Law on Intellectual Property

Module 1

Declaration of State Policy

Intellectual Property Association of the Philippines v. Ochoa, G.R. No. 204605, July 19, 2016

FACTS:

The Madrid System for the International Registration of Marks (Madrid System), which is the
centralized system providing a one-stop solution for registering and managing marks worldwide,
allows the trademark owner to file one application in one language, and to pay one set of fees to
protect his mark in the territories of up to 97 member-states. The Madrid System is governed by the
Madrid Agreement, concluded in 1891, and the Madrid Protocol, concluded in 1989.

The Madrid Protocol has two objectives, namely: (1) to facilitate securing protection for marks;
and (2) to make the management of the registered marks easier in different countries. In 2004, the
Intellectual Property Office of the Philippines (IPOPHL) began considering the country's accession
to the Madrid Protocol. After a campaign for information dissemination, and a series of
consultations with stakeholders, IPOPHL ultimately arrived at the conclusion that accession would
benefit the country and help raise the level of competitiveness for Filipino brands. Hence, it
recommended to the Department of Foreign Affairs (DFA) that the Philippines should accede to
the Madrid Protocol.

After its own review, the DFA endorsed to the President the country's accession to the Madrid
Protocol. The DFA determined that the Madrid Protocol was an executive agreement. On March
27, 2012, President Benigno C. Aquino III ratified the Madrid Protocol through an instrument of
accession, which was deposited with the Director General of the World Intellectual Property
Organization (WIPO) on April 25, 2012.

The Madrid Protocol entered into force in the Philippines on July 25, 2012. Thus, the Intellectual
Property Association of the Philippines (IPAP) commenced this special civil action for certiorari
and prohibition to challenge the validity of the President's accession to the Madrid Protocol
without the concurrence of the Senate.

According to the IPAP, the Madrid Protocol is a treaty, not an executive agreement; hence,
respondent DFA Secretary Albert Del Rosario acted with grave abuse of discretion in determining
the Madrid Protocol as an executive agreement. Also, the IPAP has argued that the implementation
of the Madrid Protocol in the Philippines; specifically the processing of foreign trademark
applications, conflicts with the Intellectual Property Code of the Philippines.

ISSUE:

Whether the Madrid Protocol is unconstitutional for lack of concurrence by the Senate.

RULING: NO.
The Court finds and declares that the President’s ratification is valid and constitutional because
the Madrid Protocol, being an executive agreement as determined by the Department of
Foreign Affairs, does not require the concurrence of the Senate. Under prevailing
jurisprudence, the registration of trademarks and copyrights has been the subject of executive
agreements entered into without the concurrence of the Senate. Some executive agreements have
been concluded in conformity with the policies declared in the acts of Congress with respect to the
general subject matter.

Accordingly, DFA Secretary Del Rosario’s determination and treatment of the Madrid Protocol as
an executive agreement; being in apparent contemplation of the express state policies on
intellectual property as well as within his power under Executive Order No. 459, are upheld. The
Court observed that there are no hard and fast rules on the propriety of entering into a treaty or an
executive agreement on a given subject as an instrument of international relations. The primary
consideration in the choice of the form of agreement is the parties’ intent and desire to craft their
international agreement in the form they so wish to further their respective interests. The matter of
form takes a back seat when it comes to effectiveness and binding effect of the enforcement of a
treaty or an executive agreement; inasmuch as all the parties; regardless of the form, become
obliged to comply conformably with the time-honored principle of pacta sunt servanda. The
principle binds the parties to perform in good faith their parts in the agreements.

Module 2

Acquisition of Ownership of Mark

Birkenstock GmbH v. Phil Shoe Marketing, G.R. No. 194307, November 29, 2013

FACTS:

Petitioner applied for various trademark registrations before the Philippine IPO, namely: a)
“BIRKENSTOCK”; b) “BIRKENSTOCK BAD HONNEF-RHEIN & DEVICE COMPRISING OF
ROUND COMPANY SEAL AND REPRESENTATION OF A FOOT, CROSS AND
SUNBEAM”; c) “BIRKENSTOCK BAD HONNEF-RHEIN & DEVICE COMPRISING OF
ROUND COMPANY SEAL AND REPRESENTATION OF A FOOT, CROSS AND
SUNBEAM”. However, the registration proceedings were suspended in view of an existing
registration of mark “BIRKENSTOCK AND DEVICE” in the name of Shoe Town International
and Industrial Corporation, the predecessor-in-interest of respondent Philippine Shoe Expo
Marketing Corporation. Here, petitioner filed a petition for cancellation of the registration on the
ground that it is the lawful and rightful owner of the Birkenstock marks.

Respondent filed an opposition, alleging that: a) it, together with its predecessor-in-interest, has
been using Birkenstock marks in the Philippines for more than 16 years through the mark
“BIRKENSTOCK AND DEVICE”; b) the marks covered by the subject applications are identical
to the one covered by the registration and thus, petitioner has no right to the registration of such
marks; d) that while respondent failed to file the 10th Year DAU, it continued the use of
“BIRKENSTOCK AND DEVICE” in lawful commerce, among others.
The BLA rejected the petitioner’s application for registration. It ruled that the competing marks of
the parties are confusingly similar since they contained the work “BIRKENSTOCK” and are used
on the same and related goods. It found respondent as the prior user and adopter of
“BIRKENSTOCK” in the Philippines.

IPO Director General reversed BLA’s ruling, and allowed the registration of petitioner’s
application. CA reversed, and reinstated BLA’s ruling.

ISSUE:

Whether or not the subject marks should be allowed registration in the name of petitioner.

HELD:

Yes.

Respondent is deemed to have abandoned the mark when it failed to file the 10th Year DAU for
Registration on or before the lawful period. As a consequence, it was deemed to have abandoned or
withdrawn any right or interest over the mark “BIRKENSTOCK”.
Petitioner has duly established its true and lawful ownership of the mark “BIRKENSTOCK”.
Under Sec. 2 of RA 166, 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.

The registration of a trademark is not a mode of acquiring ownership. If the applicant is not the
owner of the trademark, he has no right to apply for its registration. Registration merely creates a
prima facie presumption of validity of the registration, of the registrant’s ownership of the
trademark, and of the exclusive right to the use thereof. 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.

Here, petitioner was able to establish that it is the owner of the mark “BIRKENSTOCK”. It has
used it in commerce long before respondent was able to register the same here in the Philippines.

Superior Commercial Enterprises, Inc. v. Kunna Enterprises Ltd. and Sports Concept &
Distributor, Inc., G.R. no. 169974, April 20, 2010

FACTS:

On October 1, 1982, KUNNAN appointed SUPERIOR as its exclusive distributor in the

Philippines under a Distributorship Agreement which states that:

“Kunnan intends to acquire ownership of the Kennex trademark registered by Superior

Commercial in the Philippines. Superior Commercial is desirous of being appointed as the sole
distributor of Kunnan products in the Philippines.”
SUPERIOR’s President and General Manager, misled KUNNAN’s officers into believing that
KUNNAN could not acquire trademark rights in the Philippines. KUNNAN decided to assign its
applications to register ‘Pro Kennex’ as a trademark to SUPERIOR, on condition that SUPERIOR
acknowledged that KUNNAN was still the real owner of the mark and agreed to return it to
KUNNAN on request.

On December 3, 1991, upon the termination of its distributorship agreement with SUPERIOR,

KUNNAN appointed SPORTS CONCEPT as its new distributor. Subsequently, KUNNAN also
caused the publication of a Notice and Warning in the Manila Bulletin’s January 29, 1993 issue,
stating that (1) it is the owner of the disputed trademarks; (2) it terminated its Distributorship
Agreement with SUPERIOR; and (3) it appointed SPORTS CONCEPT as its exclusive
distributor.  This notice prompted SUPERIOR to file its Complaint for Infringement of Trademark
and Unfair Competition with Preliminary Injunction against KUNNAN.

Prior to and during the pendency of the infringement and unfair competition case before the RTC,
KUNNAN filed with the Bureau of Patents, Trademarks and Technology Transfer separate
Petitions for the Cancellation of Registration Trademarks well as Opposition to Applications
(Consolidated Petitions for Cancellation) involving the KENNEX and PRO KENNEX
trademarks. In essence, KUNNAN filed the Petition for Cancellation and Opposition on the ground
that SUPERIOR fraudulently registered and appropriated the disputed trademarks; as mere
distributor and not as lawful owner, it obtained the registrations and assignments of the disputed
trademarks in violation of the terms of the Distributorship Agreement and Sections 2-A and 17 of
Republic Act No. 166, as amended. These cases were resolved in favour of Kunnan by the BPTTT
and the Court of Appeals. This decision became final.

Issue: WON Superior, as a distributor, is the true and rightful owner of the trademarks.

Held: No. An exclusive distributor does not acquire any proprietary interest in the principal’s
trademark and cannot register it, unless the owner has assigned the right.

SUPERIOR as a mere distributor and not the owner cannot assert any protection from trademark
infringement as it had no right in the first place to the registration of the disputed trademarks. In
fact, jurisprudence holds that in the absence of any inequitable conduct on the part of the
manufacturer, an exclusive distributor who employs the trademark of the manufacturer does not
acquire proprietary rights of the manufacturer, and a registration of the trademark by the distributor
as such belongs to the manufacturer provided the fiduciary relationship does not terminate before
application for registration is filed. KUNNAN was able to overcome the presumption of ownership
in favor of SUPERIOR; the former sufficiently established the fraudulent registration of the
questioned trademarks by Superior. The KENNEX trademark was fraudulently obtained by
petitioner SUPERIOR. Even before PROKENNEX products were imported by Superior into the
Philippines, the same already enjoyed popularity in various countries and had been distributed
worldwide, particularly among the sports and tennis enthusiasts since 1976. SUPERIOR caused the
registration thereof in the Philippines under its name when it knew fully well that it did not own
nor did it manufacture the PROKENNEX products. SUPERIOR claimed ownership of the subject
marks and failed to disclose in its application with the IPO that it was merely a distributor of
KENNEX and PROKENNEX products in the Philippines.
Trademark infringement

To establish trademark infringement, the following elements must be proven: (1) the validity of
plaintiff’s mark; (2) the plaintiff’s ownership of the mark; and (3) the use of the mark or its
colorable imitation by the alleged infringer results in “likelihood of confusion.

Based on these elements, we find it immediately obvious that the second element – the plaintiff’s
ownership of the mark – was what the Registration Cancellation Case decided with finality.  On
this element depended the validity of the registrations that, on their own, only gave rise to the
presumption of, but was not conclusive on, the issue of ownership.

In no uncertain terms, the appellate court in the Registration Cancellation Case ruled

that SUPERIOR was a mere distributor and could not have been the owner, and was thus an invalid
registrant of the disputed trademarks. 

The right to register a trademark is based on ownership, and therefore only the owner can register
it. In finding that Kunnan owned the marks, the court considered the distributorship agreement and
the so-called assignment agreement in their entirety; it confirmed that Superior had sought to be
Kunnan’s exclusive distributor.

As enunciated in the case of Gabriel vs. Perez, 50 SCRA 406, “a mere distributor of a product
bearing a trademark, even if permitted to use said trademark has no right to and cannot register the
said trademark.

Unfair competition

Unfair competition has been defined as the passing off (or palming off) or attempting to pass off
upon the public of the goods or business of one person as the goods or business of another with the
end and probable effect of deceiving the public.  The essential elements of unfair competition are
(1) confusing similarity in the general appearance of the goods; and (2) intent to deceive the public
and defraud a competitor.

Jurisprudence also formulated the following “true test” of unfair competition:  whether the acts of
the defendant have the intent of deceiving or are calculated to deceive the ordinary buyer making
his purchases under the ordinary conditions of the particular trade to which the controversy relates.
One of the essential requisites in an action to restrain unfair competition is proof of fraud; the intent
to deceive, actual or probable must be shown before the right to recover can exist.

In the present case, no evidence exists showing that KUNNAN ever attempted to pass off the goods
it sold (i.e. sportswear, sporting goods and equipment) as those of SUPERIOR.  In addition, there is
no evidence of bad faith or fraud imputable to KUNNAN in using the disputed trademarks.
Specifically, SUPERIOR failed to adduce any evidence to show that KUNNAN by the above-cited
acts intended to deceive the public as to the identity of the goods sold or of the manufacturer of the
goods sold.  

Zuneca Pharmaceutical v. Natrapharm, Inc., G.R. No. 211850, September 8, 2020

Facts:

The case involves a dispute between the use and ownership of the confusingly similar marks
“ZYNAPS” and “ZYNAPSE”.

Zuneca Pharmaceutical (“Zuneca”) has been engaged in the sale of “ZYNAPS”, an anti-convulsant
used to control all types of seizure disorders like epilepsy as early as 2004. Natrapharm, Inc.
(“Natrapharm”), on the other hand, has also been engaged in the sale of “ZYNAPSE” for the
treatment of cerebrovascular disease or stroke, and is the registrant of the “ZYNAPSE” mark which
was registered with the Intellectual Property Office of the Philippines (“IPO”) on 24 September
2007.

On 29 November 2007, Natrapharm filed a Trademark Infringement case against Zuneca, alleging
that “ZYNAPS” is confusingly similar to its registered trademark “ZYNAPSE”. While Zuneca
argued that as the first entity to use the mark in good faith, it was the rightful owner of the mark
“ZYNAPS”.

Issues:

Whether or not the CA erred in affirming the RTC's ruling that the first-to-file trademark
registrant in good faith defeats the right of the prior user in good faith.

Held: NO.

The Supreme Court held that the language of the Intellectual Property Code of the Philippines (“IP
Code”) clearly provides that ownership of a mark is acquired through registration. Furthermore,
the Supreme Court stated that the intention of the lawmakers was to abandon the rule that
ownership of a mark is acquired through prior use, and that the rule on ownership used in Berris
Agricultural Co., Inc. v. Abyadang (“Berris”) and E. Y. Industrial Sales, Inc. et al. v. Shen Dar
Electricity and Machinery Co., Ltd. (“E. Y Industrial Sales, Inc.”) is inconsistent with the IP Code
regime of acquiring ownership through registration.

Language of the IP Code

Section 122 of the IP Code provides how marks are acquired:

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) (Emphasis and underscoring supplied)

The language of the IP Code as to the acquisition of ownership of a mark provides for a stark
contrast with that of the old Trademark Law, which provided that prior use and non-abandonment
of a mark banned future registration of an identical or confusingly similar mark by a different
proprietor. Such a change effectively connotes that prior use no longer determines acquisition.

While doubts have been expressed by Associate Justices Leonen and Lazaro-Javier over the
supposed abandonment of the requirement of actual use, the Supreme Court clarified that the filing
of the Declaration of Actual Use (“DAU”) is not a prerequisite for the acquisition of ownership of a
mark as it is only necessary to maintain ownership over the registered Trademark. On the other
hand, the prima facie nature of the Certificate of Registration (“COR”) is only meant to recognize
the instances when the COR is no longer reflective of the ownership of the holder thereof, such as,
but not limited to, cases when the first registrant subsequently lost its ownership due to non-use or
abandonment.

Acquisition of Ownership of Trade Name

Ecole De Cuisine Manille (Cordon Bleu of the Philippines), Inc. v. Renaus Cointreau & Cie
and Le Cordon Bleu Int’l B.V., G.R. No. 185830, June 5, 2013

DOCTRINE:

Foreign marks which are not registered are still accorded protection against infringement and/or
unfair competition. 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.

FACTS:

Cointreau, a partnership registered under the laws of France, filed before the DTI a trademark
application for the mark “LE CORDON BLEU & DEVICE.” The application was filed pursuant to
Section 37 of RA No. 166. Petitioner Ecole filed an opposition to the subject application, averring
that it is the owner of the mark “LE CORDON BLEU ECOLE DE CUISINE MANILLE,” which it
has been using since 1948. The petitioner also averred that Cointreau’s use of the subject mark will
actually create confusion, Mistake, and deception to buying public. Cointreau filed its answer
claiming to be the true owner if the subject mark. It averred that Le Cordon Bleu is a culinary
school of worldwide acclaim which was established in Paris, France in 1895. It also has trained
students from more than 80 nationalities, including Ecole’s directress, Ms. Lourdes L. Dayrit.
Thus, Cointreau concluded that Ecole’s claim of being the exclusive owner of the subject mark is a
fraudulent misrepresentation. Bureau of Legal Affairs (BLA) sustained Ecole’s opposition. On
appeal, the IPO Director General reversed and set aside the BLA’s decision, thus granting
Cointreu’s appeal and allowing the registration of the subject mark. The CA affirmed the IPO
Director General’s Decision in toto.

ISSUE:

Whether the CA was correct in upholding the IPO Director General’s ruling that Cointreau is the
true and lawful owner of the subject mark and thus, entitled to have the same registered under
its name.

HELD: Yes.

It is clear that actual use in commerce is also the test of ownership but the mark must not
have been so appropriated by another. Nevertheless, foreign marks which are not registered are
still accorded protection against infringement and/or unfair competition. At this point, it is worthy
to emphasize that the Philippines and France, Cointreau’s country of origin, are both signatories to
the Paris Convention for the Protection of Industrial Property (Paris Convention).

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. It is also clear that at the time Ecole started using the subject
mark, the same was already being used by Cointreau, albeit abroad, of which Ecole’s directress
was fully aware, being an alumna of the latter’s culinary school. Hence, Ecole cannot claim any
tinge of ownership whatsoever over the subject mark as Cointreau is the true and lawful owner
thereof.

Module 3

Tests to Determine Confusing Similarity between Marks

Dominancy Test

Asia Brewery, Inc. v. Court of Appeals, G.R. No. 103543

FACTS:

San Miguel Corporation (SMC) filed a complaint against Asia Brewery Inc. (ABI) for infringement
of trademark and unfair competition on account of the latter's BEER PALE PILSEN or BEER NA
BEER product which has been competing with SMC's SAN MIGUEL PALE PILSEN for a share
of the local beer market.

The trial court dismissed SMC's complaint because ABI "has not committed trademark
infringement or unfair competition against" SMC

On appeal by SMC, the Court of Appeals reversed the decision rendered by the trial court, finding
the defendant Asia Brewery Incorporated GUILTY of infringement of trademark and unfair
competition. ABI then filed a petition for certiorari.

ISSUE: Whether or not ABI infringes SMC’s trademark and as such constitutes unfair
competition?

HELD: NO.

Infringement is determined by a test of dominance. 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. A closer look at the trademark of both companies will show that the
dominant features of each absolutely bear no similarity to each other. SMC’s dominant 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 while ABI’s is
the name “Beer Pale Pilsen” with the word Beer written in large amber letters, larger than any of
the letter found in SMC label.
The word “pale pilsen” on ABI’s trademark does not constitute trademark infringement for it is a
generic word descriptive of the color of a type of beer. No one may appropriate generic or
descriptive words for they belong to the public domain.

The Supreme Court further said that the words "pale pilsen" may not be appropriated by SMC for
its exclusive use even if they are part of its registered trademark. No one may appropriate generic
or descriptive words. They belong to the public domain.

Petitioner ABI has neither infringed SMC's trademark nor committed unfair competition with the
latter's SAN MIGUEL PALE PILSEN product.

McDonald’s Corporation v. L.C. Bigmak Burgers, Inc., G.R. No. 143993

FACTS:

Petitioner McDonald’s Corporation (“McDonald’s”) is a corporation organized under the laws of

Delaware, United States. McDonald’s operates, by itself or through its franchisees, a global chain
of fast-food restaurants. McDonald’s owns a family of marks including the “Big Mac” mark for its
“double-decker hamburger sandwich.” McDonald’s registered this trademark with the United
States Trademark Registry on 16 October 1979. Based on this Home Registration, McDonald’s
applied for the registration of the same mark in the Principal Register of the then Philippine Bureau
of Patents, Trademarks and Technology (“PBPTT”), now the Intellectual Property Office (“IPO”).
Pending approval of its application, McDonald’s introduced its “Big Mac” hamburger sandwiches
in the Philippine market in September 1981. On 18 July 1985, the PBPTT allowed registration of
the “Big Mac” mark in the Principal Register based on its Home Registration in the United States.

Respondent L.C. Big Mak Burger, Inc. (“respondent corporation”) is a domestic corporation which
operates fast-food outlets and snack vans in Metro Manila and nearby provinces. 12 Respondent
corporation’s menu includes hamburger sandwiches and other food items. 13 Respondents Francis
B. Dy, Edna A. Dy, Rene B. Dy, William B. Dy, Jesus Aycardo, Araceli Aycardo, and Grace
Huerto (“private respondents”) are the incorporators, stockholders and directors of respondent
corporation. 14

On 21 October 1988, respondent corporation applied with the PBPTT for the registration of the
“Big Mak” mark for its hamburger sandwiches. McDonald’s opposed respondent corporation’s
application on the ground that “Big Mak” was a colorable imitation of its registered “Big Mac”
mark for the same food products. McDonald’s also informed respondent Francis Dy (“respondent
Dy”), the chairman of the Board of Directors of respondent corporation, of its exclusive right to the
“Big Mac” mark and requested him to desist from using the “Big Mac” mark or any similar mark.

Mcdonald’s then sued L.C. Big Mak Burger Inc. of Trademark Infringement. It argued that it has
used and is known to use the Big Mac trademark for a long time now and also such mark is
protected as Mcdonald’s was the first one to register it.

Big Mak argued the following:

1) Mcdonald’s has no legal capacity to sue, as the Big Mac trade mark has already been previously
registered by Topacio in 1983 and the Isaiyas Group registered the same in the supplemental
register in 1979.

2) There is no trademark infringement it is apparent that the L.C. Big Mak is only a small eatery,
catering mostly to low income customers, while Mcdonald’s is a well-known chain of fast-food
restaurants catering mostly to medium to high income customers

3) The packaging, the logo, and the color theme of Mcdonald’s and Big Mak is very different to
one another, that one will not be confused with the other

ISSUE:

Whether Big Mak committed trademark infringement?

HELD: Yes, there is trade infringement.

To establish trademark infringement, the following elements must be shown:

(1) the validity of plaintiff’s mark;

(2) the plaintiff’s ownership of the mark; and

(3) the use of the mark or its colorable imitation by the alleged infringer results in “likelihood of
confusion.”

Of these, it is the element of likelihood of confusion that is the gravamen of trademark

infringement

In this case, the plaintiff’s mark of the name Big Mac is valid. Mcdonald’s own such mark as it was
registered in the Philippines, and Mcdonalds is widely known for their Big Mac Burger.

The use of Big Mak of the name Big Mak can cause confusion as consumers could believe that
their burger is associated with Mcdonald’s.

DOMINANCY TEST AND HOLISTIC TEST

In determining likelihood of confusion, jurisprudence has developed two tests, the dominancy test
and the holistic test. The dominancy test focuses on the similarity of the prevalent features of the
competing trademarks that might cause confusion. In contrast, the holistic test requires the court to
consider the entirety of the marks as applied to the products, including the labels and packaging, in
determining confusing similarity.

[T]he 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 test of dominancy is now explicitly incorporated into law in Section 155.1 of the Intellectual
Property Code which defines infringement as the “colorable imitation of a registered mark . . . 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 in “Mak” while
a “k” sounds the same as “c” when the word “Mak” is pronounced. Fifth, in Filipino, the letter “k”
replaces “c” in spelling, thus “Caloocan” is spelled “Kalookan.”

In short, aurally the two marks are the same, with the first word of both marks phonetically the
same, and the second word of both marks also phonetically the same. Visually, the two marks have
both two words and six letters, with the first word of both marks having the same letters and the
second word having the same first two letters. In spelling, considering the Filipino language, even
the last letters of both marks are the same.

Clearly, respondents have adopted in “Big Mak” not only the dominant but also almost all the
features of “Big Mac.” Applied to the same food product of hamburgers, the two marks will likely
result in confusion in the public mind.

Societes Des Produits Nestle, S.A. v. Court of Appeals, G.R. No. 112012

Facts:

On January 18, 1984, private respondent CFC Corporation filed with the BPTTT an application for

the registration of the trademark "FLAVOR MASTER" for instant coffee. Petitioner Societes Des
Produits Nestle, S.A., a Swiss company filed an unverified Notice of Opposition, claiming that the
trademark of private respondent’s product is "confusingly similar to its trademarks for coffee and
coffee extracts, to wit: MASTER ROAST and MASTER BLEND."

Nestle claimed that the use, if any, by CFC of the trademark FLAVOR MASTER and its
registration would likely cause confusion in the trade; or deceive purchasers and would falsely
suggest to the purchasing public a connection in the business of Nestle, as the dominant word
present in the three trademarks is "MASTER"; or that the goods of CFC might be mistaken as
having originated from the latter.

In answer to the two oppositions, CFC argued that its trademark, FLAVOR MASTER, is not
confusingly similar with the former’s trademarks, MASTER ROAST and MASTER BLEND,
alleging that, the other words that are used respectively with said word in the three trademarks are
very different from each other – in meaning, spelling, pronunciation, and sound". CFC further
argued that its trademark, FLAVOR MASTER, "is clearly very different from any of Nestle’s
alleged trademarks MASTER ROAST and MASTER BLEND, especially when the marks are
viewed in their entirety, by considering their pictorial representations, color schemes and the letters
of their respective labels
The court of appeals ruled that the general appearances of the labels bearing the respective
trademarks are so distinct from each other that appellees cannot assert that the dominant features, if
any, of its trademarks were used or appropriated in appellant CFC’s
own

Issue: whether the CA properly applied the Totality rule rather than test of dominancy

Held: 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.

It is the observation of this Office that much of the dominance which the word MASTER has
acquired through Opposer’s advertising schemes is carried over when the same is incorporated into
respondent-applicant’s trademark FLAVOR MASTER. Thus, when one looks at the label bearing
the trademark FLAVOR MASTER one’s attention is easily attracted to the word MASTER, rather
than to the dissimilarities that exist. Therefore, the possibility of confusion as to the goods
which bear the competing marks or as to the origins thereof is not farfetched.

McDonald’s Corporation v. McJoy Fast-food Corporation, G.R. No. 166115, February 2,

2007

FACTS:

Macjoy Fast-food Corporation (Macjoy), a corporation selling fried chicken, chicken

barbeque, burgers, fries, spaghetti, palabok, tacos, sandwiches, halo-halo and steaks (fast-food
products) in Cebu City filed with the BPTT-IPO an application for the registration of the trademark
“MACJOY & DEVICE”.

McDonald’s Corporation, a corporation organized under the laws of Delaware, USA opposed
against the respondent’s application claiming that such trademark so resembles its corporate logo
(Golden Arches) design and its McDONALD’s marks such that when used on identical or related
goods, the trademark applied for would confuse or deceive purchasers into believing that the goods
originated from the same source or origin.

Respondent averred that MACJOY has been used for the past many years in good faith and has
spent considerable sums of money for said mark.
The IPO ratiocinated that the predominance of the letter “M” and the prefixes “Mac/Mc” in both
the Macjoy and McDonald’s marks lead to the conclusion that there is confusing similarity
between them x x x. Therefore, Macjoy’s application was denied.

Upon appeal to the CA it favored with MacJoy and against McDonald’s. The Court of Appeals, in
ruling over the case, actually used the holistic test (which is a test commonly used in infringement
cases). The holistic test looks upon the visual comparisons between the two trademarks. The
justifications are the following:

1. The word “MacJoy” is written in round script while the word “McDonald’s is written in single
stroke gothic;

2. The word “MacJoy” comes with the picture of a chicken head with cap and bowtie and wings
sprouting on both sides, while the word “McDonald’s” comes with an arches “M” in gold
colors, and absolutely without any picture of a chicken;

3. The word “MacJoy” is set in deep pink and white color scheme while the word
“McDonald’s” is written in red, yellow, and black color combination;

4. The facade of the respective stores of the parties, are entirely different.

ISSUE: Whether there is a confusing similarity between the McDonald’s marks of the petitioner
and the respondent’s “MACJOY & DEVICE” trademark when it applied to classes 29 ad 30 of the
International Classification of Goods.

RULING: YES.

Jurisprudence developed two tests, the dominancy and holistic test. The Supreme Court ruled that
the proper test to be used is the dominancy test. The dominancy test not only looks at the visual
comparisons between two trademarks but also the aural impressions created by the marks in the
public mind as well as connotative comparisons, giving little weight to factors like prices, quality,
sales outlets and market segments. In the case at bar, the Supreme Court ruled that “McDonald’s”
and “MacJoy” marks are confusingly similar with each other such that an ordinary purchaser can
conclude an association or relation between the marks. To begin with, both marks use the corporate
“M” design logo and the prefixes “Mc” and/or “Mac” as dominant features. The first letter “M” in
both marks puts emphasis on the prefixes “Mc” and/or “Mac” by the similar way in which they are
depicted i.e. in an arch-like, capitalized and stylized manner. For sure, it is the prefix “Mc,” an
abbreviation of “Mac,” which visually and aurally catches the attention of the consuming public.
Verily, the word “MACJOY” attracts attention the same way as did “McDonalds,” “MacFries,”
“McSpaghetti,” “McDo,” “Big Mac” and the rest of the MCDONALD’S marks which all use the
prefixes Mc and/or Mac. Besides and most importantly, both trademarks are used in the sale of
fast-food products.

Further, the owner of MacJoy provided little explanation why in all the available names for a
restaurant he chose the prefix “Mac” to be the dominant feature of the trademark. The prefix “Mac”
and “Macjoy” has no relation or similarity whatsoever to the name Scarlett Yu Carcel, which is the
name of the niece of MacJoy’s president whom he said was the basis of the trademark MacJoy. By
reason of the MacJoy’s implausible and insufficient explanation as to how and why out of the
many choices of words it could have used for its trade-name and/or trademark, it chose the word
“Macjoy,” the only logical conclusion deducible therefrom is that the MacJoy would want to ride
high on the established reputation and goodwill of the McDonald’s marks, which, as applied to its
restaurant business and food products, is undoubtedly beyond question.

Sketchers USA v. Inter Pacific Industrial Trading Corporation, G.R. No. 164321, March 28,
2011

FACTS:

Petitioner engaged the services of a private investigation firm to check if respondents are indeed
engaged in the importation, distribution and sale of unauthorized products bearing counterfeit
or unauthorized trademarks owned by petitioner. An investigator went to respondents’
warehouse and saw different kinds and models of rubber shoes including shoes bearing the “S”
logo. He found that the shoes bearing the “Strong” name with the “S” logo have the same style as
petitioner’s shoes.

Petitioner filed a complaint with the National Bureau of Investigation (NBI) requesting assistance
in stopping the illegal importation, manufacture and sale of counterfeit products bearing the
trademarks it owns and in prosecuting the owners of the establishments engaged therein. NBI
representatives bought 24 pairs of rubber shoes bearing the “Strong” name and the “S” logo. They
then applied for search warrants with the court, which eventually issued the same.

After seizure of their goods, respondents sought to quash the search warrants on the ground that
there is no confusing similarity between the petitioner’s Skechers’ rubber shoes and respondent’s
Strong rubber shoes. The court eventually issued an order quashing the search warrants.

Petitioner’s Claim: Petitioner filed with Regional Trial Court (RTC) an application for the issuance
of search warrants against an outlet and warehouse operated by respondents for infringement of
trademark. In the course of its business, petitioner has registered the trademark “SKECHERS” and
the trademark “S” (within an oval design) with the Intellectual Property Office (IPO).

Respondent’s Claim: Respondents moved to quash the search warrants, arguing that there was no
confusing similarity between petitioner’s “Skechers” rubber shoes and its “Strong” rubber shoes.

ISSUE:

Whether respondent is guilty of trademark infringement.

HELD: Yes.

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.

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
trademark, already constitutes infringement under the Dominancy Test.

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.

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. As can be
readily observed by simply comparing petitioner’s Energy model and respondent’s Strong rubber
shoes, respondent also used the color scheme of blue, white and gray utilized by petitioner. Even
the design and “wavelike” pattern of the midsole and outer sole of respondent’s shoes are very
similar to petitioner’s shoes, if not exact patterns thereof. At the side of the midsole near the heel of
both shoes are two elongated designs in practically the same location. Even the outer soles of both
shoes have the same number of ridges, five at the back and six in front. On the side of respondent’s
shoes, near the upper part, appears the stylized “S,” placed in the exact location as that of the
stylized “S” on petitioner’s shoes. On top of the “tongue” of both shoes appears the stylized “S” in
practically the same location and size. Moreover, at the back of petitioner’s shoes, near the heel
counter, appears “Skechers Sport Trail” written in white lettering. However, on respondent’s shoes
appears “Strong Sport Trail” noticeably written in the same white lettering, font size, direction and
orientation as that of petitioner’s shoes. On top of the heel collar of petitioner’s shoes are two
grayish-white semi-transparent circles. Not surprisingly, respondent’s shoes also have two grayish-
white semi-transparent circles in the exact same location.

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.

Societes Des Produits Nestle, S.A. v. Dy, G.R. No. 172276, August 8, 2010

Facts:

Petitioner Nestle, a Swiss corporation, owns the ‘NAN’ trademark for its line of infant
powdered milk products in the Philippines. Respondent Dy, Jr. on the other hand, owner of 5M
Enterprises, imports and repacks powdered milk for adults bearing the mark ‘NANNY.’ Petitioner
Nestle filed before the trial court an infringement complaint against respondent. The trial court held
that respondent’s trademark is an infringement to petitioner’s mark because it would imply that
respondent’s ‘NANNY’ product came from petitioner. CA reversed and held that the two marks are
not confusingly similar thus respondent cannot be held liable for infringement.

Issue:

Whether or not respondent is liable for trademark infringement.

Ruling: YES.

In accordance with Section 22 of R.A. No. 166, as well as Sections 2, 2-A, 9-A, and 20

thereof, the following constitute the elements of trademark infringement: (a) A trademark actually
used in commerce in the Philippines and registered in the principal register of the Philippine Patent
Office; (b) It is used by another person in connection with the sale, offering for sale, or advertising
of any goods, business or services or in connection with which such use is likely to cause confusion
or mistake or to deceive purchasers or others as to the source or origin of such goods or services, or
identity of such business; or such trademark is reproduced, counterfeited, copied or colorably
imitated by another person and such reproduction, counterfeit, copy or colorable imitation is
applied to labels, signs, prints, packages, wrappers, receptacles or advertisements intended to be
used upon or in connection with such goods, business or services as to likely cause confusion or
mistake or to deceive purchasers; (c) The trademark is used for identical or similar goods; and (d)
Such act is done without the consent of the trademark registrant or assignee.

On the other hand, the elements of infringement under R.A. No. 8293 are as follows: (a) The
trademark being infringed is registered in the Intellectual Property Office; however, in
infringement of trade name, the same need not be registered; (b) The trademark or trade name is
reproduced, counterfeited, copied, or colorably imitated by the infringer; (c) The infringing mark or
trade name is used in connection with the sale, offering for sale, or advertising of any goods,
business or services; or the infringing mark or trade name is applied to labels, signs, prints,
packages, wrappers, receptacles or advertisements intended to be used upon or in connection with
such goods, business or services; (d) The use or application of the infringing mark or trade name is
likely to cause confusion or mistake or to deceive purchasers or others as to the goods or services
themselves or as to the source or origin of such goods or services or the identity of such business;
and (e) It is without the consent of the trademark or trade name owner or the assignee thereof.

Among the elements, the element of likelihood of confusion is the gravamen of trademark
infringement. Applying the dominancy test in the present case, the Court finds that “NANNY” is
confusingly similar to “NAN.” “NAN” is the prevalent feature of Nestle’s line of infant powdered
milk products. It is written in bold letters and used in all products. The line consists of PRE-NAN,
NAN-H.A., NAN-1, and NAN-2. Clearly, “NANNY” contains the prevalent feature “NAN.” The
first three letters of “NANNY” are exactly the same as the letters of “NAN.”
Kolin Electronics Co., Inc. v. Kolin Philippines International, Inc., G.R. No. 228165,
February 9, 2021

FACTS:

KPII, an affiliate of TKC, filed a trademark application for “kolin” mark covering Televisions and
DVD Players. KECI filed an opposition against the application based on the fact that it is the
registered owner of the KOLIN mark and that its registration will cause confusion among
customers. KPII insisted that Televisions and DVD Players are not related to the goods covered by
KECI’s registered mark. The buyers would be confused as of the origin of the products being
offered by KECI and KPII.

ISSUE:

Whether or not KPII should be allowed to register its Kolin mark

HELD: NO

KPII’s trademark application is not registrable because it will cause damage to KECI. The
dominancy test as applied in this case, KPII’s Kolin mark resembles KECI’s KOLIN mark because
the word Kolin is the prevalent feature of both marks. There are no special characteristics to be
shown in the reproduction of the mark in the application; the word itself is the subject of
protection. The fact that KPII’s trademark application possesses special characteristics makes no
difference in terms of appearance, sound, connotation or overall impression because the KOLIN
word itself is the subject of KECI’s registration.

Holistic Test

Emerald Garment Manufacturing Corp. v. CA, G.R. No. 100098

FACTS:

Private respondent H.D. Lee Co., Inc., a foreign corporation, filed with the Bureau of Patents,
Trademarks & Technology Transfer (BPTTT) a Petition for Cancellation of Registration No. SR
5054 for the trademark “STYLISTIC MR. LEE” used on clothing and lingerie issued in the name
of petitioner Emerald Garment Manufacturing Corp., a domestic corporation organized and
existing under Philippine laws.

Petitioner contended that its trademark was entirely and unmistakably different from that of private
respondent and that its certificate of registration was legally and validly granted.

The Director of Patents 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.
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.”

Petitioner appealed to the CA which in turn affirmed the decision of the Director of Patents.

ISSUE:

Whether or not petitioner’s trademark Stylistic Mr. Lee, is confusingly similar with the private
respondent’s trademark Lee or Lee-Rider, Lee-Leens and Lee-Sures.

RULING: NO.

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.

In determining whether colorable imitation exists, jurisprudence has developed two kinds of tests
— the Dominancy Test and the Holistic Test.

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.

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.

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

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.

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.

Bristol Myers Co. v. Director of Patents & United American Pharmaceuticals, Inc., G.R. No.
L-21587, May 19, 1966

Facts:

A petition for registration of the trademark "BIOFERIN" was filed by the respondent United
American Pharmaceuticals, Inc. It covers medicine for simple headaches, neuralgia, colds,
menstrual pain and minor muscular aches.

Petitioner Bristol Myers Co. filed an opposition to the application. Said oppositor is the owner in
the Philippines of the trademark “BUFFERIN" The product covered by "BUFFERIN" also
medicine for simple headaches, neuralgia, colds, menstrual pain and minor muscular aches.

Oppositor's contention was that the registration of the applicant's trademark "BIOFERIN” would
violate its rights and interests in its registered trademark "BUFFERIN" as well as mislead and
confuse the public as to the source and origin of the goods covered by the respective marks, in view
of the allegedly practically the same spelling, pronunciation and letter-type design of the two
trademarks covering goods of the same class.

Issue:
Whether the respondent’s trademark would cause confusion or mistakes in the mind of the public
or deceive purchasers?

Ruling: No, the words "BIOFERIN" and "BUFFERIN" have the same suffix and similar sounding
prefixes; they appear in their respective labels with strikingly different backgrounds and
surroundings, as to color, size and design.

The product of the applicant is expressly stated as dispensable only upon doctor's prescription,
while that of oppositor does not require the same. The chances of being confused into purchasing
one for the other are therefore all the more rendered negligible.

Doctrine:

The test is not simply to take their words and compare the spelling and pronunciation of said
words. Rather, it is to consider the two marks in their entirety, as they appear in the respective
labels, in relation to the goods to which they are attached.

Victorio Diaz v. People, G.R. No. 180677, February 18, 2013

FACTS:

On February 10, 2000, the Department of Justice filed two informations in the RTC of Las Piñas
City, charging Victorio P. Diaz with violation of Section 155, in relation to Section 170, of
Republic Act No. 8293, also known as the Intellectual Property Code of the Philippines.

On or about August 28, 1998, and on dates prior thereto, in Las Piñas City, the above-named
accused, with criminal intent to defraud Levi's Strauss (Phil.), Inc. (LEVI'S), knowingly and
intentionally engaged in commerce by reproducing, counterfeiting, copying and colorably
imitating Levi's registered trademarks or dominant features thereof such as the ARCUATE
DESIGN, TWO HORSE BRAND, TWO HORSE PATCH, TWO HORSE LABEL WITH
PATTERNED ARCUATE DESIGN, TAB AND COMPOSITE ARCUATE/TAB/TWO HORSE
PATCH, and in connection thereto, sold, offered for sale, manufactured, distributed counterfeit
patches and jeans, including other preparatory steps necessary to carry out the sale of
said patches and jeans, which likely caused confusion, mistake, and/or deceived the general
consuming public, without the consent, permit or authority of the registered owner, LEVI'S,
thus depriving and defrauding the latter of its right to the exclusive use of its trademarks and
legitimate trade, to the damage and prejudice of LEVI'S.

Levi Strauss and Company (Levi's), a foreign corporation based in the State of Delaware, United
States of America, had been engaged in the apparel business. It is the owner of trademarks and
designs of Levi's jeans like LEVI'S 501, the arcuate design, the two-horse brand, the two-horse
patch, the two- horse patch with pattern arcuate, and the composite tab arcuate.

LEVI'S 501 have the following registered trademarks, to wit:

1. The leather patch showing two horses pulling a pair of pants;

2. The arcuate pattern with the inscription "LEVI STRAUSS & CO;"
 3. The arcuate design that refers to "the two parallel stitching curving downward that are
being sewn on both back pockets of a Levi's Jeans;" and

4. The tab or piece of cloth located on the structural seam of the right back pocket, upper left
side. All these trademarks were registered in the Philippine Patent Office in the 1970's,
1980's and early part of 1990's.

Levi Strauss Philippines, Inc. (Levi's Philippines) is a licensee of Levi's. After receiving
information that Diaz was selling counterfeit LEVI'S 501 jeans in his tailoring shops in Almanza
and Talon, Las Piñas City, Levi's Philippines hired a private investigation group to verify the
information. Surveillance and the purchase of jeans from the tailoring shops of Diaz established
that the jeans bought from the tailoring shops of Diaz were counterfeit or imitations of LEVI'S 501.
Levi's Philippines then sought the assistance of the National Bureau of Investigation (NBI)

for purposes of applying for a search warrant against Diaz to be served at his tailoring shops. The
search warrants were issued in due course. Armed with the search warrants, NBI agents searched
the tailoring shops of Diaz and seized several fake LEVI'S 501 jeans from them. Levi's
Philippines claimed that it did not authorize the making and selling of the seized jeans; that each

of the jeans were mere imitations of genuine LEVI'S 501 jeans.

Diaz admitted being the owner of the shops searched, but he denied any criminal liability. Diaz
stated that he did not manufacture Levi's jeans, and that he used the label "LS Jeans Tailoring" in
the jeans that he made and sold; that the label "LS Jeans Tailoring" was registered with the
Intellectual Property Office; that his shops received clothes for sewing or repair; that his shops
offered made-to- order jeans, whose styles or designs were done in accordance with instructions of
the customers; that since the time his shops began operating in 1992, he had received no notice or
warning regarding his operations; that the jeans he produced were easily recognizable because the
label "LS Jeans Tailoring," and the names of the customers were placed inside the pockets, and
each of the jeans had an "LSJT" red tab; that "LS" stood for "Latest Style;" and that the leather
patch on his jeans had two buffaloes, not two horses

The Regional Trial Court found Diaz guilty beyond reasonable doubt of trademark infringement,
and the Court of Appeals dismissed the appeal. Hence, this petition.

ISSUES:

Whether Diaz is guilty of infringing the trademark of LEVI’S 501 jeans.

RULING: NO. Diaz is acquitted.

The elements of the offense of trademark infringement under the Intellectual Property Code are,
therefore, the following:

1. The trademark being infringed is registered in the Intellectual Property Office;

2. The trademark is reproduced, counterfeited, copied, or colorably imitated by the
infringer;

3. The infringing mark is used in connection with the sale, offering for sale, or advertising of any
goods, business or services; or the infringing mark is applied to labels, signs, prints, packages,
wrappers, receptacles or advertisements intended to be used upon or in connection with such
goods, business or services;

4. The use or application of the infringing mark is likely to cause confusion or mistake or to
deceive purchasers or others as to the goods or services themselves or as to the source or origin
of such goods or services or the identity of such business; and

5. The use or application of the infringing mark is without the consent of the trademark
owner or the assignee thereof.

As can be seen, the likelihood of confusion is the gravamen of the offense of trademark
infringement. There are two tests to determine likelihood of confusion, namely: the dominancy test,
and the holistic test. The contrasting concept of these tests was explained in Societes Des Produits
Nestle, S.A. v. Dy, Jr., thus:

The dominancy test focuses on the similarity of the main, prevalent or essential features of the
competing trademarks that might cause confusion. Infringement takes place when the competing
trademark contains the essential features of another. Imitation or an effort to imitate is unnecessary.
The question is whether the use of the marks is likely to cause confusion or deceive purchasers.

The holistic test considers the entirety of the marks, including labels and packaging, in
determining confusing similarity. The focus is not only on the predominant words but also on
the other features appearing on the labels.

The case of Emerald Garment Manufacturing Corporation v. Court of Appeals, which

involved an alleged trademark infringement of jeans products, is worth referring to. There, H.D.
Lee Co., Inc. (H.D. Lee), a corporation based in the United States of America, claimed that
Emerald Garment's trademark of "STYLISTIC MR. LEE" that it used on its jeans products was
confusingly similar to the "LEE" trademark that H.D. Lee used on its own jeans products.
Applying the holistic test, the Court ruled that there was no infringement.

The holistic test is applicable here considering that the herein criminal cases also involved
trademark infringement in relation to jeans products. Accordingly, the jeans trademarks of Levi's
Philippines and Diaz must be considered as a whole in determining the likelihood of confusion
between them. The maong pants or jeans made and sold by Levi's Philippines, which included
LEVI'S 501, were very popular in the Philippines. The consuming public knew that the original
LEVI'S 501 jeans were under a foreign brand and quite expensive. Such jeans could be purchased
only in malls or boutiques as ready- to-wear items, and were not available in tailoring shops like
those of Diaz's as well as not acquired on a "made-to-order" basis. Under the circumstances, the
consuming public could easily discern if the jeans were original or fake LEVI'S 501, or were
manufactured by other brands of jeans. Confusion and deception were remote.

Diaz used the trademark "LS JEANS TAILORING" for the jeans he produced and sold in his
tailoring shops. His trademark was visually and aurally different from the trademark "LEVI
STRAUSS & CO" appearing on the patch of original jeans under the trademark LEVI'S 501. The
word "LS" could not be confused as a derivative from "LEVI STRAUSS" by virtue of the "LS"
being connected to the word "TAILORING", thereby openly suggesting that the jeans bearing the
trademark "LS JEANS TAILORING" came or were bought from the tailoring shops of Diaz, not
from the malls or boutiques selling original LEVI'S 501 jeans to the consuming public.

Philip Morris, Inc. v. Fortune Tobacco Corporation, G.R. No. 158589, June 27, 2006

Facts:

Petitioners are foreign corporations organized under US laws not doing business in the Philippines
and registered owners of symbols ‘MARK VII,’ ‘MARK TEN,’ and ‘LARK’ used in their cigarette
products. Petitioners moved to enjoin respondent Fortune Tobacco from manufacturing and selling
cigarettes bearing the symbol ‘MARK’ asserting that it is identical or confusingly similar with their
trademarks. Petitioners relied on Section 21-A of the Trademark Law to bring their suit and the
Paris Convention to protect their trademarks.

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:

The court denied the prayer for injunction stating that since petitioners are not doing business in the
Philippines, respondent’s cigarettes would not cause irreparable damage to petitioner. CA granted
the injunction but on a subsequent motion, dissolved the writ.

Issues:

1. Whether or not petitioner’s mark may be afforded protection under said laws;

2. Whether or not petitioner may be granted injunctive relief.

Ruling:
(1) NO. 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. 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.

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.

(2) NO. More telling are the allegations of petitioners in their complaint as well as in the very
petition filed with this Court 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. 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. 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. 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.

Del Monte Corporation and Philippine Packing Corporation v. Court of Appeals, G.R. No. L-
78325, January 25, 1990

FACTS: 

Petitioner Del Monte Corporation (Del Monte), through its local distributor and manufacturer,
PhilPack filed an infringement of copyright complaint against respondent Sunshine Sauce
Manufacturing Industries (SSMI), also a maker of catsup and other kitchen sauces. In its complaint,
Del Monte alleged that SSMI are using bottles and logos identical to the petitioner, to which is
deceiving and misleading to the public.

In its answer, Sunshine alleged that it had ceased to use the Del Monte bottle and that its logo was
substantially different from the Del Monte logo and would not confuse the buying public to the
detriment of the petitioners.

The Regional Trial Court of Makati dismissed the complaint. It held that there were substantial
differences between the logos or trademarks of the parties nor on the continued use of  Del Monte
bottles. The decision was affirmed in toto by the Court of Appeals.

ISSUE: Whether or not SSMI committed infringement against Del Monte in the use of its logos
and bottles.

HELD: Yes.

In determining whether two trademarks are confusingly similar, the two marks in their entirety as
they appear in the respective labels must be considered in relation to the goods to which they are
attached; the discerning eye of the observer must focus not only on the precognizant words but also
on the other features appearing on both labels. It has been correctly held that side-by-side
comparison is not the final test of similarity. In determining whether a trademark has been
infringed, we must consider the mark as a whole and not as dissected.

The Court is agreed that are indeed distinctions, but similarities holds a greater weight in this case.
The Sunshine label is a colorable imitation of the Del Monte trademark. What is undeniable is the
fact that when a manufacturer prepares to package his product, he has before him a boundless
choice of words, phrases, colors and symbols sufficient to distinguish his product from the others.
Sunshine chose, without a reasonable explanation, to use the same colors and letters as those used
by Del Monte though the field of its selection was so broad, the inevitable conclusion is that it was
done deliberately to deceive.

With regard to the bottle use, Sunshine despite the many choices available to it and
notwithstanding that the caution "Del Monte Corporation, Not to be refilled" was embossed on the
bottle, still opted to use the petitioners' bottle to market a product which Philpack also produces.
This clearly shows the private respondent's bad faith and its intention to capitalize on the latter's
reputation and goodwill and pass off its own product as that of Del Monte.

Module 4

Well-Known Marks

In-N-Out Burger, Inc. v. Sehwani, Incorporated and/or Benita’s Frites, Inc., G.R. No. 179127,
December 24, 2008

Facts:
Petitioner IN-N-OUT BURGER, INC., is a business entity incorporated under the laws of
California. It is a signatory to the Convention of Paris on Protection of Industrial Property and the
TRIPS Agreement. It is engaged mainly in the restaurant business, but it has never engaged in
business in the Philippines.

Respondents Sehwani, Incorporated and Benita Frites, Inc. are corporations organized in the
Philippines. Sometime in 1991, Sehwani filed with the BPTTT an application for the registration of
the mark “IN N OUT (the inside of the letter “O” formed like a star). Its application was approved
and a certificate of registration was issued in its name on 1993. In 2000, Sehwani, Incorporated and
Benita Frites, Inc. entered into a Licensing Agreement, wherein the former entitled the latter to use
its registered mark, “IN N OUT.”

Sometime in 1997, In-N-Out Burger filed trademark and service mark applications with the Bureau
of Trademarks for the “IN-N-OUT” and “IN-N-OUT Burger & Arrow Design. In 2000, In-N-Out
Burger found out that Sehwani, Incorporated had already obtained Trademark Registration for the
mark “IN N OUT (the inside of the letter “O” formed like a star).” Also in 2000, In-N-Out Burger
sent a demand letter directing Sehwani, Inc. to cease and desist from claiming ownership of the
mark “IN-N-OUT” and to voluntarily cancel its trademark registration. Sehwani Inc. did not accede
to In-N-Out Burger’s demand but it expressed its willingness to surrender its registration for a
consideration.

In 2001 In-N-Out Burger filed before the Bureau of Legal Affairs an administrative complaint
against the Sehwani, Inc. and Benita Frites, Inc. for unfair competition and cancellation of
trademark registration.

Issues:

 Whether or not the Intellectual Property Office (an administrative body) have jurisdiction of
cases involving provisions of the IPC (e.g. unfair competition).[1]

 Whether or not there was unfair competition.

Held:

FIRST ISSUE: Yes, the IPO (an administrative body) has jurisdiction in cases involving
provisions of the IPC (e.g. unfair competition) due to the following reasons:

 Section 10 of the Intellectual Property Code specifically identifies the functions of the
Bureau of Legal Affairs, thus:

Section 10. The Bureau of Legal Affairs.“The Bureau of Legal Affairs shall have the following
functions:

10.1 Hear and decide opposition to the application for registration of marks; cancellation of

trademarks; subject to the provisions of Section 64, cancellation of patents and utility models, and
industrial designs; and petitions for compulsory licensing of patents;
10.2 (a) Exercise original jurisdiction in administrative complaints for violations of laws
involving intellectual property rights; Provided, That its jurisdiction is limited to complaints
where the total damages claimed are not less than Two hundred thousand pesos
(P200,000): Provided, futher, That availment of the provisional remedies may be granted in
accordance with the Rules of Court. Xxx

Xxx

(vi) The cancellation of any permit, license, authority, or registration which may have been
granted by the Office, or the suspension of the validity thereof for such period of time as the
Director of Legal Affairs may deem reasonable which shall not exceed one (1) year;

Xxx

(viii) The assessment of damages;

Unquestionably, petitioner’s complaint, which seeks the cancellation of the disputed mark in
the name of respondent Sehwani, Incorporated, and damages for violation of petitioner’s
intellectual property rights, falls within the jurisdiction of the IPO Director of Legal Affairs.

 While Section 163 thereof vests in civil courts jurisdiction over cases of unfair
competition, nothing in the said section states that the regular courts have sole
jurisdiction over unfair competition cases, to the exclusion of administrative bodies.

 Sections 160 and 170, which are also found under Part III of the Intellectual Property
Code, recognize the concurrent jurisdiction of civil courts and the IPO over unfair
competition cases.

These two provisions read:

Section 160. Right of Foreign Corporation to Sue in Trademark or Service Mark Enforcement

Action. Any foreign national or juridical person who meets the requirements of Section 3 of this
Act and does not engage in business in the Philippines may bring a civil or administrative
action hereunder for opposition, cancellation, infringement, unfair competition, or false
designation of origin and false description, whether or not it is licensed to do business in the
Philippines under existing laws.

Section 170. Penalties. Independent of the civil and administrative sanctions imposed by law, a

criminal penalty of imprisonment from two (2) years to five (5) years and a fine ranging from Fifty
thousand pesos (P50,000) to Two hundred thousand pesos (P200,000), shall be imposed on any
person who is found guilty of committing any of the acts mentioned in Section 155, Section168,
and Subsection169.1.

Based on the foregoing discussion, the IPO Director of Legal Affairs had jurisdiction to
decide the petitioner’s administrative case against respondents and the IPO Director General
had exclusive jurisdiction over the appeal of the judgment of the IPO Director of Legal
Affairs.

SECOND ISSUE: Yes. The evidence on record shows that Sehwani Inc. and Benita Frites were
not using their registered trademark but that of In-n-Out Burger. Sehwani and Benita Frites are also
giving their products the general appearance that would likely influence the purchasers to believe
that their products are that of In-N-Out Burger. The intention to deceive may be inferred from the
similarity of the goods as packed and offered for sale, and, thus, an action will lie to restrain unfair
competition. The respondents’ fraudulent intention to deceive purchasers is also apparent in their
use of the In-N-Out Burger in business signages.

The essential elements of an action for unfair competition are (1) confusing similarity in the
general appearance of the goods and (2) intent to deceive the public and defraud a competitor. The
confusing similarity may or may not result from similarity in the marks, but may result from other
external factors in the packaging or presentation of the goods. The intent to deceive and defraud
may be inferred from the similarity of the appearance of the goods as offered for sale to the public.
Actual fraudulent intent need not be shown.

Fredco Manufacturing Corporation v. President and Fellows of Harvard College, G.R. No.
185917, June 1, 2011

Facts:

Petitioner Fredco Manufacturing filed a petition to cancel the registration of respondent’s mark
‘Harvard Veritas Shield Symbol’ used in products such as bags and t-shirts. Fredco alleges that the
mark ‘Harvard’ was first used and registered by New York Garments, a domestic corporation and
its predecessor-in-interest, used in its clothing articles. Respondent Harvard University on the other
hand, alleges that it is the lawful owner of the name and mark in numerous countries worldwide
including in the Philippines which was used in commerce as early as 1872. Respondent further
contend that it never authorized any person to use its name or mark in connection with any goods
in the Philippines. The IPO Bureau of Legal Affairs cancelled respondent’s registration of the mark
but only over the goods which are confusingly similar with that of petitioner. IPO reversed the
decision. CA affirmed.

Issue:

Whether or not respondent’s trade name is infringed.

Ruling: YES.

Fredco’s use of the mark “Harvard,” coupled with its claimed origin in Cambridge, Massachusetts,
obviously suggests a false connection with Harvard University. On this ground alone, Fredco’s
registration of the mark “Harvard” should have been disallowed. Indisputably, Fredco does not
have any affiliation or connection with Harvard University, or even with Cambridge,
Massachusetts. Fredco or its predecessor New York Garments was not established in 1936, or in
the U.S.A. as indicated by Fredco in its oblong logo.
Under Philippine law, a trade name of a national of a State that is a party to the Paris Convention,
whether or not the trade name forms part of a trademark, is protected “without the obligation of
filing or registration.” “Harvard” is the trade name of the world famous Harvard University, and it
is also a trademark of Harvard University. Under Article 8 of the Paris Convention, as well as
Section 37 of R.A. No. 166, Harvard University is entitled to protection in the Philippines of its
trade name “Harvard” even without registration of such trade name in the Philippines. This means
that no educational entity in the Philippines can use the trade name “Harvard” without the consent
of Harvard University. Likewise, no entity in the Philippines can claim, expressly or impliedly
through the use of the name and mark “Harvard,” that its products or services are authorized,
approved, or licensed by, or sourced from, Harvard University without the latter’s consent.

Rights Conferred by Registration

Taiwan Kolin Corp. v. Kolin Electronics, Co., G.R. no. 209843, March 25, 2015

Facts: 

On February 29, 1996, Taiwan Kolin filed with the Intellectual Property Office (IPO), docketed as
Application No. 4-1996-106310, for the use of  “KOLIN” on a combination of goods, including
colored televisions, refrigerators, window-type and split-type air conditioners, electric fans and
water dispensers. Application No. 4-1996-106310 would eventually be considered abandoned for
Taiwan Kolin’s failure to respond to IPO’s Paper No. 5 requiring it to elect one class of good for its
coverage. However, the same application was subsequently revived through Application Serial No.
4-2002-011002, with petitioner electing Class 9 as the subject of its application, particularly:
television sets, cassette recorder, VCD Amplifiers, camcorders and other audio/video electronic
equipment, flat iron, vacuum cleaners, cordless handsets, videophones, facsimile machines,
teleprinters, cellular phones and automatic goods vending machine.

On July 13, 2006, respondent Kolin Electronics Co., Inc. (Kolin Electronics) opposed petitioner’s
revived application arguing that the mark Taiwan Kolin seeks to register is identical, if not
confusingly similar, with its “KOLIN” mark registered on November 23, 2003, covering the
following products under Class 9 of the NCL: automatic voltage regulator, converter, recharger,
stereo booster, AC-DC regulated power supply, step-down transformer, and PA amplified AC-
DC.5cralawred

Issue:

Whether or not petitioner is entitled to its trademark registration of “KOLIN” over its specific
goods of television sets and DVD players.

Ruling: 

The Supreme Court held that he petitioner’s trademark registration not only covers unrelated good,
but is also incapable of deceiving the ordinary intelligent buyer. The ordinary purchaser must be
thought of as having, and credited with, at least a modicum of intelligence to be able to see the
differences between the two trademarks in question.
On the arguments that both their goods belong to Class 9 of the NCL, the Supreme Court ruled that
identical marks may be registered for products from the same classification.  The mere uniformity
in categorization, by itself, does not automatically preclude the registration of what appears to be
an identical mark, if that be the case.

Moreover, the Supreme Court stated that the products covered by petitioner’s application and
respondent’s registration are unrelated.  It agreed with the petitioner on the following:

 Taiwan Kolin’s goods are classified as home appliances as opposed to Kolin Electronics’
goods which are power supply and audio equipment
accessories;ChanRoblesVirtualawlibrary

 Taiwan Kolin’s television sets and DVD players perform distinct function and purpose
from Kolin Electronics’ power supply and audio equipment; and

 Taiwan Kolin sells and distributes its various home appliance products on wholesale and to
accredited dealers, whereas Kolin Electronics’ goods are sold and flow through electrical
and hardware stores.

Mighty Corporation v. E & J. Gallo Winery, G.R. No. 154342, July 14, 2004

FACTS:

On March 12, 1993, E. & J. GALLO WINERY and THE ANDRESONS GROUP, INC
(respondents) sued MIGHTY CORPORATION and LA CAMPANA FABRICA DE TABACO,
INC. (petitioners) in the RTC-Makati for trademark and trade name infringement and unfair
competition, with a prayer for damages and preliminary injunction.

They claimed that petitioners adopted the Gallo trademark to ride on Gallo Winery’s and Gallo and
Ernest & Julio Gallo trademark’s established reputation and popularity, thus causing confusion,
deception and mistake on the part of the purchasing public who had always associated Gallo and
Ernest and Julio & Gallo trademarks with Gallo Winery’s wines.

In their answer, petitioners alleged, among other affirmative defenses that: petitioners Gallo
cigarettes and Gallo Winery’s wine were totally unrelated products. To wit:

1. Gallo Winery’s GALLO trademark registration certificates covered wines only, and not
cigarettes;

2. GALLO cigarettes and GALLO wines were sold through different channels of trade;

3. the target  market of Gallo Winery’s wines was the middle or high-income bracket while
Gallo cigarette buyers were farmers, fishermen, laborers and other low-income workers;

4. that the dominant feature of the Gallo cigarette was the rooster device with the
manufacturer’s name clearly indicated as MIGHTY CORPORATION, while in the case of
Gallo Winery’s wines, it was the full names of the founders-owners ERNEST & JULIO
GALLO or just their surname GALLO;
The Makati RTC denied, for lack of merit, respondent’s prayer for the issuance of a writ of
preliminary injunction. CA likewise dismissed respondent’s petition for review on certiorari.

After the trial on the merits, however, the Makati RTC held petitioners liable for committing
trademark infringement and unfair competition with respect to the GALLO trademark.

On appeal, the CA affirmed the Makati RTC’s decision and subsequently denied petitioner’s
motion for reconsideration.

ISSUE/S: 

Whether GALLO cigarettes and GALLO wines were identical, similar or related goods for the
reason alone that they were purportedly forms of vice.

RULING: NO.

Wines and cigarettes are not identical, similar, competing or related goods.

In resolving whether goods are related, several factors come into play:

· The business (and its location) to which the goods belong;

· The class of product to which the good belong;

· The product’s quality, quantity, or size, including the nature of the package, wrapper or
container;

· The nature and cost of the articles;

· The descriptive properties, physical attributes or essential characteristics with

reference to their form, composition, texture or quality;

· The purpose of the goods;

· Whether the article is bought for immediate consumption, that is, day-to-day
household items;

· The field of manufacture;

· The conditions under which the article is usually purchased; and

· The articles of the trade through which the goods flow, how they are distributed,
marketed, displayed and sold.

The test of fraudulent simulation is to the likelihood of the deception of some persons in some
measure acquainted with an established design and desirous of purchasing the commodity with
which that design has been associated. The simulation, in order to be objectionable, must be as
appears likely to mislead the ordinary intelligent buyer who has a need to supply and is familiar
with the article that he seeks to purchase. The petitioners are not liable for trademark infringement,
unfair competition or damages.
 Module 5

Limitations to Actions for Infringement

Shangri-La International Hotel Management, Ltd. v. Developers Group of

Companies, Inc., G.R. No. 159938, March 31, 2006

Facts:

Respondent DGCI applied for and was granted registration of the ‘Shangri-La’ mark
and ‘S’ logo in its restaurant business. Petitioner Shangri-La, chain of hotels and
establishments owned by the Kuok family worldwide, moved to cancel the registration
of the mark on the ground that it was illegally and fraudulently obtained and
appropriated by respondents. Petitioner also moved to register the mark and logo in its own
name. Later, respondent DGCI filed before the trial court a complaint for infringement
against petitioner alleging that DGCI had been the prior exclusive user and the registered
owner in the Philippines of said mark and logo. Petitioner Shangri-La argued that respondent
had no right to apply for the registration because it did not have prior actual commercial use
thereof. The trial court found for respondent. CA affirmed.

Issue:

Whether or not respondent’s prior use of the mark is a requirement for its registration.

Ruling: YES.

While the present law on trademarks has dispensed with the requirement of prior actual use at
the time of registration, the law in force at the time of registration must be applied. Under
the provisions of the former trademark law, R.A. No. 166, as amended, 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. Trademark is a creation of use and therefore actual use is a
pre-requisite to exclusive ownership and its registration with the Philippine Patent
Office is a mere administrative confirmation of the existence of such right.

While the petitioners may not have qualified under 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.
Prosource International, Inc. v. Horphag Research Management SA, G.R. No. 180073,
November 25, 2009

FACTS:

Respondent is a corporation and owner of trademark PYCNOGENOL, a food.

Respondent later discovered that petitioner was also distributing a similar food
supplement using the mark PCO-GENOLS since 1996. This prompted respondent to
demand that petitioner cease and desist from using the aforesaid mark.

Respondent filed a Complaint for Infringement of Trademark with Prayer for

Preliminary Injunction against petitioner, in using the name PCO-GENOLS for being
confusingly similar. Petitioner appealed otherwise.

The RTC decided in favor of respondent. It observed that PYCNOGENOL and PCO-
GENOLS have the same suffix "GENOL" which appears to be merely descriptive and thus
open for trademark registration by combining it with other words and concluded that the
marks, when read, sound similar, and thus confusingly similar especially since they both refer
to food supplements.

On appeal to the CA, petitioner failed to obtain a favorable decision. The appellate court
explained that under the Dominancy or the Holistic Test, PCO-GENOLS is deceptively
similar to PYCNOGENOL.

ISSUE:

Whether the names are  confusingly similar.

RULING: Yes. There is confusing similarity and the petition is denied. Jurisprudence
developed two tests to prove such.

The Dominancy Test focuses on the similarity of the prevalent features of the competing
trademarks that might cause confusion and deception, thus constituting infringement. If the
competing trademark contains the main, essential and dominant features of another, and
confusion or deception is likely to result, infringement takes place. Duplication or imitation is
not necessary; nor is it necessary that the infringing label should suggest an effort to imitate.
The question is whether the use of the marks involved is likely to cause confusion or mistake
in the mind of the public or to deceive purchasers. 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.

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. Not only
on the predominant words should be the focus but also on the other features appearing on
both labels in order that the observer may draw his conclusion whether one is confusingly
similar to the other.

SC applied the Dominancy Test. Both the words have the same suffix "GENOL" which
on evidence, appears to be merely descriptive and furnish no indication of the origin of
the article and hence, open for trademark registration by the plaintiff through
combination with another word or phrase. When the two words are pronounced, the
sound effects are confusingly similar not to mention that they are both described by
their manufacturers as a food supplement and thus, identified as such by their public
consumers. And although there were dissimilarities in the trademark due to the type of
letters used as well as the size, color and design employed on their individual
packages/bottles, still the close relationship of the competing products’ name in sounds
as they were pronounced, clearly indicates that purchasers could be misled into
believing that they are the same and/or originates from a common source and
manufacturer.

Coffee Partners, Inc. v. San Francisco Coffee & Roastery, Inc., G.R. No. 169504, March
3, 2010

Facts:

Petitioner Coffee Partners entered into a franchise agreement with Coffee Partners Ltd.
to operate coffee shops in the country using the trademark ‘San Francisco Coffee.’
Respondent on the other hand, is a local corporation engaged in the wholesale and retail
sale of coffee and uses the business name ‘San Francisco Coffee & Roastery’ registered
with the DTI. Later, respondent filed an infringement and/or unfair competition
complaint against petitioner alleging that the latter was about to open a coffee shop
under the name ‘San Francisco Coffee’ causing confusion in the minds of the public as it
bore a similar name and is engaged also in selling of coffee. Petitioner contended no
infringement would arise because respondent’s tradename was not registered.

Issue:

Whether or not petitioner’s trademark would infringe respondent’s tradename.

Ruling: YES.

In Prosource International, Inc. v. Horphag Research Management SA, this Court laid down
what constitutes infringement of an unregistered trade name, thus:

(1) The trademark being infringed is registered in the Intellectual Property Office; however,
in infringement of trade name, the same need not be registered;

(2) The trademark or trade name is reproduced, counterfeited, copied, or colorably

imitated by the infringer;
(3) The infringing mark or trade name is used in connection with the sale, offering for sale,
or advertising of any goods, business or services; or the infringing mark or trade name
is applied to labels, signs, prints, packages, wrappers, receptacles, or advertisements
intended to be used upon or in connection with such goods, business, or services;

(4) The use or application of the infringing mark or trade name is likely to cause confusion
or mistake or to deceive purchasers or others as to the goods or services themselves or as to
the source or origin of such goods or services or the identity of such business; and

(5) It is without the consent of the trademark or trade name owner or the assignee
thereof.

RA 8293, which took effect on 1 January 1998, has dispensed with the registration
requirement. Section 165.2 of RA 8293 categorically states that trade names shall be
protected, even prior to or without registration with the IPO, against any unlawful act
including any subsequent use of the trade name by a third party, whether as a trade name or a
trademark likely to mislead the public.

It is the likelihood of confusion that is the gravamen of infringement. Applying the

dominancy test or the holistic test, petitioner’s “SAN FRANCISCO COFFEE” trademark
is a clear infringement of respondent’s “SAN FRANCISCO COFFEE & ROASTERY,
INC.” trade name. The descriptive words “SAN FRANCISCO COFFEE” are precisely
the dominant features of respondent’s trade name. Petitioner and respondent are
engaged in the same business of selling coffee, whether wholesale or retail. The
likelihood of confusion is higher in cases where the business of one corporation is the
same or substantially the same as that of another corporation. In this case, the consuming
public will likely be confused as to the source of the coffee being sold at petitioner’s coffee
shops.

Ong v. People, G.R. no. 169440, November 23, 2011

FACTS:

On September 2003, the Regional Trial Court of Manila convicted Gemma Ong for
Infringement under Sec. 155 in relation to Sec. 170 of Republic Act. No. 8293 or the
Intellectual Property Code. This decision was assailed based on facts established that
Gemma Ong was engaged in the distribution, sale and offering for sale of counterfeit
Marlboro cigarettes which caused confusion and deception to public and without permit
or authority from the Telengtan Brothers and Sons Inc., the exclusive manufacturer of
Malboro cigarette in the Philippines and from the Philip Morris Products, Inc. (PMPI)
which is the registered owner and proprietor of the MARLBORO trademark. The
decision of the RTC Manila was affirmed by the Court of Appeals and hence this appeal by
certiorari by Gemma Ong praying that the decision of RTC and CA to be set aside and
reverse.

ISSUE:
Whether or not Gemma Ong, setting aside the issue of alleged mistaken identity, is guilty
beyond reasonable doubt of Infringement under the Intellectual Property Code.

RULING: YES.

The Supreme Court AFFIRMED the decision of Court of Appeals. In McDonald’s

Corporation and McGeorge Food Industries, Inc. v. L.C. Big Mak Burger, Inc., Supreme
Court held: To establish trademark infringement, the following elements must be shown: (1)
the validity of plaintiff’s mark; (2) the plaintiff’s ownership of the mark; and (3) the use
of the mark or its colorable imitation by the alleged infringer results in "likelihood of
confusion." Of these, it is the element of likelihood of confusion that is the gravamen of
trademark infringement. A mark is valid if it is distinctive and not barred from
registration. Once registered, not only the mark’s validity, but also the registrant’s
ownership of the mark is prima facie presumed. Anent the element of confusion, both the
RTC and the Court of Appeals have correctly held that the counterfeit cigarettes seized
from Gemma’s possession were intended to confuse and deceive the public as to the
origin of the cigarettes intended to be sold, as they not only bore PMPI’s mark, but they
were also packaged almost exactly as PMPI’s products. The prosecution was able to
establish that the trademark "Marlboro" was not only valid for being neither generic
nor descriptive, it was also exclusively owned by PMPI, as evidenced by the certificates
of registration issued by the Intellectual Property Office of the Department of Trade
and Industry.

Republic Gas Corporation v. Petron Corporation, G.R. No. 194062, June 17, 2013

FACTS: 

Petitioners Petron Corporation (“Petron” for brevity) and Pilipinas Shell Petroleum
Corporation (“Shell” for brevity) are two of the largest bulk suppliers and producers of LPG
in the Philippines. Petron is the registered owner in the Philippines of the trademarks GASUL
and GASUL cylinders used for its LPG products. It is the sole entity in the Philippines
authorized to allow re-fillers and distributors to refill, use, sell, and distribute GASUL LPG
containers, products and its trademarks. Pilipinas Shell, on the other hand, is the authorized
user in the Philippines of the tradename, trademarks, symbols or designs of its principal,
Shell International Petroleum Company Limited, including the marks SHELLANE and
SHELL device in connection with the production, sale and distribution of SHELLANE LPGs.
It is the only corporation in the Philippines authorized to allow re-fillers and distributors to
refill, use, sell and distribute SHELLANE LPG containers and products. Private respondents,
on the other hand, are the directors and officers of Republic Gas Corporation (“REGASCO”
for brevity), an entity duly licensed to engage in, conduct and carry on, the business of
refilling, buying, selling, distributing and marketing at wholesale and retail of Liquefied
Petroleum Gas (“LPG”).

LPG Dealers Associations, such as the Shellane Dealers Association, Inc., Petron Gasul
Dealers Association, Inc. and Totalgaz Dealers Association, received reports that certain
entities were engaged in the unauthorized refilling, sale and distribution of LPG cylinders
bearing the registered tradenames and trademarks of the petitioners. As a consequence, on
February 5, 2004, Genesis Adarlo (hereinafter referred to as Adarlo), on behalf of the
aforementioned dealers associations, filed a letter-complaint in the National Bureau of
Investigation (“NBI”) regarding the alleged illegal trading of petroleum products and/or
under-delivery or under-filling in the sale of LPG products.

Acting on the said letter-complaint, NBI Senior Agent Marvin E. De Jemil (hereinafter
referred to as “De Jemil”) was assigned to verify and confirm the allegations contained in the
letter-complaint. An investigation was thereafter conducted, particularly within the areas of
Caloocan, Malabon, Novaliches and Valenzuela, which showed that several persons and/or
establishments, including REGASCO, were suspected of having violated provisions of Batas
Pambansa Blg. 33 (B.P. 33). The surveillance revealed that REGASCO LPG Refilling Plant
in Malabon was engaged in the refilling and sale of LPG cylinders bearing the registered
marks of the petitioners without authority from the latter. Based on its General Information
Sheet filed in the Securities and Exchange Commission, REGASCO’s members of its Board
of Directors are: (1) Arnel U. Ty — President, (2) Marie Antoinette Ty — Treasurer, (3)
Orlando Reyes — Corporate Secretary, (4) Ferrer Suazo and (5) Alvin Ty (hereinafter
referred to collectively as private respondents).

De Jemil, with other NBI operatives, then conducted a test-buy operation on February 19,
2004 with the former and a confidential asset going undercover. They brought with them four
(4) empty LPG cylinders bearing the trademarks of SHELLANE and GASUL and included
the same with the purchase of J&S, a REGASCO’s regular customer. Inside REGASCO’s
refilling plant, they witnessed that REGASCO’s employees carried the empty LPG cylinders
to a refilling station and refilled the LPG empty cylinders. Money was then given as payment
for the refilling of the J&S’s empty cylinders which included the four LPG cylinders brought
in by De Jemil and his companion. Cash Invoice No. 191391 dated February 19, 2004 was
issued as evidence for the consideration paid.

After leaving the premises of REGASCO LPG Refilling Plant in Malabon, De Jemil and the
other NBI operatives proceeded to the NBI headquarters for the proper marking of the LPG
cylinders. The LPG cylinders refilled by REGASCO were likewise found later to be under-
refilled.

Thus, on March 5, 2004, De Jemil applied for the issuance of search warrants in the Regional
Trial Court, Branch 24, in the City of Manila against the private respondents.

DOJ RULING: DISMISSED THE COMPLAINT. MERE REFILLING IS NOT PER SE A

VIOLATION OF IP CODE. 

CA: REVERSED AND SET ASIDE. 

ISSUE: whether probable cause exists to hold petitioners liable for the crimes of trademark
infringement and unfair competition as defined and penalized under Sections 155 and 168, in
relation to Section 170 of Republic Act (R.A.) No. 8293.

HELD: YES. 
From the foregoing provision, the Court in a very similar case, made it categorically clear
that the mere unauthorized use of a container bearing a registered trademark in connection
with the sale, distribution or advertising of goods or services which is likely to cause
confusion, mistake or deception among the buyers or consumers can be considered as
trademark infringement.

Here, petitioners have actually committed trademark infringement when they refilled, without
the respondents’ consent, the LPG containers bearing the registered marks of the respondents.
As noted by respondents, petitioners’ acts will inevitably confuse the consuming public, since
they have no way of knowing that the gas contained in the LPG tanks bearing respondents’
marks is in reality not the latter’s LPG product after the same had been illegally refilled. The
public will then be led to believe that petitioners are authorized re-fillers and distributors of
respondents’ LPG products, considering that they are accepting empty containers of
respondents and refilling them for resale.

As to the charge of unfair competition, Section 168.3, in relation to Section 170, of R.A. No.
8293, unfair competition has been defined as the passing off (or palming off) or attempting to
pass off upon the public of the goods or business of one person as the goods or business of
another with the end and probable effect of deceiving the public.

Passing off (or palming off) takes place where the defendant, by imitative devices on the
general appearance of the goods, misleads prospective purchasers into buying his
merchandise under the impression that they are buying that of his competitors. Thus, the
defendant gives his goods the general appearance of the goods of his competitor with the
intention of deceiving the public that the goods are those of his competitor.

In the present case, respondents pertinently observed that by refilling and selling LPG
cylinders bearing their registered marks, petitioners are selling goods by giving them the
general appearance of goods of another manufacturer.

What’s more, the CA correctly pointed out that there is a showing that the consumers may be
misled into believing that the LPGs contained in the cylinders bearing the marks “GASUL”
and “SHELLANE” are those goods or products of the petitioners when, in fact, they are not.
Obviously, the mere use of those LPG cylinders bearing the trademarks “GASUL” and
“SHELLANE” will give the LPGs sold by REGASCO the general appearance of the products
of the petitioners.

In sum, this Court finds that there is sufficient evidence to warrant the prosecution of
petitioners for trademark infringement and unfair competition, considering that petitioner
Republic Gas Corporation, being a corporation, possesses a personality separate and distinct
from the person of its officers, directors and stockholders. Petitioners, being corporate
officers and/or directors, through whose act, default or omission the corporation commits a
crime, may themselves be individually held answerable for the crime. Veritably, the CA
appropriately pointed out that petitioners, being in direct control and supervision in the
management and conduct of the affairs of the corporation, must have known or are aware that
the corporation is engaged in the act of refilling LPG cylinders bearing the marks of the
respondents without authority or consent from the latter which, under the circumstances,
could probably constitute the crimes of trademark infringement and unfair competition. The
existence of the corporate entity does not shield from prosecution the corporate agent who
knowingly and intentionally caused the corporation to commit a crime. Thus, petitioners
cannot hide behind the cloak of the separate corporate personality of the corporation to
escape criminal liability. A corporate officer cannot protect himself behind a corporation
where he is the actual, present and efficient actor.

Emzee Foods, Inc. v. Elarfoods, Inc., G.R. No. 220558, February 17, 2021.

Facts:

Sometime in 1970, spouses Jose and Leonor Lontoc (spouses Lontoc) established a business
of selling Filipino food and roasted pigs, which they marketed under the name "ELARS
Lechon."

Desiring to leave a legacy, in 1989, the spouses Lontoc incorporated their food business.
Thus, on May 19, 1989, Elarfoods, Inc. (respondent) was granted a Certificate of Registration
by the Securities and Exchange Commission (SEC).

Since then, the spouses Lontoc actively managed the respondent corporation. Over the years,
respondent used Elarfoods, Inc. as its business name and marketed its products, particularly;
it’s roasted pigs as "ELAR'S LECHON ON A BAMBOO TRAY." Eventually, it rose to
notoriety as the "ELAR'S LECHON'' brand.

However, without respondent's knowledge and permission, petitioner sold and

distributed roasted pigs using the marks "ELARZ LECHON," "ELAR LECHON,"
"PIG DEVICE" and "ON A BAMBOO TRAY," thereby making it appear that
petitioner was a branch or franchisee of the respondent.

On September 25, 2001, respondent filed with the IPO an application for registration of the
trademark "ELARS LECHON." Thereafter, on October 1, 2001, respondent filed two more
applications for the marks "ON A BAMBOO TRAY" and "ROASTED PIG DEVICE"
(collectively, subject marks). The mark "ROASTED PIG DEVICE" is a design or
representation of a roasted pig on a bamboo stick placed on top of a bamboo tray.

On October 2, 2001, respondent sent the petitioner a Cease and Desist Letter urging the
latter to stop using the subject marks or any variations thereof. However, petitioner ignored
the demand and continued selling its roasted pigs under the marks "ELARZLECHON,"
"ELAR LECHON," "PIG DEVICE," and "ON A BAMBOO TRAY," thereby causing
confusion as to the source and origin of the products.

Thereafter, respondent filed three separate complaints for unfair competition and violation of
intellectual property rights against petitioner for the latter's use of the former's trademarks
"ELARS LECHON," "ROASTED PIG DEVICE," and "ON A BAMBOO TRAY."
Respondent claimed that petitioner unfairly rode on its fame, goodwill and reputation,
causing its sales and profits to be diverted to petitioner.
Petitioner filed an Answer, where it countered that the respondent is not the owner of the
subject marks. Rather, respondent is a mere alter ego or business conduit of the spouses
Lontoc who have proprietary rights over the marks. Petitioner related that the mark "Elar"
stands for "L.R.," which are the initials of the spouses Lontoc-Rodriguez's family
names. In fact, since 1967, the spouses Lontoc have used "Elar" for their other
corporations, such as Elar Development (ELARDEV) for their livestock business; Casa
Elar Incorporated (CASA ELAR) for their restaurant business; and Elar Foods
(Elarfoods) for their meat business. Petitioner further narrated that Jose Lontoc (Jose)
himself designed the logo which became the symbol and mark of "ELARS LECHON." The
phrase "ON A BAMBOO TRAY'' was loosely used by Jose and through word of mouth,
became associated with "ELARS LECHON."

On August 8, 2005, BLA Director Estrelita Beltran-Abelardo (Beltran-Abelardo)

dismissed the complaint. She ruled that the spouses Lontoc are the owners of the subject
marks by prior commercial use. Said marks acquired popularity through their consistent use
in connection with the spouses Lontoc's lechon business, even prior to the respondent's
incorporation. Moreover, BLA Director Beltran-Abelardo opined that the use of the
"ELAR" mark was not coined by the spouses Lontoc for the sole benefit of respondent,
but for the use of the Lontoc-Rodriguez clan in their businesses. At best, respondent merely
acquired the usufruct of the subject trademarks. On this score, the real-party-in-interest to
file a suit against the petitioner is the Estate of the spouses Lontoc.

In a Decision dated December 20, 2013, IPO Director General Ricardo R. Blancaflor
(Blancaflor) reversed the BLA. He stated that there was no need for a written
assignment of the subject trademarks because the spouses Lontoc themselves, in their
desire to leave a legacy, incorporated and registered respondent with the SEC. As a
result, all rights and interests of the spouses Lontoc, including the subject trademarks
were transferred to respondent. In fact, the spouses Lontoc actively managed
respondent and represented to the public that they were its owners. Even petitioner
admitted that respondent is an alter ego of the spouses Lontoc, implying that the rights and
interests of respondent are identical and inseparable from those of the spouses Lontoc.

Likewise, Director General Blancaflor explained that the requirement of a written assignment
of rights applies only if the trademark is already registered, or has a pending application for
registration. In this case, a written assignment was not yet possible considering that the
subject trademarks were not yet registered nor the subject of an application for registration.
Hence, Director General Blancaflor concluded that petitioner's use of the trademarks
"ELARZLECHON," "ELAR LECHON," "PIG DEVICE," and "ON A BAMBOO TRAY"
constituted unfair competition during the time that the marks were not yet registered, and
trademark infringement, after their registration. He further expressed that the petitioner
should have been made liable for the payment of damages and should have been subject to
injunction.

On March 27, 2015, the CA affirmed the ruling of IPO Director General Blancaflor. 28 The
CA noted that the IPO had already issued the respondent Certificates of Registration for the
subject trademarks. These Certificates of Registration carry with them the operation of
ownership and exclusive use of the subject trademarks. Consequently, the CA found the
petitioner liable for infringement.

Issues:

Whether the petitioner is liable for damages for violating the respondent’s intellectual
property rights and the propriety of granting an injunction against the petitioner.

Ruling: YES.

It cannot be gainsaid that respondent corporation is a creation of the spouses Lontoc

themselves. In 1989, the spouses Lontoc wanted to leave their legacy, and thus incorporated
the respondent to ensure the continuation of their lechon and food business. From that
moment, the spouses Lontoc transferred to the respondent the ownership of ELARS Lechon
and the subject marks in connection with the sale of its roasted pigs and other products. 70
Moreover, all throughout their lives, the spouses Lontoc actively managed respondent and
consistently used the subject trademarks in promoting the latter's goods. Certainly, the
spouses Lontoc's overt acts of incorporating respondent, actively managing it, and
consistently representing to the public that ELARS Lechon is operating under the respondent,
conclusively prove that indeed the "ELARS LECHON" brand has been transferred to, and is
owned by respondent. As such, the respondent has the exclusive right to use the name
ELARS LECHON to the exclusion of all other parties, including the descendants of the
spouses Lontoc.

In fact, Jose, as then President and General Manager of respondent, eagerly promoted Elar's
Lechon as the respondent's business. This was established through Jose's Letter dated October
7, 1996 under respondent's letterhead, where he declared that "we are one of the biggest
lechon producers in the country under our brand name — "ELAR LECHON on a BAMBOO
TRAY. " Indeed, Jose's unqualified representation that Elar's Lechon is the business of
respondent confirms that even without a formal assignment, exclusive ownership of the mark
"ELARS LECHON" and its adjunct trademarks have been vested on respondent. Actually,
even the petitioner admitted that respondent is an "alter ego of the spouses Lontoc," implying
that the rights and interests of respondent are identical and inseparable from those of the
spouses Lontoc.

Similarly, respondent's prior adoption and continuous use of the subject trademarks since
1990 are bolstered by documents consisting of various commercial sales invoices from
November 1990 to February 1995.

In addition, respondent invested time and money in promoting and advertising its food
products and roasted pigs "ELARS LECHON ON A BAMBOO TRAY" or popularly known
by the public as "Elar's Lechon." Certainly, these cumulative acts that have been done for
decades have resulted in respondent's notoriety to the public as the source of roasted pigs
bearing the subject trademarks.
Interestingly, even the BLA ruled that the spouses Lontoc, by virtue of prior commercial use
under Section 2-A of R.A. No. 166 are the owners of the subject trademarks. However, it
refused to recognize the transfer of ownership to the respondent due to the absence of a
written assignment in favor of the latter.

Notably, this lacuna was filled by IPO Director General Blancaflor who explained that the
fact of the transfer may not be disproven by the absence of a written assignment. A
trademark, like any incorporeal right may be disposed of not only by way of formal
assignment. More importantly, the subject trademarks were not yet registered when
respondent started doing business under the Elar's Lechon brand. Neither was there a pending
application for the said trademarks. Besides, under Article 1624 of the Civil Code, in relation
to Article 1475 of the same Code, the assignment of incorporeal rights, like an unregistered
mark, is perfected by mere consent without need of a written contract. Thus, what matters is
that from the time of respondent’s incorporation until present, respondent has used and
exclusively appropriated the subject trademarks as its own.

Applying the dominancy test to the case at bar, it is very obvious that the petitioner's marks
"ELARZ LECHON'' and "ELAR LECHON'' bear an indubitable likeness with respondent's
"ELARS LECHON." As can easily be seen, both marks use the essential and dominant word
"ELAR." The only difference between the petitioner's mark from that of respondent's are the
last letters Z and S, respectively. However, the letters Z and S sound similar when
pronounced. Thus, both marks are not only visually similar, but are phonetically and aurally
similar as well. To top it all off, both marks are used in selling lechon products. Verily, there
exists a high likelihood that the consumers may conclude an association or relation between
the products. Likewise, the uncanny resemblance between the marks may even lead
purchasers to believe that the petitioner and respondent are the same entity.

In fine, petitioner's use of marks similar to those of the respondent's constitutes a violation of
the latter's intellectual property rights. It is high time for petitioner to desist from
conveniently latching on to the good will and reputation built by the respondent over the
years. To fully protect the respondent's rights, it is imperative to order the petitioner to cease
and desist from using the former's marks. This remedy is recognized under Section 156.4 of
the IP Code, which grants the complainant the right to demand an injunction, upon proper
showing of its entitlement thereto.

Unfortunately, despite the IPO Director General’s finding that the petitioner is liable for
unfair competition, and thus, "should have been subject to injunction," it failed to
categorically order the latter to cease and desist from using the respondent's marks. Similarly,
the CA affirmed the petitioner's culpability for unfair competition, yet failed to issue an order
directing the latter to refrain from using the subject marks. Hence, to afford the respondent
full relief, an injunction must be issued against the petitioner.
Unfair Competition

Pilipinas Shell Petroleum v. Romars Int’l, G.R. No. 189669, February 16, 2015

FACTS:

1. Pilipinas Shell received information that Romars International was selling, offering for
sale, or distributing LPGs. Upon investigation by the NBI, it was found out that there are
Gasul and Shellane cylinders stockpiled in defendant’s warehouse. The NBI also noticed
trucks from Romar’s refilling facility deposit said cylinders to Edrich Enterprises in Iriga
City.

2. NBI filed two separate applications of search warrant before the RTC of Naga City.
Respondent filed a Motion to Quash alleging the fact that they do not own the cylinders.

3. Respondent’s new counsel filed for an Appearance with Motion for Reconsideration,
alleging the ground that the RTC of Naga City has no territorial jurisdiction to issue search
warrants because the warehouse is to be found in Iriga City. RTC granted Romars Motion for
Reconsideration, CA affirmed.

ISSUE:

Whether the RTC- Naga City can issue search warrants

RULING:

YES.

An application for a search warrant is not a criminal action. The foregoing explanation shows
why the CA arrived at the wrong conclusion. It gravely erred in equating the proceedings for
applications for search warrants with criminal actions themselves. As elucidated by the Court,
proceedings for said applications are not criminal in nature and, thus, the rule that venue is
jurisdictional does not apply thereto. Evidently, the issue of whether the application should
have been filed in RTC-Iriga City or RTC-Naga, is not one involving jurisdiction because, as
stated in the afore-quoted case, the power to issue a special criminal process is inherent in all
courts.

Inferring from the foregoing, the Court deems it improper for the RTC-Naga to have even
taken into consideration an issue which respondent failed to raise in its motion to quash, as it
did not involve a question of jurisdiction over the subject matter. It is quite clear that the
RTC-Naga had jurisdiction to issue criminal processes such as a search warrant.

Willaware Products Corp v. Jesichris Mfg. Corp., G.R. No. 195549, September 3, 2014

Facts:
Jesichris Manufacturing Company the respondent filed this present complaint for damages
for unfair competition with prayer for permanent injunction to enjoin Willaware Products
Corporation the petitioner from manufacturing and distributing plastic-made automotive parts
similar to Jesichris Manufacturing Company. The respondent, alleged that it is a duly
registered partnership engaged in the manufacture and distribution of plastic and metal
products, with principal office at No. 100 Mithi Street, Sampalukan, Caloocan City. Since its
registration in 1992, Jesichris Manufacturing Company has been manufacturing in its
Caloocan plant and distributing throughout the Philippines plastic-made automotive
parts. Willaware Products Corporation, on the other hand, which is engaged in the
manufacture and distribution of kitchenware items made of plastic and metal has its office
near that of the Jesichris Manufacturing Company. Respondent further alleged that in view of
the physical proximity of petitioner’s office to respondent’s office, and in view of the fact
that some of the respondent’s employees had transferred to petitioner, petitioner had
developed familiarity with respondent’s products, especially its plastic-made automotive
parts.

That sometime in November 2000, [respondent] discovered that [petitioner] had been
manufacturing and distributing the same automotive parts with exactly similar design, same
material and colors but was selling these products at a lower price as [respondent’s] plastic-
made automotive parts and to the same customers.

Respondent alleged that it had originated the use of plastic in place of rubber in the
manufacture of automotive under chassis parts such as spring eye bushing, stabilizer bushing,
shock absorber bushing, center bearing cushions, among others. [Petitioner’s] manufacture of
the same automotive parts with plastic material was taken from respondent’s idea of using
plastic for automotive parts. Also, [petitioner] deliberately copied [respondent’s] products all
of which acts constitute unfair competition, is and are contrary to law, morals, good customs
and public policy and have caused [respondent] damages in terms of lost and unrealized
profits in the amount of 2,000,000 as of the date of respondent’s complaint.

Issue: 

1. Whether or not there is unfair competition under human relations when the parties are not
competitors and there is actually no damage on the part of Jesichris?

2. Consequently, if there is no unfair competition, should there be moral damages and

attorney’s fees?

3. Whether or not the addition of nominal damages is proper although no rights have been
established?

Held:

Article 28 of the Civil Code provides that "unfair competition in agricultural, commercial or
industrial enterprises or in labor through the use of force, intimidation, deceit, machination or
any other unjust, oppressive or high-handed method shall give rise to a right of action by the
person who thereby suffers damage."
From the foregoing, it is clear that what is being sought to be prevented is not competition per
se but the use of unjust, oppressive or high handed methods which may deprive others of a
fair chance to engage in business or to earn a living. Plainly, what the law prohibits is unfair
competition and not competition where the means use dare fair and legitimate.

In sum, petitioner is guilty of unfair competition under Article 28 of the Civil Code.

However, since the award of Two Million Pesos (P2,000,000.00) in actual damages had been
deleted and in its place Two Hundred Thousand Pesos (P200,000.00) in nominal damages is
awarded, the attorney's fees should concomitantly be modified and lowered to Fifty Thousand
Pesos (P50,000.00).

Espiritu v. Petron Corporation, G.R. No. 170891, November 24, 2009

FACTS:

1.  Respondent Petron Corporation (Petron) sold and distributed liquefied petroleum gas
(LPG) in cylinder tanks that carried its trademark Gasul Respondent Carmen J. Doloiras
owned and operated Kristina Patricia Enterprises (KPE), the exclusive distributor of Gasul
LPGs in the whole of Sorsogon. Bicol Gas Refilling Plant Corporation (Bicol Gas) was also
in the business of selling and distributing LPGs in Sorsogon but theirs carried the trademark
Bicol Savers Gas. 

2. In the course of trade and competition, any given distributor of LPGs at times acquired
possession of LPG cylinder tanks belonging to other distributors operating in the same
area. They called these captured cylinders. It is a common practice to swap captured cylinders
and return it to their respective LPG owners.

3. A KPE employee visited Bicol Gas, he requested for a swap but the employee of Bicol Gas
refused as he first needed to ask the permission of the Bicol Gas Owners.

4. KPE filed a complaint for violation of RA 623 (illegally filling up of registered cylinder
tanks), infringement of trade marks and unfair competition. The provincial prosecutors only
found probable cause on the violation of RA 623.

5. KPE and Petron filed a special civil action for certiorari. CA ruled in their favor, holding
that unfair competition do not absorb trademark infringement,

ISSUE:

Whether Bicol Gas committed the following:

1. Trademark Infringement

2.  Unfair Competition

RULING:

1.  Anent Trademark Infringment: NO

Section 155 of R.A. 8293 (in relation to Section 170 [13]) provides that it is committed by any
person who shall, without the consent of the owner of the registered mark:

1. Use in commerce any reproduction, counterfeit, copy or colorable imitation of a registered

mark or the same container or a dominant feature thereof in connection with the sale, offering
for sale, distribution, advertising of any goods or services including other preparatory steps
necessary to carry out the sale of any goods or services on or in connection with which such
use is likely to cause confusion, or to cause mistake, or to deceive; or

2. Reproduce, counterfeit, copy or colorably imitate a registered mark or a dominant feature

thereof and apply such reproduction, counterfeit, copy or colorable imitation to labels, signs,
prints, packages, wrappers, receptacles or advertisements intended to be used in commerce
upon or in connection with the sale, offering for sale, distribution, or advertising of goods or
services on or in connection with which such use is likely to cause confusion, or to cause
mistake, or to deceive.

KPE and Petron have to show that the alleged infringer, the responsible officers and staff of
Bicol Gas, used Petrons Gasul trademark or a confusingly similar trademark on Bicol Gas
tanks with intent to deceive the public and defraud its competitor as to what it is selling.

Here, however, the allegations in the complaint do not show that Bicol Gas painted on its
own tanks Petrons Gasul trademark or a confusingly similar version of the same to deceive its
customers and cheat Petron. Indeed, in this case, the one tank bearing the mark of Petron
Gasul found in a truck full of Bicol Gas tanks was a genuine Petron Gasul tank, more of a
captured cylinder belonging to competition. No proof has been shown that Bicol Gas has
gone into the business of distributing imitation Petron Gasul LPGs.

2. Anent Unfair Competition: NO

Section 168.3 (a) of R.A. 8293 (also in relation to Section 170) describes the acts constituting
the offense as follows:

168.3. In particular, and without in any way limiting the scope of protection against unfair
competition, the following shall be deemed guilty of unfair competition:

(a) Any person, who is selling his goods and gives 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;
Essentially, what the law punishes is the act of giving ones goods the general appearance of
the goods of another, which would likely mislead the buyer into believing that such goods
belong to the latter.

Levi Strauss (Phils.), Inc. v. Lim, G.R. No. 162311, December 4, 2008

Facts:

In 1972, LS & Co. granted petitioner a non-exclusive license to use its registered trademarks
and trade names[6] for the manufacture and sale of various garment products, primarily
pants, jackets, and shirts, in the Philippines.

Sometime in 1995, petitioner lodged a complaint[10] before the Inter-Agency Committee on

Intellectual Property Rights, alleging  that  a  certain establishment in Metro Manila was
manufacturing garments using colorable imitations of the

LEVI'S trademarks.

(1) a slavish imitation of petitioner's "arcuate" trademark has been stitched on the backpocket
of "LIVE'S" jeans;

(2) the appearance of the mark "105" on... respondent's product is obviously a play on
petitioner's "501" trademark

(3) the appearance of the word/phrase "LIVE'S" and "LIVE'S ORIGINAL JEANS" is
confusingly similar to petitioner's "LEVI'S" trademark;

(4) a red tab, made of fabric, attached at the left seam of the right... backpocket of petitioner's
standard five-pocket jeans, also appears at the same place on "LIVE'S" jeans;

(5) the patch used on "LIVE'S" jeans (depicting three men on each side attempting to pull
apart a pair of jeans) obviously thrives on petitioner's own patch showing two... horses being
whipped by two men in an attempt to tear apart a pair of jeans;

(6) "LEVI'S" jeans are packaged and sold with carton tickets, which are slavishly copied by
respondent in his own carton ticket bearing the marks "LIVE'S," "105," the horse mark, and
basic features... of petitioner's ticket designs, such as two red arrows curving and pointing
outward, the arcuate stitching pattern, and a rectangular portion with intricate border
orientation.[

Issues:

In essence, petitioner asks this Court to determine if probable cause exists to charge
respondent with the crime of unfair competition under Article 189(1) of the Revised Penal
Code, prior to its repeal by Section 239 of RA No. 8293.

Ruling:
Now, even if We brush aside technicalities and consider the petition for review filed with the
CA as one under Rule 65, the petition must fail just the same.

In finding that respondent's goods were not clothed with an appearance which is likely to
deceive the ordinary purchaser exercising ordinary care, the investigating prosecutor
exercised the discretion lodged in him by law.

We are disinclined to find that grave of abuse of discretion was committed when records
show that the finding of no probable cause is supported by the evidence, law, and
jurisprudence.

While it is true that there may be unfair competition even if the competing mark is registered
in the Intellectual Property Office, it is equally true that the same may show prima facie good
faith.

Principles:

The elements of unfair competition under Article 189(1)[63] of the Revised Penal Code are:

(a) That the offender gives his goods the general appearance of the goods of another
manufacturer or dealer;

(b) That the general appearance is shown in the (1) goods themselves, or in the (2) wrapping
of their packages, or in the (3) device or words therein, or in (4) any other feature of their
appearance;

(c) That the offender offers to sell or sells those goods or gives other persons a chance or
opportunity to do the same with a like purpose; and

(d) That there is actual intent to deceive the public or defraud a competitor.

However, the mark's registration, coupled with the stark differences between the competing
marks, negate the existence... of actual intent to deceive, in this particular case.

Coca-Cola Bottlers Philippines, Inc. Naga Plant v. Gomez, G.R. No. 154491, November
14, 2008

Facts:

Petitioner Coca-Cola applied for a search warrant against Pepsi for hoarding empty Coke
bottles in Pepsi’s yard, an act allegedly penalized as unfair competition under the IP Code.
MTC issued the search warrants and the local police seized the goods. Later, a complaint
against respondents was filed for violation of the IP Code. Respondent contended that the
hoarding of empty Coke bottles did not involve fraud and deceit for them to be liable for
unfair competition. MTC upheld the validity of the warrants. RTC voided the warrant for lack
of probable cause of the commission of unfair competition.

Issue:
Whether or not respondent’s hoarding of Coke bottles constitute unfair competition.

Ruling: NO.

From jurisprudence, unfair competition has been defined as the passing off (or palming off)
or attempting to pass off upon the public the goods or business of one person as the goods or
business of another with the end and probable effect of deceiving the public. One of the
essential requisites in an action to restrain unfair competition is proof of fraud; the intent to
deceive must be shown before the right to recover can exist. The advent of the IP Code has
not significantly changed these rulings as they are fully in accord with what Section 168 of
the Code in its entirety provides. Deception, passing off and fraud upon the public are still
the key elements that must be present for unfair competition to exist.

As basis for this interpretative analysis, we note that Section 168.1 speaks of a person who
has earned goodwill with respect to his goods and services and who is entitled to protection
under the Code, with or without a registered mark. Section 168.2, as previously discussed,
refers to the general definition of unfair competition. Section 168.3, on the other hand, refers
to the specific instances of unfair competition, with Section 168.3(a) referring to the sale of
goods given the appearance of the goods of another; Section 168.3(b), to the inducement of
belief that his or her goods or services are that of another who has earned goodwill; while the
disputed Section 168.3(c) being a “catch all” clause whose coverage the parties now dispute.

Under all the above approaches, we conclude that the “hoarding” – as defined and charged by
the petitioner – does not fall within the coverage of the IP Code and of Section 168 in
particular. It does not relate to any patent, trademark, trade name or service mark that the
respondents have invaded, intruded into or used without proper authority from the petitioner.
Nor are the respondents alleged to be fraudulently “passing off” their products or services as
those of the petitioner. The respondents are not also alleged to be undertaking any
representation or misrepresentation that would confuse or tend to confuse the goods of the
petitioner with those of the respondents, or vice versa. What in fact the petitioner alleges is an
act foreign to the Code, to the concepts it embodies and to the acts it regulates; as alleged,
hoarding inflicts unfairness by seeking to limit the opposition’s sales by depriving it of the
bottles it can use for these sales. In this light, hoarding for purposes of destruction is closer to
what another law, R.A. No. 623 covers.

Uyco v. Lo, G.R. No. 202423, January 28, 2013

FACTS:

The disputed marks in this case are the “HIPOLITO & SEA HORSE & TRIANGULAR
DEVICE,” “FAMA,” and other related marks, service marks and trade names of Casa
Hipolito S.A. Portugal appearing in kerosene burners.

Respondent Vicente Lo and Philippine Burners Manufacturing Corporation (PBMC) filed a

complaint against the officers of Wintrade Industrial Sales Corporation (Wintrade), including
petitioners Chester Uyco, Winston Uychiyong and Cherry Uyco-Ong, and of National
Hardware, including Mario Sy Chua, for violation of Section 169.1, in relation to Section
170, of RA 8293.
Lo claimed in his complaint that Gasirel-Industria de Comercio e Componentes para Gass,
Lda. (Gasirel), the owner of the disputed marks, executed a deed of assignment transferring
these marks in his favor, to be used in all countries except for those in Europe and America. 
In a test buy, Lo purchased from National Hardware kerosene burners with the subject marks
and the designations “Made in Portugal” and “Original Portugal” in the wrappers. These
products were manufactured by Wintrade. Lo claimed that as the assignee for the trademarks,
he had not authorized Wintrade to use these marks, nor had Casa Hipolito S.A. Portugal.
While a prior authority was given to Wintrade’s predecessor-in-interest, Wonder Project &
Development Corporation (Wonder), Casa Hipolito S.A. Portugal had already revoked this
authority through a letter of cancellation dated May 31, 1993.  The kerosene burners
manufactured by Wintrade have caused confusion, mistake and deception on the part of the
buying public. Lo stated that the real and genuine burners are those manufactured by its
agent, PBMC.

After the preliminary investigation, the Chief State Prosecutor found probable cause to indict
the petitioners for violation of Section 169.1, in relation with Section 170, of RA 8293. This
law punishes any person who uses in commerce any false designation of origin which is
likely to cause confusion or mistake as to the origin of the product.

On appeal, the DOJ issued a resolution affirming the finding of probable case. It gave
credence to Lo’s assertion that he is the proper assignee of the subject marks. More
importantly, it took note of the petitioners’ admission that they used the words “Made in
Portugal” when in fact, these products were made in the Philippines. Had they intended
to refer to the source of the design or the history of the manufacture, they should have
explicitly said so in their packaging.

ISSUE: Whether or not petitioners should be held liable for violating Section 169.1, in
relation to Section 170, of RA 8293.

HELD: Yes.

The petitioners again try to convince the Court that they have not manufactured the products
bearing the marks “Made in Portugal” and “Original Portugal” that were bought during the
test buy. However, their own admission and the statement given by Chua that he was not 
aware that WINTRADE was no longer authorized to deal, distribute or sell kerosene burner
bearing the mark HIPOLITO and SEA HORSE Device, with markings “Made in Portugal”
on the wrapper as he was never informed of such by WINTRADE, bear considerable weight.

However, evidence shows that petitioners, who are officers of Wintrade, placed the words
“Made in Portugal” and “Original Portugal” with the disputed marks knowing fully
well — because of their previous dealings with the Portuguese company — that these
were the marks used in the products of Casa Hipolito S.A. Portugal. More importantly,
the products that Wintrade sold were admittedly produced in the Philippines, with no
authority from Casa Hipolito S.A. Portugal. The law on trademarks and trade names precisely
precludes a person from profiting from the business reputation built by another and from
deceiving the public as to the origins of products. These facts support the consistent findings
of the State Prosecutor, the DOJ and the CA that probable cause exists to charge the
petitioners with false designation of origin.

Century Chinese Medicine Co. v. People, G.R. no. 188526, November 11, 2013

FACTS:

Respondent Ling Na Lau, doing business under the name and style Worldwide Pharmacy, is
the sole distributor and registered trademark owner of TOP GEL T.G. & DEVICE OF A
LEAF papaya whitening soap as shown by Certificate of Registration 4-2000-009881 issued
to her by the Intellectual Property Office (IPO) for a period of ten years from August 24,
2003.

On November 7, 2005, her representative, Ping Na Lau, (Ping) wrote a letter addressed to
National Bureau of Investigation (NBI) requesting assistance for an investigation on several
drugstores which were selling counterfeit whitening papaya soaps bearing the general
appearance of their products. NBI Agent Furing was assigned to the case and he executed an
affidavit stating that: he conducted his own investigation, and on November 9 and 10, 2005,
he, together with Junayd Esmael (Esmael), were able to buy whitening soaps bearing the
trademark "TOP-GEL", "T.G." & "DEVICE OF A LEAF" with corresponding receipts
from a list of drugstores which included herein petitioners Century Chinese Medicine Co.,
Min Seng Chinese Drugstore, Xiang Jiang Chinese Drug Store, Tek San Chinese Drug Store,
Sim Sim Chinese Drug Store, Ban Shiong Tay Drugstore, Shuang Ying Chinese Drugstore,
and Baclaran Chinese Drug Store; while conducting the investigation and test buys, he was
able to confirm Ping's complaint to be true as he personally saw commercial quantities of
whitening soap bearing the said trademarks being displayed and offered for sale at the said
drugstores; he and Esmael took the purchased items to the NBI, and Ping, as the authorized
representative and expert of Worldwide Pharmacy in determining counterfeit and
unauthorized reproductions of its products, personally examined the purchased samples, and
issued a Certification wherein he confirmed that, indeed, the whitening soaps bearing the
trademarks "TOP-GEL", "T.G." & "DEVICE OF A LEAF" from the subject drugstores
were counterfeit.

On November 21, 2005, Agent Furing applied for the issuance of search warrants before the
Regional Trial Court (RTC), Branch 143, Makati City, against petitioners and other
establishments for violations of Sections 168 and 155, both in relation to Section 170 of
Republic Act (RA) No. 8293, otherwise known as the Intellectual Property Code of the
Philippines. Section 168, in relation to

Section 170, penalizes unfair competition; while Section 155, in relation to Section 170,
punishes trademark infringement. the RTC granted the applications and issued Search
Warrants

On December 8, 2005, petitioners collectively filed their Motion to Quash the Search
Warrants contending that their issuances violated the rule against forum shopping; that
Benjamin Yu (Yu) is the sole owner and distributor of the product known as "TOP-GEL";
and there was a prejudicial question posed in Civil Case No. 05-54747 entitled Zenna
Chemical Industry v. Ling Na Lau, et al., pending in Branch 93 of the RTC of Quezon City,
which is a case filed by Yu against respondent for damages due to infringement of
trademark/tradename, unfair competition with prayer for the immediate issuance of a
temporary restraining order and/or preliminary prohibitory injunction.

On September 25, 2006, the RTC issued its Order sustaining the Motion to Quash the Search
Warrants.

In reversing the RTC's quashal of the search warrants, the CA found that the search warrants
were applied for and issued for violations of Sections 155 and 168, in relation to Section 170,
of the Intellectual Property Code and that the applications for the search warrants were in
anticipation of criminal actions which are to be instituted against petitioners; thus, Rule 126
of the Rules of Criminal Procedure was applicable. It also ruled that the basis for the
applications for issuance of the search warrants on grounds of trademarks infringement and
unfair competition was the trademark TOP GEL T.G. & DEVICE OF A LEAF; that
respondent was the registered owner of the said trademark, which gave her the right to
enforce and protect her intellectual property rights over it by seeking assistance from the
NBI.

ISSUE

Whether there is probable cause for Trademark Infringement. (YES)

RULING

The applications for the issuance of the assailed search warrants were for violations of
Sections 155 and 168, both in relation to Section 170 of Republic Act (RA) No. 8293,
otherwise known as the Intellectual Property Code of the Philippines. Section 155, in relation
to Section 170, punishes trademark infringement; while Section 168, in relation to Section
170, penalizes unfair competition, to wit:

Sec 155. Remedies; Infringement. – Any person who shall, without the consent of the owner
of the registered mark:

155.1 Use in commerce any reproduction, counterfeit, copy or colorable imitation of a

registered mark or the same container or a dominant feature thereof in connection with the
sale, offering for sale, distribution, advertising of any goods or services including other
preparatory steps necessary to carry out the sale of any goods or services on or in connection
with which such use is likely to cause confusion, or to cause mistake, or to deceive; or

While

Sec. 168. Unfair Competition, Rights, Regulation and Remedies. –

xxxx
168.3. In particular, and without in any way limiting the scope of protection against unfair
competition, the following shall be deemed guilty of unfair competition: (a) Any person, who
is selling his goods and gives 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;

And

SEC. 170. Penalties. - Independent of the civil and administrative sanctions imposed by law,
a criminal penalty of imprisonment from two (2) years to five (5) years and a fine ranging
from Fifty thousand pesos (₱50,000.00) to Two hundred thousand pesos (₱200,000.00) shall
be imposed on any person who is found guilty of committing any of the acts mentioned in
Section 155 [Infringement], Section 168 [Unfair Competition] and Subsection 169.1 [False
Designation of Origin and False Description or Representation]. Thus, we agree with the CA
that A.M. No. 02-1-06-SC, which provides for the Rules on the Issuance of the Search and
Seizure in Civil Actions for Infringement of Intellectual Property Rights, is not applicable in
this case as the search warrants were not applied based thereon, but in anticipation of criminal
actions for violation of intellectual property rights under RA 8293. It was established that
respondent had asked the NBI for assistance to conduct investigation and search warrant
implementation for possible apprehension of several drugstore owners selling imitation or
counterfeit TOP GEL T.G. & DEVICE OF A LEAF papaya whitening soap. Also, in his
affidavit to support his application for the issuance of the search warrants, NBI Agent Furing
stated that "the items to be seized will be used as relevant evidence in the criminal actions
that are likely to be instituted." Hence, Rule 126 of the Rules of Criminal Procedure applies.
Rule 126 of the Revised Rules of Court, which governs the issuance of the assailed Search
Warrants, provides, to wit: SEC. 3. Personal property to be seized. - A search warrant may be
issued for the search and seizure of personal property:

(a) Subject of the offense;

(b) Stolen or embezzled and other proceeds or fruits of the offense; or

(c) Used or intended to be used as the means of committing an offense.

SEC. 4. Requisites for issuing search warrant. - A search warrant shall not issue except upon
probable cause in connection with one specific offense to be determined personally by the
judge after examination under oath or affirmation of the complainant and the witnesses he
may produce, and particularly describing the place to be searched and the things to be seized
which may be anywhere in the Philippines.
SEC. 5. Examination of complainant; record. - The judge must, before issuing the warrant,
personally examine in the form of searching questions and answers, in writing and under
oath, the complainant and the witnesses he may produce on facts personally known to them
and attach to the record their sworn statements together with the affidavits submitted. A core
requisite before a warrant shall validly issue is the existence of a probable cause, meaning
"the existence of such facts and circumstances which would lead a reasonably discreet and
prudent man to believe that an offense has been committed and that the objects sought in
connection with the offense are in the place to be searched." And when the law speaks of
facts, the reference is to facts, data or information personally known to the applicant and the
witnesses he may present. Absent the element of personal knowledge by the applicant or his
witnesses of the facts upon which the issuance of a search warrant may be justified, the
warrant is deemed not based on probable cause and is a nullity, its issuance being, in legal
contemplation, arbitrary. The determination of probable cause does not call for the
application of rules and standards of proof that a judgment of conviction requires after trial
on the merits. As implied by the words themselves, "probable cause" is concerned with
probability, not absolute or even moral certainty. The prosecution need not present at this
stage proof beyond reasonable doubt. The standards of judgment are those of a reasonably
prudent man, not the exacting calibrations of a judge after a full-blown trial.

The RTC quashed the search warrants, saying that (1) there exists a prejudicial question
pending before Branch 93 of the RTC of Quezon City, docketed as Civil Case No. 05-54747,
i.e., the determination as to who between respondent and Yu is the rightful holder of the
intellectual property right over the trademark TOP GEL T.G. & DEVICE OF A LEAF; and
there was also a case for trademark infringement and/or unfair competition filed by
respondent against Yu pending before the IPO, docketed as IPV Case No. 10-2005-00001;
and (2) Yu's representation that he is the sole distributor of the Top Gel whitening soap, as
the latter even presented Registration No. 4-1996- 109957 issued by the IPO to Zenna
Chemical Industry as the registered owner of the trademark TOP GEL MCA & DEVICE
MCA for a term of 20 years from November 17, 2000 covering the same product.

We do not agree. We affirm the CA's reversal of the RTC Order quashing the search
warrants.

The affidavits of NBI Agent Furing and his witnesses, Esmael and Ling, clearly showed that
they are seeking protection for the trademark "TOP GEL T.G. and DEVICE OF A LEAF"
registered to respondent under Certificate of Registration 4-2000-009881 issued by the IPO
on August 24, 2003, and no other. While petitioners claim that the product they are
distributing was owned by Yu with the trademark TOP GEL MCA and MCA DEVISE under
Certificate of Registration 4-1996-109957, it was different from the trademark TOP GEL
T.G. and DEVICE OF A LEAF subject of the application. We agree with the CA's finding in
this wise:

xxx

It bears stressing that the basis for the applications for issuances of the search warrants on
grounds of trademark infringement and unfair competition is the trademark TOP GEL T.G. &
DEVICE OF A LEAF. Private complainant-appellant was issued a Certificate of Registration
No. 4-2000- 009881 of said trademark on August 24, 2003 by the Intellectual Property
Office, and is thus considered the lawful holder of the said trademark. Being the registrant
and the holder of the same, private complainant-appellant had the authority to enforce and
protect her intellectual property rights over it. This prompted her to request for assistance
from the agents of the NBI, who thereafter conducted a series of investigation, test buys and
inspection regarding the alleged trademark infringement by herein respondents-appellees.
Subsequently, Ping Na Lau, private complainant-appellant’s representative, issued a
certification with the finding that the examined goods were counterfeit. This prompted the
NBI agents to apply for the issuances of search warrants against the respondents-appellees.
Said applications for the search warrants were granted after by Judge Laguilles after
examining under oath the applicant Agent Furing of the NBI and his witnesses Ping Na Lau
and Junayd R. Ismael.

Based on the foregoing, it is clear that the requisites for the issuance of the search warrants
had been complied with and that there is probable cause to believe that an offense had been
committed and that the objects sought in connection with the offense were in the places to be
searched. The offense pertains to the alleged violations committed by respondents-appellees
upon the intellectual property rights of herein private complainant-appellant, as holder of the
trademark TOP GEL T.G. & DEVICE OF A LEAF under Certificate of Registration No. 4-
2000-009881, issued on August 24, 2003 by the Intellectual Property Office