Sasot vs. People GR No.

143193 (June 29,2005)

FACTS:

          The National Bureau of Investigation conducted an investigation pursuant to a complaint filed by
the NBA Properties, Inc. against petitioners for possible violation of Article 189 of the Revised Penal
Code on unfair competition. Based on the report from the NBI, they have conducted two investigations
due to the petitioners’ alleged participation in the manufacture, printing, sale and distribution of
counterfeit “NBA” garment products, which led to the search and seizure of several items from
petitioner’s establishment. 

          Before arraignment, petitioners filed a Motion to Quash on the ground that, the facts charged do
not constitute an offense and that the court did not have jurisdiction over the offense charged or the
person of the accused. Petitioners contend that since the complainant is a foreign corporation not doing
business in the Philippines, and cannot be protected by Philippine patent laws since it is not a registered
patentee. Petitioners aver that they have been using the business name ALLANDALE SPORTSLINE, INC.
since 1972, and their designs are original and do not appear to be similar to complainants, and they do
not use complainants logo or design.

           In the Comment/Opposition filed by the trial prosecutor of Manila RTC Branch 1, it stated that the
State is entitled to prosecute the offense even without the participation of the private offended party, as
the crime charged is a public crime, as provided for in the Revised Penal Code.

          The trial court sustained the prosecution’s arguments and denied petitioners’ motion to quash
which lead to the filing of a special civil action for Certiorari with the CA. According to the CA, the
petition is not the proper remedy in assailing the denial of the  quashal motion, and that the grounds
raised therein should be raised during the trial of the case on the merits.

          Petitioners sought for the reconsideration of the Decision, but was denied by the CA, hence this
petition.

ISSUE: Whether or not a foreign corporation not doing business in the Philippines and not licensed to do
business in the Philippines have the right to sue for unfair competition.

HELD:          The petition must be denied.

          While petitioners raise in their motion to quash the grounds that the facts charged do not
constitute an offense and that the trial court has no jurisdiction over the offense charged or the person
of the accused, their arguments focused on an alleged defect in the complaint filed before the fiscal,
complainants capacity to sue and petitioners exculpatory defenses against the crime of unfair
competition.

          More importantly, the crime of Unfair Competition punishable under Article 189 of the Revised
Penal Code is a public crime. It is essentially an act against the State and it is the latter which principally
stands as the injured party. The complainant’s capacity to sue in such case becomes immaterial.
PEARL & DEAN (PHIL.), INC. vs SHOEMART, INC GR No. 148222 (August 15,2003)

FACTS:

          Pearl and Dean is a corporation engaged in the manufacture of advertising display units referred to
as light boxes and these light boxes were marketed under the trademark Poster Ads. Pearl and Dean
entered into a contract with Shoemart, Inc. for the lease and installation of the light boxes in SM North
Edsa. However, due to construction constraints, Shoemart, Inc offered as an alternative SM Makati and
SM Cubao.

          After Pearl and Dean’s contract was rescinded, exact copies of its light boxes were installed in
various SM malls, fabricated by Metro Industrial Services and later by EYD Rainbow Advertising
Corporation. Pearl and Dean sent a letter to Shoemart and its sister company, North Edsa Marketing to
cease using the light boxes and to remove them from the malls, and demanded the discontinued used of
the trademark “Poster Ads”.

          Unsatisfied with the compliance of its demands, Pearl and Dean sued Shoemart which was ruled by
the trial court in their favor. On appeal, however, the Court of Appeals reversed the trial court’s
decision.

ISSUE:

          Whether Pearl and Dean’s copyright registration for its light boxes and the trademark registration
of “Poster Ads” preclude Shoemart and North Edsa Marketing from using the same.

HELD:

          No, Pearl and Dean secured its copyright under the classification class “o” work. This being so, its
protection extended only to the technical drawings and not to the light box itself. Pearl and Dean cannot
exclude others from the manufacture, sale and commercial use over the light boxes on the sole basis of
its copyright, certificated over the technical drawings. It cannot be the intention of the law that the right
of exclusivity would be granted for a longer time through the simplified procedure of copyright
registration with the National Library, without the rigor of defending the patentability of its “invention”
before the IPO and the public.

          On the other hand, there has been no evidence that Pearl and Dean’s use of “Poster Ads” was
distinctive or well known. “Poster Ads” was too generic a name to identify it to a specific company or
entity. “Poster Ads” was generic and incapable of being used as a trademark because it was used in the
field of poster advertising, the very business engaged by Pearl and Dean. Furthermore, Pearl and Dean’s
exclusive right to the use of “Poster Ads” is limited to what is written in its certificate of registration.
Shoemart cannot be held liable for the infringement of the trademark.
itself.

Although petitioner’s copyright certificate was entitled “Advertising Display Units” (which depicted the
box-type electrical devices), its claim of copyright infringement cannot be sustained.

Copyright, in the strict sense of the term, is purely a statutory right. Accordingly, it can cover only the
works falling within the statutory enumeration or description.

Even as we find that P & D indeed owned a valid copyright, the same could have referred only to the
technical drawings within the category of “pictorial illustrations.” It could not have possibly stretched
out to include the underlying light box. The light box was not a literary or artistic piece which could be
copyrighted under the copyright law.

The Court reiterated the ruling in the case of Kho vs. Court of Appeals, differentiating patents, copyrights
and trademarks, namely:

A trademark is any visible sign capable of distinguishing the goods (trademark) or services (service mark)
of an enterprise and shall include a stamped or marked container of goods. In relation thereto, a trade
name means the name or designation identifying or distinguishing an enterprise. Meanwhile, the scope
of a copyright is confined to literary and artistic works which are original intellectual creations in the
literary and artistic domain protected from the moment of their creation. Patentable inventions, on the
other hand, refer to any technical solution ON THE ISSUE OF COPYRIGHT INFRINGEMENT

The Court of Appeals correctly held that the copyright was limited to the drawings alone and not to the
light box of a problem in any field of human activity which is new, involves an inventive step and is
industrially applicable.

ON THE ISSUE OF PATENT INFRINGEMENT

Petitioner never secured a patent for the light boxes. It therefore acquired no patent rights which and
could not legally prevent anyone from manufacturing or commercially using the contraption. To be able
to effectively and legally preclude others from copying and profiting from the invention, a patent is a
primordial requirement. No patent, no protection.

ON THE ISSUE OF TRADEMARK INFRINGEMENT

On the issue of trademark infringement, the petitioner’s president said “Poster Ads” was a contraction
of “poster advertising.” P & D was able to secure a trademark certificate for it, but one where the goods
specified were “stationeries such as letterheads, envelopes, calling cards and newsletters.”Petitioner
admitted it did not commercially engage in or market these goods. On the contrary, it dealt in
electrically operated backlit advertising units which, however, were not at all specified in the trademark
certificate.

Assuming arguendo that “Poster Ads” could validly qualify as a trademark, the failure of P & D to secure
a trademark registration for specific use on the light boxes meant that there could not have been any
trademark infringement since registration was an essential element thereof.

ON THE ISSUE OF UNFAIR COMPETITION

There was no evidence that P & D’s use of “Poster Ads” was distinctive or well-known. As noted by the
Court of Appeals, petitioner’s expert witnesses himself had testified that ” ‘Poster Ads’ was too generic a
name. So it was difficult to identify it with any company, honestly speaking.”This crucial admission that
“Poster Ads” could not be associated with P & D showed that, in the mind of the public, the goods and
services carrying the trademark “Poster Ads” could not be distinguished from the goods and services of
other entities.

“Poster Ads” was generic and incapable of being used as a trademark because it was used in the field of
poster advertising, the very business engaged in by petitioner. “Secondary meaning” means that a word
or phrase originally incapable of exclusive appropriation with reference to an article in the market might
nevertheless have been used for so long and so exclusively by one producer with reference to his article
that, in the trade and to that branch of the purchasing public, the word or phrase has come to mean
that the article was his property.

Kho v. CA (G.R. No. 115758)

Facts:

Petitioner, doing business under the name and style KEC Cosmetics Laboratory,
alleges that it is the registered owner of copyright and patent registration of the Chin
Chun Su container and medicated cream. Hence, petitioner filed a complaint to enjoin
respondent Summerville Company from advertising and selling cream products under
the same brand name Chin Chun Su as it will mislead the public and damage
petitioner’s business. The trial court granted the injunction. On appeal, the writ was
dissolved. The trial court ruled to bar petitioner from using the mark Chin Chun Su.

Issue:

Whether or not petitioner is entitled to the exclusive use of the trademark Chin Chun Su
based on her copyright and patent registration over the product.

Ruling: NO.

Trademark, copyright and patents are different intellectual property rights that cannot be
interchanged with one another. A trademark is any visible sign capable of distinguishing
the goods (trademark) or services (service mark) of an enterprise and shall include a
stamped or marked container of goods. In relation thereto, a trade name means the
name or designation identifying or distinguishing an enterprise. Meanwhile, the scope of
a copyright is confined to literary and artistic works which are original intellectual
creations in the literary and artistic domain protected from the moment of their creation.
Patentable inventions, on the other hand, refer to any technical solution of a problem in
any field of human activity which is new, involves an inventive step and is industrially
applicable.
Here, the Petitioner has no right to support her claim for the exclusive use of the subject
trade name and its container. The name and container of a beauty cream product are
proper subjects of a trademark in as much as the same falls squarely within its
definition.

In order to be entitled to exclusively use the same in the sale of the beauty cream
product, the user must sufficiently prove that she registered or used it before anybody
else did. The petitioner’s copyright and patent registration of the name and container
would not guarantee her right to the exclusive use of the same for the reason that they
are not appropriate subjects of the said intellectual rights. Consequently, a preliminary
injunction order cannot be issued for the reason that the petitioner has not proven that
she has a clear right over the said name and container to the exclusion of others, not
having proven that she has registered a trademark thereto or used the same before
anyone did.

FERNANDO U. JUAN v. ROBERTO U. JUAN GR No. 221732, Aug 23, 2017

Facts:

Respondent Roberto U. Juan claimed that he began using the name and mark "Lavandera Ko" in
his laundry business on July 4, 1994. He then opened his laundry store at No. 119 Alfaro St., Salcedo St.,
Makati City in 1995. Thereafter, on March 17, 1997, the National Library issued to him a certificate of
copyright over said name and mark. Over the years, the laundry business expanded with numerous
franchise outlets in Metro Manila and other provinces. Respondent Roberto then formed a corporation
to handle the said business, hence, Laundromatic Corporation (Laundromatic) was incorporated in 1997,
while "Lavandera Ko" was registered as a business name on November 13, 1998 with the Department of
Trade and Industry (DTI). Thereafter, respondent Roberto discovered that his brother, petitioner
Fernando was able to register the name and mark "Lavandera Ko" with the Intellectual Property Office
(IPO) on October 18, 2001, the registration of which was filed on June 5, 1995. Respondent Roberto also
alleged that a certain Juliano Nacino (Juliano) had been writing the franchisees of the former
threatening them with criminal and civil cases if they did not stop using the mark and name "Lavandera
Ko." It was found out by respondent Roberto that petitioner Fernando had been selling his own
franchises.

Thus, respondent Roberto filed a petition for injunction, unfair competition, infringement of
copyright, cancellation of trademark and name with/and prayer for TRO and Preliminary Injunction with
the Regional Trial Court (RTC) and the case was raffled off at Branch 149, Makati City. The RTC issued a
writ of preliminary injunction against petitioner Fernando in Order dated June 10, 2004. On July 21,
2008, due to the death of respondent Roberto, the latter was substituted by his son, Christian Juan
(Christian). Pretrial conference was concluded on July 13, 2010 and after the presentation of evidence of
both parties, the RTC rendered a Resolution dated September 23, 2013, dismissing the petition and
ruling that neither of the parties had a right to the exclusive use or appropriation of the mark
"Lavandera Ko" because the same was the original mark and work of a certain Santiago S. Suarez
(Santiago). According to the RTC, the mark in question was created by Suarez in 1942 in his musical
composition called, "Lavandera Ko" and both parties of the present case failed to prove that they were
the originators of the same mark. Petitioner appealed to CA but CA dismissed due to technical grounds.
Petitioner files Certiorari under Rule 45 with the SC.

Issue:

WHETHER OR NOT A MARK IS THE SAME AS A COPYRIGHT.

Held:

No. The Ruling of RTC is erroneous. The law on trademarks, service marks and trade names are
found under Part III of Republic Act (R.A.) No. 8293, or the Intellectual Code of the Philippines, while
Part IV of the same law governs copyrights.

"Lavandera Ko," the mark in question in this case is being used as a trade name or specifically, a
service name since the business in which it pertains involves the rendering of laundry services. Under
Section 121.1 of R.A. No. 8293, "mark" is defined as any visible sign capable of distinguishing the goods
(trademark) or services (service mark) of an enterprise and shall include a stamped or marked container
of goods. As such, the basic contention of the parties is, who has the better right to use "Lavandera Ko"
as a service name because Section 165.2[13] of the said law, guarantees the protection of trade names
and business names even prior to or without registration, against any unlawful act committed by third
parties. A cause of action arises when the subsequent use of any third party of such trade name or
business name would likely mislead the public as such act is considered unlawful. Hence, the RTC erred
in denying the parties the proper determination as to who has the ultimate right to use the said trade
name by ruling that neither of them has the right or a cause of action since "Lavandera Ko" is protected
by a copyright.

By their very definitions, copyright and trade or service name are different. Copyright is the right
of literary property as recognized and sanctioned by positive law.[14] An intangible, incorporeal right
granted by statute to the author or originator of certain literary or artistic productions, whereby he is
invested, for a limited period, with the sole and exclusive privilege of multiplying copies of the same and
publishing and selling them.[15] Trade name, on the other hand, is any designation which (a) is adopted
and used by person to denominate goods which he markets, or services which he renders, or business
which he conducts, or has come to be so used by other, and (b) through its association with such goods,
services or business, has acquired a special significance as the name thereof, and (c) the use of which for
the purpose stated in (a) is prohibited neither by legislative enactment nor by otherwise defined public
policy.[16]

Section 172.1 of R.A. 8293 enumerates the following original intellectual creations in the literary
and artistic domain that are protected from the moment of their creation, thus:

172.1 Literary and artistic works, hereinafter referred to as "works", are original intellectual
creations in the literary and artistic domain protected from the moment of their creation and shall
include in particular:

(a) Books, pamphlets, articles and other writings;

(b) Periodicals and newspapers;

c) Lectures, sermons, addresses, dissertations prepared for oral delivery, whether or not reduced in
writing or other material form;

(d) Letters;

(e) Dramatic or dramatico-musical compositions; choreographic works or entertainment in dumb shows;

(f) Musical compositions, with or without words;

(g) Works of drawing, painting, architecture, sculpture, engraving, lithography or other works of art;
models or designs for works of art;

(h) Original ornamental designs or models for articles of manufacture, whether or not registrable as an
industrial design, and other works of applied art;

(i) Illustrations, maps, plans, sketches, charts and three-dimensional works relative to geography,
topography, architecture or science;

(j) Drawings or plastic works of a scientific or technical character;

(k) Photographic works including works produced by a process analogous to photography; lantern slides;

(l) Audiovisual works and cinematographic works and works produced by a process analogous to
cinematography or any process for making audio-visual recordings;

(m) Pictorial illustrations and advertisements;

(n) Computer programs; and

(o) Other literary, scholarly, scientific and artistic works.

As such, "Lavandera Ko," being a musical composition with words is protected under the copyright law
(Part IV, R.A. No. 8293) and not under the trademarks, service marks and trade names law (Part III, R.A.
No. 8293).

Considering, therefore, the above premise, this Court deems it proper to remand the case to the RTC for
its proper disposition since this Court cannot, based on the records and some of the issues raised by
both parties such as the cancellation of petitioner's certificate of registration issued by the Intellectual
Property Office, make a factual determination as to who has the better right to use the
trade/business/service name, "Lavandera Ko."
SEHWANI INCORPORATED vs. IN-N-OUT BURGER, INC.
G.R. No. 171053
October 15, 2007
YNARES-SANTIAGO, J.:

FACTS:

Respondent IN-N-OUT Burger, Inc., a foreign corporation (California, USA), and not doing
business in the Philippines, filed before the Bureau of Legal Affairs of the IPO, an administrative
complaint against petitioners Sehwani, Inc. and Benita’s Frites, Inc. for violation of intellectual property
rights, attorney’s fees and damages with prayer for the issuance of a restraining order or writ of
preliminary injunction.

Respondent, alleges that it is the owner of the tradename “IN-N-OUT” and trademarks “IN-N-

OUT,” “IN-N-OUT Burger & Arrow Design” and “IN-N-OUT Burger Logo” which are used in its business
since 1948 up to the present.  These tradename and trademarks were registered in the United States as
well as in other parts of the world.  Petitioner Sehwani allegedly had obtained a trademark registration
for the mark “IN N OUT” (with the inside letter O formed like a star) without its authority.

In their answer with counterclaim, petitioners alleged that respondent lack the legal capacity to
sue because it was not doing business in the Philippines and that it has no cause of action because its
mark is not registered or used in the Philippines. Petitioner Sehwani, Inc. also claimed that as the
registered owner of the "IN-N-OUT" mark, it enjoys the presumption that the same was validly acquired
and that it has the exclusive right to use the mark. Moreover, petitioners argued that other than the
bare allegation of fraud in the registration of the mark, respondent failed to show the existence of any
of the grounds for cancellation thereof under Section 151 of Republic Act (R.A.) No. 8293, otherwise
known as The Intellectual Property Code of the Philippines.

The Bureau ruled in favor of In-N-Out and cancelled the registration of Shwani.

ISSUE/S:
1. Whether or not the Respondent has the legal capacity to sue for the protection of its trademarks
albeit it is not doing business in the Philippines

2. Whether or not a ground exists for the cancellation of the Petitioners’ registration

RULING:

1. Yes. Section 160 RA No. 8293 provides for the right of foreign corporations to sue in trademark or
service mark enforcement action, provided that it meets the requirements under Section 3 thereof,
which are a) Any convention, treaty or agreement relation to intellectual property right or the
repression of unfair competition wherein Philippines is also a party; and b) An extension therein of
reciprocal rights.

Moreoever, Article 6 of The Paris Convention, which governs the protection of well-known trademarks,
is a self-executing provision and does not require legislative enactment to give it effect in the member
country.  The essential requirement therein is that the trademark must be well-known in the country
where protection is sought.  In this case, Director Beltran-Abelardo found that In-n-out Burger and
Arrow Design is an internationally well known mark as evidenced by its trademark registrations around
the world and its comprehensive advertisements therein.

2. Yes. Section 151(b) of RA 8293 provides that a petition to cancel a registration of a mark may be filed
with the Bureau of Legal Affairs by any person who believes that he is or will be damaged by the
registration of a mark at any time, if the registered mark becomes the generic name for the goods or
services, or a portion thereof, for which it is registered, or has been abandoned, or its registration was
fraudulently or contrary to the provisions of this Act, or if the registered mark is being used by or with
the permission of, the registrant so as to misrepresent the source of goods or services on or in
connection with which the mark is used.  The evidence showed that not only did the petitioners use the
IN-N-OUT Burger trademark for the name of their restaurant, but they also used identical or confusingly
similar mark for their hamburger wrappers and French-fries receptacles, thereby effectively
misrepresenting the source of the goods and services.