical, similar,
competing or related. We need not belabor a
similar discussion here considering that the
essential element in determining likelihood of
confusion, i.e., colorable imitation by LO LANE of
the mark ORLANE, is absent in this case.
Resemblance between the marks is a separate
requirement from, and must not be confused with,
the requirement of a similarity of the goods to
which the trademarks are attached. In Great White
Shark Enterprises, Inc v. Caralde, Jr., 86 after we
ruled that there was no confusing similarity
between Great White Shark's "GREG NORMAN
LOGO" and Caralde's "SHARK & LOGO" mark due
to the visual and aural dissimilarities between the
two marks, we deemed it unnecessary to resolve
whether Great White Shark's mark has gained
recognition as a well-known mark.

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FIRST DIVISION
January 20, 2016
G.R. No. 198889
UFC PHILIPPINES, INC. (now merged with
NUTRI-ASIA, INC., with NUTRI-ASIA, INC. as the
surviving entity), Petitioner,
vs.
BARRIO FIESTA MANUFACTURING
CORPORATION, Respondent.
DECISION
LEONARDO-DE CASTRO, J.:
For our disposition is a petition for review
on certiorari under Rule 45 seeking to annul and
set aside the June 23, 2011 Decision1 and the
October 4, 2011 Resolution2 of the Court of
Appeals in CA-G.R. SP No. 107570, which reversed
and set aside the March 26, 2008 Decision3 of the
Bureau of Legal Affairs of the Intellectual Property
Office (IPO-BLA) and the January 29,
2009 Decision4 of the Director General of the IPO.
Petitioner Nutri-Asia, Inc. (petitioner) is a
corporation duly organized and existing under
Philippine laws.5 It is the emergent entity in a
merger with UFC Philippines, Inc. that was
completed on February 11, 2009.6 Respondent
Barrio Fiesta Manufacturing Corporation
(respondent) is likewise a corporation organized
and existing under Philippine laws.
On April 4, 2002, respondent filed Application No.
4-2002-002757 for the mark "PAPA BOY &
DEVICE" for goods under Class 30, specifically for
"lechon sauce."7 The Intellectual Property Office
(IPO) published said application for opposition in
the IP Phil. e-Gazette released on September 8,
2006. The mark appears as follows:
On December 11, 2006, petitioner filed with the
IPO-BLA a Verified Notice of Opposition to the
above-mentioned application and alleged that:
1. The mark "PAPA" for use on banana catsup and
other similar goods was first used [in] 1954 by
Neri Papa, and thus, was taken from his surname;
2. After using the mark "PAP A" for about twenty-
seven (27) years, Neri Papa subsequently assigned
the mark "PAPA" to Heman D. Reyes who, on
September 17, 1981, filed an application to
register said mark "PAP A" for use on banana
catsup, chili sauce, achara, banana chips, and
instant ube powder;
3. On August 14, 1983, Heman D. Reyes was issued
Certificate of Registration No. 32416;
4. [Certificate of] Registration No. 32416 was
subsequently assigned to the following in
successive fashion: Acres & Acres Food, Inc.,
Southeast Asia Food, Inc., Heinz-UFC Philippines,
Inc., and Opposer UFC Philippines, Inc.;
5. Last October 28, 2005, Heinz-UFC Philippines,
Inc. filed Application Serial No. 4-2005-010788
which, in effect, is a re-registration of Registration
No. 32416 which expired on August 11, 2003;
6. Heman D. Reyes also filed on March 04, 1982 an
application to register in the Supplemental
Register the "PAPA BANANA CATSUP Label";
7. On August 11, 1983, Heman D. Reyes was issued
Certificate of Registration No. SR-6282 which was
subsequently assigned to Acres & Acres Food, Inc.,
Southeast Asia Food, Inc., Heinz-UFC Philippines,
Inc.;
8. After its expiration, Opposer filed on November
15, 2006 Trademark Application Serial No. 4-
2006-012346 for the re-registration of the "PAP A
Label Design";
9. The mark "PAP A KETSARAP" for use on banana
sauce falling under Class 30 was also registered in
favor of Acres & Acres Food, Inc. under
Registration No. 34681 issued on August 23, 1985
and renewed last August 23, 2005 by Heinz-UFC
Philippines, Inc. for ten (10) years;
10. On November 07, 2006, Registration No.
34681 was assigned to Opposer;
11. Opposer has not abandoned the use of the
mark "PAP A" and the variations thereof as
Opposer has continued their use up to the present;
12. The mark "PAPA BOY & DEVICE" is identical to
the mark "PAPA" owned by Opposer and duly
registered in its favor, particularly the dominant
feature thereof;
13. [With the] dominant feature of respondent-
applicant's mark "PAPA BOY & DEVICE", which is
Opposer's "PAPA" and the variations thereof,
confusion and deception is likely to result: The
consuming public, particularly the unwary
customers, will be deceived, confused, and
mistaken into believing that respondent-
applicant's goods come from Opposer or are
authorized by Opposer to Opposer's prejudice,
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
which is particularly true considering that
Opposer's sister company, Southeast Asia Food,
Inc., and its predecessors-in-interest have been
major manufacturers and distributors of lechon
sauce and other table sauces since 1965 under its
registered mark "Mang Tomas";
14. Respondent-applicant's mark "PAPA BOY &
DEVICE" which nearly resembles Opposer's mark
"PAPA" and the variations thereof will impress
upon the gullible or unsuspecting public that it is
the same or related to Opposer as to source
because its dominant part is the same as
Opposer's mark and, thus, will likely be mistaken
to be the mark, or related to, or a derivative or
variation of, Opposer's mark;
15. The goods covered by respondent-applicant's
application fall under Class 30, the same Class
under which Opposer's goods enumerated in its
earlier issued registrations;
16. The test of dominancy is now explicitly
incorporated into law in Section 155 .1 of the IP
Code which defines infringement as the colorable
imitation of a registered mark or a dominant
feature thereof, and is provided for by
jurisprudence;
17. As a corporation also engaged in the food
business, Respondent-applicant knew and/or
ought to know that Opposer and its predecessors-
in-interest have been using the mark "PAPA" and
the variations thereof for the last fifty-two (52)
years while its sister company is engaged in the
business of manufacturing and distributing
"lechon sauce" and other table sauces for the last
forty-one (41) years;
18. The approval of the subject application will
violate Opposer's right to the exclusive use of its
registered mark "PAPA" and the variations thereof
per Section 138 of the IP Code;
19. The approval of the subject application has
caused and will continue to cause great and
irreparable damage and injury to Opposer;
20. Respondent-applicant filed the subject
application fraudulently and in bad faith; and
21. Respondent-applicant is not entitled to
register the subject mark in its favor.8
In its verified opposition before the IPO, petitioner
contended that "PAPA BOY & DEVICE" is
confusingly similar with its "PAPA" marks
inasmuch as the former incorporates the term
"PAP A," 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 30.9
Petitioner alleged that the registration of
respondent's challenged mark was also likely to
damage the petitioner, considering that its former
sister company, Southeast Asia Food, Inc., and the
latter's predecessors-in-interest, had been major
manufacturers and distributors of lechon and
other table sauces since 1965, such as products
employing the registered "Mang Tomas" mark.
In its Verified Answer, respondent argued that
there is no likelihood of confusion between
petitioner's family of "PAPA" trademarks and
respondent's "PAPA BOY & DEVICE" trademark.
Respondent raised affirmative defenses and we
quote the relevant ones below:
3. Opposer cites several of its following marks in
support of its opposition to the application but an
examination of said marks [reveals] that these
have already expired and/or that no confusing
similarity exists x xx;
4. Assuming that the mark "PAPA KETSARAP" had
been timely renewed on August 23, 2005 for
"banana sauce" under Class 30, the same is not a
hindrance to the successful registration of the
mark "PAPA BOY & DEVICE": Jurisprudence
provides that a 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;
5. As a result, Opposer's right to use the mark
"PAPAKETSARAP" is limited to the products
covered by its certificate of registration which is
Class 30 for banana sauce;
6. Contrary to Opposer's belief, the dominant
features of Respondent-applicant's mark "PAPA
BOY & DEVICE" are the words "PAPA BOY" and
the representation of a smiling hog-like character
gesturing the thumbs-up sign and wearing a
traditional Filipino hat and scarf while the
dominant feature of Opposer's mark "PAPA
KETSARAP" are the words "Papa" and "Ketsarap",
not the word "Papa"; and the word "Ketsarap " is
more prominently printed and displayed in the
foreground than the word "Papa" for which
reasons opposer's reference to the Dominancy
Test fails;
7. Opposer's allegation that the registration of
Respondent-applicant's mark "PAPA BOY &
DEVICE" will damage and prejudice the mark
"MANG TOMAS" is irrelevant considering that
Opposer's basis for filing this opposition is the
alleged confusing similarity between Respondent-
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
applicant's mark and Opposer's mark "PAPA
KETSARAP", not the mark "MANG TOMAS";
8. Respondent-applicant's mark "PAPA BOY &
DEVICE" is neither identical nor confusingly
similar to Opposer's mark "PAPA KETSARAP":
Respondent-applicant's mark "PAPABOY &
DEVICE" is an arbitrary mark which differs in
overall sound, spelling, meaning, style,
configuration, presentation, and appearance from
Opposer's mark "PAPA KETSARAP";
9. The dissimilarities between the marks are so
distinct, thus, confusion is very unlikely: While
Opposer's mark is a plain word mark,
Respondent-applicant's mark "PAPA BOY &
DEVICE" is much more intricate and distinctive
such as Opposer's mark not having the words
"Lechon Sauce" printed inside a blue ribbon-like
device which is illustrated below the words "PAPA
BOY", Opposer's mark not having a prominent
smiling hog-like character gesturing a thumbs-up
sign and wearing a Filipino hat and scarf stands
beside the words "PAPA BOY", and Opposer's
mark not having the words "Barrio Fiesta" albeit
conspicuously displayed above the mark, all which
leave no doubt in the consumer's mind on the
product that he is purchasing;
10. Aside from the fact that Respondent-
applicant's mark "PAPA BOY & DEVICE" is distinct
and different in appearance, spelling, sound,
meaning, and style from Opposer's mark "PAPA
KETSARAP", the difference in the goods covered
by both marks is obvious: Since the goods covered
by Respondent-applicant's mark is unrelated and
non-competing to those covered by Opposer's
mark, the doctrine allowing the registrations of
marks covering unrelated and non-competing
goods as enunciated by the Supreme Court is
therefore applicable in this case;
11. Respondent-applicant's mark cannot be
confusingly similar to Opposer's mark considering
that the products covered by these marks are
different: While Respondent-applicant's mark
"PAPA BOY & DEVICE" covers lechon sauce under
Class 30, Opposer's mark "PAPA KETSARAP"
covers banana sauce;
12. If a consumer is in the market for banana
sauce, he will not buy lechon sauce and vice-versa
and as a result, the margin of error in the
acquisition of one from the other is simply remote;
13. Respondent-applicant is the exclusive owner
of the mark "PAPA BOY & DEVICE" for lechon
sauce under Class 30: The words "PAPA BOY" is a
combination of the nickname of Bonifacio
Ongpauco who is one of Respondent-applicant's
incorporators and founders" BOY"- and the word
"PAPA" as Bonifacio Ongpauco's mother, Sixta P.
Evangelista, had been fondly known as "Mama
Chit", making Respondent-applicant the prior
adopter, user, and applicant of the mark "PAPA
BOY & DEVICE" in the Philippines;
14. To protect its ownership over the mark "PAPA
BOY & DEVICE" considering that it is the first to
adopt and use said mark, Respondent-applicant
applied for its registration under Application
Serial No. 4-2002-002757 for Class 30, and said
application was found registrable by the Examiner
as. a consequence of which the same was
recommended for allowance after undergoing a
thorough process of examination, which
recommendation was then approved by the
Director of the Bureau of Trademarks (BOT);
15. Respondent-applicant's mark "PAPA BOY &
DEVICE" has been commercially used in the
Philippines;
16. Respondent-applicant's mark "PAPA BOY &
DEVICE" has been promoted and advertised for a
considerable duration of time and over wide
geographical areas: Respondent-applicant has
invested tremendous amount of resources in the
promotion of its mark "PAPA BOY & DEVICE"
through various media including print
publications and promotional materials;
17. The widespread local commercial use of the
subject mark by Respondent-applicant to
distinguish and identify its various high-quality
consumer products has earned Respondent-
applicant a well-deserved business reputation and
goodwill;
18. Respondent-applicant's mark is distinctive and
capable of identifying its goods and distinguishing
them from those offered for sale by others in the
market including Opposer's goods for which
reason no confusion will result because
Respondent-applicant's mark is for lechon sauce
while Opposer's mark is for banana sauce; and
19. The presence of a common prefix "PAPA" in
the marks of both parties does not render said
marks identical or confusingly similar: Opposer
cannot exclusively appropriate said prefix
considering that other marks such as "Papa Heinz
Pizza", "Papa Heinz Sausage", "Papa Beaver",
"Papa Pop", "Pizza Papa John's & Design",
"Papadoods", and "Papa in Wine and Device" are
valid and active.10
Petitioner's mark and its variations appear as
follows:
1. "PAPA" under Registration No. 32416 for Class
29 goods;11
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
2. The mark "PAPA" as it appeared upon re-
registration of Certificate No. 32416, under
Application No. 4-2005-010788 for Classes 29 and
30 goods;12
3. "PAPA LABEL DESIGN" under Registration No.
4-2006-012364·13 and
4. "PAPA KETSARAP" under Certificate of
Registration No. 34681, for banana sauce (Class
30).14
PROCEEDINGS BEFORE THE INTELLECTUAL
PROPERTY OFFICE
The case was referred to mediation but the parties
failed to arrive at an amicable settlement. The case
was thus set for preliminary conference.
Subsequently, the IPO-BLA directed the parties to
file their respective position papers and draft
decisions.
The IPO-BLA rendered a Decision on March 26,
2008 sustaining petitioner's Opposition and
rejecting respondent's application for "PAPA BOY
& DEVICE." The fallo of said decision reads as
follows:
WHEREFORE, the VERIFIED NOTICE OF
OPPOSITION filed by UFC Philippines, Inc. is, as it
is hereby, SUSTAINED. Consequently, Application
Serial No. 4-2002-002757 for the mark "PAPA
BOY & DEVICE" for lechon sauce under Class 30
filed on April 04, 2002 by Barrio Fiesta
Manufacturing Corporation, is, as it is hereby,
REJECTED.
Let the file wrapper of PAPA BOY & Device subject
matter of this case be forwarded to the Bureau of
Trademarks (BOT) for appropriate action in
accordance with this Decision.15
Respondent filed an appeal before the IPO
Director General, who found it unmeritorious, and
disposed of the case in the following manner:
WHEREFORE, the instant appeal is hereby
DISMISSED. Let a copy of this Decision as well as
the trademark application and records be
furnished and returned to the Director of the
Bureau of Legal Affairs for appropriate action.
Further, let also the Director of the Bureau of
Trademarks and the library of the Documentation,
Information and Technology Transfer Bureau be
furnished a copy of this Decision for information,
guidance, and records purposes."16
DECISION OF THE COURT OF APPEALS
Respondent then filed a petition with the Court of
Appeals, questioning the above decision of the IPO
Director General that affirmed the decision of the
IPO Bureau of Legal Affairs Director, which
disallowed respondent's application for
trademark registration. Respondent's arguments
before the Court of Appeals are quoted below:
A.
REGISTRATION NOS. 32416 AND 42005010788
ISSUED FOR THE "PAPA" MARK AND
REGISTRATION NOS. SR-6282 AND 42006012364
ISSUED FOR THE TRADEMARK "PAPA BANANA
CATSUP LABEL/PAPA LABEL DESIGN" SHOULD
NOT BE USED AS BASIS IN DETERMINING THE
EXISTENCE OF CONFUSING SIMILARITY.
B.
THERE IS NO CONFUSING SIMILARITY BETWEEN
PETITIONER-APPLICANT'S "PAPA BOY & DEVICE"
AND RESPONDENT'S "PAPA KETSARAP" MARK.
C.
PETITIONER-APPLICANT IS ENTITLED TO THE
REGISTRATION OF THE MARK "PAPA BOY &
DEVICE."
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D.
THE OPPOSITION STATES NO CAUSE OF ACTION,
AND HENCE, SHOULD BE DENIED OUTRIGHT.17
As regards the first ground, the Court of Appeals
held:
Records show that respondent UFC has
Certificates of Registration for the trademarks
PAPA, PAPA BANANA CATSUP label and PAPA
KETSARAP. A closer look at the respective
Certificate[ s] of Registration of the
aforementioned marks, however, reveals that at
the time the trademark application of petitioner
was published in the IPO e-Gazette on September
8, 2006, the duration of the trademark
registration of respondent over the marks PAPA
and PAPA BANANA CATSUP have already expired.
On the other hand, the mark PAPA KETSARAP
was timely renewed by respondent as shown
by the Certificate of Renewal of Registration
issued on September 1, 2006 by the Director of
the Bureau of Trademarks.
Under R.A. No. 8293, as amended by R.A. No. 9150,
the duration of a trademark registration is 10
years, renewable for periods of 10 years each
renewal. The request for renewal must be made
within 6 months before or after the expiration of
the registration. Respondent's PAPA mark was not
renewed within the period provided for under RA
No. 8293. Its registered term ended on August 11,
2003 but was reapplied for registration only on
April 4, 2005. Meanwhile, the mark PAPA
BANANA CATSUP was registered by respondent
only in the Supplemental Register, hence, was not
provided any protection. x x x. It is noted that the
PAPA BANANA CATSUP label was applied for
registration on November 15, 2006, over three
years after the expiration of its registration in the
Supplemental Register of the Philippine Patent
Office on August 11, 2003. Thus, while petitioner
has a point that the marks PAPA and PAPA
BANANA CATSUP have already expired and the
latter having been afforded no protection at all
and should not be juxtaposed with petitioner's
trademark, respondent can still use the marks
PAPA KETSARAP and PAPA BANANA CATSUP,
it appearing that the Intellectual Property
Office issued a Certificate of Registration No. 4-
2006-012364 for the latter on April 30, 2007,
to bar the registration of petitioner's "PAPA
BOY & DEVICE" mark.18 (Emphases supplied,
citations omitted.)
Anent the second ground, the Court of Appeals
ruled in the following manner:
After taking into account the aforementioned
doctrines and the factual circumstances of the
case at bar, this Court, after considering the
trademarks involved as a whole, is of the view
that petitioner's trademark "PAP A BOY &
DEVICE" is not confusingly similar to
respondent's "PAPA KETSARAP" and "PAPA
BANANA CATSUP" trademark. Petitioner's
trademark is "PAPA BOY" as a whole as opposed
to respondent's "PAPA". Although on its label the
word "PAPA" is prominent, the trademark should
be taken as a whole and not piecemeal. The
difference between the two marks are
conspicuous and noticeable. While respondent's
products are both labeled as banana sauces, that
of petitioner Barrio Fiesta is labeled as lechon
sauce.
Moreover, it appears on the label of petitioner's
product that the said lechon sauce is
manufactured by Barrio Fiesta thus, clearly
informing the public [of] the identity of _the
manufacturer of the lechon sauce. As claimed by
respondent, its products have been in commercial
use for decades. It is safe to assume then that the
consumers are already aware that "PAPA
KETSARAP" and "PAPA BANANA CATSUP" are
products of UFC and not of petitioner or the other
way around. In addition, as correctly pointed out
by petitioner, if a consumer is in the market for
banana sauce, he will not buy lechon sauce and
vice-versa because aside from the fact that the
labels of both parties' products contain the kind of
sauce they are marketing, the color of the
products is visibly different. An ordinary
consumer is familiar with the fact that the color of
a banana sauce is red while a lechon sauce is dark
brown. There can be no deception as both
products are marketed in bottles making the
distinction visible to the eye of the consumer and
the likelihood of acquiring a wrong sauce, remote.
Even if the products are placed side by side, the
dissimilarities between the two marks are
conspicuous, noticeable and substantial enough to
matter especially in the light of the following
variables that must be factored in.
Lastly, respondent avers that the word "PAPA"
was coined after the surname of the person who
first created and made use of the mark.
Admittedly, while "PAPA" is a surname, it is more
widely known as a term of endearment for one's
father. Respondent cannot, therefore, claim
exclusive ownership over and singular use of [the]
term. Petitioner was able to explain that it
adopted the word "PAPA" in parallel to the
nickname of the founder of Barrio fiesta which is
"MAMA CHIT". "PAPA BOY" was derived from the
nickname of one of the incorporators of herein
petitioner, a certain Bonifacio Ongpauco, son of
Mama Chit.19 (Emphasis ours, citation omitted.)
THEORY OF PETITIONER
Thus, petitioner came to this Court, seeking the
reversal of the questioned decision and resolution
of the Court of Appeals, and the reinstatement of
the decision of the IPO Director General affirming
the decision of the IPO-BLA. Petitioner raises the
following grounds:
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
I.
The court a quo erred in applying the "holistic
test" to determine whether there is confusing
similarity between the contending marks, and in
reversing the IPO-BLA and the Director General's
application of the "dominancy test."
II.
The court a quo erred in holding that there is no
likelihood of confusion between the contending
marks given that the "PAPA BOY & DEVICE" mark
is used on lechon sauce, as opposed to ketchup
products.
III.
The court a quo erred in holding that Petitioner
cannot claim exclusive ownership and use of the
"PAP A" mark for its sauce products because
"PAPA" is supposedly a common term of
endearment for one's father.20
Under the first ground, petitioner submitted the
following arguments:
1. The findings of administrative agencies, if
supported by substantial evidence, are binding
upon the courts.21
Petitioner alleges that the Court of Appeals should
have respected the ruling of the IPO Director
General, which was consistent with the ruling of
the IPO-BLA and supported by substantial
evidence, instead of substituting its findings of fact
for those of the Director General and the IPO-BLA.
2. The dominancy test should have been applied to
determine if there is confusing similarity between
the competing marks.22
Petitioner points out that the Director General and
the IPO-BLA found that the dominant feature of
the competing marks is the word "PAP A" and the
minor additions to respondent's "PAPA BOY &
DEVICE" mark do not negate likelihood of
confusion caused by the latter's use of the
dominant word "PAPA." Petitioner claims that
even compared solely to petitioner's "PAPA
KETSARAP" mark (Registration No. 34681), which
is conceded to have been timely renewed and to
have never expired, respondent's "PAPA BOY &
DEVICE" would still create the likelihood of
confusion.23
According to petitioner, the Court of Appeals
based its decision on Mead Johnson & Co. v. N.V.J.
Van Dorp, Ltd.,24 a case decided almost five
decades ago, long before Republic Act No. 8293 or
the 1998 Intellectual Property Code was enforced.
Thus, the Court of Appeals erroneously applied
the holistic test since given the nature of the
products bearing the competing marks, the
dominancy test should have been applied.
Petitioner claims that "[k]etchup and lechon sauce
are common and inexpensive household products
that are sold in groceries and regularly
encountered by the ordinary or common
purchaser who is not expected to examine,
scrutinize, and compare the details of the
competing marks."25
Petitioner distinguishes this case from Mead
Johnson and claims that the ordinary purchaser of
ketchup or lechon sauce is not likely to closely
scrutinize each mark as a whole, for the latter is
"undiscemingly rash" and usually in a hurry, and
cannot be expected to take note of the smiling
hog-like character or the blue ribbon-like device
with the words "Lechon Sauce." Petitioner argues
that under the Intellectual Property Code, it is not
necessary for one to colorably imitate the
competing trademark as a whole. It is sufficient
that one imitates a "dominant feature" of the mark
to constitute trademark infringement.
Petitioner asserts that as the IPO-BLA and the
Director General observed that the ordinary
purchaser is most likely to notice the words
"PAPA BOY," which, in turn, may lead him to
believe that there is a connection between
respondent's lechon sauce and petitioner's
ketchup products.
Under the second ground, petitioner argues that
the Court of Appeals seemed to be unmindful that
two kinds of confusion may arise from the use of
similar or colorable imitation
marks, i.e., confusion of goods (product confusion)
and confusion of business (source or origin
confusion). Petitioner claims that it is reasonable
to assume that it may expand its business to
producing lechon sauce, inasmuch as it already
produces food sauce products and its Articles of
Incorporation authorizes it to do so.
Petitioner alleges that the IPO-BLA recognized
that confusion of business may arise from
respondent's use of its "PAPA BOY & DEVICE"
mark for lechon sauce products, and that the
Director-General agreed with the IPO-BLA's
findings on this issue.
Petitioner asserts that ketchup and lechon sauce
are undeniably related goods; that they belong to
the same class, i.e., Class 30 of the Nice
Classifications; that they serve practically the
same purpose, i.e., to spice up dishes; and that
they are sold in similar bottles in the same shelves
in grocery stores. Petitioner argues that the Court
of Appeals had absolutely no basis for stating that
a person who is out to buy ketchup is not likely to
buy lechon sauce by mistake, as this analysis
allegedly only applies to "product confusion" and
does not consider confusion of business.
Petitioner alleges that "[t]here equally is
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actionable confusion when a buyer purchases
Respondent's 'PAPA BOY' lechon sauce believing
that the said product is related to or associated
with the famous 'PAPA KETSUP' makers."
Petitioner further alleges that "it is reasonable and
likely for a consumer to believe that Respondent's
'PAPA BOY' lechon sauce originated from or is
otherwise connected with Petitioner's line of
sauces" and that this is "the precise evil that
recognition of confusion of business seeks to
prevent."26
Petitioner avers that "PAPA" is a well-known mark
and that it has been in commercial use as early as
1954 on banana ketchup and similar goods. The
"PAPA" mark is also registered as a trademark and
in commercial use in other parts of the world such
as the United States of America and the Middle
East. Petitioner claims that "[b ]eing a trademark
that is registered and well-known both locally and
internationally, Petitioner's 'PAPA' marks cannot
be appropriated by another person or entity not
only with respect to goods similar to those with
respect to which it is registered, but also with
respect to goods which are not similar to those for
which the 'PAPA' marks are registered."27
Under the third ground, petitioner claims that the
fact that the word "PAPA" is a known term of
endearment for fathers does not preclude it from
being used as a mark to identify goods. Petitioner
claims that their mark falls under a type of mark
known as "arbitrary or fanciful marks," which are
"marks that bear no logical relation to the actual
characteristics of the products they represent,"
are "highly distinctive and valid," and "are entitled
to the greatest protection."28
Petitioner claims that the mark "PAPA" falls under
this class of arbitrary marks, even if "PAPA" is also
a common term of endearment for one's father.
Petitioner states that there is no logical
connection between one's father and food sauces,
such as ketchup; thus, with respect to ketchup,
food sauces, and their related products, and for
the purpose of identifying its products, petitioner
claims exclusive ownership of the term "PAPA" as
an arbitrary mark.
Petitioner alleges that if respondent "has a good
faith and proud desire to unmistakably and
distinctly identify its lechon sauce product out in
the market, it should have coined a mark that
departs from and is distinguished from those of its
competitors." Petitioner claims that respondent,
with full knowledge of the fame and the decades-
long commercial use of petitioner's "PAPA" marks,
opted for "PAPA BOY & DEVICE," which obviously
is just a "colorable imitation."29
THEORY OF RESPONDENT
In 30
its Comment,  respondent claims that
petitioner's marks have either expired and/or
"that no confusing similarity exists between them
and respondent's "PAPA BOY & DEVICE' mark."
Respondent alleges that under Section 15 of
Republic Act No. 166, a renewal application
should be filed within six months before the
expiration of the period or within three months
after such expiration. Respondent avers that the
expiration of the 20-year term for the "PAPA"
mark under Registration No. 32416 issued on
August 11, 1983 was August 11, 2003. The sixth
month before August 11, 2003 was February 11,
2003 and the third month after August 11, 2003
was November 11, 2003. Respondent claims that
the application that petitioner filed on October 28,
2005 was almost two years late. Thus, it was not a
renewal application, but could only be considered
a new application under the new Trademark Law,
with the filing date reckoned on October 28, 2005.
The registrability of the mark under the new
application was examined again, and any
certificate issued for the registration of "PAPA"
could not have been a renewal certificate.
As for petitioner's other mark "PAPA BANANA
CATSUP LABEL," respondent claims that its 20-
year term also expired on August 11, 2003 and
that petitioner only filed its application for the
new "PAPA LABEL DESIGN" on November 15,
2006. Having been filed three years beyond the
renewal application deadline, petitioner was not
able to renew its application on time, and cannot
claim a "continuous existence of its rights over the
'PAPA BANANA CATSUP LABEL."' Respondent
claims that the two marks are different from each
other and that the registration of one is
independent of the other. Respondent concludes
that the certificate of registration issued for "PAPA
LABEL DESIGN" is "not and will never be a
renewal certificate."31
Respondent also avers as follows:
1.3. With regard to the two new registrations of
petitioner namely: "PAPA" (Reg. No. 4-2005-
010788) and "PAPA LABEL DESIGN" (Reg. No. 4-
2006-012364), these were filed on October 28,
2005 and November 15, 2006, respectively, under
the Intellectual Property Code (RA 8293), which
follows the "first to file" rule, and were obviously
filed later than respondent's "PAPA BOY &
DEVICE" mark filed on April 4, 2002. These new
marks filed much later than the opposed "PAPA
BOY & DEVICE" mark cannot, therefore, be used as
basis for the opposition and should in fact, be
denied outrightly.
xxxx
A search of the Online Trademark Database of
Intellectual Property Office (IPO) will show that
only Registration No. 34681 issued for "PAPA
KETSARAP" was properly renewed on August 23,
2005. xx x Clearly, the registrations of "PAPA" and
"PAPA BANANA CATSUP LABEL" marks under
registration nos. 32416 and SR-6282 respectively,
have already expired when Petitioner filed its
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opposition proceeding against Respondent's
trademark on December 11, 2006. Having expired,
and therefore, no longer legally existing, the
"PAPA" and "PAPA BANANA CATSUP LABEL"
marks CANNOT BAR the registration of
respondent's mark. To allow petitioner's expired
marks to prevent respondent's distinct "PAPA
BOY & DEVICE" mark from being registered would
be the ultimate absurdity.32
Respondent posits that the Court of Appeals did
not err in reversing the decisions of the
administrative agencies, alleging that "[while] it is
true that the general rule is that the factual
findings of administrative bodies deserve utmost
respect when supported by evidence, the same is
subject to exceptions,"33 and that the Court of
Appeals had justifiable reasons to disregard the
factual finding of the IPO. Here, the Court of
Appeals wisely identified certain material facts
that were overlooked by the IPO-BLA and the IPO
Director General which it opined, when correctly
appreciated, would alter the result of the case.
Respondent alleges that the IPO-BLA erroneously
considered petitioner's marks "PAPA" and "PAPA
BANANA CATSUP LABEL" when it applied the
dominancy test in determining whether
petitioner's marks are confusingly similar to those
of respondent's mark "PAPA BOY & DEVICE."
Respondent avers that the IPO-BLA absurdly took
emphasis on the mark "PAPA" to arrive at its
decision and did not take into consideration that
petitioner's mark was already expired when
respondent applied for the registration of its
"PAPA BOY & DEVICE" mark. Respondent
compares its "PAPA BOY & DEVICE" with the only
mark that respondent allegedly has, "PAPA
KETSARAP," and found no confusing similarity
between the two.
We quote below respondent's discussion of its
application of the dominancy test to the marks in
question:
Applying the Dominancy test, as correctly
emphasized by the Court of Appeals, the dominant
feature in respondent's mark is "PAPA BOY" and
not "PAPA". It can be gleaned from respondent's
mark that the word "PAPA" was written in the
same font, style and color as the word "BOY".
There is also the presence of a "smiling hog-like
character" which is positioned very prominently,
both in size and location in said mark, at
glance (sic) even more dominant than the word
"PAPA BOY".
xxxx
On the other hand, the dominant feature in
petitioner's mark is "KETSARAP", not "PAPA".
Even an ordinary examiner could observe that the
word "KETSARAP" in petitioner's mark is more
prominently printed than the word "PAPA".
xxxx
In a dominancy test, the prominent feature of the
competing trademarks must be similar to cause
confusion or deception. x x x.34
Verily, respondent's dominant feature "PAPA
BOY" and the smiling hog-like character and
petitioner's dominant feature "KETSARAP", being
the word written in a larger font, are neither
confusing nor deceiving to the public. In fact, the
differences between their dominant marks are
very noticeable and conspicuous to every
purchaser.
Furthermore, the Supreme Court in Societe des
Produits Nestle, SA. v. Dy [ 641 Phil. 345], applied
the dominancy test by taking into account the
aural effects of the words and letters contained in
the marks in determining the issue of confusing
similarity. Obviously, petitioners' "PAPA
KETSARAP" mark does not in any way
sounds (sic) like respondent's "PAPA BOY" mark.
The common prefix "PAPA" does not render the
marks aurally the same. As discussed above, the
dominant feature in petitioner's mark is
"KETSARAP" and the dominant feature in
respondent's mark is "PAPA BOY". Thus, the
words "KETSARAP" and "PAP A BOY" in
petitioner's and respondent's respective marks
are obviously different in sound, making "PAPA
BOY & DEVICE" even more distinct from
petitioner's "PAPA KETSARAP" mark.35
Using the holistic test, respondent further
discusses the differences in the marks in this wise:
Even the use of the holistic test x x x takes into
consideration the entirety of the marks in
question [to] be considered in resolving confusing
similarity. The differences are again very obvious.
Respondent's mark has (1) the word "lechon
sauce" printed inside a blue ribbon-like device
which is illustrated below the word "PAPA BOY";
(2) a prominent smiling hog-like character
gesturing a thumbs-up sign and wearing a Filipino
hat and scarf stands beside the word "PAPA BOY";
and the word "BARRIO FIESTA" conspicuously
displayed above the said trademark which leaves
no doubt in the consumer's mind on the product
that he or she is purchasing. On the other hand,
petitioner's mark is the word "PAPA" enclosed by
a cloud on top of the word "KETSARAP' enclosed
by a geometrical figure.
xxxx
In the instant case, the respective marks are
obviously different in color scheme, logo, spelling,
sound, meaning and connotation. Thus, yet again,
under the holistic test there can be no confusion
or deception between these marks.
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It also bears stressing that petitioner's "PAPA
KETSARAP" mark covers "banana catsup" while
respondent's "PAPA BOY & DEVICE" covers
"lechon sauce'', thereby obliterating any confusion
of products of both marks as they travel different
channels of trade. If a consumer is in the market
for banana catsup, he or she will not buy lechon
sauce and vice-versa. As a result, the margin of
error in the acquisition of one for the other is
simply remote. Lechon sauce which is liver sauce
is distinct from catsup extracted/ made from
banana fruit. The flavor and taste of a lechon sauce
are far from those of a banana catsup. Lechon
sauce is sauce for "lechon" while banana catsup is
apparently catsup made from banana.36
Respondent also contends that "PAPA BOY &
DEVICE" mark is not confusingly similar to
petitioner's trademark "PAPA KETSARAP" in
terms of appearance, sound, spelling and meaning.
The difference in nature, usage, taste and
appearance of products decreases the possibility
of deception among buyers.37
Respondent alleges that since petitioner merely
included banana catsup as its product in its
certificate, it cannot claim any further right to the
mark "PAPA KETSARAP" on products other than
banana catsup. Respondent also alleges that
petitioner cannot raise "international notoriety of
the mark" for the first time on appeal and that
there is no proof that petitioner's mark is
internationally well-known.38
Furthermore, respondent argues that petitioner
cannot claim exclusive ownership over the use of
the word "PAPA," a term of endearment for one's
father. Respondent points out that there are
several other valid and active marks owned by
third parties which use the word "PAPA," even in
classes of goods similar to those of petitioner's.
Respondent avers that petitioner's claim that its
"PAPA" mark is an arbitrary mark is belatedly
raised in the instant petition, and cannot be
allowed because the "PAPA KETSARAP" mark
would immediately bring the consuming public to
thinking that the product involved is catsup and
the description of said catsup
is "masarap" (delicious) and due to the logical
relation of the petitioner's mark to the actual
product, it being descriptive or generic, it is far
from being arbitrary or fanciful.39
Lastly, respondent claims that the Court of
Appeals correctly ruled that respondent's product
cannot be confused as originating from the
petitioner. Since it clearly appears in the product
label of the respondent that it is manufactured by
Barrio Fiesta, the public is dutifully informed of
the identity of the lechon sauce manufacturer. The
Court of Appeals further took into account the fact
that petitioner's products have been in
commercial use for decades.40
Petitioner, in its Reply41 to respondent's
Comment, contends that respondent cannot
invoke a prior filing date for the "PAPA BOY" mark
as against Petitioner's "PAPA" and "PAPA
BANANA CATSUP LABEL" marks, because the
latter marks were still registered when
respondent applied for registration of its "PAPA
BOY" mark. Thus, the IPO-BLA and Director
General correctly considered them in deciding
whether the "PAPA BOY" mark should be
registered, using the "first to file" rule under
Section 123.l(d) of Republic Act No. 8293, or the
Intellectual Property Code (IP Code).
Petitioner reiterates its argument that the Court of
Appeals erred in applying the holistic test and that
the proper test under the circumstances is the
dominancy test, which was correctly applied by
the IPO-BLA and the Director General.42
THIS COURT'S RULING
The petition has merit.
We find that the Court of Appeals erred in
applying the holistic test and in reversing and
setting aside the decision of the IPO-BLA and that
of the IPO Director General, both of which rejected
respondent's application for the mark "PAPA BOY
& DEVICE."
In Dermaline, Inc. v. Myra Pharmaceuticals,
Inc.,43 we defined a trademark as "any distinctive
word, name, symbol, emblem, sign, or device, or
any combination thereof, adopted and used by a
manufacturer or merchant on his goods to identify
and distinguish them from those manufactured,
sold, or dealt by others." We held that a trademark
is "an intellectual property deserving protection
by law."
The rights of the trademark owner are found in
the Intellectual Property Code, which provides:
Section 147. Rights Conferred. - 147.1. The
owner of a registered mark shall have the
exclusive right to prevent all third parties not
having the owner's consent from using in the
course of trade identical or similar signs or
containers for goods or services which are
identical or similar to those in respect of which
the trademark is registered where such use would
result in a likelihood of confusion. In case of the
use of an identical sign for identical goods or
services, a likelihood of confusion shall be
presumed.
Section 168. Unfair Competition, Rights,
Regulation and Remedies. - 168.1. A person who
has identified in the mind of the public the goods
he manufactures or deals in, his business or
services from those of others, whether or not a
registered mark is employed, has a property right
in the goodwill of the said goods, business or
services so identified, which will be protected in
the same manner as other property rights.
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The guideline for courts in determining likelihood
of confusion is found in A.M. No. 10-3-10-SC, or
the Rules of Procedure for Intellectual Property
Rights Cases, Rule 18, which provides:
RULE 18
Evidence in Trademark Infringement and Unfair
Competition Cases
SECTION 1. Certificate of Registration. - A
certificate of registration of a mark shall be prima
facie evidence of:
a) the validity of the registration;
b) the registrant's ownership of the mark;
and
c) the registrant's exclusive right to use
the same in connection with the goods or
services and those that are related
thereto specified in the certificate.
xxxx
SECTION 3. Presumption of Likelihood of
Confusion. - Likelihood of confusion shall be
presumed in case an identical sign or mark is used
for identical goods or services.
SECTION 4. Likelihood of Confusion in Other
Cases. - In determining whether one trademark is
confusingly similar to or is a colorable imitation of
another, the court must consider the general
impression of the ordinary purchaser, buying
under the normally prevalent conditions in trade
and giving the attention such purchasers usually
give in buying that class of goods. Visual, aural,
connotative comparisons and overall impressions
engendered by the marks in controversy as they
are encountered in the realities of the marketplace
must be taken into account. Where there are both
similarities and differences in the marks, these
must be weighed against one another to see which
predominates.
In determining likelihood of confusion between
marks used on non-identical goods or services,
several factors may be taken into account, such as,
but not limited to:
a) the strength of plaintiffs mark;
b) the degree of similarity between the
plaintiffs and the defendant's marks;
c) the proximity of the products or
services;
d) the likelihood that the plaintiff will
bridge the gap;
e) evidence of actual confusion;
f) the defendant's good faith in adopting
the mark;
g) the quality of defendant's product or
service; and/or
h) the sophistication of the buyers.
"Colorable imitation" denotes such a close or
ingenious imitation as to be calculated to deceive
ordinary persons, or such a resemblance to the
original as to deceive an ordinary purchaser
giving such attention as a purchaser usually gives,
as to cause him to purchase the one supposing it
to be the other.
SECTION 5. Determination of Similar and
Dissimilar Goods or Services. - Goods or services
may not be considered as being similar or
dissimilar to each other on the ground that, in any
registration or publication by the Office, they
appear in different classes of the Nice
Classification.
In this case, the findings of fact of the highly
technical agency, the Intellectual Property Office,
which has the expertise in this field, should have
been given great weight by the Court of Appeals.
As we held in Berris Agricultural Co., Inc. v.
Abyadang44:
R.A. No. 8293 defines a "mark" as any visible sign
capable of distinguishing the goods (trademark)
or services (service mark) of an enterprise and
shall include a stamped or marked container of
goods. It also defines a "collective mark" as any
visible sign designated as such in the application
for registration and capable of distinguishing the
origin or any other common characteristic,
including the quality of goods or services of
different enterprises which use the sign under the
control of the registered owner of the collective
mark.
On the other hand, R.A. No. 166 defines a
"trademark" as any distinctive word, name,
symbol, emblem, sign, or device, or any
combination thereof, adopted and used by a
manufacturer or merchant on his goods to identify
and distinguish them from those manufactured,
sold, or dealt by another. A trademark, being a
special property, is afforded protection by law.
But for one to enjoy this legal protection, legal
protection ownership of the trademark should
rightly be established.
The ownership of a trademark is acquired by its
registration and its actual use by the
manufacturer. or distributor of the goods made
available to the purchasing public. Section 122 of
R.A.. No. 8293 provides that the rights in a mark
shall be acquired by means of its valid registration
with the IPO. A certificate of registration of a
mark, once issued, constitutes prima
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facie evidence of the validity of the registration, of
the registrant's ownership of the mark, and of the
registrant's exclusive right to use the same in
connection with the goods or services and those
that are related thereto specified in the certificate.
R.A. No. 8293, however, requires the applicant for
registration or the registrant to file a declaration
of actual use (DAU) of the mark, with evidence to
that effect, within three (3) years from the filing of
the application for registration; otherwise, the
application shall be refused or the mark shall be
removed from the register. In other words,
the prima facie presumption brought about by the
registration of a mark may be challenged and
overcome, in an appropriate action, by proof of
the nullity of the registration or of non-use of the
mark, except when excused. Moreover, the
presumption may likewise be defeated by
evidence of prior use by another person, i.e., it will
controvert a claim of legal appropriation or of
ownership based on registration by a subsequent
user. This is because a trademark is a creation of
use and belongs to one who first used it in trade or
commerce.
The determination of priority of use of a mark is a
question of fact. Adoption of the mark alone does
not suffice. One may make advertisements, issue
circulars, distribute price lists on certain goods,
but these alone will not inure to the claim of
ownership of the mark until the goods bearing the
mark are sold to the public in the market.
Accordingly, receipts, sales invoices, and
testimonies of witnesses as customers, or orders
of buyers, best prove the actual use of a mark in
trade and commerce during a certain period of
time.
xxxx
Verily, the protection of trademarks as intellectual
property is intended not only to preserve the
goodwill and reputation of the business
established on the goods bearing the mark
through actual use over a period of time, but also
to safeguard the public as consumers against
confusion on these goods. On this matter of
particular concern, administrative agencies,
such as the IPO, by reason of their special
knowledge and expertise over matters falling
under their jurisdiction, are in a better
position to pass judgment thereon. Thus, their
findings of fact in that regard are generally
accorded great respect, if not finality by the
courts, as long as they are supported by
substantial evidence, even if such evidence
might not be overwhelming or even
preponderant. It is not the task of the
appellate court to weigh once more the
evidence submitted before the administrative
body and to substitute its own judgment for
that of the administrative agency in respect to
sufficiency of evidence. (Emphasis added,
citations omitted.)
In trademark controversies, each case must be
scrutinized according to its peculiar
circumstances, such that jurisprudential
precedents should only be made to apply if they
are specifically in point.45 The cases discussed
below are mentioned only for purposes of lifting
the applicable doctrines, laws, and concepts, but
not for their factual circumstances, because of the
uniqueness of each case in controversies such as
this one.
There are two tests used in jurisprudence to
determine likelihood of confusion, namely the
dominancy test used by the IPO, and the holistic
test adopted by the Court of Appeals. In Skechers,
U.S.A., Inc. v. Inter Pacific Industrial Trading
Corp.,46 we held:
The essential element of infringement under R.A.
No. 8293 is that the infringing mark is likely to
cause confusion. In determining similarity and
likelihood of confusion, jurisprudence has
developed tests - the Dominancy Test and the
Holistic or Totality Test. The Dominancy Test
focuses on the similarity of the prevalent or
dominant features of the competing trademarks
that might cause confusion, mistake, and
deception in the mind of the purchasing public.
Duplication or imitation is not necessary; neither
is it required that the mark sought to be registered
suggests an effort to imitate. Given more
consideration are the aural and visual impressions
created by the marks on the buyers of goods,
giving little weight to factors like prices, quality,
sales outlets, and market segments.
xxxx
Relative to the question on confusion of marks and
trade names, jurisprudence has noted two (2)
types of confusion, viz.: (1) confusion of goods
(product confusion), where the ordinarily prudent
purchaser would be induced to purchase one
product in the belief that he was purchasing the
other; and (2) confusion of business (source or
origin confusion), where, although the goods of"
the parties are different, the product, the mark of
which registration is applied for by one party, is
such as might reasonably be assumed to originate
with the registrant of an earlier product, and the
public would then be deceived either into that
belief or into the belief that there is some
connection between the two parties, though
inexistent.
Applying the Dominancy Test to the case at bar,
this Court finds that the use of the stylized "S" by
respondent in its Strong rubber shoes infringes on
the mark already registered by petitioner with the
IPO. While it is undisputed that petitioner's
stylized "S" is within an oval design, to this Court's
mind, the dominant feature of the trademark is
the stylized "S," as it is precisely the stylized "S"
which catches the eye of the purchaser. Thus, even
if respondent did not use an oval design, the mere
fact that it used the same stylized "S", the same
being the dominant feature of petitioner's
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trademark, already constitutes infringement
under the Dominancy Test.
This Court cannot agree with the observation of
the CA that the use of the letter "S" could hardly be
considered as highly identifiable to the products
of petitioner alone. The CA even supported its
conclusion by stating that the letter "S" has been
used in so many existing trademarks, the most
popular of which is the trademark "S" enclosed by
an inverted triangle, which the CA says is
identifiable to Superman. Such reasoning,
however, misses the entire point, which is that
respondent had used a stylized "S," which is the
same stylized "S" which petitioner has a registered
trademark for. The letter "S" used in the
Superman logo, on the other hand, has a block-like
tip on the upper portion and a round elongated tip
on the lower portion. Accordingly, the comparison
made by the CA of the letter "S" used in the
Superman trademark with petitioner's stylized "S"
is not appropriate to the case at bar.
Furthermore, respondent did not simply use the
letter "S," but it appears to this Court that based
on the font and the size of the lettering, the
stylized "S" utilized by respondent is the very
same stylized "S" used by petitioner; a stylized "S"
which is unique and distinguishes petitioner's
trademark. Indubitably, the likelihood of
confusion is present as purchasers will associate
the respondent's use of the stylized "S" as having
been authorized by petitioner or that
respondent's product is connected with
petitioner's business.
xxxx
While there may be dissimilarities between the
appearances of the shoes, to this Court's mind
such dissimilarities do not outweigh the stark and
blatant similarities in their general features.xx x.
Based on the foregoing, this Court is at a loss as to
how the RTC and the CA, in applying the holistic
test, ruled that there was no colorable imitation,
when it cannot be any more clear and apparent to
this Court that there is colorable imitation. The
dissimilarities between the shoes are too trifling
and frivolous that it is indubitable that
respondent's products will cause confusion and
mistake in the eyes of the public. Respondent's
shoes may not be an exact replica of petitioner's
shoes, but the features and overall design are so
similar and alike that confusion is highly likely.
xxxx
Neither can the difference in price be a complete
defense in trademark infringement. In McDonald's
Corporation v. L.C Big Mak Burger, Inc., this Court
held:
Modem 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 (see 148 ALR 56 et seq;  53 Am. Jur. 576)
or is in any way connected with the activities of
the infringer; or when it forestalls the normal
potential expansion of his business (v. 148 ALR
77, 84; 52 Am. Jur. 576, 577). xx x.
Indeed, the registered trademark owner may use
its mark on the same or similar products, in
different segments of the market, and at different
price levels depending on variations of the
products for specific segments of the market. The
purchasing public might be mistaken in thinking
that petitioner had ventured into a lower market
segment such that it is not inconceivable for the
public to think that Strong or Strong Sport Trail
might be associated or connected with petitioner's
brand, which scenario is plausible especially since
both petitioner and respondent manufacture
rubber shoes.
Withal, the protection of trademarks as
intellectual property is intended not only to
preserve the goodwill and reputation of the
business established on the goods bearing the
mark through actual use over a period of time, but
also to safeguard the public as consumers against
confusion on these goods. While respondent's
shoes contain some dissimilarities with
petitioner's shoes, this Court cannot close its eye
to the fact that for all intents and purpose,
respondent had deliberately attempted to copy
petitioner's mark and overall design and features
of the shoes. Let it be remembered, that
defendants in cases of infringement do not
normally copy but only make colorable changes.
The most successful form of copying is to employ
enough points of similarity to confuse the public,
with enough points of difference to confuse the
courts. (Citations omitted.)
The Court discussed the concept of confusion of
business in the case of Societe Des Produits Nestle,
S.A. v. Dy, Jr.,47 as quoted below:
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. In Sterling Products
International, Inc. v. Farbenfabriken Bayer
Aktiengesellschaft, the Court distinguished the two
types of confusion:
Callman notes two types of confusion. The first is
the confusion of goods "in which event the
ordinarily prudent purchaser would be induced to
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purchase one product in the belief that he was
purchasing the other." In which case, "defendant's
goods are then bought as the plaintiff's, and the
poorer quality of the former reflects adversely on
the plaintiff's reputation." The other is
the confusion of business: "Here though the goods
of the parties are different, the defendant's
product is such as might reasonably be assumed
to originate with the plaintiff, and the public
would then be deceived either into that belief or
into the belief that there is some connection
between the plaintiff and defendant which, in fact,
does not exist."
There 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 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.
xxxx
In cases involving trademark infringement, no set
of rules can be deduced. Each case must be
decided on its own merits. Jurisprudential
precedents must be studied in the light of the facts
of each particular case. In McDonald's Corporation
v. MacJoy Fastfood Corporation, the Court held:
In trademark cases, particularly in ascertaining
whether one trademark is confusingly similar to
another, no set rules can be deduced because each
case must be decided on its merits. In such cases,
even more than in any other litigation, precedent
must be studied in the light of the facts of the
particular case. That is the reason why in
trademark cases, jurisprudential precedents
should be applied only to a case if they are
specifically in point.
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.
x x x.
xxxx
In McDonald's Corporation v. MacJoy Fastfood
Corporation, the Court applied the dominancy test
in holding that "MACJOY" is confusingly similar to
"MCDONALD'S." The Court held:
While we agree with the CA's detailed
enumeration of differences between the two (2)
competing trademarks herein involved, we believe
that the holistic test is not the one applicable in
this case, the dominancy test being the one more
suitable. In recent cases with a similar factual
milieu as here, the Court has consistently used and
applied the dominancy test in determining
confusing similarity or likelihood of confusion
between competing trademarks.
xxxx
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 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. x x x.
For sure, it is the prefix "Mc," and 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," "Mac Fries," "Mc Spaghetti,"
"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.
In McDonald's Corporation v. L. C. Big Mak Burger,
Inc., the Court applied the dominancy test in
holding that "BIG MAK" is confusingly similar to
"BIG MAC." The Court held:
This Court x x x has relied on the dominancy test
rather than the holistic test. The dominancy test
considers the dominant features in the competing
marks in determining whether they are
confusingly similar. Under the dominancy test,
courts give greater weight to the similarity of the
appearance of the product arising from the
adoption of the dominant features of the
registered mark, disregarding minor differences.
Courts will consider more the aural and visual
impressions created by the marks in the public
mind, giving little weight to factors like prices,
quality, sales outlets and market segments.
Thus, in the 1954 case of Co Tiong Sa v. Director of
Patents, the Court ruled:
x x x It has been consistently held that the
question of infringement of a trademark is to be
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determined by the test of dominancy. Similarity in
size, form and color, while relevant, is not
conclusive. If the competing trademark contains
the main or essential or dominant features of
another, and confusion and deception is likely to
result, infringement takes place. Duplication or
imitation is not necessary; nor is it necessary that
the infringing label should suggest an effort to
imitate. (G. Heilman Brewing Co. vs. Independent
Brewing Co., 191 F., 489, 495, citing Eagle White
Lead Co. vs. Pflugh (CC) 180 Fed. 579). The
question at issue in cases of infringement of
trademarks is whether the use of the marks
involved would be likely to cause confusion or
mistakes in the mind of the public or deceive
purchasers. (Auburn Rubber Corporation vs.
Hanover Rubber Co., 107 F. 2d 588; xx x)
xxxx
The test of dominancy is now explicitly
incorporated into law in Section 155.l of the
Intellectual Property Code which defines
infringement as the "colorable imitation of a
registered mark x x x or a dominant
feature thereof."
Applying the dominancy test, the Court finds that
respondents' use of the "Big Mak" mark results in
likelihood of confusion. First, "Big Mak" sounds
exactly the same as "Big Mac." Second, the first
word in "Big Mak" is exactly the same as the first
word in "Big Mac." Third, the first two letters in
"Mak" are the same as the first two letters in
"Mac." Fourth, the last letter "Mak" while a "k"
sounds the same as "c" when the word "Mak" is
pronounced. Fifth, in Filipino, the letter "k"
replaces "c" in spelling, thus "Caloocan" is spelled
"Kalookan."
In Societe Des Produits Nestle, SA. v. Court of
Appeals, the Court applied the dominancy test in
holding that "FLAVOR MASTER" is confusingly
similar to "MASTER ROAST" and "MASTER
BLEND." The Court held:
While this Court agrees with the Court of Appeals'
detailed enumeration of differences between the
respective trademarks of the two coffee products,
this Court cannot agree that totality test is the one
applicable in this case. Rather, this Court believes
that the dominancy test is more suitable to this
case in light of its peculiar factual milieu.
Moreover, the totality or holistic test is contrary to
the elementary postulate of the law on trademarks
and unfair competition that confusing similarity is
to be determined on the basis of visual, aural,
connotative comparisons and overall impressions
engendered by the marks in controversy as they
are encountered in the realities of the
marketplace. The totality or holistic test only
relies on visual comparison between two
trademarks whereas the dominancy test relies not
only on the visual but also on the aural and
connotative comparisons and overall impressions
between the two trademarks.
For this reason, this Court agrees with the BPTTT
when it applied the test of dominancy and held
that:
xxxx
The scope of protection afforded to registered
trademark owners is not limited to protection
from. infringers with identical
goods.1âwphi1 The scope of protection
extends to protection from infringers with
related goods, and to market areas that are the
normal expansion of business of the registered
trademark owners. Section 138 of R.A. No. 8293
states:
Certificates of Registration. - A certificate of
registration of a mark shall be prima
facie evidence of validity of the registration, the
registrant's ownership of the mark, and of the
registrant's exclusive right to use the same in
connection with the goods or services and those
that are related thereto specified in the certificate.
x x x.
In Mighty Corporation v. E. & J Gallo Winery, the
Court held that, "Non-competing goods may be
those which, though they are not in actual
competition, are so related to each other that it
can reasonably be assumed that they originate
from one manufacturer, in which case, confusion
of business can arise out of the use of similar
marks." In that case, the Court enumerated factors
in determining whether goods are related: (1)
classification of the goods; (2) nature of the goods;
(3) descriptive properties, physical attributes or
essential characteristics of the goods, with
reference to their form, composition, texture or
quality; and (4) style of distribution and
marketing of the goods, including how the goods
are displayed and sold.
xxxx
x x x. 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 afforded to registered trademark
owners extends to market areas that are the
normal expansion of business:
xxxx
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.
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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 (see 148 ALR 56 et sq;  53 Am. Jur. 576) or
is in any way connected with the activities of the
infringer; or when it forestalls the normal
potential expansion of his business (v. 148 ALR,
77, 84; 52 Arn. Jur. 576, 577). (Emphases supplied,
citations omitted.)
Again, this Court discussed the dominancy test
and confusion of business in Dermaline, Inc. v.
Myra Pharmaceuticals, Inc.,48 and we quote:
The Dominancy Test focuses on the similarity of
the prevalent features of the competing
trademarks that might cause confusion or
deception. It is applied when the trademark
sought to be registered contains the main,
essential and dominant features of the earlier
registered trademark, and confusion or deception
is likely to result. Duplication or imitation is not
even required; neither is it necessary that the
label of the applied mark for registration should
suggest an effort to imitate. The important issue is
whether the use of the marks involved would
likely cause confusion or mistake in the mind of or
deceive the ordinary purchaser, or one who is
accustomed to buy, and therefore to some extent
familiar with, the goods in question. Given greater
consideration are the aural and visual impressions
created by the marks in the public mind, giving
little weight to factors like prices, quality, sales
outlets, and market segments. The test of
dominancy is now explicitly incorporated into law
in Section 155.l of R.A. No. 8293 which provides-
155.1. Use in commerce any reproduction,
counterfeit, copy, or colorable
imitation of a registered mark or the
same container or a dominant
feature thereof in connection with the
sale, offering for sale, distribution,
advertising of any goods or services
including other preparatory steps
necessary to carry out the sale of any
goods or services on or in connection
with which such use is likely to cause
confusion, or to cause mistake, or to
deceive xx x.
xxxx
Relative to the question on confusion of marks and
trade names, jurisprudence has noted two (2)
types of confusion, viz.: (1) confusion of goods
(product confusion), where the ordinarily prudent
purchaser would be induced to purchase one
product in the belief that he was purchasing the
other; and (2) confusion of business (source or
origin confusion), where, although the goods of
the parties are different, the product, the mark of
which registration is applied for by one party, is
such as might reasonably be assumed to originate
with the registrant of an earlier product, and the
public would then be deceived either into that
belief or into the belief that there is some
connection between the two parties, though
inexistent.
xxxx
We agree with the findings of the IPO. As correctly
applied by the IPO in this case, while there are no
set rules that can be deduced as what constitutes a
dominant feature with respect to trademarks
applied for registration; usually, what are taken
into account are signs, color, design, peculiar
shape or name, or some special, easily
remembered earmarks of the brand that readily
attracts and catches the attention of the ordinary
consumer.
xxxx
Further, Dermaline's stance that its product
belongs to a separate and different classification
from Myra's products with the registered
trademark does not eradicate the possibility of
mistake on the part of the purchasing public to
associate the former with the latter, especially
considering that both classifications pertain to
treatments for the skin.
Indeed, the registered trademark owner may use
its mark on the same or similar products, in
different segments of the market, and at different
price levels depending on variations of the
products for specific segments of the market. The
Court is cognizant that the registered trademark
owner enjoys protection in product and market
areas that are the normal potential expansion of
his business. Thus, we have held-
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
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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 (see 148 ALR
56 et seq; 53 Am Jur. 576) or is in any way
connected with the activities of the
infringer; or when it forestalls the
normal potential expansion of his
business (v. 148 ALR 77, 84; 52 Am. Jur.
576, 577).
Thus, the public may mistakenly think that
Dermaline is connected to or associated with
Myra, such that, considering the current
proliferation of health and beauty products in the
market, the purchasers would likely be misled that
Myra has already expanded its business through
Dermaline from merely carrying pharmaceutical
topical applications for the skin to health and
beauty services.
Verily, when one applies for the registration of a
trademark or label which is almost the same or
that very closely resembles one already used and
registered by another, the application should be
rejected and dismissed outright, even without any
opposition on the part of the owner and user of a
previously registered label or trademark. This is
intended not only to avoid confusion on the part of
the public, but also to protect an already used and
registered trademark and an established goodwill.
(Citations omitted.)
Section 123.l(d) of the IP Code provides:
A mark cannot be registered if it:
xxxx
(d) Is identical with a registered mark belonging
to a different proprietor or a mark with an earlier
filing or priority date, in respect of:
i. The same goods or services, or
ii. Closely related goods or services, or
iii. If it nearly resembles such a mark as to
be likely to deceive or cause confusion[.]
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." Contrary to
respondent's contention, "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."49 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.
We quote the relevant portion of the IPO-BLA
decision on this point below:
A careful examination of Opposer's and
Respondent-applicant's respective marks shows
that the word "PAPA" is the dominant feature: In
Opposer's marks, the word "PAPA" is either the
mark by itself or the predominant word
considering its stylized font and the conspicuous
placement of the word "PAPA" before the other
words. In Respondent-applicant's mark, 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. The visual and aural impressions
created by such dominant word "PAPA" at the
least is that the respective goods of the parties
originated from the other, or that one party has
permitted or has been given license to the other to
use the word "PAPA" for the other party's product,
or that there is a relation/connection between the
two parties when, in fact, there is none. This is
especially true considering that the products of
both parties belong to the same class and are
closely related: Catsup and lechon sauce or liver
sauce are both gravy-like condiments used to
spice up dishes. Thus, confusion of goods and of
business may likely result.
Under the Dominancy Test, the dominant features
of the competing marks are considered in
determining whether these competing marks are
confusingly similar. Greater weight is given to the
similarity of the appearance of the products
arising from the adoption of the dominant
features of the registered mark, disregarding
minor differences. The visual, aural, connotative,
and overall comparisons and impressions
engendered by the marks in controversy as they
are encountered in the realities of the marketplace
are the main considerations (McDonald's
Corporation, et al., v. L. C. Big Mak Burger, Inc., et
al., G. R. No.143993, August 18, 2004; Societe Des
Produits Nestle, S. A." et al. v. Court of Appeals, et
al., G. R. No. 112012, April 4, 2001). 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. (Lim Hoa v. Director of
Patents, 100 Phil. 214 [1956]); Co Tiong Sa v.
Director of Patents, et al., G. R. No. L-5378, May 24,
1954). Duplication or imitation is not necessary;
nor is it necessary that the infringing label should
suggest an effort to imitate (Lim Hoa v. Director of
Patents, supra, and Co Liang Sa v. Director of
Patents, supra). Actual confusion is not required:
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Only likelihood of confusion on the part of the
buying public is necessary so as to render two
marks confusingly similar so as to deny the
registration of the junior mark (Sterling Products
International, Inc. v. Farbenfabriken Bayer
Aktiengesellschaft, 137 Phil. 838 [1969]).
As to the first issue of whether PAPA BOY is
confusingly similar to Opposer's PAPA mark, this
Bureau rules in the affirmative.
The records bear the following:
1. Registration No. 32416 issued for the
mark "PAPA" under Class 29 goods was
deemed expired as of February 11, 2004
(Exhibit "A" attached to the VERIFIED
NOTICE OF OPPOSITION). Application
Serial No. 4-2005-010788 was filed on
October 28, 2005 for the same mark
"PAPA" for Class 30 goods and
Registration No. 42005010788 was
issued on March 19, 2007;
2. Opposer was issued for the mark
"PAPA BANANA CATSUP LABEL" on
August 11, 1983 Registration No. SR-6282
for Class 30 goods in the Supplemental
Register, which registration expired in
2003. Application Serial No. 4-2006-
012364 was filed for the mark "PAPA
LABEL DESIGN" for Class 30 goods on
November 15, 2006, and Registration No.
42006012364 was issued on April 30,
2007; and
3. Lastly, Registration No. 34681 for the
mark "PAPA KETSARAP" for Class 30
goods was issued on August 23, 1985 and
was renewed on August 23, 2005.
Though Respondent-applicant was first to file the
subject application on April 04, 2002 vis-a-vis the
mark "PAP A" the filing date of which is reckoned
on October 28, 2005, and the mark "PAPA LABEL
DESIGN" the filing date of which is reckoned on
November 15, 2006, Opposer was able to secure a
registration for the mark "PAPA KETSARAP" on
August 23, 1985 considering that Opposer was the
prior registrant and that its renewal application
timely filed on August 23, 2005.
xxxx
Pursuant to [Section 123 .1 (d) of the IP Code], the
application for registration of the subject mark
cannot be allowed considering that Opposer was
earlier registrant of the marks PAPA and PAPA
KETSARAP which registrations were timely
renewed upon its expiration. Respondent-
applicant's mark "PAPA BOY & DEVICE" is
confusingly similar to Opposer's mark "PAPA
KETSARAP" and is applied to goods that are
related to Opposer's goods, but Opposer's mark
"PAPA KETSARAP" was registered on August 23,
1985 per Certificate of Registration No. 34681,
which registration was renewed for a period of 10
years counted from August 23, 2005 per
Certificate of Renewal of Registration No. 34681
issued on August 23, 2005. To repeat, Opposer has
already registered a mark which Respondent-
applicant's mark nearly resembles as to likely
deceive or cause confusion as to origin and which
is applied to goods to which respondent-
applicant's goods under Class 30 are closely
related.1âwphi1
Section 138 of the IP Code provides that a
certificate of registration of a mark is prima
facie  evidence of the validity of the registration,
the registrant's ownership of the mark, and of the
registrant's exclusive right to use the same in
connection with the goods and those that are
related thereto specified in the certificate.50
We agree that respondent's mark cannot be
registered. 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 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
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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. 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 of fair play.51

WHEREFORE, we hereby GRANT the petition.

We SET ASIDE the June 23, 2011 Decision and
the October 4, 2011 Resolution of the Court of
Appeals in CA-G.R. SP No. 107570,
and REINSTATE the March 26, 2008 Decision of
the Bureau of Legal Affairs of the Intellectual
Property Office (IPO-BLA) and the January 29,
2009 Decision of the Director General of the IPO.

SO ORDERED.

TERESITA J. LEONARDO-DE CASTRO

Associate Justice

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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 171053               October 15, 2007
SEHWANI, INCORPORATED and/or BENITA'S
FRITES, INC., Petitioner,
vs.
IN-N-OUT BURGER, INC., Respondent.
DECISION
YNARES-SANTIAGO, J.:
This petition for review assails the Decision1 of the
Court of Appeals in CA-G.R. SP No. 88004 dated
October 21, 2005, which affirmed the December 7,
2004 Order2 of Director General Emma C.
Francisco of the Intellectual Property Office (IPO),
in Appeal No. 14-2004-0004 finding that
petitioners’ appeal was filed out of time, as well as
the Resolution3 dated January 12, 2006 denying
the motion for reconsideration.
Respondent IN-N-OUT Burger, Inc., a foreign
corporation organized under the laws of
California, U.S.A., and not doing business in the
Philippines, filed before the Bureau of Legal
Affairs of the IPO (BLA-IPO), an administrative
complaint against petitioners Sehwani, Inc. and
Benita’s Frites, Inc. for violation of intellectual
property rights, attorney’s fees and damages with
prayer for the issuance of a restraining order or
writ of preliminary injunction.4
Respondent alleged that it is the owner of the
tradename "IN-N-OUT" and trademarks "IN-N-
OUT," "IN-N-OUT Burger & Arrow Design" and
"IN-N-OUT Burger Logo," which are used in its
business since 1948 up to the present. These
tradename and trademarks were registered in the
United States as well as in other parts of the
world.5
On June 2, 1997, respondent applied with the IPO
for the registration of its trademark "IN-N-OUT
Burger & Arrow Design" and servicemark "IN-N-
OUT." In the course of its application, respondent
discovered that petitioner Sehwani, Inc. had
obtained Trademark Registration No. 56666 for
the mark "IN N OUT" (THE INSIDE OF THE
LETTER "O" FORMED LIKE A STAR) on December
17, 1993 without its authority.6 Respondent thus
demanded that petitioner Sehwani, Inc. desist
from claiming ownership of the mark "IN-N-OUT"
and to voluntarily cancel its Trademark
Registration No. 56666. Petitioner Sehwani, Inc.
however refused to accede to the demand and
even entered into a Licensing Agreement granting
its co-petitioner Benita’s Frites, Inc. license to use
for a period of five years the trademark "IN-N-OUT
BURGER" in its restaurant in Pasig City.7 Hence,
respondent filed a complaint for violation of
intellectual property rights.
In their answer with counterclaim, petitioners
alleged that respondent lack the legal capacity to
sue because it was not doing business in the
Philippines and that it has no cause of action
because its mark is not registered or used in the
Philippines. Petitioner Sehwani, Inc. also claimed
that as the registered owner of the "IN-N-OUT"
mark, it enjoys the presumption that the same was
validly acquired and that it has the exclusive right
to use the mark. Moreover, petitioners argued that
other than the bare allegation of fraud in the
registration of the mark, respondent failed to
show the existence of any of the grounds for
cancellation thereof under Section 151 of Republic
Act (R.A.) No. 8293, otherwise known as The
Intellectual Property Code of the Philippines.8
On December 22, 2003, Bureau Director Estrellita
Beltran-Abelardo rendered Decision No. 2003-02
finding that respondent has the legal capacity to
sue and that it is the owner of the internationally
well-known trademarks; however, she held that
petitioners are not guilty of unfair competition,
thus:
With the foregoing disquisition, Certificate of
Registration No. 56666 dated 17 December 1993
for the mark "IN-N-OUT (the inside of the letter
"O" formed like a star) issued in favor of Sehwani,
Incorporated is hereby CANCELLED.
Consequently, Respondents Sehwani, Inc. and
Benita’s Frites are hereby ordered to permanently
cease and desist from using the mark "IN-N-OUT"
and "IN-N-OUT BURGER LOGO" on its goods and
in its business. With regard to mark "Double-
Double", considering that as earlier discussed, the
mark has been approved by this Office for
publication and that as shown by the evidence,
Complainant is the owner of the said mark,
Respondents are also ordered to permanently
cease and desist from using the mark Double-
Double. NO COSTS.
SO ORDERED.9
Petitioners filed a motion for
reconsideration10 insisting that respondent has no
legal capacity to sue, that no ground for
cancellation was duly proven, and that the action
is barred by laches; while respondent moved for
partial reconsideration11 assailing the finding that
petitioners are not guilty of unfair competition.
Both, however, were denied in Resolution No.
2004-18 dated October 28, 200412 and Resolution
No. 2005-05 dated April 25, 2005,13 respectively.
On separate dates, the parties appealed to the
Office of the Director General which rendered an
Order dated December 7, 2004,14 in Appeal No. 14-
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
2004-0004, dismissing petitioners’ appeal for
being filed out of time, thus:
WHEREFORE, premises considered, the MOTION
TO ADMIT COPY OF DECISION NO. 2003-02 is
hereby granted. The instant appeal, however, is
hereby DISMISSED for having been filed out of
time.15
Aggrieved, petitioners filed a petition before the
Court of Appeals which was dismissed for lack of
merit. It held that the right to appeal is not a
natural right or a part of due process, but a
procedural remedy of statutory origin, hence, its
requirements must be strictly complied with. The
appeal being filed out of time, the December 22,
2003 Decision and the October 28, 2004 Orders of
Bureau Director Beltran-Abelardo are now final
and executory.16
Meanwhile, respondent filed a Manifestation with
the Court of Appeals that on December 23, 2005,
Director General Adrian S. Cristobal, Jr. had
rendered a Decision in Appeal 10-05-01 finding
petitioners guilty of unfair competition.17
Petitioners’ motion for reconsideration was
denied; hence, the instant petition raising the
following issues:
THE COURT OF APPEALS COMMITTED
GRAVE ERROR IN UPHOLDING THE IPO
DIRECTOR GENERAL’S DISMISSAL OF
APPEAL NO. 14-2004-0004 ON A MERE
TECHNICALITY.
SUBSTANTIAL JUSTICE WOULD BE
BETTER SERVED IF THE COURT OF
APPEALS AND THE IPO DIRECTOR
GENERAL ENTERTAINED PETITIONERS
APPEAL AS THE BUREAU OF LEGAL
AFFAIR’S DECISION AND RESOLUTION
(1) CANCELING PETITIONER SEHWANI’S
CERTIFICATE OF REGISTRATION FOR
THE MARK "IN-N-OUT," AND (2)
ORDERING PETITIONERS TO
PERMANENTLY CEASE AND DESIST
FROM USING THE SUBJECT MARK ON ITS
GOODS AND BUSINESS ARE CONTRARY
TO LAW AND/OR NOT SUPPORTED BY
EVIDENCE.18
Petitioners contend that the Court of Appeals
erred when it dismissed the petition on mere
technicality which resulted in a miscarriage of
justice and deprivation of intellectual property
rights. They claim that their counsel believed in
good faith that Resolution No. 2004-18 dated
October 28, 2004, denying the motion for
reconsideration, was received only on November
3, 2004, thus, they have until November 18, 2004
within which to file an appeal memorandum with
the Office of the Director General. They claim that
they should not be prejudiced by their counsel’s
mistake in computing the period to appeal;
besides, the same is understandable and excusable
as their counsel is a solo practitioner with only a
handful of non-legal staff assisting him. They also
reiterate their position that respondent has no
legal capacity to sue, that no ground for
cancellation was duly proven, and that the
complaint is barred by laches, if not, by
prescription.19
The petition has no merit.
The Court has invariably ruled that perfection of
an appeal within the statutory or reglementary
period is not only mandatory but also
jurisdictional; failure to do so renders the
questioned decision/final order final and
executory, and deprives the appellate court of
jurisdiction to alter the judgment or final order,
much less to entertain the appeal.20 True, this rule
had been relaxed but only in highly meritorious
cases to prevent a grave injustice from being
done.21 Such does not obtain in this case.
Director General Francisco, as affirmed by the
Court of Appeals, correctly held:
[T]hat the appeal must be dismissed outright.
Section 2 of the Uniform Rules on Appeal (Office
Order no. 12, s. 2002) states that:
Section 2. Appeal to the Director General. – The
decisions or final orders of the Bureau Director
shall become final and executory thirty (30) days
after receipt of a copy thereof by the appellant or
appellants unless, within the same period, a
motion for reconsideration is filed with the
Bureau Director or an appeal to the Director
General has been perfected; Provided, that only
one (1) motion for reconsideration of the decision
or order of the Bureau Director shall be allowed,
and, in case the motion for reconsideration is
denied, the appellant or appellants has/have the
balance of the period prescribed above within
which to file the appeal.
Considering that the Respondent-Appellants
received a copy of the appealed Decision on 15
January 2004 and filed their MOTION FOR
RECONSIDERATION on 30 January 2004, said
parties had a balance of 15 days from their receipt
of the Resolution denying said motion within
which to file the APPEAL MEMORANDUM. Per
records of the Bureau of Legal Affairs, the
Respondents-Appellants received a copy of the
Resolution on 29 October 2004. Hence the
deadline for the filing of the APPEAL
MEMORANDUM was on 13 November 2004. Since
said date fell on a Saturday, the appeal should
have been filed on the ensuing working day, that
is, 15 November 2004.
On this score, Section 5(c) of the Uniform Rules on
Appeal provides:
Section 5. Action on the Appeal Memorandum –
The Director General shall:
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
xxxx
c) Dismiss the appeal for being patently without
merit, provided that the dismissal shall be
outright if the appeal is not filed within the
prescribed period or for failure of the appellant to
pay the required fee within the period of
appeal.22 (Underscoring supplied)
Petitioners’ allegation that they honestly believed
that they received Resolution No. 2004-18 dated
October 28, 2004 on November 3, 2004 and not on
October 29, 2004, as what appears on the records
of the BLA-IPO, is self-serving and unbelievable.
The inadvertent computation of the period for one
to file a pleading is inexcusable, and has become
an all too familiar and ready excuse on the part of
lawyers remiss in their bounden duty to comply
with the mandatory periods.23
This Court has always reminded the members of
the legal profession that every case they handle
deserves full and undivided attention, diligence,
skill and competence, regardless of its
importance.24 A lawyer has the responsibility of
monitoring and keeping track of the period of time
left to file pleadings and to see to it that said
pleadings are filed before the lapse of the period.
If he fails to do so, his client is bound by his
conduct, negligence and mistakes.25 This
responsibility is imposed on all lawyers
notwithstanding the presence or absence of staff
assisting them in the discharge thereof.
Thus, as correctly held by the Court of Appeals,
petitioners’ belated filing of an appeal
memorandum rendered the December 22, 2003
Decision and the October 28, 2004 Order of
Bureau Director Beltran-Abelardo final and
executory.
At this point, the Court could very well write finis
to this petition. However, in disposing of the
instant case, we shall resolve the principal issues
raised by petitioners.
Contrary to petitioners’ argument, respondent has
the legal capacity to sue for the protection of its
trademarks, albeit it is not doing business in the
Philippines. Section 160 in relation to Section 3 of
R.A. No. 8293, provides:
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 3 thereof provides:
SECTION 3. International Conventions and
Reciprocity. — Any person who is a national or
who is domiciled or has a real and effective
industrial establishment in a country which is a
party to any convention, treaty or agreement
relating to intellectual property rights or the
repression of unfair competition, to which the
Philippines is also a party, or extends reciprocal
rights to nationals of the Philippines by law, shall
be entitled to benefits to the extent necessary to
give effect to any provision of such convention,
treaty or reciprocal law, in addition to the rights to
which any owner of an intellectual property right
is otherwise entitled by this Act.
Respondent anchors its causes of action under
Articles 6bis and 8 of The Convention of Paris for
the Protection of Industrial Property, otherwise
known as the Paris Convention, wherein both the
United States and the Philippines are
signatories.26 The Articles read:
Article 6bis
(1) The countries of the Union undertake, ex
officio if their legislation so permits, or at the
request of an interested party, to refuse or to
cancel the registration, and to prohibit the use, of
a trademark which constitutes a reproduction, an
imitation, or a translation, liable to create
confusion, of a mark considered by the competent
authority of the country of registration or use to
be well known in that country as being already the
mark of a person entitled to the benefits of this
Convention and used for identical or similar
goods. These provisions shall also apply when the
essential part of the mark constitutes a
reproduction of any such well-known mark or an
imitation liable to create confusion therewith.
x x x x.
Article 8
A tradename shall be protected in all countries of
the Union without the obligation of filing or
registration whether or not it forms part of a
trademark.
Article 6bis which governs the protection of well-
known trademarks, is a self-executing provision
and does not require legislative enactment to give
it effect in the member country. It may be applied
directly by the tribunals and officials of each
member country by the mere publication or
proclamation of the Convention, after its
ratification according to the public law of each
state and the order for its execution. The essential
requirement under this Article is that the
trademark to be protected must be "well-known"
in the country where protection is sought. The
power to determine whether a trademark is well-
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
known lies in the "competent authority of the
country of registration or use." This competent
authority would be either the registering
authority if it has the power to decide this, or the
courts of the country in question if the issue
comes before a court.27
The question of whether or not respondent’s
trademarks are considered "well-known" is
factual in nature, involving as it does the
appreciation of evidence adduced before the BLA-
IPO. The settled rule is that the factual findings of
quasi-judicial agencies, like the IPO, which have
acquired expertise because their jurisdiction is
confined to specific matters, are generally
accorded not only respect, but, at times, even
finality if such findings are supported by
substantial evidence.28
Director Beltran-Abelardo found that:
Arguing mainly that it is the owner of an
internationally well-known mark, complainant
presented its United States trademark
registrations, namely: United States Trademark
Registration No. 1,514,689 for the mark "IN-N-
OUT Burger and Arrow Design" under class 25
dated November 29, 1988 for the shirts (Exhibit
"L"); United States Trademark Registration No.
1,528,456 for the mark "IN-N-OUT Burger and
Arrow Design" under Class 29, 30, 32 and 42
dated March 7, 1989 for milk and french-fried
potatoes for consumption on or off the premises,
for hamburger sandwiches, cheeseburger
sandwiches, hot coffee and milkshakes for
consumption on or off the premises, lemonade
and softdrinks for consumption on and off the
premises, restaurant services respectively
(Exhibit "M"); US Trademark Registration No.
1,101,638 for the mark "IN-N-OUT" under Class
No. 30 dated September 5, 1978 for
cheeseburgers, hamburgers, hot coffee and
milkshake for consumption on or off premises
(Exhibit "N"); US Trademark Registration No.
1,085,163 "IN-N-OUT" under Class 42 dated
February 7, 1978 for Restaurant Services and
carry-out restaurant services (Exhibit "Q"). For its
mark "Double-Double" it submitted Certificates of
Registration of said mark in several countries
(Exhibits "MM" and submarkings).
xxxx
Moreover, complainant also cites our decision in
Inter Pares Case No. 14-1998-00045 dated 12
September 2000, an opposition case involving the
mark "IN-N-OUT" between IN-N-OUT Burger
(herein complainant) and Nestor SJ Bonjales
where we ruled:
"And last but not the lease, the herein Opposer
was able to prove substantially that its mark "IN-
N-OUT Burger and Arrow Design" is an
internationally well known mark as evidenced by
its trademark registrations around the world and
its comprehensive advertisements therein."
The nub of complainant’s reasoning is that the
Intellectual Property Office as a competent
authority had declared in previous inter partes
case that "IN-N-OUT Burger and Arrow Design" is
an internationally well known mark.
In the aforementioned case, we are inclined to
favor the declaration of the mark "IN-N-OUT" as
an internationally well-known mark on the basis
of "registrations in various countries around the
world and its comprehensive advertisements
therein."
The Ongpin Memorandum dated 25 October 1983
which was the basis for the decision in the
previous inter partes case and which set the
criteria for determining whether a mark is well
known, takes into consideration the extent of
registration of a mark. Similarly, the implementing
rules of Republic Act 8293, specifically Section (e)
Rule 102 Criteria for determining whether a mark
is well known, also takes into account the extent
to which the mark has been registered in the
world in determining whether a mark is well
known.
Likewise, as shown by the records of the instant
case, Complainant submitted evidence consisting
of articles about "IN-N-OUT Burger" appearing in
magazines, newspapers and print-out of what
appears to be printed representations of its
internet website (www.innout.com) (Exhibits
"CCC" to "QQQ"), as well as object evidence
consisting of videotapes of famous celebrities
mentioning IN-N-OUT burgers in the course of
their interviews (Exhibits "EEEE" and "FFFF")
showing a tremendous following among
celebrities.
The quality image and reputation acquired by the
complainant’s IN-N-OUT mark is unmistakable.
With this, complainant’s mark have met other
criteria set in the Implementing Rules of Republic
Act 8293, namely, ‘a’ and ‘d’ of Rule 102, to wit:
"Rule 102:
(a) the duration, extent and geographical area of
any use of the mark, in particular, the duration,
extent and geographical area of any promotion of
the mark, including publicity and the presentation
at fairs or exhibitions, of the goods and/or
services to which the mark applies;
xxxx
(d) the quality image or reputation acquired by
the mark"
Hence, on the basis of evidence presented
consisting of worldwide registration of mark "IN-
N-OUT" almost all of which were issued earlier
than the respondent’s date of filing of its
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
application and the subsequent registration of the
mark "IN-N-OUT" in this Office, as well as the
advertisements therein by the complainant, this
Office hereby affirms its earlier declaration that
indeed, the mark "IN-N-OUT BURGER LOGO" is an
internally well-known mark.29
We find the foregoing findings and conclusions of
Director Beltran-Abelardo fully substantiated by
the evidence on record and in accord with law.
The fact that respondent’s marks are neither
registered nor used in the Philippines is of no
moment. The scope of protection initially afforded
by Article 6bis of the Paris Convention has been
expanded in the 1999 Joint Recommendation
Concerning Provisions on the Protection of Well-
Known Marks, wherein the World Intellectual
Property Organization (WIPO) General Assembly
and the Paris Union agreed to a nonbinding
recommendation that a well-known mark should
be protected in a country even if the mark is
neither registered nor used in that country. Part I,
Article 2(3) thereof provides:
(3) [Factors Which Shall Not Be Required] (a) A
Member State shall not require, as a condition for
determining whether a mark is a well-known
mark:
(i) that the mark has been used in, or that
the mark has been registered or that an
application for registration of the mark
has been filed in or in respect of, the
Member State;
(ii) that the mark is well known in, or that
the mark has been registered or that an
application for registration of the mark
has been filed in or in respect of, any
jurisdiction other than the Member State;
or
(iii) that the mark is well known by the which is used to misrepresent the source of the
public at large in the Member State. goods or services, may be filed at any time.
(Underscoring supplied) Moreover, laches may not prevail against a
specific provision of law, since equity, which has
Moreover, petitioners’ claim that no ground exists been defined as ‘justice outside legality’ is applied
for the cancellation of their registration lacks in the absence of and not against statutory law or
merit. Section 151(b) of RA 8293 provides: rules of procedure.31 Aside from the specific
provisions of R.A. No. 8293, the Paris Convention
SECTION 151. Cancellation. — 151.1. A petition to and the WIPO Joint Recommendation have the
cancel a registration of a mark under this Act may force and effect of law, for under Section 2, Article
be filed with the Bureau of Legal Affairs by any II of the Constitution, the Philippines adopts the
person who believes that he is or will be damaged generally accepted principles of international law
by the registration of a mark under this Act as as part of the law of the land. To rule otherwise
follows: would be to defeat the equitable consideration
that no one other than the owner of the well-
known mark shall reap the fruits of an honestly
xxxx
established goodwill.
(b) At any time, if the registered mark becomes
WHEREFORE, the petition is DENIED. The
the generic name for the goods or services, or a
Decision and Resolution of the Court of Appeals in
portion thereof, for which it is registered, or has
CA-G.R. SP No. 88004, dated October 21, 2005 and
been abandoned, or its registration was obtained
January 16, 2006, affirming the December 7, 2004
fraudulently or contrary to the provisions of this
Order of Director General Emma C. Francisco, in
Act, or if the registered mark is being used by, or
Appeal No. 14-2004-0004, and denying the
with the permission of, the registrant so as to motion for reconsideration, respectively, are
misrepresent the source of the goods or services
AFFIRMED.
on or in connection with which the mark is used. x
x x.1âwphi1
SO ORDERED.
The evidence on record shows that not only did
the petitioners use the IN-N-OUT Burger CONSUELO YNARES-SANTIAGO
trademark for the name of their restaurant, but Associate Justice
they also used identical or confusingly similar
mark for their hamburger wrappers and french-
fries receptacles, thereby effectively
misrepresenting the source of the goods and
services.30
Finally, petitioner’s contention that respondent is
precluded from asserting its claim by laches, if not
by prescription, lacks basis. Section 151(b) of R.A.
No. 8293 specifically provides that a petition to
cancel the registration of a mark which is
registered contrary to the provisions thereof, or
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
FIRST DIVISION
G.R. No. 157216             November 20, 2003
246 CORPORATION, doing business under the
name and style of ROLEX MUSIC
LOUNGE, petitioner,
vs.
HON. REYNALDO B. DAWAY, in his capacity as
Presiding Judge of Branch 90 of the Regional
Trial Court of Quezon City, MONTRES ROLEX
S.A. and ROLEX CENTRE PHIL.
LIMITED, respondents.
YNARES-SANTIAGO, J.:
This is a petition for review on certiorari under
Rule 45 of the 1997 Rules of Civil Procedure
assailing the November 28, 2002 Decision1 of the
Court of Appeals in CA-G.R. SP No. 64660 which
dismissed the petition for certiorari filed by
petitioner, as well as the Resolution2 dated
February 13, 2003 denying its motion for
reconsideration.
The undisputed facts show that on November 26,
1998, respondents Montres Rolex S.A. and Rolex
Centre Phil., Limited, owners/proprietors of Rolex
and Crown Device, filed against petitioner 246
Corporation the instant suit for trademark
infringement and damages with prayer for the
issuance of a restraining order or writ of
preliminary injunction3 before the Regional Trial
Court of Quezon City, Branch 90. Respondents
alleged that sometime in July 1996, petitioner
adopted and, since then, has been using without
authority the mark "Rolex" in its business name
"Rolex Music Lounge" as well as in its newspaper
advertisements as – "Rolex Music Lounge, KTV,
Disco & Party Club."
In its answer raising special affirmative defenses, Hence, the instant petition anchored on the
petitioner argued that respondents have no cause following grounds:
of action because no trademark infringement
exist; that no confusion would arise from the use I
by petitioner of the mark "Rolex" considering that
its entertainment business is totally unrelated to IN ISSUING THE ASSAILED DECISIONS,
the items catered by respondents such as watches, THE HONORABLE COURT OF APPEALS
clocks, bracelets and parts thereof. It also PERFUNCTORILY BRUSHED ASIDE THE
contended that the complaint was not properly CONTROLLING PRECEDENTS LAID
verified and certified against forum shopping DOWN BY THIS HONORABLE COURT IN
considering that Atty. Alonzo Ancheta, the counsel ESSO STANDARD EASTERN, INC. VS.
of record of respondents who signed the COURT OF APPEALS AND UNITED
verification and certification, was not authorized CIGARETTE CORPORATION AND OTHER
to represent respondents.4 COMPANION CASES HOLDING THAT NO
TRADEMARK INFRINGEMENT CAN
On July 21, 2000, petitioner filed a motion for POSSIBLY OCCUR WHERE THE
preliminary hearing on its affirmative CONTENDING PARTIES DEAL WITH
defenses.5 Subsequently, on motion of petitioner, GOODS AND SERVICES THAT ARE
the trial court issued a subpoena ad TOTALLY UNRELATED AND NON-
testificandum requiring Atty. Alonzo Ancheta to COMPETING WITH EACH OTHER.
appear at the preliminary hearing.6 Respondents,
in the meantime, filed a Comment and
II
Opposition7 to the motion for preliminary hearing
and a motion to quash the subpoena
IN ARBITRARILY AND CAPRICIOUSLY
ad testificandum.
RULING THAT THE ISSUES RAISED IN
PETITIONER’S CERTIORARI PETITION
In an Order dated October 27, 2000, the trial court ARE QUESTIONS OF FACT, THE
quashed the subpoena ad testificandum and
HONORABLE COURT OF APPEALS
denied petitioner’s motion for preliminary VIOLATED NOT ONLY PETITIONERS
hearing on affirmative defenses with motion to
SUBSTANTIVE DUE PROCESS RIGHTS
dismiss.8 BUT ALSO THE WELL-SETTLED RULE
THAT THE ALLEGATIONS OF THE
With the denial of the motion for reconsideration COMPLAINT IS HYPOTHETICALLY
on March 16, 2001, petitioner filed a petition for ADMITTED WHEN THE MOTION TO
certiorari with the Court of Appeals contending DISMISS IS GROUNDED UPON LACK OF
that the trial court gravely abused its discretion in CAUSE OF ACTION. MOREOVER,
issuing the October 27, 2000 and March 16, 2001 INDEPENDENT OF THE
orders. HYPOTHETICALLY ADMITTED FACTS
EMBODIED IN THE COMPLAINT A QUO,
On November 28, 2002, the Court of Appeals THERE ARE SELF-EVIDENT FACTS AND
dismissed the petition. The motion for IMPLIEDLY ADMITTED FACTS
reconsideration filed by petitioner was denied. CONTAINED IN PRIVATE RESPONDENTS’
PLEADINGS THAT WOULD CLEARLY AND
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
UNMISTAKABLY SHOW PRIVATE THE GROUNDS FOR IN ARBITRARILY AND CAPRICIOUSLY
RESPONDENTS’ LACK OF CAUSE OF PETITIONER’S MOTION TO AFFIRMING RESPONDENT JUDGE’S
ACTION AGAINST HEREIN PETITIONER. DISMISS PER SE. HENCE, THE QUASHAL OF THE SUBPOENA DATED 14
SAID 20 OCTOBER 2000 AUGUST 2000 DIRECTED AGAINST ATTY.
III ORDER’S DENIAL OF ALONZO ANCHETA, THE HONORABLE
PETITIONER’S MOTION IS NOT COURT OF APPEALS VIOLATED NOT
THE HONORABLE COURT OF APPEALS LIMITED TO THE MOTION FOR ONLY PETITIONER’S SUBSTANTIVE DUE
VIOLATED PETITIONER’S RIGHT TO PRELIMINARY HEARING BUT PROCESS RIGHTS, BUT ALSO SECTION 9,
SUBSTANTIVE DUE PROCESS WHEN IT ALSO CONSTITUTES A DENIAL RULE 132 AND SECTION 7 RULE 133 OF
ARBITRARILY AND CAPRICIOUSLY OF PETITIONER’S MOTION TO THE 1989 REVISED RULES ON EVIDENCE,
RULED THAT WHAT WAS SPECIFICALLY DISMISS PER SE. AND THE RULING OF THIS HONORABLE
DENIED IN THE ASSAILED OCTOBER 20, COURT IN THE CASE OF PEOPLE VS.
2000 ORDER IS PETITIONER’S MOTION IV RIVERA.9
FOR PRELIMINARY HEARING ON
DEFENDANT’S AFFIRMATIVE DEFENSES IN ARBITRARILY AND CAPRICIOUSLY Simply put, the issues are as follows – (1) whether
AND NOT PETITIONER’S MOTION TO RULING THAT ATTY. ALONZO ANCHETA the trial court denied not only petitioner’s motion
DISMISS PER SE CONSIDERING THAT: PROPERLY VERIFIED AND CERTIFIED for preliminary hearing on its affirmative defenses
PRIVATE RESPONDENTS’ COMPLAINT A but its motion to dismiss as well; (2) if the answer
A. THERE IS ABSOLUTELY QUO, THE HONORABLE COURT OF is in the affirmative, whether or not the trial court
NOTHING IN THE ORDER DATED APPEALS VIOLATED NOT ONLY gravely abused its discretion in denying said
OCTOBER 20, 2000 OF PETITIONER’S SUBSTANTIVE DUE motions; and (3) whether the trial court gravely
RESPONDENT JUDGE WHICH PROCESS RIGHTS, BUT ALSO THE abused its discretion in quashing the subpoena ad
SUGGESTS THAT THE DOCTRINE OF SEPARATE CORPORATE testificandum issued against Atty. Ancheta.
RESOLUTION OF PETITIONER’S PERSONALITY; CONSIDERING THAT THE
MOTION TO DISMISS PER SE RECORDS OF THIS CASE IS (sic) Anent the first issue, we find that what was denied
WAS HELD IN ABEYANCE BY COMPLETELY BEREFT AND DEVOID OF in the order dated October 27, 2000 was not only
THE RESPONDENT JUDGE. ANY DULY EXECUTED SPECIAL POWER the motion for preliminary hearing but the motion
HENCE THE SAID ORDER DATED OF ATTORNEY, EMANATING FROM to dismiss as well. A reading of the dispositive
OCTOBER 20, 2000 ALSO PRIVATE RESPONDENTS, WHICH portion of said order shows that the trial court
CONSTITUTES A DENIAL ON THE EXPLICITLY AND SPECIFICALLY neither qualified its denial nor held in abeyance
MERITS OF PETITIONER’S AUTHORIZES ATTY. ALONZO ANCHETA the ruling on petitioner’s motion to dismiss thus –
MOTION TO DISMISS PER SE TO REPRESENT PRIVATE RESPONDENTS
AND NOT MERELY OF MONTRES ROLEX S.A. IN THE FILING OF IN VIEW OF THE FOREGOING, the aforecited
PETITIONER’S MOTION FOR THE COMPLAINT A QUO. BY REASON Motion To Quash Subpoena Ad Testificandum is
PRELIMINARY HEARING THEREOF, PRIVATE RESPONDENTS granted; and the aforecited Motion For
THEREON. COULD NOT BE DEEMED TO HAVE Preliminary Hearing On Defendant’s Affirmative
VOLUNTARILY APPEARED BEFORE THE Defenses With Motion To dismiss The Instant
B. PRIVATE RESPONDENTS’ RESPONDENT JUDGE; CONSEQUENTLY, Complaint Based On Said Affirmative Defenses
COMMENT AND OPPOSITION THE TRIAL COURT COULD NOT HAVE is denied.10 (Emphasis supplied)
DATED 11 AUGUST 2000, WHICH VALIDLY ACQUIRED JURISDICTION OVER
WAS CITED AND SUSTAINED BY THE PERSON OF PRIVATE In issuing the assailed order, the trial court ruled
RESPONDENT JUDGE, CLEARLY RESPONDENTS. on the merits of petitioner’s Motion to Dismiss vis-
TRAVERSED THE MERITS OF à-vis respondents’ Comment and Opposition
V
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
which clearly traversed the affirmative defenses
raised by petitioner, to wit:
After carefully going over the pleadings,
this Court finds, on the first motion that
the arguments raised in the said motion
and the reply filed in connection thereto
appear to be meritorious; and on the
second motion, that the arguments raised
in the comments and opposition and the
rejoinder filed by the plaintiffs likewise
appear to be meritorious.11
Moreover, it is presumed that all matters within
an issue raised in a case were passed upon by the
court. In the absence of evidence to the contrary,
the presumption is that the court a quo discharged
its task properly.12
In Municipality of Biñan Laguna v. Court of
Appeals,13 decided under the old Rules of Civil
Procedure, it was held that a preliminary hearing
permitted under Rule 16, Section 5, is not
mandatory even when the same is prayed for. It
rests largely on the sound discretion of the trial
court, thus –
SEC. 5. Pleading grounds as affirmative
defenses. — Any of the grounds for
dismissal provided for in this Rule, except
improper venue, may be pleaded as an
affirmative defense, and a preliminary
hearing may be had thereon as if a motion
to dismiss had been filed. (Emphasis
supplied)
The use of the word "may" in the aforequoted
provision shows that such a hearing is not a
matter of right demandable from the trial court; it
is not mandatory but discretionary. "May" is an
auxiliary verb indicating liberty, opportunity,
permission and possibility.14 Such interpretation is
specifically stated under the 1997 Rules of Civil
Procedure. Rule 16, Section 6, now provides that a
grant of a preliminary hearing rests on the
sound discretion of the court, to wit –
SEC. 6. Pleading grounds as affirmative
defenses.— If no motion to dismiss has
been filed, any of the grounds for
dismissal provided for in this Rule may be
pleaded as an affirmative defense in the
answer and, in the discretion of the
court, a preliminary hearing may be
had thereon as if a motion to dismiss
had been filed. (Emphasis supplied)
In the case at bar, the Court of Appeals did not err
in finding that no abuse of discretion could be
ascribed to the trial court’s denial of petitioner’s
motion for preliminary hearing on its affirmative
defenses with motion to dismiss. The issue of
whether or not a trademark infringement exists, is
a question of fact that could best be determined by
the trial court.
Under the old Trademark Law15 where the goods
for which the identical marks are used are
unrelated, there can be no likelihood of confusion
and there is therefore no infringement in the use
by the junior user of the registered mark on the
entirely different goods.16 This ruling, however,
has been to some extent, modified by Section
123.1(f) of the Intellectual Property Code
(Republic Act No. 8293), which took effect on
January 1, 1998. The said section reads:
Sec. 123. Registrability. – 123.1. A mark
cannot be registered if it:
x x x           x x x           x x x
(f) Is identical with, or confusingly similar
to, or constitutes a translation of a mark
considered well-known in accordance
with the preceding paragraph, which is
registered in the Philippines with respect
to goods or services which are not similar
to those with respect to which
registration is applied for: Provided, That
use of the mark in relation to those goods
or services would indicate a connection
between those goods or services, and the
owner of the registered
mark: Provided, further, That the interest
of the owner of the registered mark are
likely to be damaged by such use;
(Emphasis supplied)
A junior user of a well-known mark on goods or
services which are not similar to the goods or
services, and are therefore unrelated, to those
specified in the certificate of registration of the
well-known mark is precluded from using the
same on the entirely unrelated goods or services,
subject to the following requisites, to wit:
1. The mark is well-known internationally
and in the Philippines. Under Rule 102 of
the Rules and Regulations on
Trademarks, Service Marks, Trade Names
and Marked or Stamped Containers,17 in
determining whether a mark is well
known, the following criteria or any
combination thereof may be taken into
account:
(a) the duration, extent and
geographical area of any use of
the mark, in particular, the
duration, extent and geographical
area of any promotion of the
mark, including advertising or
publicity and presentation, at
fairs or exhibitions, of the goods
and/or services to which the
mark applies;
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
(b) the market share in the
Philippines and in other
countries, of the goods and/or
services to which the mark
applies;
(c) the degree of the inherent or
acquired distinction of the mark;
(d) the quality-image or
reputation acquired by the mark;
(e) the extent to which the mark
has been registered in the world;
(f) the exclusivity of the
registration attained by the mark
in the world;
(g) the extent to which the mark
has been used in the world;
(h) the exclusivity of use attained
by the mark in the world;
(i) the commercial value
attributed to the mark in the
world;
(j) the record of successful
protection of the rights in the
mark;
(k) the outcome of litigations
dealing with the issue of whether
the mark is a well-known mark;
and
(l) the presence of absence of
identical or similar marks validly
registered for or used on
identical or similar goods or
services and owned by persons
other than the person claiming
that his mark is a well-known
mark.
2. The use of the well-known mark on the
entirely unrelated goods or services
would indicate a connection between
such unrelated goods or services and
those goods or services specified in the
certificate of registration in the well
known mark. This requirement refers to
the likelihood of confusion of origin or
business or some business connection or
relationship between the registrant and
the user of the mark.
3. The interests of the owner of the well-
known mark are likely to be damaged. For
instance, if the registrant will be
precluded from expanding its business to
those unrelated good or services, or if the
interests of the registrant of the well-
known mark will be damaged because of
the inferior quality of the good or services
of the user.18
Section 123.1(f) is clearly in point because the
Music Lounge of petitioner is entirely unrelated to
respondents’ business involving watches, clocks,
bracelets, etc. However, the Court cannot yet
resolve the merits of the present controversy
considering that the requisites for the application
of Section 123.1(f), which constitute the kernel
issue at bar, clearly require determination facts of
which need to be resolved at the trial court. The
existence or absence of these requisites should be
addressed in a full blown hearing and not on a
mere preliminary hearing. The respondent must
be given ample opportunity to prove its claim, and
the petitioner to debunk the same.
The same is true with respect to the issue of
whether Atty. Alonzo Ancheta was properly
authorized to sign the verification and
certification against forum shopping in behalf of
respondents. This could be properly resolved
during the trial together with the substantive
issues raised by petitioner.
Considering that the trial court correctly denied
petitioner’s motion for preliminary hearing on its
affirmative defenses with motion to dismiss, there
exists no reason to compel Atty. Ancheta to testify.
Hence, no abuse of discretion was committed by
the trial court in quashing the subpoena ad
testificandum issued against Atty. Ancheta.
Grave abuse of discretion implies such capricious
and whimsical exercise of judgment as equivalent
to lack of jurisdiction, or, in other words, where
the power is exercised in an arbitrary or despotic
manner by reason of passion or personal hostility,
and it must be so patent and gross as to amount to
an evasion of positive duty or to a virtual refusal
to perform the duty enjoined or to act at all in
contemplation of law. None of these was
committed by the trial court; hence, the Court of
Appeals correctly dismissed the petition.
WHEREFORE, in view of all the foregoing, the
petition for review on certiorari filed by petitioner
is DENIED. The November 28, 2002 Decision and
the February 13, 2003 Resolution of the Court of
Appeals in CA-G.R. SP No. 64660 which dismissed
the petition for certiorari filed by petitioner
are AFFIRMED.
SO ORDERED.
Davide, Jr., C.J., Panganiban, Carpio and Azcuna,
JJ., concur.
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-63796-97 May 2, 1984
LA CHEMISE LACOSTE, S. A., petitioner,
vs.
HON. OSCAR C. FERNANDEZ, Presiding Judge of
Branch XLIX, Regional Trial Court, National
Capital Judicial Region, Manila and
GOBINDRAM HEMANDAS, respondents.
G.R. No. L-65659 May 2l, 1984
GOBINDRAM HEMANDAS SUJANANI, petitioner,
vs.
HON. ROBERTO V. ONGPIN, in his capacity as
Minister of Trade and Industry, and HON.
CESAR SAN DIEGO, in his capacity as Director
of Patents, respondents.
Castillo, Laman, Tan & Pantaleon for petitioners in
63796-97.
Ramon C. Fernandez for private respondent in
63796-97 and petitioner in 65659.
GUTIERREZ, JR., J.:
It is among this Court's concerns that the
Philippines should not acquire an unbecoming
reputation among the manufacturing and trading
centers of the world as a haven for intellectual
pirates imitating and illegally profiting from
trademarks and tradenames which have
established themselves in international or foreign
trade.
Before this Court is a petition for certiorari with
preliminary injunction filed by La Chemise
Lacoste, S.A., a well known European
manufacturer of clothings and sporting apparels
sold in the international market and bearing the
trademarks "LACOSTE" "CHEMISE LACOSTE",
"CROCODILE DEVICE" and a composite mark
consisting of the word "LACOSTE" and a
representation of a crocodile/alligator. The
petitioner asks us to set aside as null and void, the
order of judge Oscar C. Fernandez, of Branch XLIX,
Regional Trial Court, National Capital Judicial
Region, granting the motion to quash the search
warrants previously issued by him and ordering
the return of the seized items.
The facts are not seriously disputed. The
petitioner is a foreign corporation, organized and
existing under the laws of France and not doing
business in the Philippines, It is undeniable from
the records that it is the actual owner of the
abovementioned trademarks used on clothings
and other goods specifically sporting apparels
sold in many parts of the world and which have
been marketed in the Philippines since 1964, The
main basis of the private respondent's case is its
claim of alleged prior registration.
In 1975, Hemandas & Co., a duly licensed domestic
firm applied for and was issued Reg. No. SR-2225
(SR stands for Supplemental Register) for the
trademark "CHEMISE LACOSTE & CROCODILE
DEVICE" by the Philippine Patent Office for use on
T-shirts, sportswear and other garment products
of the company. Two years later, it applied for the
registration of the same trademark under the
Principal Register. The Patent Office eventually
issued an order dated March 3, 1977 which states
that:
xxx xxx xxx
... Considering that the mark was
already registered in the
Supplemental Register in favor of
herein applicant, the Office has
no other recourse but to allow
the application, however, Reg.
No. SR-2225 is now being
contested in a Petition for
Cancellation docketed as IPC No.
1046, still registrant is presumed
to be the owner of the mark until
after the registration is declared
cancelled.
Thereafter, Hemandas & Co. assigned to
respondent Gobindram Hemandas all rights, title,
and interest in the trademark "CHEMISE LACOSTE
& DEVICE".
On November 21, 1980, the petitioner filed its
application for registration of the trademark
"Crocodile Device" (Application Serial No. 43242)
and "Lacoste" (Application Serial No. 43241).The
former was approved for publication while the
latter was opposed by Games and Garments in
Inter Partes Case No. 1658. In 1982, the petitioner
filed a Petition for the Cancellation of Reg. No. SR-
2225 docketed as Inter Partes Case No. 1689. Both
cases have now been considered by this Court
in Hemandas v. Hon. Roberto Ongpin (G.R. No.
65659).
On March 21, 1983, the petitioner filed with the
National Bureau of Investigation (NBI) a letter-
complaint alleging therein the acts of unfair
competition being committed by Hemandas and
requesting their assistance in his apprehension
and prosecution. The NBI conducted an
investigation and subsequently filed with the
respondent court two applications for the
issuance of search warrants which would
183 | I P L P a r t I
THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
authorize the search of the premises used and
occupied by the Lacoste Sports Center and Games
and Garments both owned and operated by
Hemandas.
The respondent court issued Search Warrant Nos.
83-128 and 83-129 for violation of Article 189 of
the Revised Penal Code, "it appearing to the
satisfaction of the judge after examining under
oath applicant and his witnesses that there are
good and sufficient reasons to believe that
Gobindram Hemandas ... has in his control and
possession in his premises the ... properties
subject of the offense," (Rollo, pp. 67 and 69) The
NBI agents executed the two search warrants and
as a result of the search found and seized various
goods and articles described in the warrants.
Hemandas filed a motion to quash the search
warrants alleging that the trademark used by him
was different from petitioner's trademark and
that pending the resolution of IPC No. 1658 before
the Patent Office, any criminal or civil action on
the same subject matter and between the same
parties would be premature.
The petitioner filed its opposition to the motion
arguing that the motion to quash was fatally
defective as it cited no valid ground for the
quashal of the search warrants and that the
grounds alleged in the motion were absolutely
without merit. The State Prosecutor likewise filed
his opposition on the grounds that the goods
seized were instrument of a crime and necessary
for the resolution of the case on preliminary
investigation and that the release of the said goods
would be fatal to the case of the People should
prosecution follow in court.
The respondent court was, however, convinced
that there was no probable cause to justify the
issuance of the search warrants. Thus, in its order
dated March 22, 1983, the search warrants were
recalled and set aside and the NBI agents or
officers in custody of the seized items were
ordered to return the same to Hemandas. (Rollo,
p. 25)
The petitioner anchors the present petition on the
following issues:
Did respondent judge act with
grave abuse of discretion
amounting to lack of jurisdiction,
(i) in reversing the finding of
probable cause which he himself
had made in issuing the search
warrants, upon allegations which
are matters of defense and as
such can be raised and resolved
only upon trial on the merits; and
(ii) in finding that the issuance of
the search warrants is premature
in the face of the fact that (a)
Lacoste's registration of the
subject trademarks is still
pending with the Patent Office
with opposition from Hemandas;
and (b) the subject trademarks
had been earlier registered by
Hemandas in his name in the
Supplemental Register of the
Philippine Patent Office?
Respondent, on the other hand, centers his
arguments on the following issues:
I citizen, or in which it is
THE PETITIONER HAS NO CAPACITY TO SUE
BEFORE PHILIPPINE COURTS.
II
THE RESPONDENT JUDGE DID NOT COMMIT A
GRAVE ABUSE OF DISCRETION TANTAMOUNT TO
LACK OF JURISDICTION IN ISSUING THE ORDER
DATED APRIL 22, 1983.
Hemandas argues in his comment on the petition
for certiorari that the petitioner being a foreign
corporation failed to allege essential facts bearing
upon its capacity to sue before Philippine courts.
He states that not only is the petitioner not doing
business in the Philippines but it also is not
licensed to do business in the Philippines. He also
cites the case of Leviton Industries v. Salvador (114
SCRA 420) to support his contention
The Leviton case, however, involved a complaint
for unfair competition under Section 21-A of
Republic Act No. 166 which provides:
Sec. 21 — A. Any foreign
corporation or juristic person to
which a mark or tradename has
been registered or assigned
under this Act may bring an
action hereunder for
infringement, for unfair
competition, or false designation
of origin and false description,
whether or not it has been
licensed to do business in the
Philippines under Act numbered
Fourteen Hundred and Fifty-
Nine, as amended, otherwise
known as the Corporation Law, at
the time it brings the
complaint; Provided, That the
country of which the said foreign
corporation or juristic person is a
domiciled, by treaty, convention
or law, grants a similar privilege
to corporate or juristic persons of
the Philippines.
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
We held that it was not enough for Leviton, a
foreign corporation organized and existing under
the laws of the State of New York, United States of
America, to merely allege that it is a foreign
corporation. It averred in Paragraph 2 of its
complaint that its action was being filed under the
provisions of Section 21-A of Republic Act No. 166,
as amended. Compliance with the requirements
imposed by the abovecited provision was
necessary because Section 21-A of Republic Act
No. 166 having explicitly laid down certain
conditions in a specific proviso, the same must be
expressly averred before a successful prosecution
may ensue. It is therefore, necessary for the
foreign corporation to comply with these
requirements or aver why it should be exempted
from them, if such was the case. The foreign
corporation may have the right to sue before
Philippine courts, but our rules on pleadings
require that the qualifying circumstances
necessary for the assertion of such right should
first be affirmatively pleaded.
In contradistinction, the present case involves a
complaint for violation of Article 189 of the
Revised Penal Code. The Leviton case is not
applicable.
Asserting a distinctly different position from the
Leviton argument, Hemandas argued in his brief
that the petitioner was doing business in the
Philippines but was not licensed to do so. To
support this argument, he states that the
applicable ruling is the case of Mentholatum Co.,
Inc. v. Mangaliman: (72 Phil. 524) where
Mentholatum Co. Inc., a foreign corporation and
Philippine-American Drug Co., the former's
exclusive distributing agent in the Philippines filed
a complaint for infringement of trademark and
unfair competition against the Mangalimans.
The argument has no merit. The Mentholatum case
is distinct from and inapplicable to the case at bar.
Philippine American Drug Co., Inc., was admittedly
selling products of its principal Mentholatum Co.,
Inc., in the latter's name or for the latter's account.
Thus, this Court held that "whatever transactions
the Philippine-American Drug Co., Inc. had
executed in view of the law, the Mentholatum Co.,
Inc., did it itself. And, the Mentholatum Co., Inc.,
being a foreign doing business in the Philippines
without the license required by Section 68 of the
Corporation Law, it may not prosecute this action
for violation of trademark and unfair
competition."
In the present case, however, the petitioner is a
foreign corporation not doing business in the
Philippines. The marketing of its products in the
Philippines is done through an exclusive
distributor, Rustan Commercial Corporation The
latter is an independent entity which buys and
then markets not only products of the petitioner
but also many other products bearing equally
well-known and established trademarks and
tradenames. in other words, Rustan is not a mere
agent or conduit of the petitioner.
The rules and regulations promulgated by the
Board of Investments pursuant to its rule-making
power under Presidential Decree No. 1789,
otherwise known as the Omnibus Investment
Code, support a finding that the petitioner is not
doing business in the Philippines. Rule I, Sec. 1 (g)
of said rules and regulations defines "doing
business" as one" which includes, inter alia:
(1) ... A foreign firm which does
business through middlemen
acting on their own names, such
as indentors, commercial brokers
or commission merchants, shall
not be deemed doing business in
the Philippines. But such
indentors, commercial brokers or
commission merchants shall be
the ones deemed to be doing
business in the Philippines.
(2) Appointing a representative
or distributor who is domiciled in
the Philippines, unless said
representative or distributor has
an independent status, i.e., it
transacts business in its name
and for its account, and not in the
name or for the account of a
principal Thus, where a foreign
firm is represented by a person
or local company which does not
act in its name but in the name of
the foreign firm the latter is
doing business in the Philippines.
xxx xxx xxx
Applying the above provisions to the facts of this
case, we find and conclude that the petitioner is
not doing business in the Philippines. Rustan is
actually a middleman acting and transacting
business in its own name and or its own account
and not in the name or for the account of the
petitioner.
But even assuming the truth of the private
respondent's allegation that the petitioner failed
to allege material facts in its petition relative to
capacity to sue, the petitioner may still maintain
the present suit against respondent Hemandas. As
early as 1927, this Court was, and it still is, of the
view that a foreign corporation not doing business
in the Philippines needs no license to sue before
Philippine courts for infringement of trademark
and unfair competition. Thus, in Western
Equipment and Supply Co. v. Reyes (51 Phil. 115),
this Court held that a foreign corporation which
has never done any business in the Philippines
and which is unlicensed and unregistered to do
business here, but is widely and favorably known
in the Philippines through the use therein of its
products bearing its corporate and tradename, has
a legal right to maintain an action in the
Philippines to restrain the residents and
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
inhabitants thereof from organizing a corporation
therein bearing the same name as the foreign
corporation, when it appears that they have
personal knowledge of the existence of such a
foreign corporation, and it is apparent that the
purpose of the proposed domestic corporation is
to deal and trade in the same goods as those of the
foreign corporation.
We further held:
xxx xxx xxx
... That company is not here
seeking to enforce any legal or
control rights arising from, or
growing out of, any business
which it has transacted in the
Philippine Islands. The sole
purpose of the action:
Is to protect its reputation, its
corporate name, its goodwill,
whenever that reputation,
corporate name or goodwill have,
through the natural development
of its trade, established
themselves.' And it contends that
its rights to the use of its
corporate and trade name:
Is a property right, a right in
rem, which it may assert and
protect against all the world, in
any of the courts of the world-
even in jurisdictions where it
does not transact business-just
the same as it may protect its
tangible property, real or
personal, against trespass, or
conversion. Citing sec. 10, Nims
on Unfair Competition and
TradeMarks and cases cited; secs.
21-22, Hopkins on TradeMarks,
Trade Names and Unfair
Competition and cases cited.'
That point is sustained by the
authorities, and is well stated
in Hanover Star Mining Co. v.
Allen and Wheeler Co. (208 Fed.,
513). in which the syllabus says:
Since it is the trade and not the
mark that is to be protected, a
trade-mark acknowledges no
territorial boundaries of
municipalities or states or
nations, but extends to every
market where the trader's goods
have become known and
Identified by the use of the mark.
Our recognizing the capacity of the petitioner to
sue is not by any means novel or precedent
setting. Our jurisprudence is replete with cases
illustrating instances when foreign corporations
not doing business in the Philippines may
nonetheless sue in our courts. In East Board
Navigation Ltd, v. Ysmael and Co., Inc. (102 Phil. 1),
we recognized a right of foreign corporation to sue
on isolated transactions. In General Garments
Corp. v. Director of Patents (41 SCRA 50), we
sustained the right of Puritan Sportswear Corp., a
foreign corporation not licensed to do and not
doing business in the Philippines, to file a petition
for cancellation of a trademark before the Patent
Office.
More important is the nature of the case which led
to this petition. What preceded this petition
for certiorari was a letter complaint filed before
the NBI charging Hemandas with a criminal
offense, i.e., violation of Article 189 of the Revised
Penal Code. If prosecution follows after the
completion of the preliminary investigation being
conducted by the Special Prosecutor the
information shall be in the name of the People of
the Philippines and no longer the petitioner which
is only an aggrieved party since a criminal offense
is essentially an act against the State. It is the
latter which is principally the injured party
although there is a private right violated.
Petitioner's capacity to sue would become,
therefore, of not much significance in the main
case. We cannot snow a possible violator of our
criminal statutes to escape prosecution upon a far-
fetched contention that the aggrieved party or
victim of a crime has no standing to sue.
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. We are simply
interpreting and enforcing a solemn international
commitment of the Philippines embodied in a
multilateral treaty to which we are a party and
which we entered into because it is in our national
interest to do so.
The Paris Convention provides in part that:
ARTICLE 1
(1) The countries to which the
present Convention applies
constitute themselves into a
Union for the protection of
industrial property.
(2) The protection of industrial
property is concerned with
patents, utility models, industrial
designs, trademarks service
marks, trade names, and
indications of source or
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appellations of origin, and the
repression of unfair competition.
xxx xxx xxx
ARTICLE 2
(2) Nationals of each of the
countries of the Union shall as
regards the protection of
industrial property, enjoy in all
the other countries of the Union
the advantages that their
respective laws now grant, or
may hereafter grant, to nationals,
without prejudice to the rights
specially provided by the present
Convention. Consequently, they
shall have the same protection as
the latter, and the same legal
remedy against any infringement
of their rights, provided they
observe the conditions and
formalities imposed upon
nationals.
xxx xxx xxx
ARTICLE 6
(1) The countries of the Union
undertake, either
administratively if their
legislation so permits, or at the
request of an interested party, to
refuse or to cancel the
registration and to prohibit the
use of a trademark which
constitutes a reproduction,
imitation or translation, liable to
create confusion, of a mark
considered by the competent
authority of the country of
registration or use to be well- referred to in Articles 9, 10 and
known in that country as being l0bis.
already the mark of a person
entitled to the benefits of the (2) They undertake, further, to
present Convention and used for provide measures to permit
Identical or similar goods. These syndicates and associations
provisions shall also apply when which represent the
the essential part of the mark industrialists, producers or
constitutes a reproduction of any traders concerned and the
such well-known mark or an existence of which is not contrary
imitation liable to create to the laws of their countries, to
confusion therewith. take action in the Courts or
before the administrative
xxx xxx xxx authorities, with a view to the
repression of the acts referred to
ARTICLE 8 in Articles 9, 10 and 10bis, in so
far as the law of the country in
A trade name shall be protected which protection is claimed
in all the countries of the Union allows such action by the
without the obligation of filing or syndicates and associations of
registration, whether or not it that country.
forms part of a trademark.
xxx xxx xxx
xxx xxx xxx
ARTICLE 17
ARTICLE 10bis
Every country party to this
(1) The countries of the Union Convention undertakes to adopt,
are bound to assure to persons in accordance with its
entitled to the benefits of the constitution, the measures
Union effective protection necessary to ensure the
against unfair competition. application of this Convention.
xxx xxx xxx It is understood that at the time
an instrument of ratification or
accession is deposited on behalf
ARTICLE 10ter
of a country; such country will be
in a position under its domestic
(1) The countries of the Union law to give effect to the
undertake to assure to nationals provisions of this Convention.
of the other countries of the (61 O.G. 8010)
Union appropriate legal remedies
to repress effectively all the acts
xxx xxx xxx
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In Vanity Fair Mills, Inc. v. T Eaton Co. (234 F. 2d
633) the United States Circuit Court of Appeals
had occasion to comment on the extraterritorial
application of the Paris Convention It said that:
[11] The International
Convention is essentially a
compact between the various
member countries to accord in
their own countries to citizens of
the other contracting parties
trademark and other rights
comparable to those accorded
their own citizens by their
domestic law. The underlying
principle is that foreign nationals
should be given the same
treatment in each of the member
countries as that country makes
available to its own citizens. In
addition, the Convention sought
to create uniformity in certain
respects by obligating each
member nation 'to assure to
nationals of countries of the
Union an effective protection
against unfair competition.'
[12] The Convention is not
premised upon the Idea that the
trade-mark and related laws of
each member nation shall be
given extra-territorial
application, but on exactly the
converse principle that each
nation's law shall have only
territorial application. Thus a
foreign national of a member
nation using his trademark in
commerce in the United States is
accorded extensive protection
here against infringement and
other types of unfair competition
by virtue of United States
membership in the Convention.
But that protection has its source
in, and is subject to the
limitations of, American law, not
the law of the foreign national's
own country. ...
By the same token, the petitioner should be given
the same treatment in the Philippines as we make
available to our own citizens. We are obligated to
assure to nationals of "countries of the Union" an
effective protection against unfair competition in
the same way that they are obligated to similarly
protect Filipino citizens and firms.
Pursuant to this obligation, the Ministry of Trade
on November 20, 1980 issued a memorandum
addressed to the Director of the Patents Office
directing the latter:
xxx xxx xxx
... 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, Jordache,
Gloria Vanderbilt, Sasson, Fila,
Pierre Cardin, Gucci, Christian
Dior, Oscar de la Renta, Calvin
Klein, Givenchy, Ralph Lauren,
Geoffrey Beene, Lanvin and Ted
Lapidus.
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 damages
and other legal action by the
trademarks' foreign or local
owners or original users.
The memorandum is a clear manifestation of our
avowed adherence to a policy of cooperation and
amity with all nations. It is not, as wrongly alleged
by the private respondent, a personal policy of
Minister Luis Villafuerte which expires once he
leaves the Ministry of Trade. For a treaty or
convention is not a mere moral obligation to be
enforced or not at the whims of an incumbent
head of a Ministry. It creates a legally binding
obligation on the parties founded on the generally
accepted principle of international law of pacta
sunt servanda which has been adopted as part of
the law of our land. (Constitution, Art. II, Sec. 3).
The memorandum reminds the Director of Patents
of his legal duty to obey both law and treaty. It
must also be obeyed.
Hemandas further contends that the respondent
court did not commit grave abuse of discretion in
issuing the questioned order of April 22, 1983.
A review of the grounds invoked by Hemandas in
his motion to quash the search warrants reveals
the fact that they are not appropriate for quashing
a warrant. They are matters of defense which
should be ventilated during the trial on the merits
of the case. For instance, on the basis of the facts
before the Judge, we fail to understand how he
could treat a bare allegation that the respondent's
trademark is different from the petitioner's
trademark as a sufficient basis to grant the motion
to quash. We will treat the issue of prejudicial
question later. Granting that respondent
Hemandas was only trying to show the absence of
probable cause, we, nonetheless, hold the
arguments to be untenable.
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As a mandatory requirement for the issuance of a
valid search warrant, the Constitution requires in
no uncertain terms the determination of probable
cause by the judge after examination under oath
or affirmation of the complainant and the
witnesses he may produce (Constitution, Art. IV,
Sec. 3). Probable cause has traditionally meant
such facts and circumstances antecedent to the
issuance of the warrant that are in themselves
sufficient to induce a cautious man to rely upon
them and act in pursuance thereof (People v. Sy
Juco, 64 Phil. 667).
This concept of probable cause was amplified and
modified by our ruling in Stonehill v. Diokno, (20
SCRA 383) that probable cause "presupposes the
introduction of competent proof that the party
against whom it is sought has
performed particular acts, or committed specific
omissions, violating a given provision of our
criminal laws."
The question of whether or not probable cause
exists is one which must be decided in the light of
the conditions obtaining in given situations
(Central Bank v. Morfe, 20 SCRA 507). We agree
that there is no general formula or fixed rule for
the determination of the existence of probable
cause since, as we have recognized in Luna v.
Plaza (26 SCRA 310), the existence depends to a
large degree upon the finding or opinion of the
judge conducting the examination. However, the
findings of the judge should not disregard the facts
before him nor run counter to the clear dictates of
reason. More so it is plain that our country's
ability to abide by international commitments is at
stake.
The records show that the NBI agents at the
hearing of the application for the warrants before
respondent court presented three witnesses
under oath, sworn statements, and various
exhibits in the form of clothing apparels
manufactured by Hemandas but carrying the
trademark Lacoste. The respondent court
personally interrogated Ramon Esguerra, Samuel
Fiji, and Mamerto Espatero by means of searching
questions. After hearing the testimonies and
examining the documentary evidence, the
respondent court was convinced that there were
good and sufficient reasons for the issuance of the
warrant. And it then issued the warrant.
The respondent court, therefore, complied with
the constitutional and statutory requirements for
the issuance of a valid search warrant. At that
point in time, it was fully convinced that there
existed probable cause. But after hearing the
motion to quash and the oppositions thereto, the
respondent court executed a complete turnabout
and declared that there was no probable cause to
justify its earlier issuance of the warrants.
True, the lower court should be given the
opportunity to correct its errors, if there be any,
but the rectification must, as earlier stated be
based on sound and valid grounds. In this case,
there was no compelling justification for the about
face. The allegation that vital facts were
deliberately suppressed or concealed by the
petitioner should have been assessed more
carefully because the object of the quashal was the
return of items already seized and easily
examined by the court. The items were alleged to
be fake and quite obviously would be needed as
evidence in the criminal prosecution. Moreover,
an application for a search warrant is heard ex
parte. It is neither a trial nor a part of the trial.
Action on these applications must be expedited for
time is of the essence. Great reliance has to be
accorded by the judge to the testimonies under
oath of the complainant and the witnesses. The
allegation of Hemandas that the applicant
withheld information from the respondent court
was clearly no basis to order the return of the
seized items.
Hemandas relied heavily below and before us on
the argument that it is the holder of a certificate of
registration of the trademark "CHEMISE LACOSTE
& CROCODILE DEVICE". Significantly, such
registration is only in the Supplemental Register.
A certificate of registration in the Supplemental
Register is not prima facie evidence of the validity
of registration, of the registrant's exclusive right
to use the same in connection with the goods,
business, or services specified in the certificate.
Such a certificate of registration cannot be filed,
with effect, with the Bureau of Customs in order to
exclude from the Philippines, foreign goods
bearing infringement marks or trade names (Rule
124, Revised Rules of Practice Before the Phil. Pat.
Off. in Trademark Cases; Martin, Philippine
Commercial Laws, 1981, Vol. 2, pp. 513-515).
Section 19-A of Republic Act 166 as amended not
only provides for the keeping of the supplemental
register in addition to the principal register but
specifically directs that:
xxx xxx xxx
The certificates of registration for
marks and trade names
registered on the supplemental
register shall be conspicuously
different from certificates issued
for marks and trade names on
the principal register.
xxx xxx xxx
The reason is explained by a leading commentator
on Philippine Commercial Laws:
The registration of a mark upon
the supplemental register is not,
as in the case of the principal
register, prima facie evidence of
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(1) the validity of registration;
(2) registrant's ownership of the
mark; and (3) registrant's
exclusive right to use the mark. It
is not subject to opposition,
although it may be cancelled after
its issuance. Neither may it be the
subject of interference
proceedings. Registration on the
supplemental register is not
constructive notice of registrant's
claim of ownership. A in cases where presumption and precept may
supplemental register is
provided for the registration of
marks which are not registrable
on the principal register because
of some defects (conversely,
defects which make a mark
unregistrable on the principal
register, yet do not bar them
from the supplemental register.)
(Agbayani, II Commercial Laws of
the Philippines, 1978, p. 514,
citing Uy Hong Mo v. Titay & Co.,
et al., Dec. No. 254 of Director of
Patents, Apr. 30, 1963);
Registration in the Supplemental Register,
therefore, serves as notice that the registrant is
using or has appropriated the trademark. By the
very fact that the trademark cannot as yet be
entered in the Principal Register, all who deal with
it should be on guard that there are certain
defects, some obstacles which the user must Still
overcome before he can claim legal ownership of
the mark or ask the courts to vindicate his claims
of an exclusive right to the use of the same. It
would be deceptive for a party with nothing more
than a registration in the Supplemental Register to
posture before courts of justice as if the
registration is in the Principal Register.
The reliance of the private respondent on the last
sentence of the Patent office action on application
Serial No. 30954 that "registrant is presumed to
be the owner of the mark until after the
registration is declared cancelled" is, therefore,
misplaced and grounded on shaky foundation, The
supposed presumption not only runs counter to
the precept embodied in Rule 124 of the Revised
Rules of Practice before the Philippine Patent
Office in Trademark Cases but considering all the
facts ventilated before us in the four interrelated
petitions involving the petitioner and the
respondent, it is devoid of factual basis. And even
factually be reconciled, we have held that the
presumption is rebuttable, not conclusive, (People
v. Lim Hoa, G.R. No. L10612, May 30, 1958,
Unreported). One may be declared an unfair
competitor even if his competing trademark is
registered (Parke, Davis & Co. v. Kiu Foo & Co., et
al., 60 Phil. 928; La Yebana Co. v. Chua Seco & Co.,
14 Phil. 534).
By the same token, the argument that the
application was premature in view of the pending
case before the Patent Office is likewise without
legal basis.
The proceedings pending before the Patent Office
involving IPC Co. 1658 do not partake of the
nature of a prejudicial question which must first
be definitely resolved.
Section 5 of Rule 111 of the Rules of Court
provides that:
A petition for the suspension of
the criminal action based upon
the pendency of a pre-judicial
question in a civil case, may only
be presented by any party before
or during the trial of the criminal
action.
The case which suspends the criminal prosecution
must be a civil case which is determinative of the
innocence or, subject to the availability of other
defenses, the guilt of the accused. The pending
case before the Patent Office is an administrative
proceeding and not a civil case. The decision of the
Patent Office cannot be finally determinative of
the private respondent's innocence of the charges
against him.
In Flordelis v. Castillo (58 SCRA 301), we held that:
As clearly delineated in the
aforecited provisions of the new
Civil Code and the Rules of Court,
and as uniformly applied in
numerous decisions of this Court,
(Berbari v. Concepcion, 40 Phil.
837 (1920); Aleria v. Mendoza,
83 Phil. 427 (1949); People v.
Aragon, 94 Phil. 357 (1954);
Brito-Sy v. Malate Taxicab &
Garage, Inc., 102 Phil 482 (1957);
Mendiola v. Macadael, 1 SCRA
593; Benitez v. Concepcion, 2
SCRA 178; Zapante v. Montesa, 4
SCRA 510; Jimenez v. Averia, 22
SCRA 1380.) In Buenaventura v.
Ocampo (55 SCRA 271) the
doctrine of prejudicial question
was held inapplicable because no
criminal case but merely an
administrative case and a civil
suit were involved. The Court,
however, held that, in view of the
peculiar circumstances of that
case, the respondents' suit for
damages in the lower court was
premature as it was filed during
the pendency of an
administrative case against the
respondents before the POLCOM.
'The possibility cannot be
overlooked,' said the Court, 'that
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the POLCOM may hand down a
decision adverse to the
respondents, in which case the
damage suit will become
unfounded and baseless for
wanting in cause of action.') the
doctrine of pre-judicial question
comes into play generally in a
situation where a civil action and
a criminal action both penned
and there exists in the former an
issue which must be
preemptively resolved before the
criminal action may proceed,
because howsoever the issue
raised in the civil action is
resolved would be
determinative juris et de jure of
the guilt or innocence of the
accused in the criminal case.
In the present case, no civil action pends nor has
any been instituted. What was pending was an
administrative case before the Patent Office.
Even assuming that there could be an
administrative proceeding with exceptional or
special circumstances which render a criminal
prosecution premature pending the promulgation
of the administrative decision, no such peculiar
circumstances are present in this case.
Moreover, we take note of the action taken by the
Patents Office and the Minister of Trade and
affirmed by the Intermediate Appellate Court in
the case of La Chemise Lacoste S. A. v. Ram
Sadhwani (AC-G.R. No. SP-13356, June 17, 1983).
The same November 20, 1980 memorandum of
the Minister of Trade discussed in this decision
was involved in the appellate court's decision. The
Minister as the "implementing authority" under
Article 6bis of the Paris Convention for the
protection of Industrial Property instructed the
Director of Patents to reject applications for
Philippine registration of signature and other
world famous trademarks by applicants other
than its original owners or users. The brand
"Lacoste" was specifically cited together with
Jordache, Gloria Vanderbilt, Sasson, Fila, Pierre
Cardin, Gucci, Christian Dior, Oscar dela Renta,
Calvin Klein, Givenchy, Ralph Laurence, Geoffrey
Beene, Lanvin, and Ted Lapidus. The Director of
Patents was likewise ordered to require
Philippine registrants of such trademarks to
surrender their certificates of registration.
Compliance by the Director of Patents was
challenged.
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, after going over the evidence
in the records, affirmed the decision of the Director
of Patents declaring La Chemise Lacoste &A. the
owner of the disputed trademark and crocodile or
alligator device. The Intermediate Appellate Court
speaking through Mr. Justice Vicente V. Mendoza
stated:
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.
Apart from this finding, the
annexes to the opposition, which
La Chemise Lacoste S.A. filed in
the Patent Office, show that it is
the owner of the trademark
'Lacoste' and the device
consisting of a representation of
a crocodile or alligator by the
prior adoption and use of such
mark and device on clothing,
sports apparel and the like. La
Chemise Lacoste S.A, obtained
registration of these mark and
device and was in fact issued
renewal certificates by the
French National Industry
Property Office.
xxx xxx xxx
Indeed, due process is a rule of
reason. In the case at bar the
order of the Patent Office is based
not only on the undisputed fact of
ownership of the trademark by
the appellee but on a prior
determination by the Minister of
Trade, as the competent
authority under the Paris
Convention, that the trademark
and device sought to be
registered by the appellant are
well-known marks which the
Philippines, as party to the
Convention, is bound to protect
in favor of its owners. it would be
to exalt form over substance to
say that under the circumstances,
due process requires that a
hearing should be held before the
application is acted upon.
The appellant cites section 9 of
Republic Act No. 166, which
requires notice and hearing
whenever an opposition to the
registration of a trademark is
made. This provision does not
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apply, however, to situations
covered by the Paris Convention,
where the appropriate
authorities have determined that
a well-known trademark is
already that of another person. In
such cases, the countries
signatories to the Convention are
obliged to refuse or to cancel the
registration of the mark by any
other person or authority. In this
case, it is not disputed that the
trademark Lacoste is such a well-
known mark that a hearing, such
as that provided in Republic Act
No. 166, would be superfluous.
The issue of due process was raised and fully
discussed in the appellate court's decision. The
court ruled that due process was not violated.
In the light of the foregoing it is quite plain that
the prejudicial question argument is without
merit.
We have carefully gone over the records of all the
cases filed in this Court and find more than
enough evidence to sustain a finding that the
petitioner is the owner of the trademarks
"LACOSTE", "CHEMISE LACOSTE", the crocodile or
alligator device, and the composite mark of
LACOSTE and the representation of the crocodile
or alligator. Any pretensions of the private
respondent that he is the owner are absolutely
without basis. Any further ventilation of the issue
of ownership before the Patent Office will be a
superfluity and a dilatory tactic.
The issue of whether or not the trademark used by
the private respondent is different from the
petitioner's trade mark is a matter of defense and
will be better resolved in the criminal proceedings
before a court of justice instead of raising it as a
preliminary matter in an administrative
proceeding.
The purpose of the law protecting a trademark
cannot be overemphasized. They are to point out
distinctly the origin or ownership of the article to
which it is affixed, to secure to him, who has been
instrumental in bringing into market a superior
article of merchandise, the fruit of his industry
and skill, and to prevent fraud and imposition
(Etepha v. Director of Patents, 16 SCRA 495).
The legislature has enacted laws to regulate the
use of trademarks and provide for the protection
thereof. Modern trade and commerce demands
that depredations on legitimate trade marks of
non-nationals including those who have not
shown prior registration thereof should not be
countenanced. The law against such depredations
is not only for the protection of the owner of the
trademark but also, and more importantly, for the
protection of purchasers from confusion, mistake,
or deception as to the goods they are buying.
(Asari Yoko Co., Ltd. v. Kee Boc, 1 SCRA 1; General
Garments Corporation v. Director of Patents, 41
SCRA 50).
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, deceipt, 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 (Baltimore v.
Moses, 182 Md 229, 34 A (2d) 338).
The records show that the goodwill and
reputation of the petitioner's products bearing the
trademark LACOSTE date back even before 1964
when LACOSTE clothing apparels were first
marketed in the Philippines. To allow Hemandas
to continue using the trademark Lacoste for the
simple reason that he was the first registrant in
the Supplemental Register of a trademark used in
international commerce and not belonging to him
is to render nugatory the very essence of the law
on trademarks and tradenames.
We now proceed to the consideration of the
petition in Gobindram Hemandas Suianani u. Hon.
Roberto V Ongpin, et al. (G.R. No. 65659).
Actually, three other petitions involving the same
trademark and device have been filed with this
Court.
In Hemandas & Co. v. Intermediate Appellate Court,
et al. (G.R. No. 63504) the petitioner asked for the
following relief:
IN VIEW OF ALL THE
FOREGOING, it is respectfully
prayed (a) that the Resolutions of
the respondent Court of January
3, 1983 and February 24, 1983 be
nullified; and that the Decision of
the same respondent Court of
June 30, 1983 be declared to be
the law on the matter; (b) that
the Director of Patents be
directed to issue the
corresponding registration
certificate in the Principal
Register; and (c) granting upon
the petitioner such other legal
and equitable remedies as are
justified by the premises.
On December 5, 1983, we issued the following
resolution:
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Considering the allegations
contained, issues raised and the
arguments adduced in the
petition for review, the
respondent's comment thereon,
and petitioner's reply to said
comment, the Court Resolved to
DENY the petition for lack of
merit.
The Court further Resolved to
CALL the attention of the
Philippine Patent Office to the
pendency in this Court of G.R. No.
563796-97 entitled 'La Chemise
Lacoste, S.A. v. Hon. Oscar C.
Fernandez and Gobindram
Hemandas' which was given due
course on June 14, 1983 and to
the fact that G.R. No. 63928-29
entitled 'Gobindram Hemandas v.
La Chemise Lacoste, S.A., et al.'
filed on May 9, 1983 was
dismissed for lack of merit on
September 12, 1983. Both
petitions involve the same
dispute over the use of the
trademark 'Chemise Lacoste'.
The second case of Gobindram Hemandas vs. La
Chemise Lacoste, S.A., et al. (G.R. No. 63928-29)
prayed for the following:
I. On the petition for issuance of
writ of preliminary injunction, an
order be issued after due
hearing:
l. Enjoining and restraining
respondents Company,
attorneys-in-fact, and Estanislao
Granados from further
proceedings in the unfair
competition charges pending
with the Ministry of Justice filed
against petitioner;
2. Enjoining and restraining
respondents Company and its
attorneys-in-fact from causing
undue publication in newspapers
of general circulation on their
unwarranted claim that
petitioner's products are FAKE
pending proceedings hereof; and
3. Enjoining and restraining
respondents Company and its
attorneys-in-fact from sending
further threatening letters to
petitioner's customers unjustly
stating that petitioner's products
they are dealing in are FAKE and
threatening them with
confiscation and seizure thereof.
II. On the main petition, judgment
be rendered:
l. Awarding and granting the
issuance of the Writ of
Prohibition, prohibiting,
stopping, and restraining
respondents from further
committing the acts complained
of;
2. Awarding and granting the
issuance of the Writ of
Mandamus, ordering and
compelling respondents National
Bureau of Investigation, its
aforenamed agents, and State
Prosecutor Estanislao Granados
to immediately comply with the
Order of the Regional Trial Court,
National Capital Judicial Region,
Branch XLIX, Manila, dated April
22, 1983, which directs the
immediate return of the seized
items under Search Warrants
Nos. 83-128 and 83-129;
3. Making permanent any writ of
injunction that may have been
previously issued by this
Honorable Court in the petition
at bar: and
4. Awarding such other and
further relief as may be just and
equitable in the premises.
As earlier stated, this petition was dismissed for
lack of merit on September 12, 1983. Acting on a
motion for reconsideration, the Court on
November 23, 1983 resolved to deny the motion
for lack of merit and declared the denial to be
final.
Hemandas v. Hon. Roberto Ongpin (G.R. No.
65659) is the third petition.
In this last petition, the petitioner prays for the
setting aside as null and void and for the
prohibiting of the enforcement of the following
memorandum of respondent Minister Roberto
Ongpin:
MEMORANDUM:
FOR: THE DIRECTOR OF
PATENTS
Philippine Patent Office
xxx xxx xxx
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
Pursuant to Executive Order No. 913 dated 7 for its use by other than its
October 1983 which strengthens the rule-making original owner will constitute a
and adjudicatory powers of the Minister of Trade reproduction, imitation,
and Industry and provides inter alia, that 'such translation or other
rule-making and adjudicatory powers should be infringement;
revitalized in order that the Minister of Trade and
Industry can ...apply more swift and effective (b) that the trademark is used in
solutions and remedies to old and new problems ... commerce internationally,
such as the infringement of internationally-known supported by proof that goods
tradenames and trademarks ...'and in view of the bearing the trademark are sold
decision of the Intermediate Appellate Court in the on an international scale,
case of LA CHEMISE LACOSTE, S.A., versus RAM advertisements, the
SADWHANI [AC-G.R. Sp. No. 13359 (17) June establishment of factories, sales
1983] which affirms the validity of the offices, distributorships, and the
MEMORANDUM of then Minister Luis R. like, in different countries,
Villafuerte dated 20 November 1980 confirming including volume or other
our obligations under the PARIS CONVENTION measure of international trade
FOR THE PROTECTION OF INDUSTRIAL and commerce;
PROPERTY to which the Republic of the
Philippines is a signatory, you are hereby directed (c) that the trademark is duly
to implement measures necessary to effect registered in the industrial
compliance with our obligations under said property office(s) of another
convention in general, and, more specifically, to country or countries, taking into
honor our commitment under Section 6 consideration the dates of such
bis thereof, as follows: registration;
1. Whether the trademark under (d) that the trademark has been
consideration is well-known in long established and obtained
the Philippines or is a mark goodwill and general
already belonging to a person international consumer
entitled to the benefits of the recognition as belonging to one
CONVENTION, this should be owner or source;
established, pursuant to
Philippine Patent Office
(e) that the trademark actually
procedures in inter partes and ex
belongs to a party claiming
parte cases, according to any of
ownership and has the right to
the following criteria or any
registration under the provisions
combination thereof:
of the aforestated PARIS
CONVENTION.
(a) a declaration by the Minister
of Trade and Industry that' the
2. The word trademark, as used
trademark being considered is
in this MEMORANDUM, shall
already well-known in the
include tradenames, service
Philippines such that permission
marks, logos, signs, emblems,
insignia or other similar devices
used for Identification and
recognition by consumers.
3. The Philippine Patent Office
shall refuse all applications for,
or cancel the registration of,
trademarks which constitute a
reproduction, translation or
imitation of a trademark owned
by a person, natural or corporate,
who is a citizen of a country
signatory to the PARIS
CONVENTION FOR THE
PROTECTION OF INDUSTRIAL
PROPERTY.
4. The Philippine Patent Office
shall give due course to the
Opposition in cases already or
hereafter filed against the
registration of trademarks
entitled to protection of Section 6
bis of said PARIS CONVENTION
as outlined above, by remanding
applications filed by one not
entitled to such protection for
final disallowance by the
Examination Division.
5. All pending applications for
Philippine registration of
signature and other world
famous trademarks filed by
applicants other than their
original owners or users shall be
rejected forthwith. Where such
applicants have already obtained
registration contrary to the
abovementioned PARIS
CONVENTION and/or Philippine
Law, they shall be directed to
surrender their Certificates of
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
Registration to the Philippine
Patent Office for immediate
cancellation proceedings.
6. Consistent with the foregoing,
you are hereby directed to
expedite the hearing and to
decide without delay the
following cases pending before
your Office:
1. INTER PARTES CASE NO.
1689-Petition filed by La Chemise
Lacoste, S.A. for the cancellation
of Certificate of Registration No.
SR-2225 issued to Gobindram
Hemandas, assignee of
Hemandas and Company;
2. INTER PARTES CASE NO.
1658-Opposition filed by Games
and Garments Co. against the
registration of the trademark
Lacoste sought by La Chemise
Lacoste, S.A.;
3. INTER PARTES CASE NO.
1786-Opposition filed by La
Chemise Lacoste, S.A. against the
registration of trademark
Crocodile Device and Skiva
sought by one Wilson Chua.
Considering our discussions in G.R. Nos. 63796-
97, we find the petition in G.R. No. 65659 to be
patently without merit and accordingly deny it
due course.
In complying with the order to decide without
delay the cases specified in the memorandum, the
Director of Patents shall limit himself to the
ascertainment of facts in issues not resolved by
this decision and apply the law as expounded by REVERSED and SET ASIDE. Our Temporary
this Court to those facts. Restraining Order dated April 29, 1983 is ma(i.e.
PERMANENT. The petition in G.R. NO. 65659 is
One final point. It is essential that we stress our DENIED due course for lack of merit. Our
concern at the seeming inability of law Temporary Restraining Order dated December 5,
enforcement officials to stem the tide of fake and 1983 is LIFTED and SET ASIDE, effective
counterfeit consumer items flooding the immediately.
Philippine market or exported abroad from our
country. The greater victim is not so much the SO ORDERED.
manufacturer whose product is being faked but
the Filipino consuming public and in the case of Teehankee (Chairman), Melencio-Herrera, Plana,
exportations, our image abroad. No less than the Relova and De la Fuente, JJ., concur.
President, in issuing Executive Order No. 913
dated October 7, 1983 to strengthen the powers of
the Minister of Trade and Industry for the
protection of consumers, stated that, among other
acts, the dumping of substandard, imitated,
hazardous, and cheap goods, the infringement of
internationally known tradenames and
trademarks, and the unfair trade practices of
business firms has reached such proportions as to
constitute economic sabotage. We buy a kitchen
appliance, a household tool, perfume, face powder,
other toilet articles, watches, brandy or whisky,
and items of clothing like jeans, T-shirts, neck, ties,
etc. — the list is quite length — and pay good
money relying on the brand name as guarantee of
its quality and genuine nature only to explode in
bitter frustration and genuine nature on helpless
anger because the purchased item turns out to be
a shoddy imitation, albeit a clever looking
counterfeit, of the quality product. Judges all over
the country are well advised to remember that
court processes should not be used as instruments
to, unwittingly or otherwise, aid counterfeiters
and intellectual pirates, tie the hands of the law as
it seeks to protect the Filipino consuming public
and frustrate executive and administrative
implementation of solemn commitments pursuant
to international conventions and treaties.
WHEREFORE, the petition in G.R. NOS. 63797-97
is hereby GRANTED. The order dated April 22,
1983 of the respondent regional trial court is
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 101897. March 5, 1993.
LYCEUM OF THE PHILIPPINES, INC., petitioner, vs.
COURT OF APPEALS, LYCEUM OF APARRI,
LYCEUM OF CABAGAN, LYCEUM OF
CAMALANIUGAN, INC., LYCEUM OF LALLO, INC.,
LYCEUM OF TUAO, INC., BUHI LYCEUM, CENTRAL
LYCEUM OF CATANDUANES, LYCEUM OF
SOUTHERN PHILIPPINES, LYCEUM OF EASTERN
MINDANAO, INC. and WESTERN PANGASINAN
LYCEUM, INC., respondents.
Quisumbing, Torres & Evangelista Law Offices and
Ambrosio Padilla for petitioner.
Antonio M. Nuyles and Purungan, Chato, Chato,
Tarriela & Tan Law Offices for respondents.
Froilan Siobal for Western Pangasinan Lyceum.
SYLLABUS
1. CORPORATION LAW; CORPORATE NAMES;
REGISTRATION OF PROPOSED NAME WHICH IS
IDENTICAL OR CONFUSINGLY SIMILAR TO THAT
OF ANY EXISTING CORPORATION, PROHIBITED;
CONFUSION AND DECEPTION EFFECTIVELY
PRECLUDED BY THE APPENDING OF
GEOGRAPHIC NAMES TO THE WORD "LYCEUM".
— The Articles of Incorporation of a corporation
must, among other things, set out the name of the
corporation. Section 18 of the Corporation Code
establishes a restrictive rule insofar as corporate
names are concerned: "Section 18. Corporate
name. — No corporate name may be allowed by
the Securities an Exchange Commission if the
proposed name is identical or deceptively or
confusingly similar to that of any existing
corporation or to any other name already
protected by law or is patently deceptive,
confusing or contrary to existing laws. When a
change in the corporate name is approved, the
Commission shall issue an amended certificate of
incorporation under the amended name." The
policy underlying the prohibition in Section 18
against the registration of a corporate name which
is "identical or deceptively or confusingly similar"
to that of any existing corporation or which is
"patently deceptive" or "patently confusing" or
"contrary to existing laws," is the avoidance of
fraud upon the public which would have occasion
to deal with the entity concerned, the evasion of
legal obligations and duties, and the reduction of
difficulties of administration and supervision over
corporations. We do not consider that the
corporate names of private respondent
institutions are "identical with, or deceptively or
confusingly similar" to that of the petitioner
institution. True enough, the corporate names of
private respondent entities all carry the word
"Lyceum" but confusion and deception are
effectively precluded by the appending of
geographic names to the word "Lyceum." Thus, we
do not believe that the "Lyceum of Aparri" can be
mistaken by the general public for the Lyceum of
the Philippines, or that the "Lyceum of
Camalaniugan" would be confused with the
Lyceum of the Philippines.
2. ID.; ID.; DOCTRINE OF SECONDARY MEANING;
USE OF WORD "LYCEUM," NOT ATTENDED WITH
EXCLUSIVITY. — It is claimed, however, by
petitioner that the word "Lyceum" has acquired a
secondary meaning in relation to petitioner with
the result that word, although originally a generic,
has become appropriable by petitioner to the
exclusion of other institutions like private
respondents herein. The doctrine of secondary
meaning originated in the field of trademark law.
Its application has, however, been extended to
corporate names sine the right to use a corporate
name to the exclusion of others is based upon the
same principle which underlies the right to use a
particular trademark or tradename. In Philippine
Nut Industry, Inc. v. Standard Brands, Inc., the
doctrine of secondary meaning was elaborated in
the following terms: " . . . a word or phrase
originally incapable of exclusive appropriation
with reference to an article on the market,
because geographically or otherwise descriptive,
might nevertheless have been used so long and so
exclusively by one producer with reference to his
article that, in that trade and to that branch of the
purchasing public, the word or phrase has come to
mean that the article was his product." The
question which arises, therefore, is whether or not
the use by petitioner of "Lyceum" in its corporate
name has been for such length of time and with
such exclusivity as to have become associated or
identified with the petitioner institution in the
mind of the general public (or at least that portion
of the general public which has to do with
schools). The Court of Appeals recognized this
issue and answered it in the negative: "Under the
doctrine of secondary meaning, a word or phrase
originally incapable of exclusive appropriation
with reference to an article in the market, because
geographical or otherwise descriptive might
nevertheless have been used so long and so
exclusively by one producer with reference to this
article that, in that trade and to that group of the
purchasing public, the word or phrase has come to
mean that the article was his produce (Ana Ang vs.
Toribio Teodoro, 74 Phil. 56). This circumstance
has been referred to as the distinctiveness into
which the name or phrase has evolved through the
substantial and exclusive use of the same for a
considerable period of time. . . . No evidence was
ever presented in the hearing before the
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
Commission which sufficiently proved that the
word 'Lyceum' has indeed acquired secondary
meaning in favor of the appellant. If there was any
of this kind, the same tend to prove only that the
appellant had been using the disputed word for a
long period of time. . . . In other words, while the
appellant may have proved that it had been using
the word 'Lyceum' for a long period of time, this
fact alone did not amount to mean that the said
word had acquired secondary meaning in its favor
because the appellant failed to prove that it had
been using the same word all by itself to the
exclusion of others. More so, there was no
evidence presented to prove that confusion will
surely arise if the same word were to be used by
other educational institutions. Consequently, the
allegations of the appellant in its first two
assigned errors must necessarily fail." We agree
with the Court of Appeals. The number alone of
the private respondents in the case at bar suggests
strongly that petitioner's use of the word
"Lyceum" has not been attended with the
exclusivity essential for applicability of the
doctrine of secondary meaning. Petitioner's use of
the word "Lyceum" was not exclusive but was in
truth shared with the Western Pangasinan
Lyceum and a little later with other private
respondent institutions which registered with the
SEC using "Lyceum" as part of their corporation
names. There may well be other schools using
Lyceum or Liceo in their names, but not registered
with the SEC because they have not adopted the
corporate form of organization.
3. ID.; ID.; MUST BE EVALUATED IN THEIR
ENTIRETY TO DETERMINE WHETHER THEY ARE
CONFUSINGLY OR DECEPTIVELY SIMILAR TO
ANOTHER CORPORATE ENTITY'S NAME. —
petitioner institution is not entitled to a legally
enforceable exclusive right to use the word
"Lyceum" in its corporate name and that other
institutions may use "Lyceum" as part of their
corporate names. To determine whether a given
corporate name is "identical" or "confusingly or
deceptively similar" with another entity's
corporate name, it is not enough to ascertain the
presence of "Lyceum" or "Liceo" in both names.
One must evaluate corporate names in their
entirety and when the name of petitioner is
juxtaposed with the names of private respondents,
they are not reasonably regarded as "identical" or
"confusingly or deceptively similar" with each
other.
DECISION
FELICIANO, J p:
Petitioner is an educational institution duly
registered with the Securities and Exchange
Commission ("SEC"). When it first registered with
the SEC on 21 September 1950, it used the
corporate name Lyceum of the Philippines, Inc.
and has used that name ever since.
On 24 February 1984, petitioner instituted
proceedings before the SEC to compel the private
respondents, which are also educational
institutions, to delete the word "Lyceum" from
their corporate names and permanently to enjoin
them from using "Lyceum" as part of their
respective names.
Some of the private respondents actively
participated in the proceedings before the SEC.
These are the following, the dates of their original
SEC registration being set out below opposite
their respective names:
Western Pangasinan Lyceum — 27 October 1950
Lyceum of Cabagan — 31 October 1962
Lyceum of Lallo, Inc. — 26 March 1972
Lyceum of Aparri — 28 March 1972
Lyceum of Tuao, Inc. — 28 March 1972
Lyceum of Camalaniugan — 28 March 1972
The following private respondents were declared
in default for failure to file an answer despite
service of summons:
Buhi Lyceum;
Central Lyceum of Catanduanes;
Lyceum of Eastern Mindanao, Inc.; and
Lyceum of Southern Philippines
Petitioner's original complaint before the SEC had
included three (3) other entities:
1. The Lyceum of Malacanay;
2. The Lyceum of Marbel; and
3. The Lyceum of Araullo
The complaint was later withdrawn insofar as
concerned the Lyceum of Malacanay and the
Lyceum of Marbel, for failure to serve summons
upon these two (2) entities. The case against the
Liceum of Araullo was dismissed when that school
motu proprio change its corporate name to
"Pamantasan ng Araullo."
The background of the case at bar needs some
recounting. Petitioner had sometime before
commenced in the SEC a proceeding (SEC-Case No.
1241) against the Lyceum of Baguio, Inc. to
require it to change its corporate name and to
adopt another name not "similar [to] or identical"
with that of petitioner. In an Order dated 20 April
1977, Associate Commissioner Julio Sulit held that
the corporate name of petitioner and that of the
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
Lyceum of Baguio, Inc. were substantially identical
because of the presence of a "dominant" word, i.e.,
"Lyceum," the name of the geographical location
of the campus being the only word which
distinguished one from the other corporate name.
The SEC also noted that petitioner had registered
as a corporation ahead of the Lyceum of Baguio,
Inc. in point of time, 1 and ordered the latter to
change its name to another name "not similar or
identical [with]" the names of previously
registered entities.
The Lyceum of Baguio, Inc. assailed the Order of
the SEC before the Supreme Court in a case
docketed as G.R. No. L-46595. In a Minute
Resolution dated 14 September 1977, the Court
denied the Petition for Review for lack of merit.
Entry of judgment in that case was made on 21
October 1977. 2
Armed with the Resolution of this Court in G.R. No.
L-46595, petitioner then wrote all the educational
institutions it could find using the word "Lyceum"
as part of their corporate name, and advised them
to discontinue such use of "Lyceum." When, with
the passage of time, it became clear that this
recourse had failed, petitioner instituted before
the SEC SEC-Case No. 2579 to enforce what
petitioner claims as its proprietary right to the
word "Lyceum." The SEC hearing officer rendered
a decision sustaining petitioner's claim to an
exclusive right to use the word "Lyceum." The
hearing officer relied upon the SEC ruling in the
Lyceum of Baguio, Inc. case (SEC-Case No. 1241)
and held that the word "Lyceum" was capable of
appropriation and that petitioner had acquired an
enforceable exclusive right to the use of that word.
On appeal, however, by private respondents to the
SEC En Banc, the decision of the hearing officer
was reversed and set aside. The SEC En Banc did
not consider the word "Lyceum" to have become
so identified with petitioner as to render use
thereof by other institutions as productive of
confusion about the identity of the schools
concerned in the mind of the general public.
Unlike its hearing officer, the SEC En Banc held
that the attaching of geographical names to the
word "Lyceum" served sufficiently to distinguish
the schools from one another, especially in view of
the fact that the campuses of petitioner and those
of the private respondents were physically quite
remote from each other. 3
Petitioner then went on appeal to the Court of
Appeals. In its Decision dated 28 June 1991,
however, the Court of Appeals affirmed the
questioned Orders of the SEC En Banc. 4 Petitioner
filed a motion for reconsideration, without
success.
Before this Court, petitioner asserts that the Court
of Appeals committed the following errors:
1. The Court of Appeals erred in holding that the
Resolution of the Supreme Court in G.R. No. L-
46595 did not constitute stare decisis as to apply
to this case and in not holding that said Resolution
bound subsequent determinations on the right to
exclusive use of the word Lyceum.
2. The Court of Appeals erred in holding that
respondent Western Pangasinan Lyceum, Inc. was
incorporated earlier than petitioner.
3. The Court of Appeals erred in holding that the
word Lyceum has not acquired a secondary
meaning in favor of petitioner.
4. The Court of Appeals erred in holding that
Lyceum as a generic word cannot be appropriated
by the petitioner to the exclusion of others. 5
We will consider all the foregoing ascribed errors,
though not necessarily seriatim. We begin by
noting that the Resolution of the Court in G.R. No.
L-46595 does not, of course, constitute res
adjudicata in respect of the case at bar, since there
is no identity of parties. Neither is stare decisis
pertinent, if only because the SEC En Banc itself
has re-examined Associate Commissioner Sulit's
ruling in the Lyceum of Baguio case. The Minute
Resolution of the Court in G.R. No. L-46595 was
not a reasoned adoption of the Sulit ruling.
The Articles of Incorporation of a corporation
must, among other things, set out the name of the
corporation. 6 Section 18 of the Corporation Code
establishes a restrictive rule insofar as corporate
names are concerned:
"SECTION 18. Corporate name. — No corporate
name may be allowed by the Securities an
Exchange Commission if the proposed name is
identical or deceptively or confusingly similar to
that of any existing corporation or to any other
name already protected by law or is patently
deceptive, confusing or contrary to existing laws.
When a change in the corporate name is approved,
the Commission shall issue an amended certificate
of incorporation under the amended name."
(Emphasis supplied)
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. 7
We do not consider that the corporate names of
private respondent institutions are "identical
with, or deceptively or confusingly similar" to that
of the petitioner institution. True enough, the
corporate names of private respondent entities all
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
carry the word "Lyceum" but confusion and
deception are effectively precluded by the
appending of geographic names to the word
"Lyceum." Thus, we do not believe that the
"Lyceum of Aparri" can be mistaken by the general
public for the Lyceum of the Philippines, or that
the "Lyceum of Camalaniugan" would be confused
with the Lyceum of the Philippines.
Etymologically, the word "Lyceum" is the Latin
word for the Greek lykeion which in turn referred
to a locality on the river Ilissius in ancient Athens
"comprising an enclosure dedicated to Apollo and
adorned with fountains and buildings erected by
Pisistratus, Pericles and Lycurgus frequented by
the youth for exercise and by the philosopher
Aristotle and his followers for teaching." 8 In time,
the word "Lyceum" became associated with
schools and other institutions providing public
lectures and concerts and public discussions. Thus
today, the word "Lyceum" generally refers to a
school or an institution of learning. While the
Latin word "lyceum" has been incorporated into
the English language, the word is also found in
Spanish (liceo) and in French (lycee). As the Court
of Appeals noted in its Decision, Roman Catholic
schools frequently use the term; e.g., "Liceo de
Manila," "Liceo de Baleno" (in Baleno, Masbate),
"Liceo de Masbate," "Liceo de Albay." 9 "Lyceum"
is in fact as generic in character as the word
"university." In the name of the petitioner,
"Lyceum" appears to be a substitute for
"university;" in other places, however, "Lyceum,"
or "Liceo" or "Lycee" frequently denotes a
secondary school or a college. It may be (though
this is a question of fact which we need not
resolve) that the use of the word "Lyceum" may
not yet be as widespread as the use of
"university," but it is clear that a not
inconsiderable number of educational institutions
have adopted "Lyceum" or "Liceo" as part of their
corporate names. Since "Lyceum" or "Liceo"
denotes a school or institution of learning, it is not
unnatural to use this word to designate an entity
which is organized and operating as an
educational institution.
It is claimed, however, by petitioner that the word
"Lyceum" has acquired a secondary meaning in
relation to petitioner with the result that that
word, although originally a generic, has become
appropriable by petitioner to the exclusion of
other institutions like private respondents herein.
The doctrine of secondary meaning originated in
the field of trademark law. Its application has,
however, been extended to corporate names sine
the right to use a corporate name to the exclusion
of others is based upon the same principle which
underlies the right to use a particular trademark
or tradename. 10 In Philippine Nut Industry, Inc.
v. Standard Brands, Inc., 11 the doctrine of
secondary meaning was elaborated in the
following terms:
" . . . a word or phrase originally incapable of
exclusive appropriation with reference to an
article on the market, because geographically or
otherwise descriptive, might nevertheless have
been used so long and so exclusively by one
producer with reference to his article that, in that
trade and to that branch of the purchasing public,
the word or phrase has come to mean that the
article was his product." 12
The question which arises, therefore, is whether
or not the use by petitioner of "Lyceum" in its
corporate name has been for such length of time
and with such exclusivity as to have become
associated or identified with the petitioner
institution in the mind of the general public (or at
least that portion of the general public which has
to do with schools). The Court of Appeals
recognized this issue and answered it in the
negative:
"Under the doctrine of secondary meaning, a word
or phrase originally incapable of exclusive
appropriation with reference to an article in the
market, because geographical or otherwise
descriptive might nevertheless have been used so
long and so exclusively by one producer with
reference to this article that, in that trade and to
that group of the purchasing public, the word or
phrase has come to mean that the article was his
produce (Ana Ang vs. Toribio Teodoro, 74 Phil.
56). This circumstance has been referred to as the
distinctiveness into which the name or phrase has
evolved through the substantial and exclusive use
of the same for a considerable period of time.
Consequently, the same doctrine or principle
cannot be made to apply where the evidence did
not prove that the business (of the plaintiff) has
continued for so long a time that it has become of
consequence and acquired a good will of
considerable value such that its articles and
produce have acquired a well-known reputation,
and confusion will result by the use of the
disputed name (by the defendant) (Ang Si Heng vs.
Wellington Department Store, Inc., 92 Phil. 448).
With the foregoing as a yardstick, [we] believe the
appellant failed to satisfy the aforementioned
requisites. No evidence was ever presented in the
hearing before the Commission which sufficiently
proved that the word 'Lyceum' has indeed
acquired secondary meaning in favor of the
appellant. If there was any of this kind, the same
tend to prove only that the appellant had been
using the disputed word for a long period of time.
Nevertheless, its (appellant) exclusive use of the
word (Lyceum) was never established or proven
as in fact the evidence tend to convey that the
cross-claimant was already using the word
'Lyceum' seventeen (17) years prior to the date
the appellant started using the same word in its
corporate name. Furthermore, educational
institutions of the Roman Catholic Church had
been using the same or similar word like 'Liceo de
Manila,' 'Liceo de Baleno' (in Baleno, Masbate),
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'Liceo de Masbate,' 'Liceo de Albay' long before
appellant started using the word 'Lyceum'. The
appellant also failed to prove that the word
'Lyceum' has become so identified with its
educational institution that confusion will surely
arise in the minds of the public if the same word
were to be used by other educational institutions.
In other words, while the appellant may have
proved that it had been using the word 'Lyceum'
for a long period of time, this fact alone did not
amount to mean that the said word had acquired
secondary meaning in its favor because the
appellant failed to prove that it had been using the
same word all by itself to the exclusion of others.
More so, there was no evidence presented to
prove that confusion will surely arise if the same
word were to be used by other educational
institutions. Consequently, the allegations of the
appellant in its first two assigned errors must
necessarily fail." 13 (Underscoring partly in the
original and partly supplied)
We agree with the Court of Appeals. The number
alone of the private respondents in the case at bar
suggests strongly that petitioner's use of the word
"Lyceum" has not been attended with the
exclusivity essential for applicability of the
doctrine of secondary meaning. It may be noted
also that at least one of the private respondents,
i.e., the Western Pangasinan Lyceum, Inc., used the
term "Lyceum" seventeen (17) years before the
petitioner registered its own corporate name with
the SEC and began using the word "Lyceum." It
follows that if any institution had acquired an
exclusive right to the word "Lyceum," that
institution would have been the Western
Pangasinan Lyceum, Inc. rather than the petitioner
institution.
In this connection, petitioner argues that because
the Western Pangasinan Lyceum, Inc. failed to
reconstruct its records before the SEC in
accordance with the provisions of R.A. No. 62,
which records had been destroyed during World Review is DENIED for lack of merit, and the
War II, Western Pangasinan Lyceum should be Decision of the Court of Appeals dated 28 June
deemed to have lost all rights it may have 1991 is hereby AFFIRMED. No pronouncement as
acquired by virtue of its past registration. It might to costs.
be noted that the Western Pangasinan Lyceum,
Inc. registered with the SEC soon after petitioner SO ORDERED.
had filed its own registration on 21 September
1950. Whether or not Western Pangasinan Bidin, Davide, Jr., Romero and Melo, JJ ., concur.
Lyceum, Inc. must be deemed to have lost its
rights under its original 1933 registration,
Gutierrez, Jr., J ., on terminal leave.
appears to us to be quite secondary in importance;
we refer to this earlier registration simply to
underscore the fact that petitioner's use of the
word "Lyceum" was neither the first use of that
term in the Philippines nor an exclusive use
thereof. Petitioner's use of the word "Lyceum" was
not exclusive but was in truth shared with the
Western Pangasinan Lyceum and a little later with
other private respondent institutions which
registered with the SEC using "Lyceum" as part of
their corporation names. There may well be other
schools using Lyceum or Liceo in their names, but
not registered with the SEC because they have not
adopted the corporate form of organization.
We conclude and so hold that petitioner
institution is not entitled to a legally enforceable
exclusive right to use the word "Lyceum" in its
corporate name and that other institutions may
use "Lyceum" as part of their corporate names. To
determine whether a given corporate name is
"identical" or "confusingly or deceptively similar"
with another entity's corporate name, it is not
enough to ascertain the presence of "Lyceum" or
"Liceo" in both names. One must evaluate
corporate names in their entirety and when the
name of petitioner is juxtaposed with the names of
private respondents, they are not reasonably
regarded as "identical" or "confusingly or
deceptively similar" with each other.
WHEREFORE, the petitioner having failed to show
any reversible error on the part of the public
respondent Court of Appeals, the Petition for
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Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-20635             March 31, 1966
ETEPHA, A.G., petitioner,
vs.
DIRECTOR OF PATENTS and WESTMONT
PHARMACEUTICALS, INC., respondents.
McClure, Salas and Gonzalez, for petitioner.
Sycip, Salazar, Manalo, Luna and Associates, for
respondent.
SANCHEZ, J.:
To the question: May trademark ATUSSIN be
registered, given the fact that PERTUSSIN, another
trademark, had been previously registered in the
Patent Office? — the Director of Patents answered
affirmatively. Hence this appeal.
On April 23, 1959, respondent Westmont
Pharmaceuticals, Inc., a New York corporation,
sought registration of trademark "Atussin" placed
on its "medicinal preparation of expectorant
antihistaminic, bronchodilator sedative, ascorbic
acid (Vitamin C) used in the treatment of cough".
The trademark is used exclusively in the
Philippines since January 21, 1959.1
Petitioner, Etepha, A. G., a Liechtenstin
(principality) corporation, objected. Petitioner
claims that it will be damaged because Atussin is
so confusedly similar to its Pertussin (Registration
No. 6089, issued on September 25, 1957) used on
a preparation for the treatment of coughs, that the
buying public will be misled into believing that
Westmont's product is that of petitioner's which
allegedly enjoys goodwill.
1. The objects of a trademark are "to point
out distinctly the origin or ownership of
the articles to which it is affixed, to secure
to him who has been instrumental in
bringing into market a superior article or
merchandise the fruit of his industry and
skill, and to prevent fraud and
imposition."2 Our over-all task then is to
ascertain whether or not Atussin so
resembles Pertussin "as to be likely, when
applied to or used in connection with the
goods ... of the applicant, to cause
confusion or mistake or to deceive
purchasers".3 And, we are to be guided by
the rule that the validity of a cause for
infringement is predicated upon colorable
imitation. The phrase "colorable
imitation" denotes such a "close or
ingenious imitation as to be calculated to
deceive ordinary persons, or such a
resemblance to the original as to deceive
an ordinary purchaser, giving such
attention as a purchaser usually gives,
and to cause him to purchase the one
supposing it to be the other."4
2. That the word "tussin" figures as a
component of both trademarks is nothing
to wonder at. The Director of Patents
aptly observes that it is "the common
practice in the drug and pharmaceutical
industries to 'fabricate' marks by using
syllables or words suggestive of the
ailments for which they are intended and
adding thereto distinctive prefixes or
suffixes".5 And appropriately to be
considered now is the fact that,
concededly, the "tussin" (in Pertussin and
Atussin) was derived from the Latin root-
word "tussis" meaning cough.6
"Tussin" is merely descriptive; it is
generic; it furnishes to the buyer no
indication of the origin of the goods; it is
open for appropriation by anyone. It is
accordingly barred from registration as
trademark. With jurisprudence holding
the line, we feel safe in making the
statement that any other conclusion
would result in "appellant having
practically a monopoly"7 of the word
"tussin" in a trademark.8
While "tussin" by itself cannot thus be
used exclusively to identify one's goods, it
may properly become the subject of a
trademark "by combination with another
word or phrase".9 And this union of words
is reflected in petitioner's Pertussin and
respondent's Atussin, the first with prefix
"Per" and the second with Prefix
"A".1äwphï1.ñët
3. A practical approach to the problem of
similarity or dissimilarity is to go into
the whole of the two trademarks pictured
in their manner of display. Inspection
should be undertaken from the viewpoint
of a prospective buyer. The trademark
complained of should be compared and
contrasted with the purchaser's memory
(not in juxtaposition) of the trademark
said to be infringed. 10 Some such factors
as "sound; appearance; form, style, shape,
size or format; color; ideas connoted by
marks; the meaning, spelling, and
pronunciation, of words used; and the
setting in which the words appear" may
be considered. 11 For, indeed, trademark
infringement is a form of unfair
competition. 12
We take a casual look at the two labels —
without spelling out the details — bearing
in mind the easy-to-remember earmarks
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thereof. Respondent's label underscores
the trademark Atussin in bold, block
letters horizontally written. In
petitioner's, on the other hand, Pertussin
is printed diagonally upwards and across
in semiscript style with flourishes and
with only the first letter "P" capitalized.
Each label plainly shows the source of the
medicine: petitioner's at the foot bears
"Etepha Ltd. Schaan Fl", and on top,
"Apothecary E. Taeschner's";
respondent's projects "Westmont
Pharmaceuticals, Inc. New York, USA" at
the bottoms, and on the lower left side the
word "Westmont" upon a white diamond
shaped enclosure and in red ink — a color
different from that of the words above
and below it. Printed prominently along
the left, bottom and right edges of
petitioner's label are indications of the
use: "for bronchial catarrh — whopping-
cough — coughs and asthma".
Respondent's for its part briefly
represents what its produce actually is - a
"cough syrup". The two labels are entirely
different in colors, contents, arrangement
of words thereon, sizes, shapes and
general appearance. The contrasts in
pictorial effects and appeals to the eye is
so pronounced that the label of one
cannot be mistaken for that of the other,
not even by persons unfamiliar with the
two trademarks. 13
On this point the following culled from a
recent decision of the United States Court
of Customs and Patent Appeals (June 15,
1956) is persuasive: 14
Confusion is likely between
trademarks, however, only if
their over-all presentations in
any of the particulars of
sound, appearance, or meaning
are such as would lead the
purchasing public into believing
that the products to which the
marks are applied emanated
from the same source. In testing
this issue, fixed legal rules exist
— if not in harmony, certainly in
abundance — but, in the final
analysis, the application of these
rules in any given situation
necessarily reflects a matter of
individual judgment largely
predicated on opinion. There is,
however, and can be no
disagreement with the rule that
the purchaser is confused, if at
all, by the marks as a whole.
4. We now consider exclusively the two
words — Pertussin and Atussin — as they
appear on the respective labels. As
previously adverted to, these words are
presented to the public in different styles
of writing and methods of design. The
horizontal plain, block letters of Atussin
and the diagonally and artistically upward
writing of Pertussin leave distinct visual
impressions. One look is enough to
denude the mind of that illuminating
similarity so essential for a trademark
infringement case to prosper.
5. As we take up Pertussin and Atussin
once again, we cannot escape notice of the
fact that the two words do not sound alike
— when pronounced. There is not much
phonetic similarity between the two. The
Solicitor General well-observed that in
Pertussin the pronunciation of the prefix
"Per", whether correct or incorrect,
includes a combination of three letters
P, e and r; whereas, in Atussin the whole
starts with the single letter A added to
suffix "tussin". Appeals to the ear are
disimilar. And this, because in a word
combination, the part that comes first is
the most pronounced. An expositor of the
applicable rule here is the decision in the
Syrocol-Cheracol controversy. 15 There,
the ruling is that trademark Syrocol (a
cough medicine preparation) is not
confusedly similar to
trademark Cheracol (also a cough
medicine preparation). Reason: the two
words "do not look or sound enough alike
to justify a holding of trademark
infringement", and the "only similarity is
in the last syllable, and that is not
uncommon in names given drug
compounds".
6. In the solution of a trademark
infringement problem, regard too should
be given to the class of persons who buy
the particular product and the
circumstances ordinarily attendant to its
acquisition. 16 The medicinal preparation
clothed with the trademarks in question,
are unlike articles of everyday use such as
candies, ice cream, milk, soft drinks and
the like which may be freely obtained by
anyone, anytime, anywhere. Petitioner's
and respondent's products are to be
dispensed upon medical prescription. The
respective labels say so. An intending
buyer must have to go first to a licensed
doctor of medicine; he receives
instructions as to what to purchase; he
reads the doctor's prescription; he knows
what he is to buy. He is not of the
incautious, unwary, unobservant or
unsuspecting type; he examines the
product sold to him; he checks to find out
whether it conforms to the medical
prescription. The common trade channel
is the pharmacy or the drugstore.
Similarly, the pharmacist or druggist
verifies the medicine sold. The margin of
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error in the acquisition of one for the
other is quite remote.

We concede the possibility that buyers might be

able to obtain Pertussin or Attusin without
prescription. When this happens, then the buyer
must be one throughly familiar with what he
intends to get, else he would not have the temerity
to ask for a medicine — specifically needed to cure
a given ailment. In which case, the more
improbable it will be to palm off one for the other.
For a person who purchases with open eyes is
hardly the man to be deceived.

For the reasons given, the appealed decision of the

respondent Director of Patents — giving due
course to the application for the registration of
trademark ATTUSIN is hereby affirmed. Costa
against petitioner. So ordered.

Bengzon, C.J., Bautista Angelo, Concepcion, Reyes,

J.B.L., Barrera, Regala, Makalintal, Bengzon, J. P.,
and Zaldivar, JJ., concur.
Dizon, J., took no part.

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Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-1750             October 26, 1905
GUILLERMO BAXTER AND G. GAXTER &
CO., plaintiffs-appellees,
vs.
ZOSIMO ZUAZUA, ET AL., defendants-appellants.
Jose Ma. Rosado for appellants.
Pillsbury and Sutro for appellees.
MAPA, J.:
Guillermo Baxter, the plaintiff in this case, after
complying with the necessary formalities, secured
from the Government of the Philippine Islands, on
the 30th day of August, 1894, the right to use the
trade-mark described as "Agua de Kananga", as
well as the labels annexed thereto, a facsimile of
which was attached to the complaint filed in this
case.
On the 23rd day of July, 1901, the said Guillermo
Baxter associated himself with certain merchants
of the city of Manila for the purpose of organizing
a limited partnership for a period of five years,
under the firm name and style of "Baxter &
Company," the object of which said partnership
was the manufacture of toilet water and
perfumery. Guillermo Baxter contributed to the
partnership, of which he was elected manager and
administrator, the business which is now the basis
of that carried on by the said partnership; also his
title to certain trade-marks, among them the one
described as "Agua de Kananga." For this reason
the proprietor of the said trade-mark was joined
as a party plaintiff with the partnership of Baxter
& Co., the firm directly interested in the use and
exploitation of the said trade-mark. This trade-
mark is actually used by the plaintiffs to designate
the ownership and origin of a certain toilet water
manufactured and sold by them under the said
name of "Agua de Kananga."
The plaintiffs brought this action for unfair
competition under section 7 of Act No. 666 of the
Philippine Commission. It is alleged that the
defendant Zosimo Zuazua, for the purpose of
imitating and fraudulently simulating the "Agua
de Kananga" manufactured by plaintiffs, placed on
the market for sale a certain toilet water under the
name and denomination of "Kananga
Superior" and "Kanangue", and disposed of the
same in bottles with labels similar to those used
by the plaintiffs for their own goods. It was further
alleged that the other defendants were engaged in
retailing to the public the product manufactured
by the defendant Zuazua. Certain facsimiles of the
labels used by the said Zuazua were also attached
to the complaint.
Zuazua admitted that he had manufactured
certain toilet water under the denomination
of "Kananga Superior" and "Kanangue", and that
he had also sold the same in bottles labeled as
alleged in the complaint. As to the bottles, it was
stipulated, page 19 of the bill of exceptions, that
"those used by the defendant Zuazua, as well as
those used by the plaintiffs, were universally used
by all persons engaged in the manufacture of toilet
water, and that the fact that they were used by the
defendant did not, of itself, constitute a violation
of the rights of the plaintiffs, nor a fraud or deceit
upon the public."
The trial court entered judgment enjoining the
defendants from the further manufacture of toilet
water under the trade-mark of "Kananga
Superior" and "Kananga", and the selling of the
same in bottles of the size and form of those
introduced in evidence at the trial, labeled as
aforesaid, and for costs. The said judgment was
based upon the ground that the labels, words, and
bottles in question, taken together, were an
imitation of those used by the plaintiffs, and
tended to deceive the public by making it appear
that the toilet water manufactured and sold by the
defendants was the same toilet water
manufactured by the plaintiffs, and that the use of
the said labels, words, and bottles was therefore
illegal, and constituted a violation of plaintiff's
rights.lawphil.net
The trial court found also, as a conclusion of law,
that the grant by the Government of the Philippine
Islands did not give the plaintiffs an exclusive
right to the use of the word "Kananga," but to the
phrase "Agua de Kananga;" that "Kananga" was
the name of a well-known tree of the Philippine
Islands, and held that, although the plaintiffs had a
right to the exclusive use of the phrase "Agua de
Kananga," it did not follow that they had an
exclusive right to the use of any of the words
contained in the said phrase.
The plaintiffs, as well as the defendant Zosimo
Zuazua, excepted to the judgment of the trial
court, upon different grounds. The defendant
moved for a new trial in the Court of First
Instance, upon the ground that the judgment was
contrary to the weight of evidence.
The main reliance of the defendant is that the
labels used on his goods differed from those used
by the plaintiffs as to the drawing, color, and
general appearance of the design, and he denies
emphatically that he had any intention to deceive
the public thereby, alleging that the people clearly
distinguished the goods of the plaintiffs from
those of the defendants, the former being known
204 | I P L P a r t I
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from the picture on the bottle as the "Payo Brand"
and the latter as the "Señ orita Brand."
The alleged similarity or resemblance between the
labels is a question of fact which can be decided by
a mere inspection of the same. After a careful
comparison of the labels used by the defendant
with those used by the plaintiffs, we have
unanimously arrived at the conclusion that there
is no identity nor even any similarity whatsoever
between them, either in detail or as a whole. The
difference between the two is so apparent that it
can be readily noticed. We do not believe that the
public could have been deceived by the
appearance of the labels to the extent of taking the
goods of the plaintiffs for those manufactured and
sold by the defendant. We make no finding as to
the bottles because they were not forwarded to
this court for inspection, and, moreover, because it
was stipulated by the parties that the said bottles
were universally used by all manufacturers of
toilet water, and that their particular use by
defendant was not, therefore, an act of fraud or
deceit practiced by him upon the plaintiffs or the
public generally.
Section 7 of Act No. 666 provides in part as
follows:
And in order that the action shall lie
under this section, actual intent to deceive
the public and defraud a competitor shall
affirmatively appear on the part of the
person sought to be made liable, but such
intent may be inferred from similarity in
the appearance of the goods as packed or
offered for sale to those of the
complaining party.
The plaintiffs have not proved, or attempted to
prove, the fraudulent intent attributed to the
defendant Zuazua by any means other that the
alleged similarity between the labels used by him
and those used by the defendant to designate his
own goods. There being no such similarity
between the labels, we find no reason for even
inferring that the defendant had any such
intention, and therefore the action brought by the
plaintiffs in this case can not be maintained under
the law. The judgment appealed from should be
reversed in so far as it holds that such an action
lies in this case.
We agree, however, with the trial court, that the
ownership of the trade-mark "Agua de
Kananga" did not give the plaintiffs a right to the
exclusive use of the word "Kananga."
The defendant alleged in his answer that the
word "Kananga" could not be used as a trade-
mark because it was the name of a flower. It is
stated in the judgment of the court below that the
word "Kananga" represents the name of a well-
known tree in the Philippines. This finding has not
been disputed by the plaintiffs, who simply allege
that the spelling of the said word indicates that it
is foreign to the Spanish language. This, by the
way, would not prove, even though it were true,
that the said word was not in fact the name of a
flower of the Philippine Islands, as set out in the
judgment. It is apparent, therefore, that the said
word could not be used exclusively as a trade-
mark, any more than could the words "sugar,"
"tobacco," or "coffee." The law is clear and
conclusive upon the subject. "A designation or
part of a designation," says section 2 of Act No.
666, "which relates only to the name, quality, or
description of the merchandise ... can not be the
subject of a trade-mark." This provision is in
conformity with the provisions of paragraph 3 of
article 5 of the royal decree of the 26th of October,
1888, under which Guillermo Baxter secured the
registration of his trade-mark. The said royal
decree provided that the denominations generally
used in commerce for the purpose of designating a
class of goods could not be the subject of labels or
trade-marks.
The plaintiffs allege that the defendants did not
prove, or even attempt to prove, that the goods
manufactured by them had anything to do with
the "Kananga" flower. If the goods in question had
really nothing to do with the said flower, then it
was not lawful for the plaintiffs to sell them to the
public under the name of "Agua de
Kananga," because the people might be deceived
as to the nature of the goods, taking
for "Kananga" an article which, as a matter of fact,
had nothing to do with the said flower. Both
plaintiffs and defendant would be exactly in the
same position as one who should sell goods as
"coffee" or "tobacco" which were neither one nor
the other. Such being the case the plaintiffs could
not have maintained this action for unfair
competition, because under section 9 of said Act
No. 666 such action would not lie "when the trade-
mark or designation of its origin, ownership, or
manufacture has been used by the claimant for the
purpose of deceiving the public as to the nature of
the goods in which he deals, his business,
profession, or occupation." The law can not and
does not permit that trade-marks shall contain
indications capable of deceiving the public as to
the nature of the goods. This would be exactly the
case if under the trade-mark of "Agua de
Kananga" the plaintiffs should sell goods that had
in fact nothing to do, as they say, with
the "Kananga" flower. However the contention of
the plaintiffs may be considered, the proof is
nevertheless insufficient to show that the
word "Kananga," the name of a flower, can be
appropriated as the subject of a trade-mark, under
the law.
The defendant prays that judgment be entered
against the plaintiffs for damages incurred by
reason of the preliminary injunction, still in force,
issued by the trial court on the 18th day of June,
1903. In his answer the defendant estimates these
damages at 800 pesos per month. He did not,
however, introduce evidence in support of his
allegation, and no order can be made by the court
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upon this matter. The foregoing disposes of the
other questions raised by the parties in their brief
in this court.

The judgment appealed from is hereby reversed,

and another judgment entered in favor of the
defendant and appellant Zosimo Zuazua,
dissolving the preliminary injunction heretofore
issued by the court below on the 18th of June,
1903. The finding of the court that the plaintiffs
have no right to the exclusive use of the
word "Kananga" is sustained. Each party shall pay
its own costs. After the expiration of ten days from
the date hereof let judgment be entered
accordingly and the case remanded to the trial
court. So ordered.

Arellano, C.J., Torres, Johnson, and Carson, JJ.,

concur.
Willard, J., did not sit in this case.

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Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-10251            February 10, 1916
COMPAÑIA GENERAL DE TABACOS DE
FILIPINAS, plaintiff-appellee,
vs.
ALHAMBRA CIGAR & CIGARETTE
MANUFACTURING CO., defendant-appellant.
Rohde and Wright for appellant.
Gilbert, Haussermann, Cohn and Fisher for appellee.
MORELAND, J.:
The plaintiff claims to have appropriated and to
own the exclusive right to use the word "Isabela"
on cigarettes.
Sometime before the commencement of this
action defendant began the manufacture of
cigarettes, offering them to the public in packages
on the front side of each of which appeared the
words "Alhambra Isabelas." Judgment was for
plaintiff and defendant appealed.
The complaint contains two counts, one for the
violation or infringement of the trade-name
"Isabela," and the other, claims the plaintiff, for
unfair competition arising out of the use by the
defendant of the word "Isabelas" on its cigarettes
in the manner already stated. The trial court
dismissed the count based on unfair competition,
saying, "we doubt that the facts established, under
the circumstances of the case, justify the inference
of actual intention on defendant's part to deceive
the public and defraud a competitor, and can,
therefore, not find the defendant guilty of unfair
competition." Although neither count in the
complaint was based on the infringement or
violation of a trade-mark, and plaintiff, during the
trial, offered no evidence on the subject, and,
accordingly, no issue was framed thereon either
by the pleadings or on the trial (Lizarraga
Hermanos vs. Yap Tico, 24 Phil. Rep., 504,),
nevertheless the court, in its decision for plaintiff,
treated the action as one for the infringement of a
trade-mark under the first four sections of Act No.
666." The court then cited those section of the Act
relative to trade-marks, discussed them at some
length, and finally founded its judgment thereon.
Plaintiff did not appeal from that portion of the
judgment finding the defendant not guilty of
unfair competition; while the defendant appealed
from that part founded on the violation of trade-
mark and decreeing a perpetual injunction.
Therefore the question involving unfair
competition is not really before us, that count of
the complaint founded thereon having been in
effect dismissed by the trial court and no appeal
having been taken from that dismissal. While the
court founded its judgment solely on the theory of
a violation of a trade-mark and, although the
defendant insisted from the very beginning that
the action as set out in the complaint in no
possible way involved the question of a trade-
mark, nevertheless, the court, as we have already
seen, proceeded to try and resolve the case on that
theory and based its judgment exclusively
thereon. Defendant now contends that, if it
appears that the action was not for a violation of a
trade-mark, the judgment should be reversed as it
was wholly misled in its defense and would be
seriously prejudiced by the change necessarily
resulting. We regard the action, however, as we
necessarily must under the statute, as one for the
violation of a trade-name and not one for the
violation of a trade-mark or for unfair
competition. But, inasmuch as we find for the
defendant on the whole case and reverse the
judgment against it, we do not stop to dispose of
the question as to whether the theory of the action
was change during or after trial or on appeal, so
long as the parties have agreed on certain
questions which they have submitted and
discussed, which questions include all those which
can arise whether the action be for the violation of
a trade-name or for unfair competition. We prefer
to decide the case so as to end the litigation once
for all.
Inasmuch as the plaintiff did not appeal from the
judgment dismissing the complaint as to unfair
competition, we would be justified in holding that
that question is not before us, and, accordingly, in
deciding the case from the single viewpoint of a
violation of a trade-name. But for the reasons just
expressed we take up both alleged causes of
action and decide all the questions presented by
both.
Plaintiff's claim is this: It has trade-name rights in
the word "Isabela." The defendant has violated
those rights. Plaintiff is entitled to damages on the
theory of violation of a trade name, or unfair
competition, or both. Can it recover? We hold that
none of these claims have been sustained and that
plaintiff is not entitled to recover on any theory
mentioned. We proceed to show why.
Rights of action for the violation of a trade-mark
or trade-name or to restrain unfair competition
are conferred by statute. Without such a statute
right of action would not exist in those cases. In
deciding this appeal, therefore, we must be
governed by the provisions of the statute.
The Act is No. 666 of the Philippine Commission
and confers a right of action in three cases — (1)
for the violation of a trade-mark, (2) a trade-name,
and (3) to restrain unfair competition. The statute
founds the cause of action in the first two cases
exclusively on the invasion of the right of property
which the statute gives in the trade-mark or trade-
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name. These actions are not based on fraud nor is
the right given on the theory of unfair
competition. It is founded solely in
the property which the statute creates in the
trade-mark or trade-name. These two cases are
dealt with somewhat on the theory of patents,
giving the owner of the trade-mark or trade-name
a right in the thing similar to the right created by a
patent. As a necessary consequence, an action for
a violation or infringement of a trade-mark or
trade-name does not proceed primarily on the
theory that either the plaintiff or the public has
been or will be defrauded, although that may be in
effect, the result; but on the hypothesis that
plaintiff's right in the mark or the name has been
invaded and that he is entitled to the damages
resulting from the invasion. In either case an
action may be maintained without proof of
anything more than the right to the exclusive use
of the mark or name and that the defendant has
violated it. No allegation or proof of fraud or intent
to defraud is necessarily. On the other hand, the
action to prevent unfair competition is
based exclusively on fraud; and it would seem from
the wording of the statute that it refers to the
fraud committed on the public rather than to the
fraud committed on the plaintiff — the fraud
against the plaintiff being only an incident — the
means by which the fraud is perpetrated on the
public. No right of property in the appearance
which plaintiff gives to his goods is required, if the
word "property" may be used in such a
connection, and none needs to be alleged or
proved. In such an action plaintiff, to recover,
must prove that the defendant, in selling his
goods, gave them the same general appearance of
the goods of the plaintiff either in the wrapping of
the package in which they were contained or in
the devices of words thereon or in some other
feature of their appearance which would be likely
to influence purchasers to believe that the goods
offered for sale by defendant were those of the
plaintiff; and that the defendant clothed his goods
with such appearance for the purpose of deceiving
the public and of defrauding the plaintiff of his
public and defraud a competitor before he can
recover; and, while such intent may be inferred
from the similarity in the appearance of the goods
as packed or offered for sale, such an inference is
not a necessary one, it being legally possible that
such similarity exist and there still be no intent to
deceive. Fraud, then, is the essence of an action of
unfair competition; right in property the essence
of the other two.
From these observations it is a necessary
deduction that an action for the violation of a
trade-name cannot be carried on in conjunction
with an action of unfair competition based on a
similarity to the plaintiff's trade-name. If an action
on the trade-name will lie, then an action of unfair
competition based on similarity to the trade-name
is impossible; whereas, on the other hand, if an
action of unfair competition is the proper action,
then one for the violation of a trade-name based
on the same facts will not lie. The facts which will
support an action for the violation of a trade-name
will not support an action of unfair competition.
The same is true of an action for the violation of a
trade-mark except where such an action fails for
the reason that the trade-mark is invalid because
it consists of a word or words which, in law, are
not capable of appropriation as a trade-mark. In
such case, by express provision of the statute
(section 7), an action of unfair competition will lie.
No such exception is made in favor of a trade-
name; and if the plaintiff fails to establish his right
of property therein, his failure is irremediable. He
cannot fall back on the action of unfair
competition. We apprehend that the reason why
this privilege was not extended to a plaintiff in an
action for the violation of a trade-name was that
an action of unfair competition is based
exclusively on the appearance of the goods as they
are exposed for sale; while, under the statute, the
trade-name; unlike the trade-mark, applies
exclusively to the business, profession, trade or
occupation of the plaintiff and, as a consequence,
it is not essential that the trade-name appear on
plaintiff's goods or go into the market with them.
(Section 5). It is clear that, if the action of unfair
competition is based on the appearance of the
goods as they exposed for sale, the facts necessary
to support an action for the violation of a trade-
name will not sustain it, as neither the trade-name
of the plaintiff nor of the defendant need go into
the market at all, and, as consequence, the
similarity of appearance between the goods of
plaintiff and defendant, a fact necessary to sustain
an action of unfair competition, may not exist.
Another principle of the law of trade-marks, trade-
names and unfair competition of importance in
this case, and one which naturally follows from
what has already been said is that there can be no
secondary meaning, as that term is understood in
the American law of trade-marks and trade-
names, with respect to a trade-name. It must be
borne in mind, as we stated at the outset, that the
only rights existing in this jurisdiction with
respect to trade-marks and trade-names, as well
as unfair competition, are conferred by Act No.
666; and, accordingly, they are limited by the
provisions of the Act. The statute prohibits the
registration of a trade-name when that trade-
name represents the geographical place of
production or origin of the products or goods to
which the trade-name refers, or when it is merely
the name, quality, or description of the
merchandise with respect to which the trade-
name is to be used. In such cases, therefore, no
trade-name can exist. The statute prescribes what
a trade-name may be and then gives a right of
action to protect the owner of that trade-name. If
it is not a trade-name defined by statute, it does
not carry with it the right of action granted by the
statute. No trade-name can legally exist except
that prescribed by the Act. If it can exist, it can be
enforced as, and only as, the rights in trade-names
are enforced under the statute. If it cannot exist as
a trade-name, i. e., as a property right, or on the
theory of unfair competition based on the doctrine
of secondary meaning. Of course, if the trade-
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name is not recognized in law, it can have no
secondary meaning. Moreover, the doctrine of
secondary meaning as it is known in the United
States, is carried into effect on the theory of unfair
competition and not on the theory of property in
the trade-name. Indeed, the necessity of basing
the action on the theory of unfair competition
negatives the existence at the time of the trade-
name in its primary meaning. In this jurisdiction
that necessity in emphasized by the fact that, as
we have seen, the statute makes a sharp
distinction between actions for the violation of a
trade-mark or trade-name and those based on
unfair competition, the former being founded in a
property right and the latter on the fact that fraud
has been or will be committed on the public.
Furthermore, if the action of unfair competition
based on the similarity of plaintiff's and
defendant's trade-names cannot be maintained in
this jurisdiction, as we have seen that it cannot,
then the fundamental basis of the doctrine of
secondary meaning disappears. We might add that
the statute does not seem to have dealt with trade-
names as it has with trade-marks; for, with
respect to the latter, it expressly confers, as we
have seen (sec. 7), a right of action for unfair
competition even though the trade-mark, as such,
is illegal and unregistered by reason of being the
name of the geographical place of production or
origin of the goods to which it is affixed, or the
name, quality or description of the merchandise
on which it is placed. In a other words, the statute
seems to create with regard to a trade-mark a
right which is, in many aspects, the equivalent of
that springing from the doctrine of secondary
meaning, and where the trade-mark, though illegal
and unregistered under the Act, has been used by
the plaintiff for such a length of time that it has
ceased to be used and understood in its primary
meaning, the owner will be protected on the
theory of unfair competition. The statute does not
confer a right on the owner of a trade-name under
similar circumstances.
The trial court was, therefore, correct in
dismissing that count of the complaint based on
unfair competition. The statute, as we have
already observed, does not permit these two
action to be maintained on the same facts. We
might say, however, that the ownership of a trade-
name does not necessarily prevent the owner
from bringing an action of unfair competition
founded on the appearance of the goods of
defendant as exposed for sale, which appearance
is not based on similarity to the owner's trade-
name. Such an action would have to be based on
the general appearance of the package, its form,
color, style, adornment, and matters of that
character; and would not lie on appearance
arising from the similarity of plaintiff's and
defendant's trade-names.
The effect of these observations and conclusions
would necessarily be to end the case at this point
if we were disposed to leave the other questions
presented for resolution unsettled; for, if there can
attach to a trade-name no secondary meaning,
plaintiff's action must fail. It is based exclusively
on the secondary signification of the word
"Isabela" which it has acquired by long association
with plaintiff's cigarettes, by virtue of which it no
longer means to the trade and the public generally
when used in connection with tobacco products, a
province of Luzon or the tobacco grown in that
province, but simply and solely the products of
plaintiff's factory. In other words, the claim is that
it has completely lost its primary signification and
come to have a secondary meaning exclusively
when used in connection with manufactured
tobacco. The action being based entirely on the
theory of secondary meaning, and the statute
giving no right of action in cases of that character,
it is evident that the action cannot be maintained.
In spite of the fact, however, that we might have
reverse the judgment on the grounds, already
stated, we prefer, in the interests of the parties,
the bar and the public generally, to decide the
other questions presented, some of them being
extremely important and of public interest and
they having been fully argued on the appeal.
(Lichauco vs. Limjuco and Gonzalo, 19 Phil. Rep.,
12.)
It is admitted all through this case, in fact it is
alleged in plaintiff's complaint and is set out in all
parts of its brief filed on this appeal, that plaintiff's
trade-name, as evidenced by the certificate issued
under the Spanish regime, consists solely of the
words "La Flor de la Isabela." Plaintiff does not
claim that the word "Isabela" has been registered
by it as a trade-name or that it has a title from any
source conferring on it the exclusive right to use
that word. The certificate offered in evidence
plaintiff to show its right to the exclusive use of
the phrase "La Flor de la Isabela" grants two
rights: One in a trade-mark consisting of a
rectangular shield, surmounted by a crown and
divided into four equal parts, in the right hand
upper corner of which is a full rigged sailing ship
at sea, in the left hand upper corner a growing
tobacco plant, in the lower right hand corner a
field of sugar cane with a pool of water in the
foreground, and in the lower left hand corner a
factory in operation; the other, a right in the trade-
name "La Flor de la Isabela." As we have already
seen, there is no claim here based on the
infringement or violation of the trade-mark just
described, nor is there contention or claim of any
kind that the use of the word "Isabela" is a
violation or an infringement of the trade-name "La
Flor de la Isabela." The action is not for the
violation of the trade-name "La Flor de la Isabela,"
but for the violation of an entirely different trade-
name, namely, "Isabela." The exclusive right to use
this name, plaintiff claims arises from two causes:
First, the contraction of the phrase "La Flor de la
Isabela" into the word "Isabela" by popular
expression and use and second, the use for more
than twenty years of the word "Isabela." In view of
the fact that there is no claim of an infringement of
the trade name "La Flor de la Isabela," these two
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claims are identical; for, there could have been no
contraction brought about by popular expression
except after long lapse of time. The contraction of
the phrase into the word would create no rights,
there being no registration, unless it resulted from
long use. Therefore, to establish a right in the
word, the contraction must be shown to have
existed for a length of time equivalent to that
which would be necessary to give the word
"Isabela" the dignity and legal status of a trade-
name. If therefore, it results from the evidence in
this action that the word "Isabela" has not been
used by the plaintiff for a period of time sufficient
to give it the special value necessary to bring it
within the law relating to trade-names (if it be
admitted for the moment that that could be done),
then the plaintiff must fail, whether it base its
action on contraction, or use, or both.
There is another ground on which plaintiff would
fail in his action. If it should appear in the case that
the word "Isabela" was a word which, at the time
of its adoption by plaintiff and at all times since,
was the name of the geographical place of
production or origin or was ordinarily and
generally used as the name, quality or description
of the merchandise to which it related, plaintiff
would fail, as such name would not be capable of
being registered as a trade-name (secs. 2 and 13)
and could not, for that reason, be appropriated by
plaintiff as such. That being so, no action for a
violation thereof could be maintained, as none is
granted by the statute in such case. (Secs. 3, 5, and
7.)
Before entering on the discussion of the facts of
the case, it may be well to set down certain things
that appear to be uncontroverted:
1. There is a province in the Island of Luzon
known as Isabela Province. In that province grows
tobacco of a class and quality not grown in any
other province or place in the Philippine Islands.
2. That tobacco is known commercially and to the
trade as Isabela tobacco and the expression
"Isabela tobacco" has in the Philippine Islands a
meaning as definite, certain and clear as the
expression "Havanna tobacco" or "Virginia
tobacco" in the United States.
3. The defendant has used on its cigarettes the
words "Alhambra Isabela" with a statement that
the cigarettes inclosed in the package are
composed exclusively of Isabela tobacco. Aside
from "Isabela" no other word or phrase or
character is used on defendant's packages which it
is claimed is in violation of plaintiff's rights.
4. There is absolutely no resemblance between the
packages of cigarettes manufactured and sold by
the plaintiff and those manufactured and sold by
the defendant, except in the word "Isabela."
5. The phrase "La Flor de la Isabela" means in
English, giving it a free translation, "The best
tobacco grown in Isabela Province," or "The finest
tobacco grown in Isabela Province," or "The finest
quality of tobacco grown in Isabela Province." The
phrase, in its primary sense, conveys the idea that
the products on which it is placed are composed of
the best tobacco grown in the Province of Isabela.
6. Plaintiff's cigarettes marked with the design "La
Flor de la Isabela," and referred to in this case, are
not manufactured or composed, either wholly or
in part, of tobacco grown in Isabela Province.
7. The cigarettes manufactured and sold by
defendant as "Alhambra Isabelas" are composed
exclusively of tobacco grown in Isabela Province.
8. The word "Isabela," when used in connection
with tobacco, cigars or cigarettes, signifies in its
primary sense that the tobacco itself, or that
composing the cigars or cigarettes, is Isabela
tobacco.
We are of the opinion that the plaintiff must fail in
this action for the reason that, in the first place, it
has not proved that the word "Isabela" has been
used in the manner and form alleged in the
complaint; and, in the second place, for the reason
that it is the name of the geographical place of
production or origin of the material composing
the article to which it is affixed and that it is the
name, quality and description thereof. The burden
is on plaintiff to prove the use of word "Isabela"
for such a length of time and under such
circumstances as to give it the right to its exclusive
use. Reviewing the evidence of record, we are of
the opinion that the overwhelming weight thereof
is contrary to plaintiff's contention. It shows that
in not a single instance in the history of the
plaintiff corporation, so far as is disclosed by the
record, has a package of its cigarettes gone into
the market, either at wholesale or retail, with the
word "Isabela" alone or the package as a separate
or distinct word or name. In every instance, so far
as the documentary evidence goes, the packages
have been marked by the phrase "La Flor de la
Isabela." There is not an exhibit of any probative
value on the issues involved which does not tend
affirmatively to establish that the word was never
used as a separate and distinct word and to
negative any intention on the part of the plaintiff
to use it as much. As far back as the time when the
plaintiff obtained the right to use the trade-name
"La Flor de la Isabela" the exhibit filed in its
application for registration of that trade-name
demonstrate, as they naturally must, that the
trade-name which plaintiff desired to secure was
"La Flor de la Isabela" and not "Isabela." These
exhibits are the wrappers which inclose plaintiff's
cigarettes as they are found exposed for sale and
have on them the words, designs and devices to
the exclusive use of which plaintiff claims to be
entitled. Every one of them contains the phrase
"La Flor de la Isabela" and not one of them the
word "Isabela." In all of them the word "Flor" is
almost equally conspicuous with the word
"Isabela" and from them we can see no intent to
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emphasize the word "Isabela" more than the word
"Flor." So far as the record shows, plaintiff
nowhere advertised or advertises its cigarettes as
"Isabela" cigarettes and we find nothing in the
exhibits which shows that the plaintiff has or ever
had the slightest intention to use the word
"Isabela" as a trade-name.
Much stress is laid by plaintiff on the fact that the
wholesale packages of cigarettes, that is, the
packages containing a number of the small retail
packages, have printed on the two edges in large
letters "Isabela Cortos," "Isabela Largos," and
"Isabela Entrelargos," as the case may be. But it is
to be noted that it appears from the exhibits
themselves that plaintiff's trade-name "La Flor de
la Isabela," in conspicuous letters, is also attached
to both ends of each of such packages; and each of
the small packages inclosed in the larger carries
the phrase "La Flor de la Isabela" and we said at
the outset, that not a single package of plaintiff's
cigarettes has ever gone into the market in the
Philippine Islands with the word "Isabela" alone
thereon as a trade-name.
Much importance is attached by plaintiff to a letter
dated April 8, 1914, received from one of its
employees in America. While this letter is of
doubtful competency as evidence for plaintiff, it is
in the record, and inasmuch as so much stress is
laid on a portion of it, and it appears to be
competent evidence as against plaintiff, we refer
to it. The sentence in the letter to which reference
is particularly made in this : "Furthermore, the
trade here knows the cigars as 'Isabela' pure and
simple." As is seen, this letter refers to cigars and
not cigarettes; but, be that as it may, we believe
that the plaintiff has quite overlooked the real
nature of the letter as evidence. In its attempt to
demonstrate that its tobacco products are known
in America as "Isabela" products, it overlooked the
first part of the letter which, to us, is the most
significant part of it. The writer says:
Ehrman Bros. and Co. have asked us to
have the paster "La Flor de la Isabela,"
which goes on the end of the boxes, as per
sample we inclose herewith, changed as
follows: Make the strip about half as wide
again as the inclosed sample, and instead
of the words "La Flor de la Isabela," put
on just the one word "Isabela" in large
letters. Ehram Bros. say their customers
claim that the lettering on this strip is too
small for the customers to notice it
readily behind the counter, whereas a
large lettering of the word "Isabela" will
be much more attractive and more
noticeable.
This portion of the letter demonstrates
conclusively that the plaintiff has never advertised
its cigars in America as "Isabela" cigars. It has
persisted always in advertising them as "La Flor
de la Isabela;" and the precise objection made by
the dealers handling plaintiff's cigars in the United
States is that plaintiff insists on advertising its
goods as "La Flor de la Isabela" instead of
"Isabela;" and it is clear from the letter that if, as
the writer says, its cigars are known to the trade
in America as "Isabela" cigars, it is not by reason
of plaintiff's efforts but in spite of them. Plaintiff
itself has put forth no effort, as far as we can see
from the record, to create a right in the word
"Isabela." All of its money has been spent and all
its energy used in the advertisement of the phrase
"La Flor de la Isabela."
A price list of the products of the plaintiff
company has been introduced in evidence, on the
tenth and eleventh pages of which appear the
words "Isabela Cortos," "Isabela Largos" and
"Isabela Entrelargos," together with the price. We
do not regard this price list as indicating anything
more that the fact that the limited space (the price
list is printed in very small letters) forbade the use
of the phrase "La Flor de la Isabela." But we note
then, in extremely large letters, comparatively
speaking, on the front page of the price list, are
found the words "La Flor de la Isabela," while on
each package of cigarettes which, in the price list,
are called "Isabela Cortos," "Isabela Largos," and
"Isabela Entrelargos," is found, in more than one
place, the phrase "La Flor de la Isabela." Moreover,
under the word "remarks" found at the close of
the price list, are these words: "When the Spanish
Government abolished the tobacco monopoly in
the Philippine Islands this company acquired
the exclusive right to use the marks Cavite,
Malabon, Princesa, and Meisic which were
formerly the property of the Government."
Nothing is said about the word "Isabela." No rights
are claimed by that advertisement in that name.
The documentary evidence introduce by plaintiff
is fully corroborated by the evidence of defendant.
The testimony of Mr. Olsen, one of the leading
tobacco manufacturers of the Philippine Islands, is
to the effect that the products of plaintiff's factory
are generally known in the Philippine Islands as
Tabacalera products, sometimes as "La Flor de la
Isabela" products, but not as "Isabela" products.
He states that the cigarettes which plaintiff calls
"Isabela Cortos" and "Isabela Largos" are
generally known to the trade as "Tabacalera
Cortos" and "Tabacalera Largos." The clerk of the
Court of First Instance in which the action was
tried, being called as a witness for the defendant,
testified that he smoked cigarettes of the
Tabacalera and Insular factories and that he had
never heard of "Isabela" cigarettes before the
defendant began the manufacture of its cigarettes;
but that he had frequently heard of the factory "La
Flor de la Isabela." Mr. Blanco, the interpreter of
the court, testified that he had smoked cigarettes
for forty or fifty years and that he had not heard of
"Isabela" cigarettes.
While some of the witnesses for the plaintiff
testified that the public knew the products of
plaintiff's factory as "Isabela" products, that
testimony was in part contradicted by other
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witnesses for the plaintiff and is entirely at
variance with its documentary evidence.
It appearing from the record in the case that the
plaintiff has always insisted on the ownership of
the trade-name "La Flor de la Isabela" and has
invariably sent it into the market with its products
both in the Philippine Islands and in the United
States, and that whatever effort and money
plaintiff has expended in securing a trade-name
have been spent with respect to "La Flor de la
Isabela" and not "Isabela," we are driven to the
conclusion that, as a matter of fact, the word
"Isabela" has never been used by the plaintiff as a
trade-name in such a way as to give it any
exclusive right therein. Moreover, the persistent
use of the trade-name "La Flor de la Isabela"
denies the possibility of any single word in that
phrase being a trade-name. It being kept in mind
that there is no contention on the part of the
plaintiff that the use of the word "Isabela" by the
defendant is an infringement of the trade-name
"La Flor de la Isabela," it is clear that the use of "La
Flor de la Isabela" has given the plaintiff no right
to the use of the word "Isabela." Furthermore,
plaintiff denies that it has abandoned the trade-
name "La Flor de la Isabela," but maintains that its
rights therein are now in full force and effect.
Admitting, even for the sake of argument, that
there can exist a trade-name unless it has used it
for a sufficient length of time to give it a special
value. But plaintiff's effort has been directed
exclusively to the trade-name "La Flor de la
Isabela," has, by plaintiff's efforts, received any
special value in connection with plaintiff's
products.
We might say, in concluding this branch of the
subject, that, even admitting that the word
"Isabela" may have been appropriable by plaintiff
as a trade-name at the time it began to use it, the
evidence showing that is had been exclusively
appropriated by the plaintiff would have to be
very strong to establish the fact of appropriation
and the right to exclusive use. The law as it now advertised. While Act No. 666, as we have seen,
stands as his stood since the Royal Decree of 1888 expressly permits the appropriation of a trade-
prohibits the use of a geographical name as a mark, although it may be a geographical or
trade-name. Act No. 666 of prohibits the use not descriptive name, it does not permit the
only of a geographical name but also of a word appropriation of a trade-name under the same
which is either the name, quality, or the circumstance. We accordingly repeat, from the
description of the article to which the trade-name Royal Decree of 1888 to the present time, the
refers. Even if appropriation were possible, it word "Isabela" has not been appropriable by
would require the clearest of proof to permit the anybody as a trade-name.
appropriation of a word as a trade-name the use
of which in that connection the law expressly For these reasons and for the further reason that
declines to sanction. we regard the case of Baxter vs. Zuazua (5 Phil.
Rep., 160), as decisive of the main questions
Furthermore, we are of the opinion that, even if involved in this case, we are of the opinion that
plaintiff had proved a right to the exclusive use of the judgment must be reversed.
the word "Isabela," we would be forced to
conclude that its use by the defendant in The judgment appealed from is reversed and the
connection with the word "Alhambra," which is perpetual injunction issued thereon is dissolved.
made equally conspicuous with the word Without costs in this instance. So ordered.
"Isabela," would be a sufficient effort on the part
of defendant to distinguish its cigarettes from Arellano, C.J. and Torres, J., concur.
those of plaintiff; particularly in view of the fact Carson and Trent, JJ., concur in the result.
that the word "Isabela" is the name of a province Johnson, J., dissents.
and also the commercial name of the tobacco
grown in that province.
We do not believe, however, that the word
"Isabela" can be appropriated or could be
appropriated at the time plaintiff claimed that it
began to use that word as descriptive of its
products. The Royal Decree of 1888 prohibited the
use of a geographical name as trade-name or
trade-mark and that decree was in force before
the use of the word "Isabela" began, even under
plaintiff's claim. At least if had not been used for a
sufficient length of time to give it a property right
therein, it never having been registered as a trade-
name either under that decree or Act No. 666.
From the date of that decree to the present time it
has been unlawful to select the word "Isabela" as a
trade-name, and it would have been impossible
during that time for plaintiff to have obtained a
right therein, no matter how much the word might
have been used or to what extent it had been
212 | I P L P a r t I
THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 91332 July 16, 1993
PHILIP MORRIS, INC., BENSON & HEDGES
(CANADA), INC., AND FABRIQUES OF TABAC
REUNIES, S.A., petitioners
vs.
THE COURT OF APPEALS AND FORTUNE
TOBACCO CORPORATION, respondents.
Quasha, Asperilla, Ancheta, Peña & Nolasco Law
Office for petitioners.
Teresita Gandionco-Oledan for private respondent.
MELO, J.:
In the petition before us, petitioners Philip Morris,
Inc., Benson and Hedges (Canada), Inc., and
Fabriques of Tabac Reunies, S.A., are ascribing
whimsical exercise of the faculty conferred upon
magistrates by Section 6, Rule 58 of the Revised
Rules of Court when respondent Court of Appeals
lifted the writ of preliminary injunction it earlier
had issued against Fortune Tobacco Corporation,
herein private respondent, from manufacturing
and selling "MARK" cigarettes in the local market.
Banking on the thesis that petitioners' respective
symbols "MARK VII", "MARK TEN", and "LARK",
also for cigarettes, must be protected against
unauthorized appropriation, petitioners twice
solicited the ancillary writ in the course the main
suit for infringement but the court of origin was
unpersuaded.
Before we proceed to the generative facts of the
case at bar, it must be emphasized that resolution
of the issue on the propriety of lifting the writ of
preliminary injunction should not be construed as
a prejudgment of the suit below. Aware of the fact
that the discussion we are about to enter into
involves a mere interlocutory order, a discourse
on the aspect infringement must thus be avoided.
With these caveat, we shall now shift our attention
to the events which spawned the controversy.
As averred in the initial pleading, Philip Morris,
Incorporated is a corporation organized under the
laws of the State of Virginia, United States of
America, and does business at 100 Park Avenue,
New York, New York, United States of America.
The two other plaintiff foreign corporations,
which are wholly-owned subsidiaries of Philip
Morris, Inc., are similarly not doing business in the
Philippines but are suing on an isolated
transaction. As registered owners "MARK VII",
"MARK TEN", and "LARK" per certificates of
registration issued by the Philippine Patent Office
on April 26, 1973, May 28, 1964, and March 25,
1964, plaintiffs-petitioners asserted that
defendant Fortune Tobacco Corporation has no
right to manufacture and sell cigarettes bearing
the allegedly identical or confusingly similar
trademark "MARK" in contravention of Section 22
of the Trademark Law, and should, therefore, be
precluded during the pendency of the case from
performing the acts complained of via a
preliminary injunction (p. 75, Court of
Appeals Rollo in AC-G.R. SP No. 13132).
For its part, Fortune Tobacco Corporation
admitted petitioners' certificates of registration
with the Philippine Patent Office subject to the
affirmative and special defense on misjoinder of
party plaintiffs. Private respondent alleged further
that it has been authorized by the Bureau of
Internal Revenue to manufacture and sell
cigarettes bearing the trademark "MARK", and
that "MARK" is a common word which cannot be
exclusively appropriated (p.158, Court of
Appeals Rollo in A.C.-G.R. SP No. 13132). On March
28, 1983, petitioners' prayer for preliminary
injunction was denied by the Presiding Judge of
Branch 166 of the Regional Trial Court of the
National Capital Judicial Region stationed at Pasig,
premised upon the following propositions:
Plaintiffs admit in paragraph 2 of
the complaint that ". . . they are
not doing business in the
Philippines and are suing on an
isolated transaction . . .". This
simply means that they are not
engaged in the sale, manufacture,
importation, expor[t]ation and
advertisement of their cigarette
products in the Philippines. With
this admission, defendant asks:
". . . how could defendant's
"MARK" cigarettes cause the
former "irreparable damage"
within the territorial limits of the
Philippines?" Plaintiffs maintain
that since their trademarks are
entitled to protection by treaty
obligation under Article 2 of the
Paris Convention of which the
Philippines is a member and
ratified by Resolution No. 69 of
the Senate of the Philippines and
as such, have the force and effect
of law under Section 12, Article
XVII of our Constitution and since
this is an action for a violation or
infringement of a trademark or
trade name by defendant, such
mere allegation is sufficient even
in the absence of proof to support
it. To the mind of the Court,
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
precisely, this is the issue in the
main case to determine whether
or not there has been an invasion
of plaintiffs' right of property to
such trademark or trade name.
This claim of plaintiffs is disputed
by defendant in paragraphs 6 and
7 of the Answer; hence, this
cannot be made a basis for the
issuance of a writ of preliminary
injunction.
There is no dispute that the First
Plaintiff is the registered owner
of trademar[k] "MARK VII" with
Certificate of Registration No.
18723, dated April 26,1973 while
the Second Plaintiff is likewise
the registered owner of
trademark "MARK TEN" under
Certificate of Registration No.
11147, dated May 28, 1963 and
the Third Plaintiff is a registrant
of trademark "LARK" as shown
by Certificate of Registration No.
10953 dated March 23, 1964, in
addition to a pending application
for registration of trademark
"MARK VII" filed on November
21, 1980 under Application Serial
No. 43243, all in the Philippine
Patent Office. In same the
manner, defendant has a pending
application for registration of the
trademark "LARK" cigarettes
with the Philippine Patent Office
under Application Serial No.
44008. Defendant contends that
since plaintiffs are "not doing
business in the Philippines"
coupled the fact that the Director
of Patents has not denied their
pending application for
registration of its trademark
"MARK", the grant of a writ of
preliminary injunction is
premature. Plaintiffs contend
that this act(s) of defendant is
but a subterfuge to give
semblance of good faith intended
to deceive the public and
patronizers into buying the
products and create the
impression that defendant's
goods are identical with or come
from the same source as
plaintiffs' products or that the
defendant is a licensee of
plaintiffs when in truth and in
fact the former is not. But the fact
remains that with its pending
application, defendant has
embarked in the manufacturing,
selling, distributing and
advertising of "MARK" cigarettes.
The question of good faith or bad
faith on the part of defendant are
matters which are evidentiary in
character which have to be
proven during the hearing on the
merits; hence, until and unless
the Director of Patents has
denied defendant's application,
the Court is of the opinion and so
holds that issuance a writ of
preliminary injunction would not
lie.
There is no question that
defendant has been authorized
by the Bureau of Internal
Revenue to manufacture
cigarettes bearing the trademark
"MARK" (Letter of Ruben B.
Ancheta, Acting Commissioner
addressed to Fortune Tobacco
Corporation dated April 3, 1981,
marked as Annex "A",
defendant's "OPPOSITION, etc."
dated September 24, 1982).
However, this authority is
qualified . . . that the said brands
have been accepted and
registered by the Patent Office
not later than six (6) months
after you have been
manufacturing the cigarettes and
placed the same in the market."
However, this grant ". . . does not
give you protection against any
person or entity whose rights
may be prejudiced by
infringement or unfair
competition in relation to your
indicated trademarks/brands".
As aforestated, the registration of
defendant's application is still
pending in the Philippine Patent
Office.
It has been repeatedly held in
this jurisdiction as well as in the
United States that the right or
title of the applicant for
injunction remedy must be clear
and free from doubt. Because of
the disastrous and painful effects
of an injunction, Courts should be
extremely careful, cautious and
conscionable in the exercise of its
discretion consistent with justice,
equity and fair play.
There is no
power the
exercise of
which is more
delicate which
requires greater
caution,
deliberation,
and sound
214 | I P L P a r t I
THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
discretion, or for it is "MARK" cigarettes and now
(which is) more impossible to comes defendant who countered
dangerous in a foresee all and refused to be restrained
doubtful case exigencies of claiming that it has been
than the issuing society which authorized temporarily by the
of an injunction; may require Bureau of Internal Revenue
it is the strong their aid to under certain conditions to do so
arm of equity protect rights as aforestated coupled by its
that never ought and restrain pending application for
to be extended wrongs. registration of trademark
unless to cases (Merced M. Go v. "MARK" in the Philippine Patent
of great injury, Freemont, 7 Gal. Office. This circumstance in itself
where courts of 317, 321; 68 has created a dispute between
law cannot Am. Dec. 262.) the parties which to the mind of
afford an the Court does not warrant the
adequate or It is the strong issuance of a writ of preliminary
commensurate arm of the court; injunction.
remedy in and to render its
damages. The operation begin It is well-settled
right must be and useful, it principle that
clear, the injury must be courts of equity
impending or exercised with will refuse an
threatened, so great discretion, application for
as to be averted and when the injunctive
only by the necessary remedy where
protecting requires it. the principle of
preventive (Attorney- law on which
process of General v. Utica the right to
injunction. Inc. Co., P. John preliminary
(Bonaparte v. Ch. (N.Y.) 371.) injunction rests
Camden, etc. N. is disputed and
Co., 3 F. Cas. No. Having taken a panoramic view will admit of
1, 617, Baldw. of the position[s] of both parties doubt, without a
205, 217.) as viewed from their pleadings, decision of the
the picture reduced to its court of law
Courts of equity minimum size would be this: At establishing
constantly the crossroads are the two (2) such principle
decline to lay contending parties, plaintiffs although
down any rule vigorously asserting the rights satisfied as to
which injunction granted by law, treaty and what is a correct
shall be granted jurisprudence to restrain conclusion of
or withheld. defendant in its activities of law upon the
There is wisdom manufacturing, selling, facts. The fact,
in this course, distributing and advertising its however, that

215 | I P L P a r t I
THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
there is no such Legal Counsel It appears from the testimony of Atty. Enrique
dispute or Fortune Tobacco Corporation Madarang, Chief of the Trademark Division of the
conflict does not then Philippine Patent Office that Fortune's
in itself Madam: application for its trademark is still pending
constitute a before said office (p. 311, Rollo).
justifiable In connection with your letter
ground for the dated January 25, 1984, Petitioners thereafter cited supervening events
court to refuse reiterating your query as to which supposedly transpired since March 28,
an application whether your label approval 1983, when the trial court first declined issuing a
for the automatically expires or becomes writ of preliminary injunction, that could alter the
injunctive relief. null and void after six (6) months results of the case in that Fortune's application
(Hackensack if the brand is not accepted and had been rejected, nay, barred by the Philippine
Impr. Commn. v. by the patent office, please be Patent Office, and that the application had been
New Jersey informed that no provision in the forfeited by abandonment, but the trial court
Midland P. Co., Tax Code or revenue regulation nonetheless denied the second motion for
22 N.J. Eg. 94.) that requires an applicant to issuance of the injunctive writ on April 22, 1987,
comply with the aforementioned thus:
Hence, the status quo existing condition order that his label
between the parties prior to the approved will remain valid and For all the prolixity of their
filing of this case should be existing. pleadings and testimonial
maintained. For after all, an evidence, the plaintiffs-movants
injunction, without reference to Based on the document you have fallen far short of the legal
the parties, should be violent, presented, it shows that requisites that would justify the
vicious nor even vindictive. (pp. registration of this particular grant of the writ of preliminary
338-341, Rollo in G.R. No. 91332.) label still pending resolution by injunction prayed for. For one,
the Patent Office. These being so , they did not even bother to
In the process of denying petitioners' subsequent you may therefore continue with establish by competent evidence
motion for reconsideration of the order denying the production said brand of that the products supposedly
issuance of the requested writ, the court of origin cigarette until this Office is affected adversely by defendant's
took cognizance of the certification executed on officially notified that the trademark now subject of an
January 30, 1984 by the Philippine Patent Office question of ownership of "MARK" application for registration with
attesting to the fact that private respondent's brand is finally resolved. the Philippine Patents Office, are
application for registration is still pending in actual use in the Philippines.
appropriate action. Apart from this Very truly yours, For another, they concentrated
communication, what prompted the trial court their fire on the alleged
judge to entertain the idea of prematurity and abandonment and forfeiture by
TEODORO D. of said application forPAREÑ O
untimeliness of petitioners' application for a writ defendant
Chief, Manufactured Tobacco
of preliminary injunction was the letter from the registration.
Tax Division
Bureau of Internal Revenue date February 2, 1984
TAN-P6531-D2830-A-6
which reads: The Court cannot help but take
note of the fact that in their
(p. 348, Rollo.)
MRS. TERESITA GANDIONGCO complaint plaintiffs included a
OLEDAN prayer for issuance preliminary
injunction. The petition was duly
216 | I P L P a r t I
THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
heard, and thereafter matter was
assiduously discussed lengthily
and resolved against plaintiffs in
a 15-page Order issued by the
undersigned's predecessor on
March 28, 1983. Plaintiffs'
motion for reconsideration was
denied in another well-argued 8
page Order issued on April 5,
1984,, and the matter was made
to rest.
However, on the strength of
supposed changes in the material
facts of this case, plaintiffs came
up with the present motion citing
therein the said changes which
are: that defendant's application
had been rejected and barred by
the Philippine Patents Office, and
that said application has been
deemed abandoned and forfeited.
But defendant has refiled the
same.
Plaintiffs' arguments in support
of the present motion appear to
be a mere rehash of their stand in
the first above-mentioned
petition which has already been
ruled upon adversely against
them. Granting that the alleged
changes in the material facts are
sufficient grounds for a motion
seeking a favorable grant of what
has already been denied, this
motion just the same cannot
prosper.
In the first place there is no proof
whatsoever that any of plaintiffs'
products which they seek to
protect from any adverse effect of
the trademark applied for by
defendant, is in actual use and
available for commercial
purposes anywhere in the
Philippines. Secondly as shown
by plaintiffs' own evidence
furnished by no less than the
chief of Trademarks Division of
the Philippine Patent Office, Atty.
Enrique Madarang, the
abandonment of an application is
of no moment, for the same can
always be refiled. He said there is
no specific provision in the rules
prohibiting such refiling (TSN,
November 21, 1986, pp. 60 & 64,
Raviera). In fact, according to
Madarang, the refiled application
of defendant is now pending
before the Patents Office. Hence,
it appears that the motion has no
leg to stand on. (pp. 350-
351, Rollo in G. R. No. 91332.)
Confronted with this rebuff, petitioners filed a
previous petition for certiorari before the Court,
docketed as G.R. No. 78141, but the petition was
referred to the Court of Appeals.
The Court of Appeals initially issued a resolution
which set aside the court of origin's order dated
April 22, 1987, and granted the issuance of a writ
of preliminary injunction enjoining Fortune, its
agents, employees, and representatives, from
manufacturing, selling, and advertising "MARK"
cigarettes. The late Justice Cacdac, speaking for
the First Division of the Court of Appeals in CA-
G.R. SP No. 13132, remarked:
There is no dispute that
petitioners are the registered
owners of the trademarks for
cigarettes "MARK VII", "MARK
TEN", and "LARK".(Annexes B, C
and D, petition). As found and
reiterated by the Philippine
Patent Office in two (2) official
communications dated April 6,
1983 and January 24, 1984, the
trademark "MARK" is
"confusingly similar" to the
trademarks of petitioners, hence
registration was barred under
Sec. 4 (d) of Rep. Act. No. 166, as
amended (pp. 106, 139,
SCA rollo). In a third official
communication dated April 8,
1986, the trademark application
of private respondent for the
"MARK" under Serial No. 44008
filed on February 13, 1981 which
was declared abandoned as of
February 16, 1986, is now
deemed forfeited, there being no
revival made pursuant to Rule 98
of the Revised Rules of
Practitioners in Trademark
Cases." (p. 107, CA rollo). The
foregoing documents or
communications mentioned by
petitioners as "the changes in
material facts which occurred
after March 28, 1983", are not
also questioned by respondents.
Pitted against the petitioners'
documentary evidence,
respondents pointed to (1) the
letter dated January 30, 1979 (p.
137, CA rollo) of Conrado P. Diaz,
then Acting Commissioner of
Internal Revenue, temporarily
granting the request of private
respondent for a permit to
manufacture two (2) new brands
of cigarettes one of which is
brand "MARK" filter-type blend,
and (2) the certification dated
September 26, 1986 of Cesar G.
217 | I P L P a r t I
THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
Sandico, Director of Patents (p. This believe and hold that petitioners
138, CA rollo) issued upon the Certification, have shown a prima facie case for
written request of private however, does the issuance of the writ of
respondents' counsel dated not give prohibitory injunction for the
September 17, 1986 attesting protection as purposes stated in their
that the records of his office against any complaint and subsequent
would show that the "trademark person or entity motions for the issuance of the
MARK" for cigarettes is now the whose right may prohibitory writ. (Buayan Cattle
subject of a pending application be prejudiced by Co. vs. Quintillan, 125 SCRA 276)
under Serial No. 59872 filed on infringement or
September 16, 1986. unfair The requisites for the granting of
competition in preliminary injunction are the
Private respondent's relation to the existence of the right protected
documentary evidence provides aforesaid and the facts against which the
the reasons neutralizing or trademark nor injunction is to be directed as
weakening their probative the right to violative of said right. (Buayan
values. The penultimate register if Cattle Co. vs. Quintillan, supra;
paragraph of Commissioner Diaz' contrary to the Ortigas & Co. vs. Ruiz, 148 SCRA
letter of authority reads: provisions of the 326). It is a writ framed
Trademark Law, according to the circumstances of
Please be Rep. Act No. 166 the case commanding an act
informed as amended and which the Court regards as
further that the the Revised essential to justice and
authority herein Rules of Practice restraining an act it deems
granted does in Trademark contrary to equity and good
not give you Cases. conscience (Rosauro vs. Cuneta,
protection 151 SCRA 570). If it is not issued,
against any The temporary permit to the defendant may, before final
person or entity manufacture under the judgment, do or continue the
whose rights trademark "MARK" for cigarettes doing of the act which the
may be and the acceptance of the second plaintiff asks the court to
prejudiced by application filed by private restrain, and thus make
infringement or respondent in the height of their ineffectual the final judgment
unfair dispute in the main case were rendered afterwards granting the
competition in evidently made subject to the relief sought by the plaintiff (Calo
relation to your outcome of the said main case or vs. Roldan, 76 Phil. 445).
above-named Civil Case No. 47374 of the Generally, its grant or denial
brands/tradema respondent Court. Thus, the rests upon the sound discretion
rk. Court has not missed to note the of the Court except on a clear
absence of a mention in the case of abuse (Belish Investment
while Director Sandico's Sandico letter of September 26, & Finance Co. vs. State House,
certification contained similar 1986 of any reference to the 151 SCRA 636). Petitioners' right
conditions as follows: pendency of the instant action of exclusivity to their registered
filed on August 18, 1982. We trademarks being clear and

218 | I P L P a r t I
THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
beyond question, the respondent
court's denial of the prohibitive
writ constituted excess of
jurisdiction and grave abuse
discretion. If the lower court does
not grant preliminary injunction,
the appellate court may grant the
same. (Service Specialists, Inc. vs.
Sheriff of Manila, 145 SCRA 139).
(pp. 165-167, Rollo in G.R. No.
91332.)
After private respondent Fortune's motion for
reconsideration was rejected, a motion to dissolve
the disputed writ of preliminary injunction with
offer to post a counterbond was submitted which
was favorably acted upon by the Court of Appeals,
premised on the filing of a sufficient counterbond
to answer for whatever perjuicio petitioners may
suffer as a result thereof, to wit:
The private respondent seeks to
dissolve the preliminary
injunction previously granted by
this Court with an offer to file a
counterbond. It was pointed out
in its supplemental motion that
lots of workers employed will be
laid off as a consequence of the
injunction and that the
government will stand to lose the
amount of specific taxes being
paid by the
private respondent. The specific
taxes being paid is the sum total
of P120,120, 295.98 from January
to July 1989.
The petitioners argued in their
comment that the damages
caused by the infringement of
their trademark as well as the
goodwill it generates are
incapable of pecuniary
estimation and monetary
evaluation and not even the
counterbond could adequately
compensate for the damages it
will incur as a result of the
dissolution of the bond. In
addition, the petitioner further
argued that doing business in the
Philippines is not relevant as the
injunction pertains to an
infringement of a trademark
right.
After a thorough re-examination
of the issues involved and the
arguments advanced by both
parties in the offer to file a
counterbond and the opposition
thereto, WE believe that there are
sound and cogent reasons for US
to grant the dissolution of the
writ of preliminary injunction by
the offer of the private
respondent to put up a
counterbond to answer for
whatever damages the petitioner
may suffer as a consequence of
the dissolution of the preliminary
injunction.
The petitioner will not be
prejudiced nor stand to suffer
irreparably as a consequence of
the lifting of the preliminary
injunction considering that they
are not actually engaged in the
manufacture of the cigarettes
with the trademark in question
and the filing of the counterbond
will amply answer for such
damages.
While the rule is that an offer of a
counterbond does not operate to
dissolve an injunction previously
granted, nevertheless, it is
equally true that an injunction
could be dissolved only upon
good and valid grounds subject to
the sound discretion of the court.
As WE have maintained the view
that there are sound and good
reasons to lift the preliminary
injunction, the motion to file a
counterbond is granted. (pp. 53-
54, Rollo in G.R. No. 91332.)
Petitioners, in turn, filed their own motion for re-
examination geared towards reimposition of the
writ of preliminary injunction but to no avail (p.
55, Rollo in G.R. No. 91332).
Hence, the instant petition casting three
aspersions that respondent court gravely abused
its discretion tantamount to excess of jurisdiction
when:
I. . . . it required, contrary to law
and jurisprudence, that in order
that petitioners may suffer
irreparable injury due to the
lifting of the injunction,
petitioners should be using
actually their registered
trademarks in commerce in the
Philippines;
II. . . . it lifted the injunction in
violation of section 6 of Rule 58
of the Rules of Court; and
III. . . . after having found that the
trial court had committed grave
abuse of discretion and exceeded
its jurisdiction for having refused
to issue the writ of injunction to
restrain private respondent's
219 | I P L P a r t I
THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
acts that are contrary to equity
and good conscience, it made a
complete about face for legally
insufficient grounds and
authorized the private
respondent to continue
performing the very same acts
that it had considered contrary to
equity and good conscience,
thereby ignoring not only the
mandates of the Trademark Law,
the international commitments of
the Philippines, the judicial
admission of private respondent
that it will have no more right to
use the trademark "MARK" after
the Director of Patents shall have
rejected the application to
register it, and the admonitions
of the Supreme Court. (pp. 24-25,
Petition; pp. 25-26, Rollo.)
To sustain a successful prosecution of their suit
for infringement, petitioners, as foreign
corporations not engaged in local commerce, rely
on section 21-A of the Trademark Law reading as
follows:
Sec. 21-A. Any foreign
corporation or juristic person to
which a mark or trade-name has
been registered or assigned
under this act may bring an
action hereunder for
infringement, for unfair
competition, or false designation
of origin and false description,
whether or not it has been
licensed to do business in the
Philippines under Act Numbered
Fourteen hundred and fifty-nine,
as amended, otherwise known as
the Corporation Law, at the time
it brings complaint: Provided,
That the country of which the
said foreign corporation or
juristic person is a citizen or in
which it is domiciled, by treaty,
convention or law, grants a
similar privilege to corporate or
juristic persons of the
Philippines. (As inserted by Sec. 7
of Republic Act No. 638.)
to drive home the point that they
are not precluded from initiating
a cause of action in the
Philippines on account of the
principal perception that another
entity is pirating their symbol
without any lawful authority to
do so. Judging from a perusal of
the aforequoted Section 21-A, the
conclusion reached by
petitioners is certainly correct for
the proposition in support
thereof is embedded in the
Philippine legal jurisprudence.
Indeed, it was stressed in General Garments
Corporation vs. Director of Patents (41 SCRA 50
[1971]) by then Justice (later Chief Justice)
Makalintal that:
Parenthetically, it may be stated
that the ruling in the
Mentholatum case was
subsequently derogated when
Congress, purposely to
"counteract the effects" of said
case, enacted Republic Act No.
638, inserting Section 21-A in the
Trademark Law, which allows a
foreign corporation or juristic
person to bring an action in
Philippine courts for
infringement of a mark or
tradename, for unfair
competition, or false designation
of origin and false description,
"whether or not it has been
licensed to do business in the
Philippines under Act Numbered
Fourteen hundred and fifty-nine,
as amended, otherwise known as
the Corporation Law, at the time
it brings complaint."
Petitioner argues that Section 21-
A militates against respondent's
capacity to maintain a suit for
cancellation, since it requires,
before a foreign corporation may
bring an action, that its
trademark or tradename has
been registered under the
Trademark Law. The argument
misses the essential point in the
said provision, which is that the
foreign corporation is allowed
thereunder to sue "whether or
not it has been licensed to do
business in the Philippines"
pursuant to the Corporation Law
(precisely to counteract the
effects of the decision in the
Mentholatum case). (at p. 57.)
However, on May, 21, 1984, Section 21-A, the
provision under consideration, was qualified by
this Court in La Chemise Lacoste S.A. vs.
Fernandez (129 SCRA 373 [1984]), to the effect
that a foreign corporation not doing business in
the Philippines may have the right to sue before
Philippine Courts, but existing adjective axioms
require that qualifying circumstances necessary
for the assertion of such right should first be
affirmatively pleaded (2 Agbayani Commercial
Laws of the Philippines, 1991 Ed., p. 598; 4 Martin,
Philippine Commercial Laws, Rev. Ed., 1986, p.
381). Indeed, it is not sufficient for a foreign
corporation suing under Section 21-A to simply
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
allege its alien origin. Rather, it must additionally
allege its personality to sue. Relative to this
condition precedent, it may be observed that
petitioners were not remiss in averring their
personality to lodge a complaint for infringement
(p. 75, Rollo in AC-G.R. SP No. 13132) especially so
when they asserted that the main action for
infringement is anchored on an isolated
transaction (p. 75, Rollo in AC-G.R. SP No. 13132;
Atlantic Mutual Ins. Co. vs. Cebu Stevedoring Co.,
Inc., 17 SCRA 1037 (1966), 1 Regalado, Remedial
Law Compendium, Fifth Rev. Ed., 1988, p. 103).
Another point which petitioners considered to be
of significant interest, and which they desire to
impress upon us is the protection they enjoy
under the Paris Convention of 1965 to which the
Philippines is a signatory. Yet, insofar as this
discourse is concerned, there is no necessity to
treat the matter with an extensive response
because adherence of the Philippines to the 1965
international covenant due to  pact sunt
servanda had been acknowledged in La
Chemise (supra at page 390).
Given these confluence of existing laws amidst the
cases involving trademarks, there can be no
disagreement to the guiding principle in
commercial law that foreign corporations not
engaged in business in the Philippines may
maintain a cause of action for infringement
primarily because of Section 21-A of the
Trademark Law when the legal standing to sue is
alleged, which petitioners have done in the case at
hand.
In assailing the justification arrived at by
respondent court when it recalled the writ of
preliminary injunction, petitioners are of the
impression that actual use of their trademarks in
Philippine commercial dealings is not an
indispensable element under Article 2 of the Paris
Convention in that:
(2) . . . . no condition as to the
possession of a domicile or
establishment in the country
where protection is claimed may
be required of persons entitled to
the benefits of the Union for the
enjoyment of any industrial
property of any industrial
property rights. (p. 28, Petition;
p. 29, Rollo in G.R. No. 91332.)
Yet petitioners' perception along this line is
nonetheless resolved by Sections 2 and 2-A of the
Trademark Law which speak loudly, about
necessity of actual commercial use of the
trademark in the local forum:
Sec. 2. What are registrable. —
Trademarks, tradenames and
service marks owned by persons,
corporations, partnerships or
associations domiciled in the
Philippines and by persons,
corporations, partnerships or
associations domiciled in any
foreign country may be
registered in accordance with the
provisions of this Act; Provided,
That said trademarks,
tradenames, or service marks are
actually in use in commerce and
services not less than two
months in the Philippines before
the time the applications for
registration are filed; And
provided, further, That the
country of which the applicant
for registration is a citizen grants
by law substantially similar
privileges to citizens of the
Philippines, and such fact is
officially certified, with a certified
true copy of the foreign law
translated into the English
language, by the government of
the foreign country to the
Government of the Republic of
the Philippines. (As amended by
R.A. No. 865).
Sec. 2-A. Ownership of
trademarks, tradenames and
service marks; how acquired. —
Anyone who lawfully produces or
deals in merchandise of any kind
or who engages in any lawful
business, or who renders any
lawful service in commerce, by
actual use thereof in manufacture
or trade, in business, and in the
service rendered, may
appropriate to his exclusive use a
trademark, a tradename, or a
service mark not so appropriated
by another, to distinguish his
merchandise, business or service
from the merchandise, business
or service of others. The
ownership or possession of a
trademark, tradename, service
mark, heretofore or hereafter
appropriated, as in this section
provided, shall be recognized and
protected in the same manner
and to the same extent as are
other property rights known to
the law. (As amended by R.A. No.
638). (Kabushi Kaisha Isetan vs.
Intermediate Appellate Court,
203 SCRA 583 [1991], at pp. 589-
590; emphasis supplied.)
Following universal acquiescence and comity, our
municipal law on trademarks regarding the
requirement of actual use in the Philippines must
subordinate an international agreement inasmuch
as the apparent clash is being decided by a
municipal tribunal (Mortensen vs. Peters, Great
221 | I P L P a r t I
THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
Britain, High Court of Judiciary of Scotland, 1906, actual use in protection in the
8 Sessions 93; Paras, International Law and World commerce or trade he has
Organization, 1971 Ed., p. 20). Withal, the fact that business is a built up and the
international law has been made part of the law of prerequisite to goodwill he has
the land does not by any means imply the primacy the acquisition accumulated
of international law over national law in the of the right of from use of the
municipal sphere. Under the doctrine of ownership over trademark. . . .
incorporation as applied in most countries, rules a trademark.
of international law are given a standing equal, not In fact, a prior registrant cannot
superior, to national legislative enactments x x x           x x x          x x x claim exclusive use of the
(Salonga and Yap, Public International Law, trademark unless it uses it in
Fourth ed., 1974, p. 16). . . . Adoption commerce.
alone of a
The aforequoted basic provisions of our trademark We rule[d] in Pagasa Industrial
Trademark Law, according to Justice Gutierrez, Jr., would not give Corporation v. Court of
in Kabushi Kaisha Isetan vs. Intermediate Appellate exclusive right Appeals (118 SCRA 526 [1982]):
Court (203 SCRA 583 [1991]), have been thereto. Such
construed in this manner: right grows out 3. The Trademark law is very
of their actual clear. It requires actual
A fundamental principle of use. Adoption is commercial use of the mark prior
Philippine Trademark Law is that not use. One to its registration. There is no
actual use in commerce in the may make dispute that respondent
Philippines is a pre-requisite to advertisements, corporation was the first
the acquisition of ownership over issue circulars, registrant, yet it failed to fully
a trademark or a tradename. give out price substantiate its claim that it used
lists on certain in trade or business in the
xxx xxx xxx goods; but these Philippines the subject mark; it
alone would not did not present proof to invest it
These provisions have been give exclusive with exclusive, continuous
interpreted in Sterling Products right of use. For adoption of the trademark which
International, Inc. v. trademark is a should consist among others, of
Farbenfabriken Bayer creation of use. considerable sales since its first
Actiengesellschaft (27 SCRA 1214 The underlying use. The invoices (Exhibits 7, 7-a,
[1969]) in this way: reason for all and 8-b) submitted by
these is that respondent which were dated
purchasers have way back in 1957 show that the
A rule widely come to zippers sent to the Philippines
accepted and understand the were to be used as "samples" and
firmly mark as "of no commercial value". The
entrenched indicating the evidence for respondent must be
because it has origin of the clear, definite and free from
come down wares. Flowing inconsistencies. (Sy Ching v. Gaw
through the from this is the Lui, 44 SCRA 148-149) "Samples"
years is that trader's right to are not for sale and therefore, the
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
fact of exporting them to the
Philippines cannot be considered
to be equivalent to the "use"
contemplated by the law.
Respondent did not expect
income from such "samples".
There were no receipts to
establish sale, and no proof were
presented to show that they were
subsequently sold in the
Philippines. (Pagasa Industrial
Corp. v. Court of Appeals, 118
SCRA 526 [1982]; Emphasis
Supplied)
The records show that the
petitioner has never conducted
any business in the Philippines. It
has never promoted its
tradename or trademark in the
Philippines. It is unknown to
Filipino except the very few who
may have noticed it while
travelling abroad. It has never
paid a single centavo of tax to the
Philippine government. Under
the law, it has no right to the
remedy it seeks. (at pp. 589-591.)
In other words, petitioners may have the capacity
to sue for infringement irrespective of lack of
business activity in the Philippines on account of
Section 21-A of the Trademark Law but the
question whether they have an exclusive right
over their symbol as to justify issuance of the
controversial writ will depend on actual use of
their trademarks in the Philippines in line with
Sections 2 and 2-A of the same law. It is thus
incongruous for petitioners to claim that when a
foreign corporation not licensed to do business in
Philippines files a complaint for infringement, the
entity need not be actually using its trademark in
commerce in the Philippines. Such a foreign
corporation may have the personality to file a suit
for infringement but it may not necessarily be
entitled to protection due to absence of actual use
of the emblem in the local market.
Going back to the first assigned error, we can not
help but notice the manner the ascription was
framed which carries with it the implied but
unwarranted assumption of the existence of
petitioners' right to relief. It must be emphasized
that this aspect of exclusive dominion to the
trademarks, together with the corollary allegation
of irreparable injury, has yet to be established by
petitioners by the requisite quantum of evidence
in civil cases. It cannot be denied that our
reluctance to issue a writ of preliminary
injunction is due to judicial deference to the lower
courts, involved as there is mere interlocutory
order (Villarosa vs. Teodoro, Sr., 100 Phil. 25
[1956]). In point of adjective law, the petition has
its roots on a remedial measure which is but
ancillary to the main action for infringement still
pending factual determination before the court of
origin. It is virtually needless to stress the obvious
reality that critical facts in an infringement case
are not before us more so when even Justice
Feliciano's opinion observes that "the evidence is
scanty" and that petitioners "have yet to submit
copies or photographs of their registered marks as
used in cigarettes" while private respondent has
not, for its part, "submitted the actual labels or
packaging materials used in selling its "Mark"
cigarettes." Petitioners therefore, may not be
permitted to presume a given state of facts on
their so called right to the trademarks which could
be subjected to irreparable injury and in the
process, suggest the fact of infringement. Such a
ploy would practically place the cart ahead of the
horse. To our mind, what appears to be the
insurmountable barrier to petitioners' portrayal
of whimsical exercise of discretion by the Court of
Appeals is the well-taken remark of said court
that:
The petitioner[s] will not be
prejudiced nor stand to suffer
irreparably as a consequence of
the lifting of the preliminary
injunction considering that they
are not actually engaged in the
manufacture of the cigarettes
with the trademark in question
and the filing of the counterbond
will amply answer for such
damages. (p. 54. Rollo in G.R. No.
91332.)
More telling are the allegations of petitioners in
their complaint (p. 319, Rollo G.R. No. 91332) as
well as in the very petition filed with this Court (p.
2, Rollo in G.R. No. 91332) indicating that they are
not doing business in the Philippines, for these
frank representations are inconsistent and
incongruent with any pretense of a right which
can breached (Article 1431, New Civil Code;
Section 4, Rule 129; Section 3, Rule 58, Revised
Rules of Court). Indeed, to be entitled to an
injunctive writ, petitioner must show that there
exists a right to be protected and that the facts
against which injunction is directed are violative
of said right (Searth Commodities Corporation vs.
Court of Appeals, 207 SCRA 622 [1992]). It may be
added in this connection that albeit petitioners are
holders of certificate of registration in the
Philippines of their symbols as admitted by
private respondent, the fact of exclusive
ownership cannot be made to rest solely on these
documents since dominion over trademarks is not
acquired by the mere fact of registration alone and
does not perfect a trademark right (Unno
Commercial Enterprises, Inc. vs. General Milling
Corporation, 120 SCRA 804 [1983]).
Even if we disregard the candid statements of
petitioners anent the absence of business activity
here and rely on the remaining statements of the
complaint below, still, when these averments are
juxtaposed with the denials and propositions of
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
the answer submitted by private respondent, the
supposed right of petitioners to the symbol have
thereby been controverted. This is not to say,
however, that the manner the complaint was
traversed by the answer is sufficient to tilt the
scales of justice in favor of private respondent. Far
from it. What we are simply conveying is another
basic tenet in remedial law that before injunctive
relief may properly issue, complainant's right or
title must be undisputed and demonstrated on the
strength of one's own title to such a degree as to
unquestionably exclude dark clouds of doubt,
rather than on the weakness of the adversary's
evidence, inasmuch as the possibility of
irreparable damage, without prior proof of
transgression of an actual existing right, is no
ground for injunction being mere damnum absque
injuria (Talisay-Silay Milling Co., Inc. vs. CFI of
Negros Occidental, 42 SCRA 577 [1971];
Francisco, Rules of Court, Second ed., 1985, p. 225;
3 Martin, Rules of Court, 1986 ed., p. 82).
On the economic repercussion of this case, we are
extremely bothered by the thought of having to
participate in throwing into the streets Filipino
workers engaged in the manufacture and sale of
private respondent's "MARK" cigarettes who
might be retrenched and forced to join the ranks
of the many unemployed and unproductive as a
result of the issuance of a simple writ of
preliminary injunction and this, during the
pendency of the case before the trial court, not to
mention the diminution of tax revenues
represented to be close to a quarter million pesos
annually. On the other hand, if the status quo is
maintained, there will be no damage that would
be suffered by petitioners inasmuch as they are
not doing business in the Philippines.
With reference to the second and third issues
raised by petitioners on the lifting of the writ of
preliminary injunction, it cannot be gainsaid that
respondent court acted well within its
prerogatives under Section 6, Rule 58 of the
Revised Rules of Court:
Sec. 6. Grounds for objection to, or
for motion of dissolution of
injunction.  — The injunction may
be refused or, if granted ex parte,
may be dissolved, upon the
insufficiency of the complaint as
shown by the complaint itself,
with or without notice to the
adverse party. It may also be
refused or dissolved on other
grounds upon affidavits on the
part of the defendants which may
be opposed by the plaintiff also
by affidavits. It may further be
refused or, if granted, may be
dissolved, if it appears after
hearing that although the plaintiff
is entitled to the injunction, the
issuance or continuance thereof,
as the case may be, would cause
great damage to the defendant
while the plaintiff can be fully
compensated for such damages
as he may suffer, and the
defendant files a bond in an
amount fixed by the judge
conditioned that he will pay all
damages which the plaintiff may
suffer by the refusal or the
dissolution of the injunction. If it
appears that the extent of the
preliminary injunction granted is
too great, it must be modified.
Under the foregoing rule, injunction may be
refused, or, if granted, may be dissolved, on the
following instances:
(1) If there is insufficiency of the
complaint as shown by the
allegations therein. Refusal or
dissolution may be granted in
this case with or without notice
to the adverse party.
(2) If it appears after hearing that
although the plaintiff is entitled
to the injunction, the issuance or
continuance thereof would cause
great damage to the defendant,
while the plaintiff can be fully
compensated for such damages
as he may suffer. The defendant,
in this case, must file a bond in an
amount fixed by the judge
conditioned that he will pay all
damages which plaintiff may
suffer by the refusal or the
dissolution of the injunction.
(3) On the other grounds upon
affidavits on the part of the
defendant which may be opposed
by the plaintiff also affidavits.
Modification of the injunction
may also be ordered by the court
if it appears that the extent of the
preliminary injunction granted is
too great. (3 Martin, Rules of
Court, 1986 ed., p. 99;
Francisco, supra, at p. 268.)
In view of the explicit representation of
petitioners in the complaint that they are not
engaged in business in the Philippines, it
inevitably follows that no conceivable damage can
be suffered by them not to mention the foremost
consideration heretofore discussed on the absence
of their "right" to be protected. At any rate, and
assuming in gratia argumenti that respondent
court erroneously lifted the writ it previously
issued, the same may be cured by appeal and not
in the form of a petition for certiorari (Clark vs.
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
Philippine Ready Mix Concrete Co., 88 Phil. 460
[1951]). Verily, and mindful of the rule that a writ
of preliminary injunction is an interlocutory order
which is always under the control of the court
before final judgment, petitioners' criticism must
fall flat on the ground, so to speak, more so when
extinction of the previously issued writ can even
be made without previous notice to the adverse
party and without a hearing (Caluya vs. Ramos, 79
Phil. 640 [1974]; 3 Moran, Rules of Court, 1970
ed., p. 81).

WHEREFORE, the petition is hereby DISMISSED

and the Resolutions of the Court of Appeals dated
September 14, 1989 and November 29, 1989 are
hereby AFFIRMED.

SO ORDERED.

Bidin, J., concurs.

Davide, Jr., concurs in the result.

Romero, J. took no part.

225 | I P L P a r t I
THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
 
G.R. No. 114508 November 19, 1999
PRIBHDAS J. MIRPURI, petitioner,
vs.
COURT OF APPEALS, DIRECTOR OF PATENTS
and the BARBIZON
CORPORATION, respondents.
 
PUNO, J.:
The Convention of Paris for the Protection of
Industrial Property is a multi-lateral treaty which
the Philippines bound itself to honor and enforce
in this country. As to whether or not the treaty
affords protection to a foreign corporation against
a Philippine applicant for the registration of a
similar trademark is the principal issue in this
case.
On June 15, 1970, one Lolita Escobar, the
predecessor-in-interest of petitioner Pribhdas J.
Mirpuri, filed an application with the Bureau of
Patents for the registration of the trademark
"Barbizon" for use in brassieres and ladies
undergarments. Escobar alleged that she had been
manufacturing and selling these products under
the firm name "L & BM Commercial" since March
3, 1970.
Private respondent Barbizon Corporation, a
corporation organized and doing business under
the laws of New York, U.S.A., opposed the
application. It claimed that:
The mark BARBIZON of
respondent-applicant is
confusingly similar to the
trademark BARBIZON which
opposer owns and has not
abandoned.
That opposer will be damaged by
the registration of the mark
BARBIZON and its business
reputation and goodwill will
suffer great and irreparable
injury.
That the respondent-applicant's
use of the said mark BARBIZON
which resembles the trademark
used and owned by opposer,
constitutes an unlawful
appropriation of a mark
previously used in the
Philippines and not abandoned
and therefore a statutory
violation of Section 4 (d) of
Republic Act No. 166, as
amended. 1
This was docketed as Inter Partes Case
No. 686 (IPC No. 686). After filing of the
pleadings, the parties submitted the case
for decision.
On June 18, 1974, the Director of Patents rendered
judgment dismissing the opposition and giving
due course to Escobar's application, thus:
WHEREFORE, the opposition
should be, as it is hereby,
DISMISSED. Accordingly,
Application Serial No. 19010 for
the registration of the trademark
BARBIZON, of respondent Lolita
R. Escobar, is given due course.
IT IS SO ORDERED. 2
This decision became final and on
September 11, 1974, Lolita Escobar was
issued a certificate of registration for the
trademark "Barbizon." The trademark
was "for use in "brassieres and lady's
underwear garments like panties." 3
Escobar later assigned all her rights and interest
over the trademark to petitioner Pribhdas J.
Mirpuri who, under his firm name then, the
"Bonito Enterprises," was the sole and exclusive
distributor of Escobar's "Barbizon" products.
In 1979, however, Escobar failed to file with the
Bureau of Patents the Affidavit of Use of the
trademark required under Section 12 of Republic
Act (R.A.) No. 166, the Philippine Trademark Law.
Due to this failure, the Bureau of Patents cancelled
Escobar's certificate of registration.
On May 27, 1981, Escobar reapplied for
registration of the cancelled trademark. Mirpuri
filed his own application for registration of
Escobar's trademark. Escobar later assigned her
application to herein petitioner and this
application was opposed by private respondent.
The case was docketed as Inter Partes Case No.
2049 (IPC No. 2049).
In its opposition, private respondent alleged that:
(a) The Opposer has adopted the
trademark BARBIZON (word),
sometime in June 1933 and has
then used it on various kinds of
wearing apparel. On August 14,
1934, Opposer obtained from the
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
United States Patent Office a
more recent registration of the
said mark under Certificate of
Registration No. 316,161. On
March 1, 1949, Opposer obtained
from the United States Patent
Office a more recent registration
for the said trademark under
Certificate of Registration No.
507,214, a copy of which is
herewith attached as Annex "A."
Said Certificate of Registration
covers the following goods —
wearing apparel: robes, pajamas,
lingerie, nightgowns and slips;
(b) Sometime in March 1976,
Opposer further adopted the
trademark BARBIZON and Bee
design and used the said mark in
various kinds of wearing apparel.
On March 15, 1977, Opposer
secured from the United States
Patent Office a registration of the
said mark under Certificate of
Registration No. 1,061,277, a
copy of which is herein enclosed
as Annex "B." The said Certificate
of Registration covers the
following goods: robes, pajamas,
lingerie, nightgowns and slips;
(c) Still further, sometime in
1961, Opposer adopted the
trademark BARBIZON and a
Representation of a Woman and
thereafter used the said
trademark on various kinds of
wearing apparel. Opposer
obtained from the United States
Patent Office registration of the
said mark on April 5, 1983 under
Certificate of Registration No.
1,233,666 for the following
goods: wearing apparel: robes,
pajamas, nightgowns and
lingerie. A copy of the said
certificate of registration is
herewith enclosed as Annex "C."
(d) All the above registrations are
subsisting and in force and
Opposer has not abandoned the
use of the said trademarks. In
fact, Opposer, through a wholly-
owned Philippine subsidiary, the
Philippine Lingerie Corporation,
has been manufacturing the
goods covered by said
registrations and selling them to
various countries, thereby
earning valuable foreign
exchange for the country. As a
result of respondent-applicant's
misappropriation of Opposer's
BARBIZON trademark, Philippine
Lingerie Corporation is
prevented from selling its goods
in the local market, to the
damage and prejudice of Opposer
and its wholly-owned subsidiary.
(e) The Opposer's goods bearing
the trademark BARBIZON have
been used in many countries,
including the Philippines, for at
least 40 years and has enjoyed
international reputation and
good will for their quality. To
protect its registrations in
countries where the goods
covered by the registrations are
being sold, Opposer has procured
the registration of the trademark
BARBIZON in the following
countries: Australia, Austria, Abu
Dhabi, Argentina, Belgium,
Bolivia, Bahrain, Canada, Chile,
Colombia, Denmark, Ecuador,
France, West Germany, Greece,
Guatemala, Hongkong, Honduras,
Italy, Japan, Jordan, Lebanon,
Mexico, Morocco, Panama, New
Zealand, Norway, Sweden,
Switzerland, Syria, El Salvador,
South Africa, Zambia, Egypt, and
Iran, among others;
(f) To enhance its international
reputation for quality goods and
to further promote goodwill over
its name, marks and products,
Opposer has extensively
advertised its products,
trademarks and name in various
publications which are circulated
in the United States and many
countries around the world,
including the Philippines;
(g) The trademark BARBIZON
was fraudulently registered in
the Philippines by one Lolita R.
Escobar under Registration No.
21920, issued on September 11,
1974, in violation of Article 189
(3) of the Revised Penal Code and
Section 4 (d) of the Trademark
Law. Herein respondent
applicant acquired by assignment
the "rights" to the said mark
previously registered by Lolita
Escobar, hence respondent-
applicant's title is vitiated by the
same fraud and criminal act.
Besides, Certificate of
Registration No. 21920 has been
cancelled for failure of either
Lolita Escobar or herein
respondent-applicant, to
seasonably file the statutory
affidavit of use. By applying for a
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
re-registration of the mark
BARBIZON subject of this
opposition, respondent-applicant
seeks to perpetuate the fraud and
criminal act committed by Lolita
Escobar.
(h) Opposer's BARBIZON as well
as its BARBIZON and Bee Design
and BARBIZON and
Representation of a Woman
trademarks qualify as well-
known trademarks entitled to
protection under Article 6bis of
the Convention of Paris for the
Protection of Industrial Property
and further amplified by the
Memorandum of the Minister of
Trade to the Honorable Director
of Patents dated October 25,
1983 [sic], 4 Executive Order No.
913 dated October 7, 1963 and
the Memorandum of the Minister
of Trade and Industry to the
Honorable Director of Patents
dated October 25, 1983.
(i) The trademark applied for by
respondent applicant is identical
to Opposer's BARBIZON
trademark and constitutes the
dominant part of Opposer's two
other marks namely, BARBIZON
and Bee design and BARBIZON
and a Representation of a
Woman. The continued use by
respondent-applicant of
Opposer's trademark BARBIZON
on goods belonging to Class 25
constitutes a clear case of
commercial and criminal piracy
and if allowed registration will
violate not only the Trademark
Law but also Article 189 of the
Revised Penal Code and the
commitment of the Philippines to
an international treaty. 5
Replying to private respondent's
opposition, petitioner raised the defense
of res judicata.
On March 2, 1982, Escobar assigned to petitioner
the use of the business name "Barbizon
International." Petitioner registered the name
with the Department of Trade and Industry (DTI)
for which a certificate of registration was issued in
1987.
Forthwith, private respondent filed before the
Office of Legal Affairs of the DTI a petition for
cancellation of petitioner's business name.
On November 26, 1991, the DTI, Office of Legal
Affairs, cancelled petitioner's certificate of
registration, and declared private respondent the
owner and prior user of the business name
"Barbizon International." Thus:
WHEREFORE, the petition is
hereby GRANTED and petitioner
is declared the owner and prior
user of the business name
"BARBIZON INTERNATIONAL"
under Certificate of Registration
No. 87-09000 dated March 10,
1987 and issued in the name of
respondent, is [sic] hereby
ordered revoked and cancelled. . .
. . 6
Meanwhile, in IPC No. 2049, the evidence of both
parties were received by the Director of Patents.
On June 18, 1992, the Director rendered a decision
declaring private respondent's opposition barred
by res judicata and giving due course to
petitioner's application for registration, to wit:
WHEREFORE, the present
Opposition in Inter Partes Case
No. 2049 is hereby DECLARED
BARRED by res judicata and is
hereby DISMISSED. Accordingly,
Application Serial No. 45011 for
trademark BARBIZON filed by
Pribhdas J. Mirpuri is GIVEN DUE
COURSE.
SO ORDERED. 7
Private respondent questioned this decision
before the Court of Appeals in CA-G.R. SP No.
28415. On April 30, 1993, the Court of Appeals
reversed the Director of Patents finding that IPC
No. 686 was not barred by judgment in IPC No.
2049 and ordered that the case be remanded to
the Bureau of Patents for further proceedings, viz:
WHEREFORE, the appealed
Decision No. 92-13 dated June 18,
1992 of the Director of Patents in
Inter Partes Case No. 2049 is
hereby SET ASIDE; and the case
is hereby remanded to the
Bureau of Patents for further
proceedings, in accordance with
this pronouncement. No costs. 8
In a Resolution dated March 16, 1994, the
Court of Appeals denied reconsideration
of its decision. 9 Hence, this recourse.
Before us, petitioner raises the following issues:
1. WHETHER OR NOT THE
DECISION OF THE DIRECTOR OF
PATENTS IN INTER PARTES
CASE NO. 686 RENDERED ON
JUNE 18, 1974, ANNEX C
HEREOF, CONSTITUTED RES
JUDICATA IN SO FAR AS THE
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
CASE BEFORE THE DIRECTOR OF BEFORE THE DIRECTOR OF Modern authorities on trademark law view
PATENTS IS CONCERNED; PATENTS IN INTER PARTES trademarks as performing three distinct functions:
CASE NO. 2049 HAS THE RIGHT (1) they indicate origin or ownership of the
2. WHETHER OR NOT THE TO DECIDE SUCH articles to which they are attached; (2) they
DIRECTOR OF PATENTS CANCELLATION NOT ON THE guarantee that those articles come up to a certain
CORRECTLY APPLIED THE BASIS OF THE BUSINESS NAME standard of quality; and (3) they advertise the
PRINCIPLE OF RES JUDICATA IN LAW (AS IMPLEMENTED BY THE articles they symbolize. 14
DISMISSING PRIVATE BUREAU OF DOMESTIC TRADE)
RESPONDENT BARBIZON'S BUT ON THE BASIS OF THE Symbols have been used to identify the ownership
OPPOSITION TO PETITIONER'S PARIS CONVENTION AND THE or origin of articles for several centuries. 15 As
APPLICATION FOR TRADEMARK LAW (R.A. 166) early as 5,000 B.C., markings on pottery have been
REGISTRATION FOR THE WHICH IS WITHIN THE found by archaeologists. Cave drawings in
TRADEMARK BARBIZON, WHICH ORIGINAL AND EXCLUSIVE southwestern Europe show bison with symbols on
HAS SINCE RIPENED TO JURISDICTION OF THE their flanks. 16 Archaeological discoveries of
CERTIFICATE OF REGISTRATION DIRECTOR OF PATENTS. 10 ancient Greek and Roman inscriptions on
NO. 53920 ON NOVEMBER 16, sculptural works, paintings, vases, precious
1992; Before ruling on the issues of the case, there is stones, glassworks, bricks, etc. reveal some
need for a brief background on the function and features which are thought to be marks or
3. WHETHER OR NOT THE historical development of trademarks and symbols. These marks were affixed by the creator
REQUISITE THAT A "JUDGMENT trademark law. or maker of the article, or by public authorities as
ON THE MERITS" REQUIRED A indicators for the payment of tax, for disclosing
"HEARING WHERE BOTH A "trademark" is defined under R.A. 166, the state monopoly, or devices for the settlement of
PARTIES ARE SUPPOSED TO Trademark Law, as including "any word, name, accounts between an entrepreneur and his
ADDUCE EVIDENCE" AND symbol, emblem, sign or device or any workmen. 17
WHETHER THE JOINT combination thereof adopted and used by a
SUBMISSION OF THE PARTIES manufacturer or merchant to identify his goods In the Middle Ages, the use of many kinds of marks
TO A CASE ON THE BASIS OF and distinguish them from those manufactured, on a variety of goods was commonplace. Fifteenth
THEIR RESPECTIVE PLEADINGS sold or dealt in by others. 11 This definition has century England saw the compulsory use of
WITHOUT PRESENTING been simplified in R.A. No. 8293, the Intellectual identifying marks in certain trades. There were
TESTIMONIAL OR Property Code of the Philippines, which defines a the baker's mark on bread, bottlemaker's marks,
DOCUMENTARY EVIDENCE "trademark" as "any visible sign capable of smith's marks, tanner's marks, watermarks on
FALLS WITHIN THE MEANING distinguishing goods." 12 In Philippine paper, etc. 18 Every guild had its own mark and
OF "JUDGMENT ON THE MERITS" jurisprudence, the function of a trademark is to every master belonging to it had a special mark of
AS ONE OF THE REQUISITES TO point out distinctly the origin or ownership of the his own. The marks were not trademarks but
CONSTITUTE RES JUDICATA; goods to which it is affixed; to secure to him, who police marks compulsorily imposed by the
has been instrumental in bringing into the market sovereign to let the public know that the goods
4. WHETHER A DECISION OF a superior article of merchandise, the fruit of his were not "foreign" goods smuggled into an area
THE DEPARTMENT OF TRADE industry and skill; to assure the public that they where the guild had a monopoly, as well as to aid
AND INDUSTRY CANCELLING are procuring the genuine article; to prevent fraud in tracing defective work or poor craftsmanship to
PETITIONER'S FIRM NAME and imposition; and to protect the manufacturer the artisan. 19 For a similar reason, merchants also
"BARBIZON INTERNATIONAL" against substitution and sale of an inferior and used merchants' marks. Merchants dealt in goods
AND WHICH DECISION IS STILL different article as his product. 13 acquired from many sources and the marks
PENDING RECONSIDERATION enabled them to identify and reclaim their goods
NEVER OFFERED IN EVIDENCE upon recovery after shipwreck or piracy. 20
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With constant use, the mark acquired popularity
and became voluntarily adopted. It was not
intended to create or continue monopoly but to
give the customer an index or guarantee of
quality. 21 It was in the late 18th century when the
industrial revolution gave rise to mass production
and distribution of consumer goods that the mark
became an important instrumentality of trade and
commerce. 22 By this time, trademarks did not
merely identify the goods; they also indicated the
goods to be of satisfactory quality, and thereby
stimulated further purchases by the consuming
public. 23 Eventually, they came to symbolize the
goodwill and business reputation of the owner of
the product and became a property right
protected by law. 24 The common law developed
the doctrine of trademarks and tradenames "to
prevent a person from palming off his goods as
another's, from getting another's business or
injuring his reputation by unfair means, and, from
defrauding the public." 25 Subsequently, England
and the United States enacted national legislation
on trademarks as part of the law regulating unfair
trade. 26 It became the right of the trademark
owner to exclude others from the use of his mark,
or of a confusingly similar mark where confusion
resulted in diversion of trade or financial injury.
At the same time, the trademark served as a
warning against the imitation or faking of
products to prevent the imposition of fraud upon
the public. 27
Today, the trademark is not merely a symbol of
origin and goodwill; it is often the most effective
agent for the actual creation and protection of
goodwill. It imprints upon the public mind an
anonymous and impersonal guaranty of
satisfaction, creating a desire for further
satisfaction. In other words, the mark actually
sells the goods. 28 The mark has become the "silent
salesman," the conduit through which direct
contact between the trademark owner and the
consumer is assured. It has invaded popular
culture in ways never anticipated that it has
become a more convincing selling point than even
the quality of the article to which it refers. 29 In the
last half century, the unparalleled growth of
industry and the rapid development of
communications technology have enabled
trademarks, tradenames and other distinctive
signs of a product to penetrate regions where the
owner does not actually manufacture or sell the
product itself. Goodwill is no longer confined to
the territory of actual market penetration; it
extends to zones where the marked article has
been fixed in the public mind through
advertising. 30 Whether in the print, broadcast or
electronic communications medium, particularly
on the Internet, 31 advertising has paved the way
for growth and expansion of the product by
creating and earning a reputation that crosses
over borders, virtually turning the whole world
into one vast marketplace.
This is the mise-en-scene of the present
controversy. Petitioner brings this action claiming
that "Barbizon" products have been sold in the
Philippines since 1970. Petitioner developed this
market by working long hours and spending
considerable sums of money on advertisements
and promotion of the trademark and its products.
Now, almost thirty years later, private respondent,
a foreign corporation, "swaggers into the country
like a conquering hero," usurps the trademark and
invades petitioner's market. 32 Justice and fairness
dictate that private respondent be prevented from
appropriating what is not its own. Legally, at the
same time, private respondent is barred from
questioning petitioner's ownership of the
trademark because of res judicata. 33
Literally, res judicata means a matter adjudged, a
thing judicially acted upon or decided; a thing or
matter settled by judgment. 34 In res judicata, the
judgment in the first action is considered
conclusive as to every matter offered and received
therein, as to any other admissible matter which
might have been offered for that purpose, and all
other matters that could have been adjudged
therein. 35 Res judicata is an absolute bar to a
subsequent action for the same cause; and its
requisites are: (a) the former judgment or order
must be final; (b) the judgment or order must be
one on the merits; (c) it must have been rendered
by a court having jurisdiction over the subject
matter and parties; (d) there must be between the
first and second actions, identity of parties, of
subject matter and of causes of action. 36
The Solicitor General, on behalf of respondent
Director of Patents, has joined cause with
petitioner. Both claim that all the four elements
of res judicata have been complied with: that the
judgment in IPC No. 686 was final and was
rendered by the Director of Patents who had
jurisdiction over the subject matter and parties;
that the judgment in IPC No. 686 was on the
merits; and that the lack of a hearing was
immaterial because substantial issues were raised
by the parties and passed upon by the Director of
Patents. 37
The decision in IPC No. 686 reads as follows:
xxx xxx xxx.
Neither party took testimony nor
adduced documentary evidence.
They submitted the case for
decision based on the pleadings
which, together with the
pertinent records, have all been
carefully considered.
Accordingly, the only issue for
my disposition is whether or not
the herein opposer would
probably be damaged by the
registration of the trademark
BARBIZON sought by the
respondent-applicant on the
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
ground that it so resembles the
trademark BARBIZON allegedly
used and owned by the former to
be "likely to cause confusion,
mistake or to deceive
purchasers."
On record, there can be no doubt
that respondent-applicant's
sought-to-be-registered
trademark BARBIZON is similar,
in fact obviously identical, to
opposer's alleged trademark
BARBIZON, in spelling and
pronunciation. The only
appreciable but very negligible
difference lies in their respective
appearances or manner of
presentation. Respondent-
applicant's trademark is in bold
letters (set against a black
background), while that of the
opposer is offered in stylish
script letters.
It is opposer's assertion that its
trademark BARBIZON has been
used in trade or commerce in the
Philippines prior to the date of
application for the registration of
the identical mark BARBIZON by
the respondent-applicant.
However, the allegation of facts
in opposer's verified notice of
opposition is devoid of such
material information. In fact, a
reading of the text of said verified
opposition reveals an apparent, if
not deliberate, omission of the
date (or year) when opposer's
alleged trademark BARBIZON
was first used in trade in the
Philippines (see par. No. 1, p. 2,
Verified Notice of Opposition,
Rec.). Thus, it cannot here and
now be ascertained whether
opposer's alleged use of the
trademark BARBIZON could be
prior to the use of the identical
mark by the herein respondent-
applicant, since the opposer
attempted neither to substantiate
its claim of use in local commerce
with any proof or evidence.
Instead, the opposer submitted
the case for decision based
merely on the pleadings.
On the other hand, respondent-
applicant asserted in her
amended application for
registration that she first used
the trademark BARBIZON for
brassiere (or "brasseire") and
ladies underwear garments and
panties as early as March 3, 1970.
Be that as it may, there being no
testimony taken as to said date of
first use, respondent-applicant
will be limited to the filing date,
June 15, 1970, of her application
as the date of first use (Rule 173,
Rules of Practice in Trademark
Cases).
From the foregoing, I conclude
that the opposer has not made
out a case of probable damage by
the registration of the
respondent-applicant's mark
BARBIZON.
WHEREFORE, the opposition
should be, as it is hereby,
DISMISSED. Accordingly,
Application Serial No. 19010, for
the registration of the trademark
BARBIZON of respondent Lolita
R. Escobar, is given due course.38
The decision in IPC No. 686 was a judgment on the
merits and it was error for the Court of Appeals to
rule that it was not. A judgment is on the merits
when it determines the rights and liabilities of the
parties based on the disclosed facts, irrespective
of formal, technical or dilatory objections. 39 It is
not necessary that a trial should have been
conducted. If the court's judgment is general, and
not based on any technical defect or objection, and
the parties had a full legal opportunity to be heard
on their respective claims and contentions, it is on
the merits although there was no actual hearing or
arguments on the facts of the case. 40 In the case at
bar, the Director of Patents did not dismiss private
respondent's opposition on a sheer technicality.
Although no hearing was conducted, both parties
filed their respective pleadings and were given
opportunity to present evidence. They, however,
waived their right to do so and submitted the case
for decision based on their pleadings. The lack of
evidence did not deter the Director of Patents
from ruling on the case, particularly on the issue
of prior use, which goes into the very substance of
the relief sought by the parties. Since private
respondent failed to prove prior use of its
trademark, Escobar's claim of first use was
upheld.
The judgment in IPC No. 686 being on the merits,
petitioner and the Solicitor General allege that IPC
No. 686 and IPC No. 2049 also comply with the
fourth requisite of res judicata, i.e., they involve
the same parties and the same subject matter, and
have identical causes of action.
Undisputedly, IPC No. 686 and IPC No. 2049
involve the same parties and the same subject
matter. Petitioner herein is the assignee of
Escobar while private respondent is the same
American corporation in the first case. The subject
matter of both cases is the trademark "Barbizon."
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
Private respondent counter-argues, however, that
the two cases do not have identical causes of
action. New causes of action were allegedly
introduced in IPC No. 2049, such as the prior use
and registration of the trademark in the United
States and other countries worldwide, prior use in
the Philippines, and the fraudulent registration of
the mark in violation of Article 189 of the Revised
Penal Code. Private respondent also cited
protection of the trademark under the Convention
of Paris for the Protection of Industrial Property,
specifically Article 6bis thereof, and the
implementation of Article 6bis by two Memoranda
dated November 20, 1980 and October 25, 1983 of
the Minister of Trade and Industry to the Director
of Patents, as well as Executive Order (E.O.) No.
913.
The Convention of Paris for the Protection of
Industrial Property, otherwise known as the Paris
Convention, is a multilateral treaty that seeks to
protect industrial property consisting of patents,
utility models, industrial designs, trademarks,
service marks, trade names and indications of
source or appellations of origin, and at the same
time aims to repress unfair competition. 41 The
Convention is essentially a compact among
various countries which, as members of the Union,
have pledged to accord to citizens of the other
member countries trademark and other rights
comparable to those accorded their own citizens
by their domestic laws for an effective protection
against unfair competition. 42 In short, foreign
nationals are to be given the same treatment in
each of the member countries as that country
makes available to its own citizens. 43 Nationals of
the various member nations are thus assured of a
certain minimum of international protection of
their industrial property. 44
The Convention was first signed by eleven
countries in Paris on March 20, 1883. 45 It
underwent several revisions — at Brussels in
1900, at Washington in 1911, at The Hague in
1925, at London in 1934, at Lisbon in 1958, 46 and
at Stockholm in 1967. Both the Philippines and the
United States of America, herein private
respondent's country, are signatories to the
Convention. The United States acceded on May 30,
1887 while the Philippines, through its Senate,
concurred on May 10, 1965. 47 The Philippines'
adhesion became effective on September 27,
1965, 48 and from this date, the country obligated
itself to honor and enforce the provisions of the
Convention. 49
In the case at bar, private respondent anchors its
cause of action on the first paragraph of Article
6bis  of the Paris Convention which reads as
follows:
Article 6bis
(1) The countries of the Union
undertake, either
administratively if their
legislation so permits, or at the
request of an interested party, to
refuse or to cancel the
registration and to prohibit the
use, of a trademark which
constitutes a reproduction, an
imitation, or a translation, liable
to create confusion, of a mark
considered by the competent
authority of the country of
registration or use to be well-
known in that country as being
already the mark of a person
entitled to the benefits of this
Convention and used for identical
or similar goods. These
provisions shall also apply when
the essential part of the mark
constitutes a reproduction of any
such well-known mark or an
imitation liable to create
confusion therewith.
(2) A period of at least five years
from the date of registration shall
be allowed for seeking the
cancellation of such a mark. The
countries of the Union may
provide for a period within which
the prohibition of use must be
sought.
(3) No time limit shall be fixed
for seeking the cancellation or
the prohibition of the use of
marks registered or used in bad
faith. 50
This Article governs protection of well-
known trademarks. Under the first
paragraph, each country of the Union
bound itself to undertake to refuse or
cancel the registration, and prohibit the
use of a trademark which is a
reproduction, imitation or translation, or
any essential part of which trademark
constitutes a reproduction, liable to
create confusion, of a mark considered by
the competent authority of the country
where protection is sought, to be well-
known in the country as being already the
mark of a person entitled to the benefits
of the Convention, and used for identical
or similar goods.
Art. 6bis was first introduced at The Hague in
1925 and amended in Lisbon in 1952. 51 It is a self-
executing provision and does not require
legislative enactment to give it effect in the
member country. 52 It may be applied directly by
the tribunals and officials of each member country
by the mere publication or proclamation of the
Convention, after its ratification according to the
public law of each state and the order for its
execution. 53
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The essential requirement under Article 6bis is
that the trademark to be protected must be "well-
known" in the country where protection is sought.
The power to determine whether a trademark is
well-known lies in the "competent authority of the
country of registration or use." This competent
authority would be either the registering
authority if it has the power to decide this, or the
courts of the country in question if the issue
comes before a court. 54
Pursuant to Article 6bis, on November 20, 1980,
then Minister Luis Villafuerte of the Ministry of
Trade issued a Memorandum to the Director of
Patents. The Minister ordered the Director that:
Pursuant to the Paris Convention
for the Protection of Industrial
Property to which the Philippines
is a signatory, you are hereby
directed 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, Jordache,
Vanderbilt, Sasson, Fila, Pierre
Cardin, Gucci, Christian Dior,
Oscar de la Renta, Calvin Klein,
Givenchy, Ralph Lauren, Geoffrey
Beene, Lanvin and Ted Lapidus.
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 damages
and other legal action by the
trademarks' foreign or local
owners or original users.
You are also required to submit
to the undersigned a progress
report on the matter.
For immediate compliance. 55
Three years later, on October 25, 1983, then
Minister Roberto Ongpin issued another
Memorandum to the Director of Patents, viz:
Pursuant to Executive Order No.
913 dated 7 October 1983 which
strengthens the rule-making and
adjudicatory powers of the
Minister of Trade and Industry
and provides inter alia, that "such
rule-making and adjudicatory
powers should be revitalized in
order that the Minister of Trade
and Industry can . . . apply more
swift and effective solutions and
remedies to old and new
problems . . . such as
infringement of internationally-
known tradenames and
trademarks . . ." and in view of
the decision of the Intermediate
Appellate Court in the case of LA
CHEMISE LACOSTE, S.A., versus
RAM SADWHANI [AC-G.R. SP NO.
13359 (17) June 1983] 56 which
affirms the validity of the
MEMORANDUM of then Minister
Luis R. Villafuerte dated 20
November 1980 confirming our
obligations under the PARIS
CONVENTION FOR THE
PROTECTION OF INDUSTRIAL
PROPERTY to which the Republic
of the Philippines is a signatory,
you are hereby directed to
implement measures necessary
to effect compliance with our
obligations under said
Convention in general, and, more
specifically, to honor our
commitment under
Section 6bis 57 thereof, as follows:
1. Whether the trademark
under consideration is
well-known in the
Philippines or is a mark
already belonging to a
person entitled to the
benefits of the
CONVENTION, this should
be established, pursuant
to Philippine Patent Office
procedures in inter
partes and ex parte cases,
according to any of the
following criteria or any
combination thereof:
(a) a declaration by the Minister of Trade and
Industry that the trademark being considered is
already well-known in the Philippines such that
permission for its use by other than its original
owner will constitute a reproduction, imitation,
translation or other infringement;
(b) that the trademark is used in commerce
internationally, supported by proof that goods
bearing the trademark are sold on an
international scale, advertisements, the
establishment of factories, sales offices,
distributorships, and the like, in different
countries, including volume or other measure of
international trade and commerce;
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
(c) that the trademark is duly registered in the
industrial property office(s) of another country or
countries, taking into consideration the date of
such regstration;
(d) that the trademark has long been established
and obtained goodwill and international
consumer recognition as belonging to one owner
or source;
(e) that the trademark actually belongs to a party
claiming ownership and has the right to
registraton under the provisions of the
aforestated PARIS CONVENTION.
2. The word trademark, as used in this
MEMORANDUM, shall include tradenames, service
marks, logos, signs, emblems, insignia or other
similar devices used for identification and
recognition by consumers.
3. The Philippine Patent Office shall refuse all
applications for, or cancel the registration of,
trademarks which constitute a reproduction,
translation or imitation of a trademark owned by
a person, natural or corporate, who is a citizen of a
country signatory to the PARIS CONVENTION FOR
THE PROTECTION OF INDUSTRIAL PROPERTY.
4. The Philippine Patent Office shall give due
course to the Opposition in cases already or
hereafter filed against the registration of
trademarks entitled to protection of Section
6bis of said PARIS CONVENTION as outlined
above, by remanding applications filed by one not
entitled to such protection for final disallowance
by the Examination Division.
5. All pending applications for Philippine
registration of signature and other world-famous
trademarks filed by applicants other than their
original owners or users shall be rejected
forthwith. Where such applicants have already
obtained registration contrary to the
abovementioned PARIS CONVENTION and/or
Philippine Law, they shall be directed to surrender
their Certificates of Registration to the Philippine
Patent Office for immediate cancellation
proceedings.
xxx xxx xxx. 58
In the Villafuerte Memorandum, the Minister of
Trade instructed the Director of Patents to reject
all pending applications for Philippine registration
of signature and other world-famous trademarks
by applicants other than their original owners or
users. The Minister enumerated several
internationally-known trademarks and ordered
the Director of Patents to require Philippine
registrants of such marks to surrender their
certificates of registration.
In the Ongpin Memorandum, the Minister of Trade
and Industry did not enumerate well-known
trademarks but laid down guidelines for the
Director of Patents to observe in determining
whether a trademark is entitled to protection as a
well-known mark in the Philippines under Article
6bis of the Paris Convention. This was to be
established through Philippine Patent Office
procedures in inter partes and ex parte cases
pursuant to the criteria enumerated therein. The
Philippine Patent Office was ordered to refuse
applications for, or cancel the registration of,
trademarks which constitute a reproduction,
translation or imitation of a trademark owned by
a person who is a citizen of a member of the
Union. All pending applications for registration of
world-famous trademarks by persons other than
their original owners were to be rejected
forthwith. The Ongpin Memorandum was issued
pursuant to Executive Order No. 913 dated
October 7, 1983 of then President Marcos which
strengthened the rule-making and adjudicatory
powers of the Minister of Trade and Industry for
the effective protection of consumers and the
application of swift solutions to problems in trade
and industry. 59
Both the Villafuerte and Ongpin Memoranda were
sustained by the Supreme Court in the 1984
landmark case of La Chemise Lacoste, S.A. v.
Fernandez. 60 This court ruled therein that under
the provisions of Article 6bis of the Paris
Convention, the Minister of Trade and Industry
was the "competent authority" to determine
whether a trademark is well-known in this
country. 61
The Villafuerte Memorandum was issued in
1980, i.e., fifteen (15) years after the adoption of
the Paris Convention in 1965. In the case at bar,
the first inter partes case, IPC No. 686, was filed in
1970, before the Villafuerte Memorandum but five
(5) years after the effectivity of the Paris
Convention. Article 6bis was already in effect five
years before the first case was instituted. Private
respondent, however, did not cite the protection
of Article 6bis, neither did it mention the Paris
Convention at all. It was only in 1981 when IPC
No. 2049 was instituted that the Paris Convention
and the Villafuerte Memorandum, and, during the
pendency of the case, the 1983 Ongpin
Memorandum were invoked by private
respondent.
The Solicitor General argues that the issue of
whether the protection of Article 6bis of the
Convention and the two Memoranda is barred
by res judicata has already been answered
in Wolverine Worldwide, Inc. v. Court of
Appeals. 62 In this case, petitioner Wolverine, a
foreign corporation, filed with the Philippine
Patent Office a petition for cancellation of the
registration certificate of private respondent, a
Filipino citizen, for the trademark "Hush Puppies"
and "Dog Device." Petitioner alleged that it was
the registrant of the internationally-known
trademark in the United States and other
countries, and cited protection under the Paris
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
Convention and the Ongpin Memorandum. The cause damage to private
petition was dismissed by the Patent Office on the respondent's business reputation
ground of res judicata. It was found that in 1973 and goodwill; and
petitioner's predecessor-in-interest filed two
petitions for cancellation of the same trademark (c) that Escobar's use of the
against respondent's predecessor-in-interest. The trademark amounts to an
Patent Office dismissed the petitions, ordered the unlawful appropriation of a mark
cancellation of registration of petitioner's previously used in the
trademark, and gave due course to respondent's Philippines which act is penalized
application for registration. This decision was under Section 4 (d) of the
sustained by the Court of Appeals, which decision Trademark Law.
was not elevated to us and became final and
executory. 63 In IPC No. 2049, private respondent's
opposition set forth several issues
Wolverine claimed that while its previous summarized as follows:
petitions were filed under R.A. No. 166, the
Trademark Law, its subsequent petition was (a) as early as 1933, it adopted
based on a new cause of action, i.e., the Ongpin the word "BARBIZON" as
Memorandum and E.O. No. 913 issued in 1983, trademark on its products such
after finality of the previous decision. We held that as robes, pajamas, lingerie,
the said Memorandum and E.O. did not grant a nightgowns and slips;
new cause of action because it did "not amend the
Trademark Law," . . . "nor did it indicate a new
(b) that the trademark
policy with respect to the registration in the
"BARBIZON" was registered with
Philippines of world-famous trademarks." 64 This
the United States Patent Office in
conclusion was based on the finding that
1934 and 1949; and that
Wolverine's two previous petitions and
variations of the same
subsequent petition dealt with the same issue of
trademark, i.e., "BARBIZON" with
ownership of the trademark. 65 In other words,
Bee design and "BARBIZON" with
since the first and second cases involved the same
the representation of a woman
issue of ownership, then the first case was a bar to
were also registered with the U.S.
the second case.
Patent Office in 1961 and 1976;
In the instant case, the issue of ownership of the
(c) that these marks have been in
trademark "Barbizon" was not raised in IPC No.
use in the Philippines and in
686. Private respondent's opposition therein was
many countries all over the
merely anchored on:
world for over forty years.
"Barbizon" products have been
(a) "confusing similarity" of its advertised in international
trademark with that of Escobar's; publications and the marks
registered in 36 countries
(b) that the registration of worldwide;
Escobar's similar trademark will
(d) Escobar's registration of the
similar trademark "BARBIZON"
in 1974 was based on fraud; and
this fraudulent registration was
cancelled in 1979, stripping
Escobar of whatsoever right she
had to the said mark;
(e) Private respondent's
trademark is entitled to
protection as a well-known mark
under Article 6bis of the Paris
Convention, Executive Order No.
913, and the two Memoranda
dated November 20, 1980 and
October 25, 1983 of the Minister
of Trade and Industry to the
Director of Patents;
(f) Escobar's trademark is
identical to private respondent's
and its use on the same class of
goods as the latter's amounts to a
violation of the Trademark Law
and Article 189 of the Revised
Penal Code.
IPC No. 2049 raised the issue of
ownership of the trademark, the first
registration and use of the trademark in
the United States and other countries, and
the international recognition and
reputation of the trademark established
by extensive use and advertisement of
private respondent's products for over
forty years here and abroad. These are
different from the issues of confusing
similarity and damage in IPC No. 686. The
issue of prior use may have been raised in
IPC No. 686 but this claim was limited to
prior use in the Philippines only. Prior use
in IPC No. 2049 stems from private
respondent's claim as originator of the
word and symbol "Barbizon," 66 as the
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
first and registered user of the mark
attached to its products which have been
sold and advertised worldwide for a
considerable number of years prior to
petitioner's first application for
registration of her trademark in the
Philippines. Indeed, these are substantial
allegations that raised new issues and
necessarily gave private respondent a
new cause of action. Res judicata does not
apply to rights, claims or demands,
although growing out of the same subject
matter, which constitute separate or
distinct causes of action and were not put
in issue in the former action. 67
Respondent corporation also introduced in the
second case a fact that did not exist at the time the
first case was filed and terminated. The
cancellation of petitioner's certificate of
registration for failure to file the affidavit of use
arose only after IPC No. 686. It did not and could
not have occurred in the first case, and this gave
respondent another cause to oppose the second
application. Res judicata extends only to facts and
conditions as they existed at the time judgment
was rendered and to the legal rights and relations
of the parties fixed by the facts so
determined. 68 When new facts or conditions
intervene before the second suit, furnishing a new
basis for the claims and defenses of the parties,
the issues are no longer the same, and the former
judgment cannot be pleaded as a bar to the
subsequent action. 69
It is also noted that the oppositions in the first and
second cases are based on different laws. The
opposition in IPC No. 686 was based on specific
provisions of the Trademark Law, i.e., Section 4
(d) 70 on confusing similarity of trademarks and
Section 8 71 on the requisite damage to file an
opposition to a petition for registration. The
opposition in IPC No. 2049 invoked the Paris
Convention, particularly Article 6bis thereof, E.O.
No. 913 and the two Memoranda of the Minister of
Trade and Industry. This opposition also invoked
Article 189 of the Revised Penal Code which is a
statute totally different from the Trademark
Law. 72 Causes of action which are distinct and
independent from each other, although arising out
of the same contract, transaction, or state of facts,
may be sued on separately, recovery on one being
no bar to subsequent actions on others. 73 The
mere fact that the same relief is sought in the
subsequent action will not render the judgment in
the prior action operative as res judicata, such as
where the two actions are based on different
statutes. 74 Res judicata therefore does not apply to
the instant case and respondent Court of Appeals
did not err in so ruling.
Intellectual and industrial property rights cases
are not simple property cases. Trademarks deal
with the psychological function of symbols and the
effect of these symbols on the public at
large. 75 Trademarks play a significant role in
communication, commerce and trade, and serve
valuable and interrelated business functions, both
nationally and internationally. For this reason, all
agreements concerning industrial property, like
those on trademarks and tradenames, are
intimately connected with economic
development. 76 Industrial property encourages
investments in new ideas and inventions and
stimulates creative efforts for the satisfaction of
human needs. They speed up transfer of
technology and industrialization, and thereby
bring about social and economic progress. 77 These
advantages have been acknowledged by the
Philippine government itself. The Intellectual
Property Code of the Philippines declares that "an
effective intellectual and industrial
property system is vital to the development of
domestic and creative activity, facilitates transfer
of technology, it attracts foreign investments, and
ensures market access for our products." 78 The
Intellectual Property Code took effect on January
1, 1998 and by its express provision, 79 repealed
the Trademark Law, 80 the Patent Law, 81 Articles
188 and 189 of the Revised Penal Code, the Decree
on Intellectual Property, 82 and the Decree on
Compulsory Reprinting of Foreign
Textbooks. 83 The Code was enacted to strengthen
the intellectual and industrial property system in
the Philippines as mandated by the country's
accession to the Agreement Establishing the
World Trade Organization (WTO). 84
The WTO is a common institutional framework for
the conduct of trade relations among its members
in matters related to the multilateral and
plurilateral trade agreements annexed to the WTO
Agreement. 85 The WTO framework ensures a
"single undertaking approach" to the
administration and operation of all agreements
and arrangements attached to the WTO
Agreement. Among those annexed is the
Agreement on Trade-Related Aspects of
Intellectual Property Rights or TRIPs. 86 Members
to this Agreement "desire to reduce distortions
and impediments to international trade, taking
into account the need to promote effective and
adequate protection of intellectual property
rights, and to ensure that measures and
procedures to enforce intellectual property rights
do not themselves become barriers to legitimate
trade." To fulfill these objectives, the members
have agreed to adhere to minimum standards of
protection set by several Conventions. 87 These
Conventions are: the Berne Convention for the
Protection of Literary and Artistic Works (1971),
the Rome Convention or the International
Convention for the Protection of Performers,
Producers of Phonograms and Broadcasting
Organisations, the Treaty on Intellectual Property
in Respect of Integrated Circuits, and the Paris
Convention (1967), as revised in Stockholm on July
14, 1967. 88
A major proportion of international trade depends
on the protection of intellectual property
rights. 89 Since the late 1970's, the unauthorized
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
counterfeiting of industrial property and
trademarked products has had a considerable
adverse impact on domestic and international
trade revenues. 90 The TRIPs Agreement seeks to
grant adequate protection of intellectual property
rights by creating a favorable economic
environment to encourage the inflow of foreign
investments, and strengthening the multi-lateral
trading system to bring about economic, cultural
and technological independence. 91

The Philippines and the United States of America

have acceded to the WTO Agreement. This
Agreement has revolutionized international
business and economic relations among states,
and has propelled the world towards trade
liberalization and economic
globalization. 92 Protectionism and isolationism
belong to the past. Trade is no longer confined to a
bilateral system. There is now "a new era of global
economic cooperation, reflecting the widespread
desire to operate in a fairer and more open
multilateral trading system." 93 Conformably, the
State must reaffirm its commitment to the global
community and take part in evolving a new
international economic order at the dawn of the
new millenium.

IN VIEW WHEREOF, the petition is denied and the

Decision and Resolution of the Court of Appeals in
CA-G.R. SP No. 28415 are affirmed.

SO ORDERED.

Davide, Jr., C.J., Kapunan, Pardo and Ynares-

Santiago, JJ., concur.

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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-28499 September 30, 1977
VICTORIAS MILLING COMPANY, INC., petitioner,
vs.
ONG SU AND THE HONORABLE TIBURCIO S.
EVALLE IN HIS CAPACITY AS DIRECTOR OF
PATENT'S, respondents.
Gonzalo W. Gonzalez, Agpalo & Associates for
petitioner.
Salonga, Ordoñez, Yap & Associates and Armando
G. Gungon for respondents.
FERNANDEZ, J.:
This is a petition to review the decision of the
Director of Patents in Inter Partes Case No. 304
entitled "Victorias Milling Company, Inc.,
petitioner, verus, Ong Su" dated August 15, 1967
denying the petition to cancel the certificate of
registration issued by the philippines Patent Office
on Jurie 20, 1961 in favor of Ong Su covering the
tradenwk "VALENTINE" and design and used on
refined sugar. 1
The petitioner, Victorias Milling Company, Inc., a
domestic corporation and engaged in the
manufacture and sale of refined granulated sugar
is the owner of the trademark "VICTORIAS" and d
design registered in the Philippines Patent Office
on November 9, 1961.
The respondent Ong Su is engaged in the
repacking and sale of refine sugar and is the
owner of the trademark "VALENTINE" and design
registered in the Philippines Patent Office on June
20, 1961.
On October 4, 1963, Victorias Mining Company,
Inc. filed with the Philippine Patent Office a
petition to cancel the registration of the Ong Su
trademark "Valentine."
The petitioner allied that its tradermrk "Victorias"
and diamond design has distinctive of its sugar
long before the respondent used its trademark;
that the registration of "Valentine" and design has
caused and will cause great damage to petitioner
by reason of mistake, confusion, or deception
among the purchasers because it is similar to its
"Victorias" trademark; that registration was
fradulently obtained by Ong Su and that
"Valentine" faisely suggests a connection with
Saint Valentine or with an institution or belief
connected therewith. 2
In his answer to the petition the respondent
averred that he is doing business under the name
and style "Valentine Packaging" and has registered
the trademark "Valentine" with a design for sugar
and was issued Certificate of Registration No.
8891 dated June 20, 1961; that the trademark
"Victorias" with diamond design and the
trademark "Valentine" with a design are two
different marks; and that there is absolutely no
likelihood of confusion, mistake or deception to
purchasers through the concurrent use of the
petitioner's mark "Victorias" with a diamond
design and the respondents' mark "Valentine"
with a design in connection with sugar. 3
The petitioner's only witness, Pacifica V. Vijandre
its vice-president and stockholder, testified that
Victorias Milling Company, Inc. has used since
1947 the trademark "Victorias" and diamond
design with colors of red and black on sacks of
sugar having variable weight and size of 5 lbs., 10
lbs., 25 N., 50 lbs., and 100 lbs.; that the company
had transactions on or sales of sugar with local
dealers such as Kim Kee, Chu Yu & Co., Limouan &
Co., Luzon Merchandising Corp. and ARCA that the
average sale from 1958 to 1962 was P30,000,000
and for the whole year of 1962 the sale was
P46,000,000; that he came to know that the
trademark "Valentine" appeared in the market in
1962 through the report of his company's field
agents; and that except for the words "Valentine
and Victorias", the design and wordings of the
bags are practically the same. 4
The respondent, Ong Su decWW that he adopted
and began using his trademark "Valentine" and
design before and continuously after World War II
in the Philippines, particularly on paper bags used
as containers for starch, coffee and sugar; and that
since January 1955 he continued using said
trademark on repacked sugar.
Arturo Chicane a witness for the respondent,
testified that he was a distribution agent of Ong Su
that he travelled a lot but he river own across an
instance when the respondent Ong Su product
was mistaken for the petitioner's product; that he
found the diamond design to be quite common in
combination with other words used as trademarks
as a background or to enhance their appearance,
such as "DIAMOND" and design (Exhibit "54-A"),
"EAGLE" and design (Exhibit "53"), and "SUNRISE"
and design (Exhibit "55"), not belonging to the
petitioner, which are also used on repacked sugar
by various sugar dealers; and that said designs
and the color of the lines on which drawn had not
been regarded as trademarks but we
ornamentation. 5
The Director of Patents denied the petition to
cancel the certificate of registration of the
respondent Ong Su covering the trademark
"Valentine" and design because:
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
From the facts of record, I find
nothing to sustain the petition.
There is no question that as to
their respective literal
designation the trademarks are
different. One is VALENTINE
while the other is VICTORIAS.
Thus, as to sound and
connotation there is no dispute
as to their dissimilarity.
However, from the evidence and
pleadings, it appears that
petitioner is relying heavily on its
diamond design, the color
scheme, and the printing
sequence or arrangement of such
legends as weight, contents and
manufacturer or packer.
I am of the firm belief that the
diamond Portion of petitioner's
trademark hag not bolstered its
cause. Common geometric shapes
such as circles, ovals, squares,
triangles, diamonds, and the like,
when used as vehicles for display
on word marks, ordinarily are
not retarded as indicia of origin
for goods to which the marks are
applied, unless of course they
have acquired secondary
meaning. I have scoured the
records completely to ascertain if
the petitioner has submitted
satisfactory evidence in this
regard, but I find absolutely
nothing to base a ruling that the
triangle (sic) design has acquired
a secondary meaning with
respect to its sugar business.
It is the common practice for
trademark owners to register
designs forming outline of their
distinguishing mark, but when
the registrant of such design
relies upon registration in
proceeding based upon
likelihood of confusion of
purchasers, he assumes the
burden of showing that the
design portion of the mark has
been so used that purchasers
recognize the design, standing
alone, as indicating goods
emanating from the
registrant. Bausch & Lomb
Optical Co., v. Overseas Finance &
Trading Co., Inc. (ComrPats) 112
USPQ 6.
Considering herein that the
petitioner failed to establish that
diamond design component of its
mark has acquired a secondary
meaning and that the literal
portion of the marks have no
similarity, there is no reasonable
likelihood of purchaser confusion
resulting from registrant's use of
VALENTINE within a diamond
and petitioner's use of
VICTORIAS within a diamond.
As regards the colors black and
red used, it is fundamental in
trademark jurisprudence that
color alone, unless displayed in a
distinct or arbitrary design, does
not function as a trademark,
inasmuch as here, or elsewhere,
the colors black and red are not
so displayed by the petitioner,
and are primary colors
commonly and freely used in the
printing business.
Finally, as regards the printing
sequences or arrangement of
such legends as weight, contents,
and manufacturer or packer, I
regard it as merely a matter
pertaining to the address of the
goods' — a matter involving
unfair competition over which
the Patent Office has no
jurisdiction. (See: Menzi & Co.,
Inc, vs. Andres Co Dee. No. 59
dated Oct. 31, 1952, Dir. of
Patents.) And in the case of A. E.
Staley Manufacturing Co., Inc. vs.
Andres Co. v. Tan Tong, citing,
Gillette Safety Razor Go. v.
Triangle Mechanical
Laboratories, 31 USPQ 24;
Aladdin Mfg. Co. v. Mantle Lamp
Co., 21 USPQ 58; and J. C. Eno
(U.S.) Limited v. Deshayas 29
USPQ 179), it was held that the
tribunals of the Philippines
Patent Office have no jurisdiction
over questions of unfair
competition. At most, the
petitioner's recourse is for it to
seek relief in civil courts.
The allegations that the
registration of VALENTINE was
obtained fraudulently; that it
falsely suggests a connection
with St. Valentine; and that it is
merely descriptive or deceptively
misdescriptive of sugar have no
basis in law and fact. 6
The petitioner submits that the Director of Patents
committed the following errors:
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
I OF PETITIONER'S AND REASONABLE LIKELIHOOD OF
RESPONDENT'S RESPECTIVE PURCHASER CONFUSION.
THE RESPONDENT DIRECTOR TRADEMARKS TO ONE SOLE
OF PATENTS ERRED IN ITEM OF THEIR DESIGN, IX
HOLDING THAT PETITIONER'S IGNORING THE COMPLETE
REGISTERED DIAMOND DESIGN LABELS AS ACTUALLY USED IN THE RESPONDENT DIRECTOR
IS NOT AN INDEX OF ORIGIN. TRADE AND SEEN BY OF PATENTS ERRED IN
CONSUMERS. ASSUMING THAT PETITIONER,
II OR THE OWNER OF ANY
VI IMITATED OR INFRINGED
THE RESPONDENT DIRECTOR TRADEMARK FOR THAT
OF PATENTS ERRED IN THE RESPONDENT DIRECTOR MATTER, MUST ESTABLISH
HOLDING THAT PETITIONER IS OF PATENTS ERRED IN TAKING ACTUAL PURCHASER
REQUIRED TO ESTABLISH THAT THE POSITION THAT IN CASES CONFUSION.
ITS DIAMOND DESIGN HAS OF TRADEMARK CANCELLATION
ACQUIRED A SECONDARY INVOLVING, AMONG OTHERS, X
MEANING. OBVIOUS ACTS OF UNFAIR
COMPETITION, HE NEED NOT THE RESPONDENT DIRECTOR
III TAKE ANY ACTION OF PATENTS ERRED IN
WHATSOEVER, SINCE HE PREVENTING THE TESTIMONIES
SUPPOSEDLY HAS NO OF RESPONDENT ONG SU AND
THE RESPONDENT DIRECTOR JURISDICTION IN THE PREMISES. WITNESS ERNESTO DURAN AS
OF PATENTS ERRED IN
HOLDING PETITIONER'S REBUTTAL WITNESSES FOR
DIAMOND DESIGN HAS NOT VII PETITIONER, SAID RULINGS OF
ACQUIRED A SECONDARY RESPONDENT DIRECTOR
MEANING. THE RESPONDENT DIRECTOR CONSTITUTING REVERSIBLE
OF PATENTS ERRED IN ERROR AND THE DENIAL OF
IV HOLDING THAT PETITIONER'S PROCEDURAL DUE PROCESS.
REGISTERED COLOR DESIGN
DOES NOT FUNCTION AS A XI
THE RESPONDENT DIRECTOR TRADEMARK.
OF PATENTS ERRED IN
HOLDING THAT THE DETAILS OF THE RESPONDENT DIRECTOR
PETITIONER'S DESIGN THAT VIII OF PATENTS ERRED IN
HAVE BEEN IMITATED BY HOLDING THAT THE
RESPONDENT ONG SU MERELY THE RESPONDENT DIRECTOR REGISTRATION OF THE
PERTAIN TO THE'DRESS OF THE OF PATENTS ERRED IN VALENTINE TRADEMARK BY
GOODS.' HOLDING THAT BECAUSE THE RESPONDENT ONG SU WAS NOT
LITERAL PORTIONS OF THE PRUDULENTLY OBTAINED.
V RESPECTIVE TRADEMARKS IN
QUESTION, NAMELY, THE XII
RESPECTIVE NAMES 'VICTORIAS'
THE RESPONDENT DIRECTOR AND 'VALENTINE', HAVE NO THE RESPONDENT DIRECTOR
OF PATENTS ERRED IN SIMILARITY, THERE IS NO OF PATENTS, ACTING TfIROUGH
CONFINING HIS COMPARISON
240 | I P L P a r t I
THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
HEARING OFFICER AMANDO 1. Both trademarks have the 8. Immediately below the words
MARQUEZ, ERRED IN same diamond design with the "VICTORIAS" and
ADMITTING RESPONDENT ONG slight modification that the lines "VALENTINE"appears the words
SU'S EXHIBITS PERTAINING TO of the "VALENTINE" diamond "REFINED SUGAR".
ONE 'MARIANO ANG SAID NAME design are a little protruding at
NOT HAVING BEEN CLEARLY the ends. 9. underneath the diamond
ESTABLISHED AS AN ALIAS, design in both trademarks are
ALHTHOUGH ADMITTEDLY 2. The lines forming the diamond the words "FINE GRANULATED"
UNAUTHORIZED, OF design in both trademarks and below said phrase are the
RESPONDENT ONG SU. 7 consist of two lines, namely, the words 'CANE SUGAR'with a small
outer portion and the inner diamond design.
The contention of petitioner that the diamond portion.
design in its trademark is an index of origin has no 10. Both, trade marks are used on
merit. The petitioner has not shown that the 3. The outer portion of the refines sugar.
design portion of the mark has been so used that diamond design of both
purchasers recognize the design, standing alone, trademarks has the color black as 11. The words "PURE,"
as indicating goods coming from the registrant. As shown in the specimens (Exhibits "VALENTINE," "VICTORIAS,"
correctly stated by the Director of Patents, "A" and "B"). The, inner line of "FINE GRANULATED" and "CANE
common geometric shapes such as diamonds the diamond design in both SUGAR" in both trade marks are
ordinarily are not regarded as indicia of origin for trademarks has the color red. same has arranged and printed.9
goods to which the remarks are applied unless
they have acquired a secondary meaning. And 4. In both trade marks, the word The respondent Ong Su maintains that the alleged
there is no evidence that the diamond design in "PURE" in black print appears are minor for the following reason:
the trademark of the petitioner has acquired a inside of the upper portion of the
secondary meaning with respect to its sugar diamond design.
business. The word "Victorias" is what Identifies Appellant attempts to show the
the sugar contained in the bag as the product of possibility or likelihood of
5. In both trade marks, the word purchaser confusion by pointing
the petitioner. Indeed, the petitioner has
"VICTORIAS" and the word out alleged similarities in the
advertised its sugar in bags marked "Victorias"
VALENTINE' placed within the packages in question, e.g. "Pure
with oval, hexagor. and other designs.
diamond design are Refined Sugar" appearing in both
conspicuously colored red. marks in question. It should be
The evidence is that Ong Su has been using his
noted, however, that these words
trademark since prior to the last World War and
6. The letter "V" in Victorias and are merely descriptive commonly
he obtained the registration thereof on June 20,
the letter "V" in Valentine are applied to the goods, namely,
1961. Vijandre declared that the petitioner started
Identically placed. sugar, and cannot be exclusively
to use its trademark only in 1947. Said trademark
appropriated by the petitioner.
was registered on November 9, 1961. It cannot be
7. The word "VICTORIAS" and the The other alleged similarities
said, therefore, that the respondent Ong Su
word "VALENTINE" are pointed to by appellant — that
imitated the trademark of the petitioner.
Identically arranged, the same the lines forming the diamond
containing the same number of design in both trademarks
The petitioner avers that purchasers of sugar are consist of two lines, the outer
letters.
likely to confuse petitioner's "Victorias" portion and the inner portion;
trademark and respondent Ong Su's "Valentine" that the diamond design in both
trademark because of the following similarities:
241 | I P L P a r t I
THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
tradeniarks has the color black
and the inner line of both designs
has the red color; that the
diamond design as used by the
petitioner and by respondent are
of the same size; that the letter
'V' in Victorias and the letter "V"
in "Valentine" are the same size;
and that the letter 'V' in
VICTORIAS and the letter "V" in
the Valentine package are
Identically pIaced in the
diamond; and that — the word
"Victorias" and the word
"VALENTINE" are Identically
arranged within the diamond —
are, we submit with respect,
minor and insignificant for the
purpose of this petition even if
the observations of appellant are
correct.10
It seems clear that the words "Valentine" and
"Victorias" and the names and places of business
of Victorias Milling Company, Inc. and Ong Su are
the dominant features of the trademarks in
question. The petitioner has not established such a
substantial similarity between the two
trademarks in question as to warrant the
cancellation of the trademark 'Valentine'of the
respondent Su. The Director of Patents correctly
ruled that he has no jurisdiction over the issue of
unfair competition. Under Section 27 of the Trade
Mark Law, Republic Act No. 166, after actions for
unfair competition shall be brought before the
proper Court of First Instance.
The refusal of the Director of Patents to allow
respondent Ong Su and witness Emesto Duran to
testify on rebuttal is not a reversible effort.
The only'purpose of the petitioner in proposing to
call Ong Su as a witness on rebuttal is to ask the
latter if he had judicial authority to use the alias
'Mariano'. Ang It appears, however, that the
counsel of petitioner had already extensively
cross-examined Ong Su as to a citizenship, alien
certificate of registration and the other name
Mariano Ang. It seems immaterial whether or not
Ong Su has judicial authority to use Mariano Ang
as an alias. There is evidence that even before the
last World War, the trademark 'Valentine' and
design had been used under the name of either
Ong Su or Mariano Ang.
The petitioner sought to present Emesto T. Duran
as rebuttal witness to prove that there was a
confusion among consumers or buyers of sugar
caused by the alleged sorority of the "Victorias"
and "Valentine" trademarks. The presentation of
Emesto T. Duran as rebuttal witness was objected
to by counsel of the respondent on the ground that
the evidence sought to be elicited from Duran did
not directly contradict the testimony of witness
Chicane The objection was sustained by the
hearing officer whose ruling was subsequently
confer by the Director of Patents. Counsel for the
petitioner made the following formal offer of
proof:
ATTY. GONZALEZ:
Your Honor please, in view of the
ruling of the Honorable Director
your Honor please on the
admissibility of certain items of
evidence, which resolution dated
February 21, 1966 was received
by undersigned counsel for the
petitioner on February 22, 1966,
said resolution was setting the
hearing of this case for this
morning, I wish to state, I wish to
register my exception, my
respectful exception to said
resolution. In view of the
resolution not permitting me to
present Mr. Ernesto Duran, my
proposed witness whom I
attempted to present at the last
hearing, I wish to offer as proof
the following items ol' the
testimony of witness Duran. Now
as he would go shopping with his
parents and that sometime in the
month of February 1963 he went
to the Aranque market, and while
he was buying groceries he saw a
shelf with five (5) lbs. bag of
sugar with the bag and package
he thought was VICTORIAS.
Witness Duran will further testify
that he went to the shelf and
pointed to the bag of sugar and
hesaid Isang support ng Victorias
Ang. That the sugar was taken by
the shopkeeper and when he
went home he found out that the
sugar was marked VALENTINE.
lie went on again on another time
later and saw that the shelf was
still filled with five (5) pounds
(lbs,) bag VALENTINE sugar. The
shelf also has bags of VICTORIAS
sugar side by side with
VALENTINE sugar, that the
package of VALENTINE looked so
much alike will VICTORIAS sugar
that he was misled into pointing
to VALENTINE and asked for
VICTORIAS.
HEARING OFFICER:
What is that, is that supposed to
be the testimony of witness
Duran?
ATTY. GONZALEZ:
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THE LAW ON TRADEMARKS, TRADENAMES, AND SERVICE MARKS (Registrability [Non-Registrable Marks])
Yes, your Honor, I am offering as WHEREFORE the decision of the Director of
proof of what the witness Duran Patents sought to be reviewed is hereby affirmed,
would have testified. Since this without pronouncement as to costs.
office has ruled that I cannot
present him an offer of proof is SO ORDERED.
being made for purposes of
putting on record what he would Teehankee (Chairman), Makasiar, Muñoz Palma,
have testified to on record in Martin and Guerrero, JJ., concur.
accordance with the Rules of
Evidence. 11

Having made the foregoing formal offer of proof,

the petitioner cannot complain that it was denied
procedural due process.

The proposed testimony of Emesto T. Duran that

in February 1963 he went to Arangue market and
bought one bag of sugar which he thought was
"Victorias" and when he went home he found out
that the sugar was marked "Valentine" is not
sufficient evidence that the two trademarks are so
similar that buyers of sugar are confused. The
words "Victorias" and "Valentine" are not similar
in spelling and do not have a similar sound when
pronounced. Even the diamond designs are
different. The diamond design of the trademark
"Valentine" has protruding fines at the comers.
Even an illiterate person can see the difference
between the two diamond designs.

There is no evidence that the respondent Ong Su

had obtained the registration of his trademark
"Valentine" and design by means of fraud. The
said trademark was registered in the Philippines
Patent Office before the petitioner registered its
trademark.

The record and evidence show that Ong Su had

also used in his business the name Mariano Ang.
Hence the licenses and permits in the name of Ong
Su and/or Mariano Ang were correctly admitted
as evidence.

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