G.R. No.
115758      March 19, 2002 After due hearing on the application for preliminary injunction, the trial court granted the
ELIDAD C. KHO, doing business under the name and style of KEC COSMETICS
LABORATORY, petitioner, vs. HON. COURT OF APPEALS, SUMMERVILLE
GENERAL MERCHANDISING and COMPANY, and ANG TIAM CHAY, respondents.
DE LEON, JR., J.:
Before us is a petition for review on certiorari of the Decision1 dated May 24, 1993 of the
Court of Appeals setting aside and declaring as null and void the Orders 2 dated February
10, 1992 and March 19, 1992 of the Regional Trial Court, Branch 90, of Quezon City
granting the issuance of a writ of preliminary injunction.
The facts of the case are as follows:
On December 20, 1991, petitioner Elidad C. Kho filed a complaint for injunction and
damages with a prayer for the issuance of a writ of preliminary injunction, docketed as
Civil Case No. Q-91-10926, against the respondents Summerville General
Merchandising and Company (Summerville, for brevity) and Ang Tiam Chay.
The petitioner's complaint alleges that petitioner, doing business under the name and
style of KEC Cosmetics Laboratory, is the registered owner of the copyrights Chin Chun
Su and Oval Facial Cream Container/Case, as shown by Certificates of Copyright
Registration No. 0-1358 and No. 0-3678; that she also has patent rights on Chin Chun
Su & Device and Chin Chun Su for medicated cream after purchasing the same from
Quintin Cheng, the registered owner thereof in the Supplemental Register of the
Philippine Patent Office on February 7, 1980 under Registration Certificate No. 4529;
that respondent Summerville advertised and sold petitioner's cream products under the
brand name Chin Chun Su, in similar containers that petitioner uses, thereby misleading
the public, and resulting in the decline in the petitioner's business sales and income; and,
that the respondents should be enjoined from allegedly infringing on the copyrights and
patents of the petitioner.
The respondents, on the other hand, alleged as their defense that Summerville is the
exclusive and authorized importer, re-packer and distributor of Chin Chun Su products
manufactured by Shun Yi Factory of Taiwan; that the said Taiwanese manufacturing
company authorized Summerville to register its trade name Chin Chun Su Medicated
Cream with the Philippine Patent Office and other appropriate governmental agencies;
that KEC Cosmetics Laboratory of the petitioner obtained the copyrights through
misrepresentation and falsification; and, that the authority of Quintin Cheng, assignee of
the patent registration certificate, to distribute and market Chin Chun Su products in the
Philippines had already been terminated by the said Taiwanese Manufacturing
Company.
same in an Order dated February 10, 1992, the dispositive portion of which reads:
ACCORDINGLY, the application of plaintiff Elidad C. Kho, doing business under
the style of KEC Cosmetic Laboratory, for preliminary injunction, is hereby
granted. Consequentially, plaintiff is required to file with the Court a bond
executed to defendants in the amount of five hundred thousand pesos
(P500,000.00) to the effect that plaintiff will pay to defendants all damages which
defendants may sustain by reason of the injunction if the Court should finally
decide that plaintiff is not entitled thereto.
SO ORDERED.3
The respondents moved for reconsideration but their motion for reconsideration was
denied by the trial court in an Order dated March 19, 1992. 4
On April 24, 1992, the respondents filed a petition for certiorari with the Court of Appeals,
docketed as CA-G.R. SP No. 27803, praying for the nullification of the said writ of
preliminary injunction issued by the trial court. After the respondents filed their reply and
almost a month after petitioner submitted her comment, or on August 14 1992, the latter
moved to dismiss the petition for violation of Supreme Court Circular No. 28-91, a
circular prohibiting forum shopping. According to the petitioner, the respondents did not
state the docket number of the civil case in the caption of their petition and, more
significantly, they did not include therein a certificate of non-forum shopping. The
respondents opposed the petition and submitted to the appellate court a certificate of
non-forum shopping for their petition.
On May 24, 1993, the appellate court rendered a Decision in CA-G.R. SP No. 27803
ruling in favor of the respondents, the dispositive portion of which reads:
WHEREFORE, the petition is hereby given due course and the orders of
respondent court dated February 10, 1992 and March 19, 1992 granting the writ
of preliminary injunction and denying petitioners' motion for reconsideration are
hereby set aside and declared null and void. Respondent court is directed to
forthwith proceed with the trial of Civil Case No. Q-91-10926 and resolve the
issue raised by the parties on the merits.
SO ORDERED.5
In granting the petition, the appellate court ruled that:
The registration of the trademark or brandname "Chin Chun Su" by KEC with the
supplemental register of the Bureau of Patents, Trademarks and Technology
Transfer cannot be equated with registration in the principal register, which is
duly protected by the Trademark Law.1âwphi1.nêt
xxx      xxx      xxx
As ratiocinated in La Chemise Lacoste, S.S. vs. Fernandez, 129 SCRA 373, 393:
 "Registration in the Supplemental Register, therefore, serves as notice
that the registrant is using or has appropriated the trademark. By the very
fact that the trademark cannot as yet be on guard and there are certain
defects, some obstacles which the use must still overcome before he can
claim legal ownership of the mark or ask the courts to vindicate his claims
of an exclusive right to the use of the same. It would be deceptive for a
party with nothing more than a registration in the Supplemental Register
to posture before courts of justice as if the registration is in the Principal
Register.
The reliance of the private respondent on the last sentence of the Patent
office action on application Serial No. 30954 that 'registrants is presumed
to be the owner of the mark until after the registration is declared
cancelled' is, therefore, misplaced and grounded on shaky foundation.
The supposed presumption not only runs counter to the precept
embodied in Rule 124 of the Revised Rules of Practice before the
Philippine Patent Office in Trademark Cases but considering all the facts
ventilated before us in the four interrelated petitions involving the
petitioner and the respondent, it is devoid of factual basis. As even in
cases where presumption and precept may factually be reconciled, we
have held that the presumption is rebuttable, not conclusive, (People v.
Lim Hoa, G.R. No. L-10612, May 30, 1958, Unreported). One may be
declared an unfair competitor even if his competing trademark is
registered (Parke, Davis & Co. v. Kiu Foo & Co., et al., 60 Phil 928; La
Yebana Co. v. chua Seco & Co., 14 Phil 534)."6
The petitioner filed a motion for reconsideration. This she followed with several motions
to declare respondents in contempt of court for publishing advertisements notifying the
public of the promulgation of the assailed decision of the appellate court and stating that
genuine Chin Chun Su products could be obtained only from Summerville General
Merchandising and Co.
In the meantime, the trial court went on to hear petitioner's complaint for final injunction
and damages. On October 22, 1993, the trial court rendered a Decision 7 barring the
petitioner from using the trademark Chin Chun Su and upholding the right of the
respondents to use the same, but recognizing the copyright of the petitioner over the oval
shaped container of her beauty cream. The trial court did not award damages and costs
to any of the parties but to their respective counsels were awarded Seventy-Five
Thousand Pesos (P75,000.00) each as attorney's fees. The petitioner duly appealed the
said decision to the Court of Appeals.
On June 3, 1994, the Court of Appeals promulgated a Resolution 8 denying the
petitioner's motions for reconsideration and for contempt of court in CA-G.R. SP No.
27803.
Hence, this petition anchored on the following assignment of errors:
I
RESPONDENT HONORABLE COURT OF APPEALS COMMITTED GRAVE
ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION IN
FAILING TO RULE ON PETITIONER'S MOTION TO DISMISS.
II
RESPONDENT HONORABLE COURT OF APPEALS COMMITTED GRAVE
ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION IN
REFUSING TO PROMPTLY RESOLVE PETITIONER'S MOTION FOR
RECONSIDERATION.
III
IN DELAYING THE RESOLUTION OF PETITIONER'S MOTION FOR
RECONSIDERATION, THE HONORABLE COURT OF APPEALS DENIED
PETITIONER'S RIGHT TO SEEK TIMELY APPELLATE RELIEF AND
VIOLATED PETITIONER'S RIGHT TO DUE PROCESS.
IV
RESPONDENT HONORABLE COURT OF APPEALS COMMITTED GRAVE
ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION IN
FAILING TO CITE THE PRIVATE RESPONDENTS IN CONTEMPT.9
The petitioner faults the appellate court for not dismissing the petition on the ground of
violation of Supreme Court Circular No. 28-91. Also, the petitioner contends that the
appellate court violated Section 6, Rule 9 of the Revised Internal Rules of the Court of
Appeals when it failed to rule on her motion for reconsideration within ninety (90) days
from the time it is submitted for resolution. The appellate court ruled only after the lapse
of three hundred fifty-four (354) days, or on June 3, 1994. In delaying the resolution
thereof, the appellate court denied the petitioner's right to seek the timely appellate relief.
Finally, petitioner describes as arbitrary the denial of her motions for contempt of court
against the respondents.
We rule in favor of the respondents.
Pursuant to Section 1, Rule 58 of the Revised Rules of Civil Procedure, one of the
grounds for the issuance of a writ of preliminary injunction is a proof that the applicant is
entitled to the relief demanded, and the whole or part of such relief consists in restraining
the commission or continuance of the act or acts complained of, either for a limited
period or perpetually. Thus, a preliminary injunction order may be granted only when the
application for the issuance of the same shows facts entitling the applicant to the relief
demanded.10 This is the reason why we have ruled that it must be shown that the
invasion of the right sought to be protected is material and substantial, that the right of
complainant is clear and unmistakable, and, that there is an urgent and paramount
necessity for the writ to prevent serious damage.11
In the case at bar, the petitioner applied for the issuance of a preliminary injunctive order
on the ground that she is entitled to the use of the trademark on Chin Chun Su and its
container based on her copyright and patent over the same. We first find it appropriate to
rule on whether the copyright and patent over the name and container of a beauty cream
product would entitle the registrant to the use and ownership over the same to the
exclusion of others.
Trademark, copyright and patents are different intellectual property rights that cannot be
interchanged with one another. A trademark is any visible sign capable of distinguishing
the goods (trademark) or services (service mark) of an enterprise and shall include a
stamped or marked container of goods. 12 In relation thereto, a trade name means the
name or designation identifying or distinguishing an enterprise. 13 Meanwhile, the scope
of a copyright is confined to literary and artistic works which are original intellectual
creations in the literary and artistic domain protected from the moment of their
creation.14 Patentable inventions, on the other hand, refer to any technical solution of a
problem in any field of human activity which is new, involves an inventive step and is
industrially applicable.15
Petitioner has no right to support her claim for the exclusive use of the subject trade
name and its container. The name and container of a beauty cream product are proper
subjects of a trademark inasmuch as the same falls squarely within its definition. In order
to be entitled to exclusively use the same in the sale of the beauty cream product, the
user must sufficiently prove that she registered or used it before anybody else did. The
petitioner's copyright and patent registration of the name and container would not
guarantee her the right to the exclusive use of the same for the reason that they are not
appropriate subjects of the said intellectual rights. Consequently, a preliminary injunction
order cannot be issued for the reason that the petitioner has not proven that she has a
clear right over the said name and container to the exclusion of others, not having proven
that she has registered a trademark thereto or used the same before anyone did.
We cannot likewise overlook the decision of the trial court in the case for final injunction
and damages. The dispositive portion of said decision held that the petitioner does not
have trademark rights on the name and container of the beauty cream product. The said
decision on the merits of the trial court rendered the issuance of the writ of a preliminary
injunction moot and academic notwithstanding the fact that the same has been appealed
in the Court of Appeals. This is supported by our ruling in La Vista Association, Inc. v.
Court of Appeals16, to wit:
Considering that preliminary injunction is a provisional remedy which may be
granted at any time after the commencement of the action and before judgment
when it is established that the plaintiff is entitled to the relief demanded and only
when his complaint shows facts entitling such reliefs xxx and it appearing that the
trial court had already granted the issuance of a final injunction in favor of
petitioner in its decision rendered after trial on the merits xxx the Court resolved
to Dismiss the instant petition having been rendered moot and academic. An
injunction issued by the trial court after it has already made a clear
pronouncement as to the plaintiff's right thereto, that is, after the same issue has
been decided on the merits, the trial court having appreciated the evidence
presented, is proper, notwithstanding the fact that the decision rendered is not
yet final xxx. Being an ancillary remedy, the proceedings for preliminary
injunction cannot stand separately or proceed independently of the decision
rendered on the merit of the main case for injunction. The merit of the main case
having been already determined in favor of the applicant, the preliminary
determination of its non-existence ceases to have any force and effect. (italics
supplied)
La Vista categorically pronounced that the issuance of a final injunction renders any
question on the preliminary injunctive order moot and academic despite the fact that the
decision granting a final injunction is pending appeal. Conversely, a decision denying the
applicant-plaintiff's right to a final injunction, although appealed, renders moot and
academic any objection to the prior dissolution of a writ of preliminary injunction.
The petitioner argues that the appellate court erred in not dismissing the petition for
certiorari for non-compliance with the rule on forum shopping. We disagree. First, the
petitioner improperly raised the technical objection of non-compliance with Supreme
Court Circular No. 28-91 by filing a motion to dismiss the petition for certiorari filed in the
appellate court. This is prohibited by Section 6, Rule 66 of the Revised Rules of Civil
Procedure which provides that "(I)n petitions for certiorari before the Supreme Court and
the Court of Appeals, the provisions of Section 2, Rule 56, shall be observed. Before
giving due course thereto, the court may require the respondents to file their comment
to, and not a motion to dismiss, the petition xxx (italics supplied)". Secondly, the issue
was raised one month after petitioner had filed her answer/comment and after private
respondent had replied thereto. Under Section 1, Rule 16 of the Revised Rules of Civil
Procedure, a motion to dismiss shall be filed within the time for but before filing the
answer to the complaint or pleading asserting a claim. She therefore could no longer
submit a motion to dismiss nor raise defenses and objections not included in the
answer/comment she had earlier tendered. Thirdly, substantial justice and equity require
this Court not to revive a dissolved writ of injunction in favor of a party without any legal
right thereto merely on a technical infirmity. The granting of an injunctive writ based on a
technical ground rather than compliance with the requisites for the issuance of the same
is contrary to the primary objective of legal procedure which is to serve as a means to
dispense justice to the deserving party.
The petitioner likewise contends that the appellate court unduly delayed the resolution of
her motion for reconsideration. But we find that petitioner contributed to this delay when
she filed successive contentious motions in the same proceeding, the last of which was
on October 27, 1993, necessitating counter-manifestations from private respondents with
the last one being filed on November 9, 1993. Nonetheless, it is well-settled that non-
observance of the period for deciding cases or their incidents does not render such
judgments ineffective or void.17 With respect to the purported damages she suffered due
to the alleged delay in resolving her motion for reconsideration, we find that the said
issue has likewise been rendered moot and academic by our ruling that she has no right
over the trademark and, consequently, to the issuance of a writ of preliminary injunction.

Finally, we rule that the Court of Appeals correctly denied the petitioner's several motions
for contempt of court. There is nothing contemptuous about the advertisements
complained of which, as regards the proceedings in CA-G.R. SP No. 27803 merely
announced in plain and straightforward language the promulgation of the assailed
Decision of the appellate court. Moreover, pursuant to Section 4 of Rule 39 of the
Revised Rules of Civil Procedure, the said decision nullifying the injunctive writ was
immediately executory.

WHEREFORE, the petition is DENIED. The Decision and Resolution of the Court of
Appeals dated May 24, 1993 and June 3, 1994, respectively, are hereby AFFIRMED.
With costs against the petitioner.

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

Sec. 6. The provisions of this Act shall not be interpreted as prohibiting the use of bottles
as containers for "sisi," "bagoong," "patis," and similar native products.

Scarcely disputed are certain and specific industry practices in the sale of gin: The
manufacturer sells the product in marked containers, through dealers, to the public in
supermarkets, grocery shops, retail stores and other sales outlets. The buyer takes the
item; he is neither required to return the bottle nor required to make a deposit to assure
its return to the seller. He could return the bottle and get a refund. A number of bottles at
times find their way to commercial users. It cannot be gainsaid that ownership of the
containers does pass on to the consumer albeit subject to the statutory limitation on the
use of the registered containers and to the trademark right of the registrant. The
statement in Section 5 of R.A. 623 to the effect that the "sale of beverage contained in
the said containers shall not include the sale of the containers unless specifically so
provided" is not a rule of proscription. It is a rule of construction that, in keeping with the
spirit and intent of the law, establishes at best a presumption (of non-conveyance of the
container) and which by no means can be taken to be either interdictive or conclusive in
character. Upon the other hand, LTDI's sales invoice, stipulating that the "sale does not
include the bottles with the blown-in marks of ownership of La Tondeña Distillers,"
cannot affect those who are not privies thereto.

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

WHEREFORE, the decision of the appellate court is MODIFIED by ordering LTDI to pay
petitioner just compensation for the seized bottles. Instead, however, of remanding the
case to the Court of Appeals to receive evidence on, and thereafter resolve, the
assessment thereof, this Court accepts and accordingly adopts the quantification of
P18,157.00 made by the trial court. No costs.

G.R. No. L-48226 December 14, 1942
ANA L. ANG, petitioner, vs. TORIBIO TEODORO, respondent
OZAETA, J.:
Petitioner has appealed to this Court by certiorari to reverse the judgment of the Court of
Appeals reversing that of the Court of First Instance of Manila and directing the Director
of Commerce to cancel the registration of the trade-mark "Ang Tibay" in favor of said
petitioner, and perpetually enjoining the latter from using said trade-mark on goods
manufactured and sold by her.
Respondent Toribio Teodoro, at first in partnership with Juan Katindig and later as sole
proprietor, has continuously used "Ang Tibay," both as a trade-mark and as a trade-
name, in the manufacture and sale of slippers, shoes, and indoor baseballs since 1910.
He formally registered it as trade-mark on September 29, 1915, and as trade-name on
January 3, 1933. The growth of his business is a thrilling epic of Filipino industry and
business capacity. Starting in an obscure shop in 1910 with a modest capital of P210 but
with tireless industry and unlimited perseverance, Toribio Teodoro, then an unknown
young man making slippers with his own hands but now a prominent business magnate
and manufacturer with a large factory operated with modern machinery by a great
number of employees, has steadily grown with his business to which he has dedicated
the best years of his life and which he has expanded to such proportions that his gross
sales from 1918 to 1938 aggregated P8,787,025.65. His sales in 1937 amounted to
P1,299,343.10 and in 1938, P1,133,165.77. His expenses for advertisement from 1919
to 1938 aggregated P210,641.56.
Petitioner (defendant below) registered the same trade-mark "Ang Tibay" for pants and
shirts on April 11, 1932, and established a factory for the manufacture of said articles in
the year 1937. In the following year (1938) her gross sales amounted to P422,682.09.
Neither the decision of the trial court nor that of the Court of Appeals shows how much
petitioner has spent or advertisement. But respondent in his brief says that petitioner
"was unable to prove that she had spent a single centavo advertising "Ang Tibay" shirts
and pants prior to 1938. In that year she advertised the factory which she had just built
and it was when this was brought to the attention of the appellee that he consulted his
attorneys and eventually brought the present suit."
The trial court (Judge Quirico Abeto) presiding absolved the defendant from the
complaint, with costs against the plaintiff, on the grounds that the two trademarks are
dissimilar and are used on different and non-competing goods; that there had been no
exclusive use of the trade-mark by the plaintiff; and that there had been no fraud in the
use of the said trade-mark by the defendant because the goods on which it is used are
essentially different from those of the plaintiff. The second division of the Court of
Appeals, composed of Justices Bengson, Padilla, Lopez Vito, Tuason, and Alex Reyes,
with Justice Padilla as ponente, reversed that judgment, holding that by uninterrupted an
exclusive use since 191 in the manufacture of slippers and shoes, respondent's trade-
mark has acquired a secondary meaning; that the goods or articles on which the two
trade-marks are used are similar or belong to the same class; and that the use by
petitioner of said trade-mark constitutes a violation of sections 3 and 7 of Act No. 666.
The defendant Director of Commerce did not appeal from the decision of the Court of
Appeals.
First. Counsel for the petitioner, in a well-written brief, makes a frontal sledge-hammer
attack on the validity of respondent's trade-mark "Ang Tibay." He contends that the
phrase "Ang Tibay" as employed by the respondent on the articles manufactured by him
is a descriptive term because, "freely translate in English," it means "strong, durable,
lasting." He invokes section 2 of Act No. 666, which provides that words or devices which
related only to the name, quality, or description of the merchandise cannot be the subject
of a trade-mark. He cites among others the case of Baxter vs. Zuazua (5 Phil., 16), which
involved the trade-mark "Agua de Kananga" used on toilet water, and in which this Court
held that the word "Kananga," which is the name of a well-known Philippine tree or its
flower, could not be appropriated as a trade-mark any more than could the words
"sugar," "tobacco," or "coffee." On the other hand, counsel for the respondent, in an
equally well-prepared and exhaustive brief, contend that the words "Ang Tibay" are not
descriptive but merely suggestive and may properly be regarded as fanciful or arbitrary in
the legal sense. The cite several cases in which similar words have been sustained as
valid trade-marks, such as "Holeproof" for hosiery, 1 "ideal for tooth brushes, 2 and
"Fashionknit" for neckties and sweaters. 3
We find it necessary to go into the etymology and meaning of the Tagalog words "Ang
Tibay" to determine whether they are a descriptive term, i.e., whether they relate to the
quality or description of the merchandise to which respondent has applied them as a
trade-mark. The word "ang" is a definite article meaning "the" in English. It is also used
as an adverb, a contraction of the word "anong" (what or how). For instance, instead of
saying, "Anong ganda!" ("How beautiful!"), we ordinarily say, "Ang ganda!" Tibay is a root
word from which are derived the verb magpatibay (to strenghten; the nouns
pagkamatibay (strength, durability), katibayan (proof, support, strength), katibay-tibayan
(superior strength); and the adjectives matibay (strong, durable, lasting), napakatibay
(very strong), kasintibay or magkasintibay (as strong as, or of equal strength). The
phrase "Ang Tibay" is an exclamation denoting administration of strength or durability.
For instance, one who tries hard but fails to break an object exclaims, "Ang tibay!" (How
strong!") It may also be used in a sentence thus, "Ang tibay ng sapatos mo!" (How
durable your shoes are!") The phrase "ang tibay" is never used adjectively to define or
describe an object. One does not say, "ang tibay sapatos" or "sapatos ang tibay" is never
used adjectively to define or describe an object. One does not say, "ang tibay sapatos"
or "sapatos ang tibay" to mean "durable shoes," but "matibay na sapatos" or "sapatos na
matibay."
From all of this we deduce that "Ang Tibay" is not a descriptive term within the meaning
of the Trade-Mark Law but rather a fanciful or coined phrase which may properly and
legally be appropriated as a trade-mark or trade-name. In this connection we do not fail
to note that when the petitioner herself took the trouble and expense of securing the
registration of these same words as a trademark of her products she or her attorney as
well as the Director of Commerce was undoubtedly convinced that said words (Ang
Tibay) were not a descriptive term and hence could be legally used and validly registered
as a trade-mark. It seems stultifying and puerile for her now to contend otherwise,
suggestive of the story of sour grapes. Counsel for the petitioner says that the function of
a trade-mark is to point distinctively, either by its own meaning or by association, to the
origin or ownership of the wares to which it is applied. That is correct, and we find that
"Ang Tibay," as used by the respondent to designate his wares, had exactly performed
that function for twenty-two years before the petitioner adopted it as a trade-mark in her
own business. Ang Tibay shoes and slippers are, by association, known throughout the
Philippines as products of the Ang Tibay factory owned and operated by the respondent
Toribio Teodoro.
Second. In her second assignment of error petitioner contends that the Court of Appeals
erred in holding that the words "Ang Tibay" had acquired a secondary meaning. In view
of the conclusion we have reached upon the first assignment of error, it is unnecessary
to apply here the doctrine of "secondary meaning" in trade-mark parlance. This doctrine
is to the effect that a word or phrase originally incapable of exclusive appropriation with
reference to an article of the market, because geographically or otherwise descriptive,
might nevertheless have been used so long and so exclusively by one producer with
reference to his article that, in that trade and to that branch of the purchasing public, the
word or phrase has come to mean that the article was his product. (G. & C. Merriam Co.
vs. Salfield, 198 F., 369, 373.) We have said that the phrase "Ang Tibay," being neither
geographic nor descriptive, was originally capable of exclusive appropriation as a trade-
mark. But were it not so, the application of the doctrine of secondary meaning made by
the Court of Appeals could nevertheless be fully sustained because, in any event, by
respondent's long and exclusive use of said phrase with reference to his products and
his business, it has acquired a proprietary connotation. (Landers, Frary, and Clark vs.
Universal Cooler Corporation, 85 F. [2d], 46.)
Third. Petitioner's third assignment of error is, that the Court of Appeals erred in holding
that pants and shirts are goods similar to shoes and slippers within the meaning of
sections 3 and 7 of Act No. 666. She also contends under her fourth assignment of error
(which we deem convenient to pass upon together with the third) that there can neither
be infringement of trade-mark under section 3 nor unfair competition under section 7
through her use of the words "Ang Tibay" in connection with pants and shirts, because
those articles do not belong to the same class of merchandise as shoes and slippers.
The question raised by petitioner involve the scope and application of sections 3,7, 11,
13, and 20 of the Trade-Mark Law (Act No. 666.) Section 3 provides that "any person
entitled to the exclusive use of a trade-mark to designate the origin or ownership of
goods he has made or deals in, may recover damages in a civil actions from any person
who has sold goods of a similar kind, bearing such trade-mark . . . The complaining party
. . . may have a preliminary injunction, . . . and such injunction upon final hearing, if the
complainant's property in the trade-mark and the defendant's violation thereof shall be
fully established, shall be made perpetual, and this injunction shall be part of the
judgment for damages to be rendered in the same cause." Section 7 provides that any
person who, in selling his goods, shall give them the general appearance of the goods of
another either in the wrapping of the packages, or in the devices or words thereon, or in
any other feature of their appearance, which would be likely to influence purchasers to
believe that the goods offered are those of the complainant, shall be guilty of unfair
competition, and shall be liable to an action for damages and to an injunction, as in the
cases of trade-mark infringement under section 3. Section 11 requires the applicant for
registration of a trade-mark to state, among others, "the general class of merchandise to
which the trade-mark claimed has been appropriated." Section 13 provides that no
alleged trade-mark or trade name shall be registered which is identical with a registered
or known trade-mark owned by another and appropriate to the same class of
merchandise, or which to nearly resembles another person's lawful trade-mark or trade-
name as to be likely to cause confusion or mistake in the mind of the public, or to
deceive purchasers. And section 2 authorizes the Director of Commerce to establish
classes of merchandise for the purpose of the registration of trade-marks and to
determine the particular description of articles included in each class; it also provides that
"an application for registration of a trade-mark shall be registered only for one class of
articles and only for the particular description of articles mentioned in said application."
We have underlined the key words used in the statute: "goods of a similar kin," "general
class of merchandise," "same class of merchandise," "classes of merchandise," and
"class of articles," because it is upon their implications that the result of the case hinges.
These phrases, which refer to the same thing, have the same meaning as the phrase
"merchandise of the same descriptive properties" used in the statutes and jurisprudence
of other jurisdictions.
The burden of petitioner's argument is that under sections 11 and 20 the registration by
respondent of the trade-mark "Ang Tibay" for shoes and slippers is no safe-guard against
its being used by petitioner for pants and shirts because the latter do not belong to the
same class of merchandise or articles as the former; that she cannot be held guilty of
infringement of trade-mark under section 3 because respondent's mark is not a valid
trade-mark, nor has it acquired a secondary meaning; that pants and shirts do not
possess the same descriptive properties as shoes and slippers; that neither can she be
held guilty of unfair competition under section 7 because the use by her of the trade-
mark "Ang Tibay" upon pants and shirts is not likely to mislead the general public as to
their origin or ownership; and that there is now showing that she in unfairly or
fraudulently using that mark "Ang Tibay" against the respondent. If we were interpreting
the statute for the first time and in the first decade of the twentieth century, when it was
enacted, and were to construe it strictly and literally, we might uphold petitioner's
contentions. But law and jurisprudence must keep abreast with the progress of mankind,
and the courts must breathe life into the statutes if they are to serve their purpose. Our
Trade-mark Law, enacted nearly forty years ago, has grown in its implications and
practical application, like a constitution, in virtue of the life continually breathed into it. It is
not of merely local application; it has its counterpart in other jurisdictions of the civilized
world from whose jurisprudence it has also received vitalizing nourishment. We have to
apply this law as it has grown and not as it was born. Its growth or development abreast
with that of sister statutes and jurisprudence in other jurisdictions is reflected in the
following observation of a well-known author:
This fundamental change in attitude first manifested itself in the year 1915-1917. Until
about then, the courts had proceeded on the theory that the same trade-mark, used on
un-like goods, could not cause confusion in trade and that, therefore, there could be no
objection to the use and registration of a well-known mark by a third party for a different
class of goods. Since 1916 however, a growing sentiment began to arise that in the
selection of a famous mark by a third party, there was generally the hidden intention to
"have a free ride" on the trade-mark owner's reputation and good will. (Derenberg,
Trade-Mark Protection & Unfair Trading, 1936 edition, p. 409.)
In the present state of development of the law on Trade-Marks, Unfair Competition, and
Unfair Trading, the test employed by the courts to determine whether noncompeting
goods are or are not of the same class is confusion as to the origin of the goods of the
second user. Although two noncompeting articles may be classified under two different
classes by the Patent Office because they are deemed not to possess the same
descriptive properties, they would, nevertheless, be held by the courts to belong to the
same class if the simultaneous use on them of identical or closely similar trade-marks
would be likely to cause confusion as to the origin, or personal source, of the second
user's goods. They would be considered as not falling under the same class only if they
are so dissimilar or so foreign to each other as to make it unlikely that the purchaser
would think the first user made the second user's goods.
Such construction of the law is induced by cogent reasons of equity and fair dealing. The
courts have come to realize that there can be unfair competition or unfair trading even if
the goods are non-competing, and that such unfair trading can cause injury or damage to
the first user of a given trade-mark, first, by prevention of the natural expansion of his
business and, second, by having his business reputation confused with and put at the
mercy of the second user. Then noncompetitive products are sold under the same mark,
the gradual whittling away or dispersion of the identity and hold upon the public mind of
the mark created by its first user, inevitably results. The original owner is entitled to the
preservation of the valuable link between him and the public that has been created by his
ingenuity and the merit of his wares or services. Experience has demonstrated that when
a well-known trade-mark is adopted by another even for a totally different class of goods,
it is done to get the benefit of the reputation and advertisements of the originator of said
mark, to convey to the public a false impression of some supposed connection between
the manufacturer of the article sold under the original mark and the new articles being
tendered to the public under the same or similar mark. As trade has developed and
commercial changes have come about, the law of unfair competition has expanded to
keep pace with the times and the element of strict competition in itself has ceased to be
the determining factor. The owner of a trade-mark or trade-name has a property right in
which he is entitled to protection, since there is damage to him from confusion of
reputation or goodwill in the mind of the public as well as from confusion of goods. The
modern trend is to give emphasis to the unfairness of the acts and to classify and treat
the issue as a fraud.
A few of the numerous cases in which the foregoing doctrines have been laid down in
one form or another will now be cited: (1) In Teodoro Kalaw Ng Khe vs. Level Brothers
Company (G.R. No. 46817), decided by this Court on April 18, 1941, the respondent
company (plaintiff below) was granted injunctive relief against the use by the petitioner of
the trade-mark "Lux" and "Lifebuoy" for hair pomade, they having been originally used by
the respondent for soap; The Court held in effect that although said articles are
noncompetitive, they are similar or belong to the same class. (2) In Lincoln Motor Co. vs.
Lincoln Automobile Co. (44 F. [2d], 812), the manufacturer of the well-known Lincoln
automobile was granted injunctive relief against the use of the word "Lincoln" by another
company as part of its firm name. (3) The case of Aunt Jemima Mills Co. vs. Rigney &
Co. (247 F., 407), involved the trade-mark "Aunt Jemima," originally used on flour, which
the defendant attempted to use on syrup, and there the court held that the goods, though
different, are so related as to fall within the mischief which equity should prevent. (4) In
Tiffany & Co., vs. Tiffany Productions, Inc. (264 N.Y.S., 459; 23 Trade-mark Reporter,
183), the plaintiff, a jewelry concern, was granted injunctive relief against the defendant,
a manufacturer of motion pictures, from using the name "Tiffany." Other famous cases
cited on the margin, wherein the courts granted injunctive relief, involved the following
trade-marks or trade-names: "Kodak," for cameras and photographic supplies, against its
use for bicycles. 4 "Penslar," for medicines and toilet articles, against its use for cigars; 5
"Rolls-Royce," for automobiles. against its use for radio tubes; 6 "Vogue," as the name of
a magazine, against its use for hats; 7 "Kotex," for sanitary napkins, against the use of
"Rotex" for vaginal syringes; 8 "Sun-Maid," for raisins, against its use for flour; 9 "Yale,"
for locks and keys, against its use for electric flashlights; 10 and "Waterman," for fountain
pens, against its use for razor blades. 11lawphil.net
Against this array of famous cases, the industry of counsel for the petitioner has enabled
him to cite on this point only the following cases: (1) Mohawk Milk Products vs. General
Distilleries Corporation (95 F. [2d], 334), wherein the court held that gin and canned milk
and cream do not belong to the same class; (2) Fawcett Publications, Inc. vs. Popular
Mechanics Co. (80 F. [2d], 194), wherein the court held that the words "Popular
Mechanics" used as the title of a magazine and duly registered as a trade-mark were not
infringed by defendant's use of the words "Modern Mechanics and Inventions" on a
competitive magazine, because the word "mechanics" is merely a descriptive name; and
(3) Oxford Book Co. vs. College Entrance Book Co. (98 F. [2d], 688), wherein the plaintiff
unsuccessfully attempted to enjoin the defendant from using the word "Visualized" in
connection with history books, the court holding that said word is merely descriptive.
These cases cites and relied upon by petitioner are obviously of no decisive application
to the case at bar.

We think reasonable men may not disagree that shoes and shirts are not as unrelated as
fountain pens and razor blades, for instance. The mere relation or association of the
articles is not controlling. As may readily be noted from what we have heretofore said,
the proprietary connotation that a trade-mark or trade-name has acquired is of more
paramount consideration. The Court of Appeals found in this case that by uninterrupted
and exclusive use since 1910 of respondent's registered trade-mark on slippers and
shoes manufactured by him, it has come to indicate the origin and ownership of said
goods. It is certainly not farfetched to surmise that the selection by petitioner of the same
trade-mark for pants and shirts was motivated by a desire to get a free ride on the
reputation and selling power it has acquired at the hands of the respondent. As observed
in another case, 12 the field from which a person may select a trade-mark is practically
unlimited, and hence there is no excuse for impinging upon or even closely approaching
the mark of a business rival. In the unlimited field of choice, what could have been
petitioner's purpose in selecting "Ang Tibay" if not for its fame?

Lastly, in her fifth assignment of error petitioner seems to make a frantic effort to retain
the use of the mark "Ang Tibay." Her counsel suggests that instead of enjoining her from
using it, she may be required to state in her labels affixed to her products the inscription:
"Not manufactured by Toribio Teodoro." We think such practice would be unethical and
unworthy of a reputable businessman. To the suggestion of petitioner, respondent may
say, not without justice though with a tinge of bitterness: "Why offer a perpetual apology
or explanation as to the origin of your products in order to use my trade-mark instead of
creating one of your own?" On our part may we add, without meaning to be harsh, that a
self-respecting person does not remain in the shelter of another but builds one of his
own.

The judgment of the Court of Appeals is affirmed, with costs against the petitioner in the
three instances. So ordered.
 G.R. No. L-20635             March 31, 1966
ETEPHA, A.G., petitioner, vs. DIRECTOR OF PATENTS and WESTMONT
PHARMACEUTICALS, INC., respondents.
SANCHEZ, J.:
To the question: May trademark ATUSSIN be registered, given the fact that
PERTUSSIN, another trademark, had been previously registered in the Patent Office? —
the Director of Patents answered affirmatively. Hence this appeal.
On April 23, 1959, respondent Westmont Pharmaceuticals, Inc., a New York corporation,
sought registration of trademark "Atussin" placed on its "medicinal preparation of
expectorant antihistaminic, bronchodilator sedative, ascorbic acid (Vitamin C) used in the
treatment of cough". The trademark is used exclusively in the Philippines since January
21, 1959.1
Petitioner, Etepha, A. G., a Liechtenstin (principality) corporation, objected. Petitioner
claims that it will be damaged because Atussin is so confusedly similar to its Pertussin
(Registration No. 6089, issued on September 25, 1957) used on a preparation for the
treatment of coughs, that the buying public will be misled into believing that Westmont's
product is that of petitioner's which allegedly enjoys goodwill.
1. The objects of a trademark are "to point out distinctly the origin or ownership of
the articles to which it is affixed, to secure to him who has been instrumental in
bringing into market a superior article or merchandise the fruit of his industry and
skill, and to prevent fraud and imposition." 2 Our over-all task then is to ascertain
whether or not Atussin so resembles Pertussin "as to be likely, when applied to
or used in connection with the goods ... of the applicant, to cause confusion or
mistake or to deceive purchasers".3 And, we are to be guided by the rule that the
validity of a cause for infringement is predicated upon colorable imitation. The
phrase "colorable imitation" denotes such a "close or ingenious imitation as to be
calculated to deceive ordinary persons, or such a resemblance to the original as
to deceive an ordinary purchaser, giving such attention as a purchaser usually
gives, and to cause him to purchase the one supposing it to be the other." 4
2. That the word "tussin" figures as a component of both trademarks is nothing to
wonder at. The Director of Patents aptly observes that it is "the common practice
in the drug and pharmaceutical industries to 'fabricate' marks by using syllables
or words suggestive of the ailments for which they are intended and adding
thereto distinctive prefixes or suffixes".5 And appropriately to be considered now
is the fact that, concededly, the "tussin" (in Pertussin and Atussin) was derived
from the Latin root-word "tussis" meaning cough.6
"Tussin" is merely descriptive; it is generic; it furnishes to the buyer no indication
of the origin of the goods; it is open for appropriation by anyone. It is accordingly
barred from registration as trademark. With jurisprudence holding the line, we
feel safe in making the statement that any other conclusion would result in
"appellant having practically a monopoly"7 of the word "tussin" in a trademark.8
While "tussin" by itself cannot thus be used exclusively to identify one's goods, it
may properly become the subject of a trademark "by combination with another
word or phrase".9 And this union of words is reflected in petitioner's Pertussin and
respondent's Atussin, the first with prefix "Per" and the second with Prefix
"A".1äwphï1.ñët
3. A practical approach to the problem of similarity or dissimilarity is to go into
the whole of the two trademarks pictured in their manner of display. Inspection
should be undertaken from the viewpoint of a prospective buyer. The trademark
complained of should be compared and contrasted with the purchaser's memory
(not in juxtaposition) of the trademark said to be infringed. 10 Some such factors
as "sound; appearance; form, style, shape, size or format; color; ideas connoted
by marks; the meaning, spelling, and pronunciation, of words used; and the
setting in which the words appear" may be considered. 11 For, indeed, trademark
infringement is a form of unfair competition. 12
We take a casual look at the two labels — without spelling out the details —
bearing in mind the easy-to-remember earmarks thereof. Respondent's label
underscores the trademark Atussin in bold, block letters horizontally written. In
petitioner's, on the other hand, Pertussin is printed diagonally upwards and
across in semiscript style with flourishes and with only the first letter "P"
capitalized. Each label plainly shows the source of the medicine: petitioner's at
the foot bears "Etepha Ltd. Schaan Fl", and on top, "Apothecary E. Taeschner's";
respondent's projects "Westmont Pharmaceuticals, Inc. New York, USA" at the
bottoms, and on the lower left side the word "Westmont" upon a white diamond
shaped enclosure and in red ink — a color different from that of the words above
and below it. Printed prominently along the left, bottom and right edges of
petitioner's label are indications of the use: "for bronchial catarrh — whopping-
cough — coughs and asthma". Respondent's for its part briefly represents what
its produce actually is - a "cough syrup". The two labels are entirely different in
colors, contents, arrangement of words thereon, sizes, shapes and general
appearance. The contrasts in pictorial effects and appeals to the eye is so
pronounced that the label of one cannot be mistaken for that of the other, not
even by persons unfamiliar with the two trademarks. 13
On this point the following culled from a recent decision of the United States
Court of Customs and Patent Appeals (June 15, 1956) is persuasive: 14
 Confusion is likely between trademarks, however, only if their over-
all presentations in any of the particulars of sound, appearance, or
meaning are such as would lead the purchasing public into believing that
the products to which the marks are applied emanated from the same
source. In testing this issue, fixed legal rules exist — if not in harmony,
certainly in abundance — but, in the final analysis, the application of
these rules in any given situation necessarily reflects a matter of
individual judgment largely predicated on opinion. There is, however, and
can be no disagreement with the rule that the purchaser is confused, if at
all, by the marks as a whole.
4. We now consider exclusively the two words — Pertussin and Atussin — as
they appear on the respective labels. As previously adverted to, these words are
presented to the public in different styles of writing and methods of design. The
horizontal plain, block letters of Atussin and the diagonally and artistically upward
writing of Pertussin leave distinct visual impressions. One look is enough to
denude the mind of that illuminating similarity so essential for a trademark
infringement case to prosper.
unsuspecting type; he examines the product sold to him; he checks to find out
whether it conforms to the medical prescription. The common trade channel is
the pharmacy or the drugstore. Similarly, the pharmacist or druggist verifies the
medicine sold. The margin of error in the acquisition of one for the other is quite
remote.
We concede the possibility that buyers might be able to obtain Pertussin or Attusin
without prescription. When this happens, then the buyer must be one throughly familiar
with what he intends to get, else he would not have the temerity to ask for a medicine —
specifically needed to cure a given ailment. In which case, the more improbable it will be
to palm off one for the other. For a person who purchases with open eyes is hardly the
man to be deceived.
For the reasons given, the appealed decision of the respondent Director of Patents —
giving due course to the application for the registration of trademark ATTUSIN is hereby
affirmed. Costa against petitioner. So ordered.

5. As we take up Pertussin and Atussin once again, we cannot escape notice of

the fact that the two words do not sound alike — when pronounced. There is not
much phonetic similarity between the two. The Solicitor General well-observed
that in Pertussin the pronunciation of the prefix "Per", whether correct or
incorrect, includes a combination of three letters P, e and r; whereas, in Atussin
the whole starts with the single letter A added to suffix "tussin". Appeals to the
ear are disimilar. And this, because in a word combination, the part that comes
first is the most pronounced. An expositor of the applicable rule here is the
decision in the Syrocol-Cheracol controversy. 15 There, the ruling is that
trademark Syrocol (a cough medicine preparation) is not confusedly similar to
trademark Cheracol (also a cough medicine preparation). Reason: the two words
"do not look or sound enough alike to justify a holding of trademark infringement",
and the "only similarity is in the last syllable, and that is not uncommon in names
given drug compounds".

6. In the solution of a trademark infringement problem, regard too should be

given to the class of persons who buy the particular product and the
circumstances ordinarily attendant to its acquisition. 16 The medicinal preparation
clothed with the trademarks in question, are unlike articles of everyday use such
as candies, ice cream, milk, soft drinks and the like which may be freely obtained
by anyone, anytime, anywhere. Petitioner's and respondent's products are to be
dispensed upon medical prescription. The respective labels say so. An intending
buyer must have to go first to a licensed doctor of medicine; he receives
instructions as to what to purchase; he reads the doctor's prescription; he knows
what he is to buy. He is not of the incautious, unwary, unobservant or
 G.R. No. 114508 November 19, 1999
PRIBHDAS J. MIRPURI, petitioner, vs. COURT OF APPEALS, DIRECTOR OF
PATENTS and the BARBIZON CORPORATION, respondents.
PUNO, J.:
The Convention of Paris for the Protection of Industrial Property is a multi-lateral treaty
which the Philippines bound itself to honor and enforce in this country. As to whether or
not the treaty affords protection to a foreign corporation against a Philippine applicant for
the registration of a similar trademark is the principal issue in this case.
On June 15, 1970, one Lolita Escobar, the predecessor-in-interest of petitioner Pribhdas
J. Mirpuri, filed an application with the Bureau of Patents for the registration of the
trademark "Barbizon" for use in brassieres and ladies undergarments. Escobar alleged
that she had been manufacturing and selling these products under the firm name "L &
BM Commercial" since March 3, 1970.
Private respondent Barbizon Corporation, a corporation organized and doing business
under the laws of New York, U.S.A., opposed the application. It claimed that:
The mark BARBIZON of respondent-applicant is confusingly similar to
the trademark BARBIZON which opposer owns and has not abandoned.
That opposer will be damaged by the registration of the mark BARBIZON
and its business reputation and goodwill will suffer great and irreparable
injury.
That the respondent-applicant's use of the said mark BARBIZON which
resembles the trademark used and owned by opposer, constitutes an
unlawful appropriation of a mark previously used in the Philippines and
not abandoned and therefore a statutory violation of Section 4 (d) of
Republic Act No. 166, as amended. 1
This was docketed as Inter Partes Case No. 686 (IPC No. 686). After filing of the
pleadings, the parties submitted the case for decision.
On June 18, 1974, the Director of Patents rendered judgment dismissing the opposition
and giving due course to Escobar's application, thus:
WHEREFORE, the opposition should be, as it is hereby, DISMISSED.
Accordingly, Application Serial No. 19010 for the registration of the
trademark BARBIZON, of respondent Lolita R. Escobar, is given due
course.
IT IS SO ORDERED. 2
This decision became final and on September 11, 1974, Lolita Escobar was
issued a certificate of registration for the trademark "Barbizon." The trademark
was "for use in "brassieres and lady's underwear garments like panties." 3
Escobar later assigned all her rights and interest over the trademark to petitioner
Pribhdas J. Mirpuri who, under his firm name then, the "Bonito Enterprises," was the sole
and exclusive distributor of Escobar's "Barbizon" products.
In 1979, however, Escobar failed to file with the Bureau of Patents the Affidavit of Use of
the trademark required under Section 12 of Republic Act (R.A.) No. 166, the Philippine
Trademark Law. Due to this failure, the Bureau of Patents cancelled Escobar's certificate
of registration.
On May 27, 1981, Escobar reapplied for registration of the cancelled trademark. Mirpuri
filed his own application for registration of Escobar's trademark. Escobar later assigned
her application to herein petitioner and this application was opposed by private
respondent. The case was docketed as Inter Partes Case No. 2049 (IPC No. 2049).
In its opposition, private respondent alleged that:
(a) The Opposer has adopted the trademark BARBIZON (word),
sometime in June 1933 and has then used it on various kinds of wearing
apparel. On August 14, 1934, Opposer obtained from the United States
Patent Office a more recent registration of the said mark under Certificate
of Registration No. 316,161. On March 1, 1949, Opposer obtained from
the United States Patent Office a more recent registration for the said
trademark under Certificate of Registration No. 507,214, a copy of which
is herewith attached as Annex "A." Said Certificate of Registration covers
the following goods — wearing apparel: robes, pajamas, lingerie,
nightgowns and slips;
(b) Sometime in March 1976, Opposer further adopted the trademark
BARBIZON and Bee design and used the said mark in various kinds of
wearing apparel. On March 15, 1977, Opposer secured from the United
States Patent Office a registration of the said mark under Certificate of
Registration No. 1,061,277, a copy of which is herein enclosed as Annex
"B." The said Certificate of Registration covers the following goods:
robes, pajamas, lingerie, nightgowns and slips;
(c) Still further, sometime in 1961, Opposer adopted the trademark
BARBIZON and a Representation of a Woman and thereafter used the
said trademark on various kinds of wearing apparel. Opposer obtained
from the United States Patent Office registration of the said mark on April
5, 1983 under Certificate of Registration No. 1,233,666 for the following
goods: wearing apparel: robes, pajamas, nightgowns and lingerie. A copy
of the said certificate of registration is herewith enclosed as Annex "C."
(d) All the above registrations are subsisting and in force and Opposer
has not abandoned the use of the said trademarks. In fact, Opposer,
through a wholly-owned Philippine subsidiary, the Philippine Lingerie
Corporation, has been manufacturing the goods covered by said
registrations and selling them to various countries, thereby earning
valuable foreign exchange for the country. As a result of respondent-
applicant's misappropriation of Opposer's BARBIZON trademark,
Philippine Lingerie Corporation is prevented from selling its goods in the
local market, to the damage and prejudice of Opposer and its wholly-
owned subsidiary.
(e) The Opposer's goods bearing the trademark BARBIZON have been
used in many countries, including the Philippines, for at least 40 years
and has enjoyed international reputation and good will for their quality. To
protect its registrations in countries where the goods covered by the
registrations are being sold, Opposer has procured the registration of the
trademark BARBIZON in the following countries: Australia, Austria, Abu
Dhabi, Argentina, Belgium, Bolivia, Bahrain, Canada, Chile, Colombia,
Denmark, Ecuador, France, West Germany, Greece, Guatemala,
Hongkong, Honduras, Italy, Japan, Jordan, Lebanon, Mexico, Morocco,
Panama, New Zealand, Norway, Sweden, Switzerland, Syria, El
Salvador, South Africa, Zambia, Egypt, and Iran, among others;
(f) To enhance its international reputation for quality goods and to further
promote goodwill over its name, marks and products, Opposer has
extensively advertised its products, trademarks and name in various
publications which are circulated in the United States and many countries
around the world, including the Philippines;
(g) The trademark BARBIZON was fraudulently registered in the
Philippines by one Lolita R. Escobar under Registration No. 21920,
issued on September 11, 1974, in violation of Article 189 (3) of the
Revised Penal Code and Section 4 (d) of the Trademark Law. Herein
respondent applicant acquired by assignment the "rights" to the said
mark previously registered by Lolita Escobar, hence respondent-
applicant's title is vitiated by the same fraud and criminal act. Besides,
Certificate of Registration No. 21920 has been cancelled for failure of
either Lolita Escobar or herein respondent-applicant, to seasonably file
the statutory affidavit of use. By applying for a re-registration of the mark
BARBIZON subject of this opposition, respondent-applicant seeks to
perpetuate the fraud and criminal act committed by Lolita Escobar.
(h) Opposer's BARBIZON as well as its BARBIZON and Bee Design and
BARBIZON and Representation of a Woman trademarks qualify as well-
known trademarks entitled to protection under Article 6bis of the
Convention of Paris for the Protection of Industrial Property and further
amplified by the Memorandum of the Minister of Trade to the Honorable
Director of Patents dated October 25, 1983 [sic], 4 Executive Order No.
913 dated October 7, 1963 and the Memorandum of the Minister of Trade
and Industry to the Honorable Director of Patents dated October 25,
1983.
(i) The trademark applied for by respondent applicant is identical to
Opposer's BARBIZON trademark and constitutes the dominant part of
Opposer's two other marks namely, BARBIZON and Bee design and
BARBIZON and a Representation of a Woman. The continued use by
respondent-applicant of Opposer's trademark BARBIZON on goods
belonging to Class 25 constitutes a clear case of commercial and criminal
piracy and if allowed registration will violate not only the Trademark Law
but also Article 189 of the Revised Penal Code and the commitment of
the Philippines to an international treaty. 5
Replying to private respondent's opposition, petitioner raised the defense of res
judicata.
On March 2, 1982, Escobar assigned to petitioner the use of the business name
"Barbizon International." Petitioner registered the name with the Department of Trade
and Industry (DTI) for which a certificate of registration was issued in 1987.
Forthwith, private respondent filed before the Office of Legal Affairs of the DTI a petition
for cancellation of petitioner's business name.
On November 26, 1991, the DTI, Office of Legal Affairs, cancelled petitioner's certificate
of registration, and declared private respondent the owner and prior user of the business
name "Barbizon International." Thus:
WHEREFORE, the petition is hereby GRANTED and petitioner is
declared the owner and prior user of the business name "BARBIZON
INTERNATIONAL" under Certificate of Registration No. 87-09000 dated
March 10, 1987 and issued in the name of respondent, is [sic] hereby
ordered revoked and cancelled. . . . . 6
Meanwhile, in IPC No. 2049, the evidence of both parties were received by the Director
of Patents. On June 18, 1992, the Director rendered a decision declaring private
respondent's opposition barred by res judicata and giving due course to petitioner's
application for registration, to wit:
WHEREFORE, the present Opposition in Inter Partes Case No. 2049 is
hereby DECLARED BARRED by res judicata and is hereby DISMISSED.
Accordingly, Application Serial No. 45011 for trademark BARBIZON filed
by Pribhdas J. Mirpuri is GIVEN DUE COURSE.
SO ORDERED. 7
Private respondent questioned this decision before the Court of Appeals in CA-G.R. SP
No. 28415. On April 30, 1993, the Court of Appeals reversed the Director of Patents
finding that IPC No. 686 was not barred by judgment in IPC No. 2049 and ordered that
the case be remanded to the Bureau of Patents for further proceedings, viz:
WHEREFORE, the appealed Decision No. 92-13 dated June 18, 1992 of
the Director of Patents in Inter Partes Case No. 2049 is hereby SET
ASIDE; and the case is hereby remanded to the Bureau of Patents for
further proceedings, in accordance with this pronouncement. No costs. 8
In a Resolution dated March 16, 1994, the Court of Appeals denied
reconsideration of its decision. 9 Hence, this recourse.
Before us, petitioner raises the following issues:
1. WHETHER OR NOT THE DECISION OF THE DIRECTOR OF
PATENTS IN INTER PARTES CASE NO. 686 RENDERED ON JUNE
18, 1974, ANNEX C HEREOF, CONSTITUTED RES JUDICATA IN SO
FAR AS THE CASE BEFORE THE DIRECTOR OF PATENTS IS
CONCERNED;
2. WHETHER OR NOT THE DIRECTOR OF PATENTS CORRECTLY
APPLIED THE PRINCIPLE OF RES JUDICATA IN DISMISSING
PRIVATE RESPONDENT BARBIZON'S OPPOSITION TO
PETITIONER'S APPLICATION FOR REGISTRATION FOR THE
TRADEMARK BARBIZON, WHICH HAS SINCE RIPENED TO
CERTIFICATE OF REGISTRATION NO. 53920 ON NOVEMBER 16,
1992;
3. WHETHER OR NOT THE REQUISITE THAT A "JUDGMENT ON THE
MERITS" REQUIRED A "HEARING WHERE BOTH PARTIES ARE
SUPPOSED TO ADDUCE EVIDENCE" AND WHETHER THE JOINT
SUBMISSION OF THE PARTIES TO A CASE ON THE BASIS OF
THEIR RESPECTIVE PLEADINGS WITHOUT PRESENTING
TESTIMONIAL OR DOCUMENTARY EVIDENCE FALLS WITHIN THE
MEANING OF "JUDGMENT ON THE MERITS" AS ONE OF THE
REQUISITES TO CONSTITUTE RES JUDICATA;
4. WHETHER A DECISION OF THE DEPARTMENT OF TRADE AND
INDUSTRY CANCELLING PETITIONER'S FIRM NAME "BARBIZON
INTERNATIONAL" AND WHICH DECISION IS STILL PENDING
RECONSIDERATION NEVER OFFERED IN EVIDENCE BEFORE THE
DIRECTOR OF PATENTS IN INTER PARTES CASE NO. 2049 HAS
THE RIGHT TO DECIDE SUCH CANCELLATION NOT ON THE BASIS
OF THE BUSINESS NAME LAW (AS IMPLEMENTED BY THE BUREAU
OF DOMESTIC TRADE) BUT ON THE BASIS OF THE PARIS
CONVENTION AND THE TRADEMARK LAW (R.A. 166) WHICH IS
WITHIN THE ORIGINAL AND EXCLUSIVE JURISDICTION OF THE
DIRECTOR OF PATENTS. 10
Before ruling on the issues of the case, there is need for a brief background on the
function and historical development of trademarks and trademark law.
A "trademark" is defined under R.A. 166, the Trademark Law, as including "any word,
name, symbol, emblem, sign or device or any combination thereof adopted and used by
a manufacturer or merchant to identify his goods and distinguish them from those
manufactured, sold or dealt in by others. 11 This definition has been simplified in R.A. No.
8293, the Intellectual Property Code of the Philippines, which defines a "trademark" as
"any visible sign capable of distinguishing goods." 12 In Philippine jurisprudence, the
function of a trademark is to point out distinctly the origin or ownership of the goods to
which it is affixed; to secure to him, who has been instrumental in bringing into the
market a superior article of merchandise, the fruit of his industry and skill; to assure the
public that they are procuring the genuine article; to prevent fraud and imposition; and to
protect the manufacturer against substitution and sale of an inferior and different article
as his product. 13
Modern authorities on trademark law view trademarks as performing three distinct
functions: (1) they indicate origin or ownership of the articles to which they are attached;
(2) they guarantee that those articles come up to a certain standard of quality; and (3)
they advertise the articles they symbolize. 14
Symbols have been used to identify the ownership or origin of articles for several
centuries. 15 As early as 5,000 B.C., markings on pottery have been found by
archaeologists. Cave drawings in southwestern Europe show bison with symbols on their
flanks. 16 Archaeological discoveries of ancient Greek and Roman inscriptions on
sculptural works, paintings, vases, precious stones, glassworks, bricks, etc. reveal some
features which are thought to be marks or symbols. These marks were affixed by the
creator or maker of the article, or by public authorities as indicators for the payment of
tax, for disclosing state monopoly, or devices for the settlement of accounts between an
entrepreneur and his workmen. 17
In the Middle Ages, the use of many kinds of marks on a variety of goods was
commonplace. Fifteenth century England saw the compulsory use of identifying marks in
certain trades. There were the baker's mark on bread, bottlemaker's marks, smith's
marks, tanner's marks, watermarks on paper, etc. 18 Every guild had its own mark and
every master belonging to it had a special mark of his own. The marks were not
trademarks but police marks compulsorily imposed by the sovereign to let the public
know that the goods were not "foreign" goods smuggled into an area where the guild had
a monopoly, as well as to aid in tracing defective work or poor craftsmanship to the
artisan. 19 For a similar reason, merchants also used merchants' marks. Merchants dealt
in goods acquired from many sources and the marks enabled them to identify and
reclaim their goods upon recovery after shipwreck or piracy. 20
With constant use, the mark acquired popularity and became voluntarily adopted. It was
not intended to create or continue monopoly but to give the customer an index or
guarantee of quality. 21 It was in the late 18th century when the industrial revolution gave
rise to mass production and distribution of consumer goods that the mark became an
important instrumentality of trade and commerce. 22 By this time, trademarks did not
merely identify the goods; they also indicated the goods to be of satisfactory quality, and
thereby stimulated further purchases by the consuming public. 23 Eventually, they came
to symbolize the goodwill and business reputation of the owner of the product and
became a property right protected by law. 24 The common law developed the doctrine of
trademarks and tradenames "to prevent a person from palming off his goods as
another's, from getting another's business or injuring his reputation by unfair means, and,
from defrauding the public." 25 Subsequently, England and the United States enacted
national legislation on trademarks as part of the law regulating unfair trade. 26 It became
the right of the trademark owner to exclude others from the use of his mark, or of a
confusingly similar mark where confusion resulted in diversion of trade or financial injury.
At the same time, the trademark served as a warning against the imitation or faking of
products to prevent the imposition of fraud upon the public. 27
Today, the trademark is not merely a symbol of origin and goodwill; it is often the most
effective agent for the actual creation and protection of goodwill. It imprints upon the
public mind an anonymous and impersonal guaranty of satisfaction, creating a desire for
further satisfaction. In other words, the mark actually sells the goods. 28 The mark has
become the "silent salesman," the conduit through which direct contact between the
trademark owner and the consumer is assured. It has invaded popular culture in ways
never anticipated that it has become a more convincing selling point than even the
quality of the article to which it refers. 29 In the last half century, the unparalleled growth
of industry and the rapid development of communications technology have enabled
trademarks, tradenames and other distinctive signs of a product to penetrate regions
where the owner does not actually manufacture or sell the product itself. Goodwill is no
longer confined to the territory of actual market penetration; it extends to zones where
the marked article has been fixed in the public mind through advertising.  30 Whether in
the print, broadcast or electronic communications medium, particularly on the
Internet, 31 advertising has paved the way for growth and expansion of the product by
creating and earning a reputation that crosses over borders, virtually turning the whole
world into one vast marketplace.
This is the mise-en-scene of the present controversy. Petitioner brings this action
claiming that "Barbizon" products have been sold in the Philippines since 1970.
Petitioner developed this market by working long hours and spending considerable sums
of money on advertisements and promotion of the trademark and its products. Now,
almost thirty years later, private respondent, a foreign corporation, "swaggers into the
country like a conquering hero," usurps the trademark and invades petitioner's
market. 32 Justice and fairness dictate that private respondent be prevented from
appropriating what is not its own. Legally, at the same time, private respondent is barred
from questioning petitioner's ownership of the trademark because of res judicata. 33
Literally, res judicata means a matter adjudged, a thing judicially acted upon or decided;
a thing or matter settled by judgment. 34 In res judicata, the judgment in the first action is
considered conclusive as to every matter offered and received therein, as to any other
admissible matter which might have been offered for that purpose, and all other matters
that could have been adjudged therein. 35 Res judicata is an absolute bar to a
subsequent action for the same cause; and its requisites are: (a) the former judgment or
order must be final; (b) the judgment or order must be one on the merits; (c) it must have
been rendered by a court having jurisdiction over the subject matter and parties; (d) there
must be between the first and second actions, identity of parties, of subject matter and of
causes of action. 36
The Solicitor General, on behalf of respondent Director of Patents, has joined cause with
petitioner. Both claim that all the four elements of res judicata have been complied with:
that the judgment in IPC No. 686 was final and was rendered by the Director of Patents
who had jurisdiction over the subject matter and parties; that the judgment in IPC No.
686 was on the merits; and that the lack of a hearing was immaterial because substantial
issues were raised by the parties and passed upon by the Director of Patents. 37
The decision in IPC No. 686 reads as follows:
xxx xxx xxx.
Neither party took testimony nor adduced documentary evidence. They
submitted the case for decision based on the pleadings which, together
with the pertinent records, have all been carefully considered.
Accordingly, the only issue for my disposition is whether or not the herein
opposer would probably be damaged by the registration of the trademark
BARBIZON sought by the respondent-applicant on the ground that it so
resembles the trademark BARBIZON allegedly used and owned by the
former to be "likely to cause confusion, mistake or to deceive
purchasers."
On record, there can be no doubt that respondent-applicant's sought-to-
be-registered trademark BARBIZON is similar, in fact obviously identical,
to opposer's alleged trademark BARBIZON, in spelling and
pronunciation. The only appreciable but very negligible difference lies in
their respective appearances or manner of presentation. Respondent-
applicant's trademark is in bold letters (set against a black background),
while that of the opposer is offered in stylish script letters.
 It is opposer's assertion that its trademark BARBIZON has been used in
trade or commerce in the Philippines prior to the date of application for
the registration of the identical mark BARBIZON by the respondent-
applicant. However, the allegation of facts in opposer's verified notice of
opposition is devoid of such material information. In fact, a reading of the
text of said verified opposition reveals an apparent, if not deliberate,
omission of the date (or year) when opposer's alleged trademark
BARBIZON was first used in trade in the Philippines (see par. No. 1, p. 2,
Verified Notice of Opposition, Rec.). Thus, it cannot here and now be
ascertained whether opposer's alleged use of the trademark BARBIZON
could be prior to the use of the identical mark by the herein respondent-
applicant, since the opposer attempted neither to substantiate its claim of
use in local commerce with any proof or evidence. Instead, the opposer
submitted the case for decision based merely on the pleadings.
On the other hand, respondent-applicant asserted in her amended
application for registration that she first used the trademark BARBIZON
for brassiere (or "brasseire") and ladies underwear garments and panties
as early as March 3, 1970. Be that as it may, there being no testimony
taken as to said date of first use, respondent-applicant will be limited to
the filing date, June 15, 1970, of her application as the date of first use
(Rule 173, Rules of Practice in Trademark Cases).
From the foregoing, I conclude that the opposer has not made out a case
of probable damage by the registration of the respondent-applicant's
mark BARBIZON.
WHEREFORE, the opposition should be, as it is hereby, DISMISSED.
Accordingly, Application Serial No. 19010, for the registration of the
trademark BARBIZON of respondent Lolita R. Escobar, is given due
course.38
The decision in IPC No. 686 was a judgment on the merits and it was error for the Court
of Appeals to rule that it was not. A judgment is on the merits when it determines the
rights and liabilities of the parties based on the disclosed facts, irrespective of formal,
technical or dilatory objections. 39 It is not necessary that a trial should have been
conducted. If the court's judgment is general, and not based on any technical defect or
objection, and the parties had a full legal opportunity to be heard on their respective
claims and contentions, it is on the merits although there was no actual hearing or
arguments on the facts of the case. 40 In the case at bar, the Director of Patents did not
dismiss private respondent's opposition on a sheer technicality. Although no hearing was
conducted, both parties filed their respective pleadings and were given opportunity to
present evidence. They, however, waived their right to do so and submitted the case for
decision based on their pleadings. The lack of evidence did not deter the Director of
Patents from ruling on the case, particularly on the issue of prior use, which goes into the
very substance of the relief sought by the parties. Since private respondent failed to
prove prior use of its trademark, Escobar's claim of first use was upheld.
The judgment in IPC No. 686 being on the merits, petitioner and the Solicitor General
allege that IPC No. 686 and IPC No. 2049 also comply with the fourth requisite of res
judicata, i.e., they involve the same parties and the same subject matter, and have
identical causes of action.
Undisputedly, IPC No. 686 and IPC No. 2049 involve the same parties and the same
subject matter. Petitioner herein is the assignee of Escobar while private respondent is
the same American corporation in the first case. The subject matter of both cases is the
trademark "Barbizon." Private respondent counter-argues, however, that the two cases
do not have identical causes of action. New causes of action were allegedly introduced in
IPC No. 2049, such as the prior use and registration of the trademark in the United
States and other countries worldwide, prior use in the Philippines, and the fraudulent
registration of the mark in violation of Article 189 of the Revised Penal Code. Private
respondent also cited protection of the trademark under the Convention of Paris for the
Protection of Industrial Property, specifically Article 6bis thereof, and the implementation
of Article 6bis by two Memoranda dated November 20, 1980 and October 25, 1983 of the
Minister of Trade and Industry to the Director of Patents, as well as Executive Order
(E.O.) No. 913.
The Convention of Paris for the Protection of Industrial Property, otherwise known as the
Paris Convention, is a multilateral treaty that seeks to protect industrial property
consisting of patents, utility models, industrial designs, trademarks, service marks, trade
names and indications of source or appellations of origin, and at the same time aims to
repress unfair competition. 41 The Convention is essentially a compact among various
countries which, as members of the Union, have pledged to accord to citizens of the
other member countries trademark and other rights comparable to those accorded their
own citizens by their domestic laws for an effective protection against unfair
competition. 42 In short, foreign nationals are to be given the same treatment in each of
the member countries as that country makes available to its own citizens. 43 Nationals of
the various member nations are thus assured of a certain minimum of international
protection of their industrial property. 44
The Convention was first signed by eleven countries in Paris on March 20, 1883. 45 It
underwent several revisions — at Brussels in 1900, at Washington in 1911, at The
Hague in 1925, at London in 1934, at Lisbon in 1958, 46 and at Stockholm in 1967. Both
the Philippines and the United States of America, herein private respondent's country,
are signatories to the Convention. The United States acceded on May 30, 1887 while the
Philippines, through its Senate, concurred on May 10, 1965. 47 The Philippines' adhesion
became effective on September 27, 1965, 48 and from this date, the country obligated
itself to honor and enforce the provisions of the Convention. 49
In the case at bar, private respondent anchors its cause of action on the first paragraph
of Article 6bis of the Paris Convention which reads as follows:
Article 6bis
(1) The countries of the Union undertake, either administratively if their
legislation so permits, or at the request of an interested party, to refuse or
to cancel the registration and to prohibit the use, of a trademark which
constitutes a reproduction, an imitation, or a translation, liable to create
confusion, of a mark considered by the competent authority of the
country of registration or use to be well-known in that country as being
already the mark of a person entitled to the benefits of this Convention
and used for identical or similar goods. These provisions shall also apply
when the essential part of the mark constitutes a reproduction of any
such well-known mark or an imitation liable to create confusion therewith.
(2) A period of at least five years from the date of registration shall be
allowed for seeking the cancellation of such a mark. The countries of the
Union may provide for a period within which the prohibition of use must
be sought.
(3) No time limit shall be fixed for seeking the cancellation or the
prohibition of the use of marks registered or used in bad faith. 50
This Article governs protection of well-known trademarks. Under the first
paragraph, each country of the Union bound itself to undertake to refuse or
cancel the registration, and prohibit the use of a trademark which is a
reproduction, imitation or translation, or any essential part of which trademark
constitutes a reproduction, liable to create confusion, of a mark considered by the
competent authority of the country where protection is sought, to be well-known
in the country as being already the mark of a person entitled to the benefits of the
Convention, and used for identical or similar goods.
Art. 6bis was first introduced at The Hague in 1925 and amended in Lisbon in 1952.   It 51
is a self-executing provision and does not require legislative enactment to give it effect in
the member country. 52 It may be applied directly by the tribunals and officials of each
member country by the mere publication or proclamation of the Convention, after its
ratification according to the public law of each state and the order for its execution. 53
The essential requirement under Article 6bis is that the trademark to be protected must
be "well-known" in the country where protection is sought. The power to determine
whether a trademark is well-known lies in the "competent authority of the country of
registration or use." This competent authority would be either the registering authority if it
has the power to decide this, or the courts of the country in question if the issue comes
before a court. 54
Pursuant to Article 6bis, on November 20, 1980, then Minister Luis Villafuerte of the
Ministry of Trade issued a Memorandum to the Director of Patents. The Minister ordered
the Director that:
Pursuant to the Paris Convention for the Protection of Industrial Property
to which the Philippines is a signatory, you are hereby directed to reject
all pending applications for Philippine registration of signature and other
world-famous trademarks by applicants other than its original owners or
users.
The conflicting claims over internationally known trademarks involve such
name brands as Lacoste, Jordache, Vanderbilt, Sasson, Fila, Pierre
Cardin, Gucci, Christian Dior, Oscar de la Renta, Calvin Klein, Givenchy,
Ralph Lauren, Geoffrey Beene, Lanvin and Ted Lapidus.
It is further directed that, in cases where warranted, Philippine registrants
of such trademarks should be asked to surrender their certificates of
registration, if any, to avoid suits for damages and other legal action by
the trademarks' foreign or local owners or original users.
You are also required to submit to the undersigned a progress report on
the matter.
For immediate compliance. 55
Three years later, on October 25, 1983, then Minister Roberto Ongpin issued another
Memorandum to the Director of Patents, viz:
Pursuant to Executive Order No. 913 dated 7 October 1983 which
strengthens the rule-making and adjudicatory powers of the Minister of
Trade and Industry and provides inter alia, that "such rule-making and
adjudicatory powers should be revitalized in order that the Minister of
Trade and Industry can . . . apply more swift and effective solutions and
remedies to old and new problems . . . such as infringement of
internationally-known tradenames and trademarks . . ." and in view of the
decision of the Intermediate Appellate Court in the case of LA CHEMISE
LACOSTE, S.A., versus RAM SADWHANI [AC-G.R. SP NO. 13359 (17)
June 1983] 56 which affirms the validity of the MEMORANDUM of then
Minister Luis R. Villafuerte dated 20 November 1980 confirming our
obligations under the PARIS CONVENTION FOR THE PROTECTION
OF INDUSTRIAL PROPERTY to which the Republic of the Philippines is
a signatory, you are hereby directed to implement measures necessary
to effect compliance with our obligations under said Convention in
general, and, more specifically, to honor our commitment under
Section 6bis 57 thereof, as follows:
1. Whether the trademark under consideration is well-known in the
Philippines or is a mark already belonging to a person entitled to the
benefits of the CONVENTION, this should be established, pursuant to
Philippine Patent Office procedures in inter partes and ex parte cases,
according to any of the following criteria or any combination thereof:
(a) a declaration by the Minister of Trade and Industry that the trademark
being considered is already well-known in the Philippines such that
permission for its use by other than its original owner will constitute a
reproduction, imitation, translation or other infringement;
(b) that the trademark is used in commerce internationally, supported by
proof that goods bearing the trademark are sold on an international scale,
advertisements, the establishment of factories, sales offices,
distributorships, and the like, in different countries, including volume or
other measure of international trade and commerce;
(c) that the trademark is duly registered in the industrial property office(s)
of another country or countries, taking into consideration the date of such
registration;
(d) that the trademark has long been established and obtained goodwill
and international consumer recognition as belonging to one owner or
source;
(e) that the trademark actually belongs to a party claiming ownership and
has the right to registration under the provisions of the aforestated PARIS
CONVENTION.
2. The word trademark, as used in this MEMORANDUM, shall include
tradenames, service marks, logos, signs, emblems, insignia or other
similar devices used for identification and recognition by consumers.
3. The Philippine Patent Office shall refuse all applications for, or cancel
the registration of, trademarks which constitute a reproduction, translation
or imitation of a trademark owned by a person, natural or corporate, who
is a citizen of a country signatory to the PARIS CONVENTION FOR THE
PROTECTION OF INDUSTRIAL PROPERTY.
4. The Philippine Patent Office shall give due course to the Opposition in
cases already or hereafter filed against the registration of trademarks
entitled to protection of Section 6bis of said PARIS CONVENTION as
outlined above, by remanding applications filed by one not entitled to
such protection for final disallowance by the Examination Division.
5. All pending applications for Philippine registration of signature and
other world-famous trademarks filed by applicants other than their
original owners or users shall be rejected forthwith. Where such
applicants have already obtained registration contrary to the
abovementioned PARIS CONVENTION and/or Philippine Law, they shall
be directed to surrender their Certificates of Registration to the Philippine
Patent Office for immediate cancellation proceedings.
xxx xxx xxx. 58
In the Villafuerte Memorandum, the Minister of Trade instructed the Director of Patents to
reject all pending applications for Philippine registration of signature and other world-
famous trademarks by applicants other than their original owners or users. The Minister
enumerated several internationally-known trademarks and ordered the Director of
Patents to require Philippine registrants of such marks to surrender their certificates of
registration.
In the Ongpin Memorandum, the Minister of Trade and Industry did not enumerate well-
known trademarks but laid down guidelines for the Director of Patents to observe in
determining whether a trademark is entitled to protection as a well-known mark in the
Philippines under Article 6bis of the Paris Convention. This was to be established
through Philippine Patent Office procedures in inter partes and ex parte cases pursuant
to the criteria enumerated therein. The Philippine Patent Office was ordered to refuse
applications for, or cancel the registration of, trademarks which constitute a reproduction,
translation or imitation of a trademark owned by a person who is a citizen of a member of
the Union. All pending applications for registration of world-famous trademarks by
persons other than their original owners were to be rejected forthwith. The Ongpin
Memorandum was issued pursuant to Executive Order No. 913 dated October 7, 1983 of
then President Marcos which strengthened the rule-making and adjudicatory powers of
the Minister of Trade and Industry for the effective protection of consumers and the
application of swift solutions to problems in trade and industry. 59
Both the Villafuerte and Ongpin Memoranda were sustained by the Supreme Court in the
1984 landmark case of La Chemise Lacoste, S.A. v. Fernandez. 60 This court ruled
therein that under the provisions of Article 6bis of the Paris Convention, the Minister of
Trade and Industry was the "competent authority" to determine whether a trademark is
well-known in this country. 61
The Villafuerte Memorandum was issued in 1980, i.e., fifteen (15) years after the
adoption of the Paris Convention in 1965. In the case at bar, the first inter partes case,
IPC No. 686, was filed in 1970, before the Villafuerte Memorandum but five (5)
years after the effectivity of the Paris Convention. Article 6bis was already in effect five
years before the first case was instituted. Private respondent, however, did not cite the
protection of Article 6bis, neither did it mention the Paris Convention at all. It was only in
1981 when IPC No. 2049 was instituted that the Paris Convention and the Villafuerte
Memorandum, and, during the pendency of the case, the 1983 Ongpin Memorandum
were invoked by private respondent.
The Solicitor General argues that the issue of whether the protection of Article 6bis of the
Convention and the two Memoranda is barred by res judicata has already been
answered in Wolverine Worldwide, Inc. v. Court of
Appeals. 62 In this case, petitioner Wolverine, a foreign corporation, filed with the
Philippine Patent Office a petition for cancellation of the registration certificate of private
respondent, a Filipino citizen, for the trademark "Hush Puppies" and "Dog Device."
Petitioner alleged that it was the registrant of the internationally-known trademark in the
United States and other countries, and cited protection under the Paris Convention and
the Ongpin Memorandum. The petition was dismissed by the Patent Office on the ground
of res judicata. It was found that in 1973 petitioner's predecessor-in-interest filed two
petitions for cancellation of the same trademark against respondent's predecessor-in-
interest. The Patent Office dismissed the petitions, ordered the cancellation of
registration of petitioner's trademark, and gave due course to respondent's application for
registration. This decision was sustained by the Court of Appeals, which decision was
not elevated to us and became final and
executory. 63
Wolverine claimed that while its previous petitions were filed under R.A. No. 166, the
Trademark Law, its subsequent petition was based on a new cause of action, i.e., the
Ongpin Memorandum and E.O. No. 913 issued in 1983, after finality of the previous
decision. We held that the said Memorandum and E.O. did not grant a new cause of
action because it did "not amend the Trademark Law," . . . "nor did it indicate a new
policy with respect to the registration in the Philippines of world-famous
trademarks." 64 This conclusion was based on the finding that Wolverine's two previous
petitions and subsequent petition dealt with the same issue of ownership of the
trademark. 65 In other words, since the first and second cases involved the same issue of
ownership, then the first case was a bar to the second case.
In the instant case, the issue of ownership of the trademark "Barbizon" was not raised in
IPC No. 686. Private respondent's opposition therein was merely anchored on:
(a) "confusing similarity" of its trademark with that of Escobar's;
(b) that the registration of Escobar's similar trademark will cause damage
to private respondent's business reputation and goodwill; and
(c) that Escobar's use of the trademark amounts to an unlawful
appropriation of a mark previously used in the Philippines which act is
penalized under Section 4 (d) of the Trademark Law.
In IPC No. 2049, private respondent's opposition set forth several issues
summarized as follows:
(a) as early as 1933, it adopted the word "BARBIZON" as trademark on
its products such as robes, pajamas, lingerie, nightgowns and slips;
(b) that the trademark "BARBIZON" was registered with the United States
Patent Office in 1934 and 1949; and that variations of the same
trademark, i.e., "BARBIZON" with Bee design and "BARBIZON" with the
representation of a woman were also registered with the U.S. Patent
Office in 1961 and 1976;
(c) that these marks have been in use in the Philippines and in many
countries all over the world for over forty years. "Barbizon" products have
been advertised in international publications and the marks registered in
36 countries worldwide;
(d) Escobar's registration of the similar trademark "BARBIZON" in 1974
was based on fraud; and this fraudulent registration was cancelled in
1979, stripping Escobar of whatsoever right she had to the said mark;
(e) Private respondent's trademark is entitled to protection as a well-
known mark under Article 6bis of the Paris Convention, Executive Order
No. 913, and the two Memoranda dated November 20, 1980 and October
25, 1983 of the Minister of Trade and Industry to the Director of Patents;
(f) Escobar's trademark is identical to private respondent's and its use on
the same class of goods as the latter's amounts to a violation of the
Trademark Law and Article 189 of the Revised Penal Code.
IPC No. 2049 raised the issue of ownership of the trademark, the first registration
and use of the trademark in the United States and other countries, and the
international recognition and reputation of the trademark established by
extensive use and advertisement of private respondent's products for over forty
years here and abroad. These are different from the issues of confusing similarity
and damage in IPC No. 686. The issue of prior use may have been raised in IPC
No. 686 but this claim was limited to prior use in the Philippines only. Prior use in
IPC No. 2049 stems from private respondent's claim as originator of the word
and symbol "Barbizon," 66 as the first and registered user of the mark attached to
its products which have been sold and advertised worldwide for a considerable
number of years prior to petitioner's first application for registration of her
trademark in the Philippines. Indeed, these are substantial allegations that raised
new issues and necessarily gave private respondent a new cause of action. Res
judicata does not apply to rights, claims or demands, although growing out of the
same subject matter, which constitute separate or distinct causes of action and
were not put in issue in the former action. 67
Respondent corporation also introduced in the second case a fact that did not exist at the
time the first case was filed and terminated. The cancellation of petitioner's certificate of
registration for failure to file the affidavit of use arose only after IPC No. 686. It did not
and could not have occurred in the first case, and this gave respondent another cause to
oppose the second application. Res judicata extends only to facts and conditions as they
existed at the time judgment was rendered and to the legal rights and relations of the
parties fixed by the facts so determined. 68 When new facts or conditions intervene
before the second suit, furnishing a new basis for the claims and defenses of the parties,
the issues are no longer the same, and the former judgment cannot be pleaded as a bar
to the subsequent action. 69
It is also noted that the oppositions in the first and second cases are based on different
laws. The opposition in IPC No. 686 was based on specific provisions of the Trademark
Law, i.e., Section 4 (d) 70 on confusing similarity of trademarks and Section 8 71 on the
requisite damage to file an opposition to a petition for registration. The opposition in IPC
No. 2049 invoked the Paris Convention, particularly Article 6bis thereof, E.O. No. 913
and the two Memoranda of the Minister of Trade and Industry. This opposition also
invoked Article 189 of the Revised Penal Code which is a statute totally different from the
Trademark Law. 72 Causes of action which are distinct and independent from each other,
although arising out of the same contract, transaction, or state of facts, may be sued on
separately, recovery on one being no bar to subsequent actions on others. 73 The mere
fact that the same relief is sought in the subsequent action will not render the judgment in
the prior action operative as res judicata, such as where the two actions are based on
different statutes. 74 Res judicata therefore does not apply to the instant case and
respondent Court of Appeals did not err in so ruling.
Intellectual and industrial property rights cases are not simple property cases.
Trademarks deal with the psychological function of symbols and the effect of these
symbols on the public at large. 75 Trademarks play a significant role in communication,
commerce and trade, and serve valuable and interrelated business functions, both
nationally and internationally. For this reason, all agreements concerning industrial
property, like those on trademarks and tradenames, are intimately connected with
economic development. 76 Industrial property encourages investments in new ideas and
inventions and stimulates creative efforts for the satisfaction of human needs. They
speed up transfer of technology and industrialization, and thereby bring about social and
economic progress. 77 These advantages have been acknowledged by the Philippine
government itself. The Intellectual Property Code of the Philippines declares that "an
effective intellectual and industrial property system is vital to the development of
domestic and creative activity, facilitates transfer of technology, it attracts foreign
investments, and ensures market access for our products." 78 The Intellectual Property
Code took effect on January 1, 1998 and by its express provision, 79 repealed the
Trademark Law, 80 the Patent Law, 81 Articles 188 and 189 of the Revised Penal Code,
the Decree on Intellectual Property, 82 and the Decree on Compulsory Reprinting of
Foreign Textbooks. 83 The Code was enacted to strengthen the intellectual and industrial
property system in the Philippines as mandated by the country's accession to the
Agreement Establishing the World Trade Organization (WTO). 84
The WTO is a common institutional framework for the conduct of trade relations among
its members in matters related to the multilateral and plurilateral trade agreements
annexed to the WTO Agreement. 85 The WTO framework ensures a "single undertaking
approach" to the administration and operation of all agreements and arrangements
attached to the WTO Agreement. Among those annexed is the Agreement on Trade-
Related Aspects of Intellectual Property Rights or TRIPs. 86 Members to this Agreement
"desire to reduce distortions and impediments to international trade, taking into account
the need to promote effective and adequate protection of intellectual property rights, and
to ensure that measures and procedures to enforce intellectual property rights do not
themselves become barriers to legitimate trade." To fulfill these objectives, the members
have agreed to adhere to minimum standards of protection set by several
Conventions. 87 These Conventions are: the Berne Convention for the Protection of
Literary and Artistic Works (1971), the Rome Convention or the International Convention
for the Protection of Performers, Producers of Phonograms and Broadcasting
Organisations, the Treaty on Intellectual Property in Respect of Integrated Circuits, and
the Paris Convention (1967), as revised in Stockholm on July 14, 1967. 88
A major proportion of international trade depends on the protection of intellectual
property rights. 89 Since the late 1970's, the unauthorized counterfeiting of industrial
property and trademarked products has had a considerable adverse impact on domestic
and international trade revenues. 90 The TRIPs Agreement seeks to grant adequate
protection of intellectual property rights by creating a favorable economic environment to
encourage the inflow of foreign investments, and strengthening the multi-lateral trading
system to bring about economic, cultural and technological independence. 91
The Philippines and the United States of America have acceded to the WTO Agreement.
This Agreement has revolutionized international business and economic relations among
states, and has propelled the world towards trade liberalization and economic
globalization. 92 Protectionism and isolationism belong to the past. Trade is no longer
confined to a bilateral system. There is now "a new era of global economic cooperation,
reflecting the widespread desire to operate in a fairer and more open multilateral trading
system." 93 Conformably, the State must reaffirm its commitment to the global community
and take part in evolving a new international economic order at the dawn of the new
millenium.
IN VIEW WHEREOF, the petition is denied and the Decision and Resolution of the Court
of Appeals in CA-G.R. SP No. 28415 are affirmed.
SO ORDERED.
 G.R. No. L-28554 February 28, 1983
UNNO COMMERCIAL ENTERPRISES, INCORPORATED, petitioner, vs. GENERAL
MILLING CORPORATION and TIBURCIO S. EVALLE, in his capacity as Director of
Patents, respondents.
TEEHANKEE, J.:
The Court affirms respondent Director of Patent's decision declaring respondent General
Milling Corporation as the prior user of the trademark "All Montana" on wheat flour in the
Philippines and ordering the cancellation of the certificate of registration for the same
trademark previously issued in favor of petitioner Unno Commercial Enterprises,
Incorporated, it appearing that Unno Commercial Enterprises, Inc. merely acted as
exclusive distributor of All Montana wheat flour in the Philippines. Only the owner of a
trademark, trade name or service mark may applly for its registration and an importer,
broker, indentor or distributor acquires no rights to the trademark of the goods he is
dealing with in the absence of a valid transfer or assignment of the trade mark.
On December 11, 1962, respondent General Milling Corporation filed an application for
the registration of the trademark "All Montana" to be used in the sale of wheat flour. In
view of the fact that the same trademark was previously, registered in favor of petitioner
Unno Commercial Enterprises, Inc., the Chief Trademark Examiner of the Philippines
Patent Office declared an interference proceeding 1 between respondent corporation's
application (Serial No. 9732), as Junior - Party-Applicant and petitioner company's
registration (Registration No. 9589), as Senior Party-Applicant, docketed in the
Philippines Patent Office as Inter Partes Case No. 313, to determine which party has
previously adopted and used the trademark "All Montana".
Respondent General Milling Corporation, in its application for registration, alleged that it
started using the trademark "All Montana" on August 31, 1955 and subsequently was
licensed to use the same by Centennial Mills, Inc. by virtue of a deed of assignment
executed on September 20, 1962. On the other hand petitioner Unno Commercial
Enterprises, Inc. argued that the same trademark had been registered in its favor on
March 8, 1962 asserting that it started using the trademark on June 30, 1956, as indentor
or broker for S.H. Huang Bros. & Co., a local firm.
The Director of Patents, after hearing, ruled in favor of respondent General Milling
Corporation and rendered its decision as follows:
However, there is testimony in the record (t.s.n., pp. 11-12, Jan.17,1967,
testimony of Jose Uy) to the effect that, indispensable, "ALL MONTANA"
wheat flour is a premium flour produced from premium wheat coming
from the State of Montana, U.S.A. It is apparent that the trademark is
primarily geographically descriptive of the goods. It is therefore a matter
overlooked by the Trademark Examiner, and it is incumbent upon him to
determine if the applicant should claim and is qualified to claim
distinctiveness under Section 4(f) of the Trademark Statute. Otherwise, it
is registrable on the Supplemental Register and should thus be
registered therein.
WHEREFORE, the Junior Party-Applicant is adjudged prior -user of the
trademark ALL MONTANA, but 'because it is primarily geographically
descriptive, the application is herein remanded to the Chief Trademark
Examiner for proper proceeding before issuance of the certificate of
registration.
The certificate of registration issued to the Senior Party is ordered
cancelled.
IT IS SO ORDERED.
After its motion for reconsideration was denied, petitioner brought the instant petition
seeking the reversal of the decision and praying that it be declared the owner and prior
user of the trademark "All Montana" on wheat flour.
Petitioner based its claim of ownership over the trademark in question by the fact that it
acted as an indentor or broker for S. H. Huang Bros. & Co., a local importer of wheat
flour, offering as evidence the various shipments, documents, invoices and other
correspondence of Centennial Mills, Inc., shipping thousand of bags of wheat flour
bearing the trademark "All Montana" to the Philippines. Petitioner argued that these
documents, invoices and correspondence proved the fact that it has been using the
trademark "All Montana" as early as 1955 in the concept of an owner and maintained
that anyone, whether he is only an importer, broker or indentor can appropriate, use and
own a particular mark of its own choice although he is not the manufacturer of the goods
he deals with. Relying on the provisions of Section 2-A of the Trademarks
Law 2 (Republic Act 166), petitioner insists that "the appropriation and ownership of a
particular trademark is not merely confined to producers or manufacturers but likewise to
anyone who lawfully deals in merchandise who renders any lawful service in commerce,
like petitioner in the case at bar. 3
The right to register trademark is based on ownership. 4 When the applicant is not the
owner of the trademark being applied for, he has no right to apply for the registration of
the same. 5 Under the Trademark Law only the owner of the trademark, trade name or
service mark used to distinguish his goods, business or service from the goods, business
or service of others is entitled to register the same. 6
The term owner does not include the importer of the goods bearing the trademark, trade
name, service mark, or other mark of ownership, unless such importer is actually the
owner thereof in the country from which the goods are imported. A local importer,
however, may make application for the registration of a foreign trademark, trade name or
service mark if he is duly authorized by the actual owner of the name or other mark of
ownership. 7
Thus, this Court, has on several occasions ruled that where the applicant's alleged
ownership is not shown in any notarial document and the applicant appears to be merely
an importer or distributor of the merchandise covered by said trademark, its application
cannot be granted. 8
Moreover, the provision relied upon by petitioner (Sec. 2-A, Rep. Act No. 166) allows one
"who lawfully produces or deals in merchandise ... or who engages in any lawful
business or who renders any lawful service in commerce, by actual use thereof . . . (to)
appropriate to his exclusive use a trademark, or a service mark not so appropriated by
another. " In the case at bar, the evidence showed that the trademark "All Montana" was
owned and registered in the name of Centennial Mills, Inc. which later transferred it to
respondent General Milling Corporation by way of a deed of assignment. It is undisputed
that way back in March, 1955, Centennial Mills, Inc. under the tradename Wenatchee
Milling Co., exported flour to the Philippines, through its distributor, herein petitioner
Unno Commercial Enterprises, Inc. which acted as indentor or broker for the firm S. H.
Huang Bros. & Co. However, because of increased taxes and subsidies, Centennial Mills
discontinued shipments of flour in the Philippines and eventually sold its brands for
wheat flour, including "All Montana" brand to respondent General Milling Corporation in
consideration of 1,000 shares of stock of respondent corporation with a par value of
P100.00 per share or a total of P100,000.00. Respondent General Milling Corporation,
since the start of the operation in 1961 of its flour mills located in Lapu-lapu City, Cebu
has been manufacturing and selling "All Montana" flour in the Philippines.
As against petitioner's argument that respondent failed to establish convincingly the
ownership of the trademark "All Montana" by its assignor Centennial Mills, Inc., the
Director of Patents correctly found that ample evidence was presented that Centennial
Mills, Inc. was the owner and prior user in the Philippines of the trademark "All Montana"
through a local importer and broker. The Deed of Assignment itself constitutes sufficient
proof of its ownership of the trademark "All Montana," showing that Centennial Mills was
a corporation duly organized and existing under and by virtue of the laws of the State of
Oregon, U.S.A. with principal place and business at Portland, Oregon, U.S.A. and the
absolute and registered owner of several trademarks for wheat flour, i.e. (Imperial, White
Lily, Duck, General, Swan, White Horse, Vinta, El Paro, Baker's Joy, Choice, Red Bowl
All Montana and Dollar.) all of which were assigned by it to respondent General Milling
Corporation. The deed of assignment was signed by its president, Dugald MacGregor,
duly acknowledged before James Hunt, a notary public for the State of Oregon,
accompanied by a certification issued by the Secretary of State of the State of Oregon
stating that the said James Hunt is a duly qualified Notary Public with full power and
authority to take acknowledgments of all oaths and that full faith and credit should be
given to his official acts as notary public.
The Director of Patents likewise correctly rejected petitioner's contention that in a 1954
conference in Manila the ownership and use by petitioner of the brand "All Montana" was
agreed upon, on the contrary finding that "Details of that meeting were, however,
explained by Mr. Dugald MacGregor, President of Centennial Mills, Inc., as the Junior
Party's rebuttal witness. Mr. MacGregor confirmed holding such conference in a
restaurant in Manila with representatives of the Senior Party, namely; Messrs. Jose Uy,
Francisco Gonzales and S. H. Huang although he could not remember the name of the
restaurant. He further explained that his company owned the trademark; that it had been
using the mark in the United States; and that ownership of the mark had never been
conferred upon any other company, much less the Senior Party"; and "Inasmuch as it
was not the owner of the trademark, the Senior Party could not be regarded as having
used and adopted it, and had no right to apply for its registration. It acknowledged that it
was a mere importer of flour, and a mere importer and distributor acquires no rights in
the mark used on the imported goods by the foreign exporter in the absence of an
assignment of any kind ... Trademarks used and adopted on goods manufactured or
packed in a foreign country in behalf of a domestic importer, broker, or indentor and
distributor are presumed to be owned by the manufacturer or packer, unless there is a
written agreement clearly showing that ownership vests in the importer, broker, indentor
or distributor.
Thus, petitioner's contention that it is the owner of the mark "All Montana" because of its
certificate of registration issued by the Director of Patents, must fail, since ownership of a
trademark is not acquired by the mere fact of registration alone. 9 Registration merely
creates a prima facie presumption of the validity of the registration, of the registrant's
ownership of the trademark and of the exclusive right to the use thereof. 10 Registration
does not perfect a trademark right. 11 As conceded itself by petitioner, evidence may be
presented to overcome the presumption. Prior use by one will controvert a claim of legal
appropriation, by subsequent users. In the case at bar, the Director of Patents found that
"ample evidence was presented in the record that Centennial Mills, Inc. was the owner
and prior user in the Philippines of the trademark 'All Montana' through a local importer
and broker. Use of a trademark by a mere importer, indentor or exporter (the Senior
Party herein) inures to the benefit of the foreign manufacturer whose goods are Identified
by the trademark. The Junior Party has hereby established a continuous chain of title
and, consequently, prior adoption and use" and ruled that "based on the facts
established, it is safe to conclude that the Junior Party has satisfactorily discharged the
burden of proving priority of adoption and use and is entitled to registration." It is well-
settled that we are precluded from making further inquiry, since the findings of fact of the
Director of Patents in the absence of any showing that there was grave abuse of
discretion is binding on us 12 and the findings of facts by the Director of Patents are
deemed conclusive in the Supreme Court provided that they are supported by substantial
evidence. 13 Petitioner has failed to show that the findings of fact of the Director of
Patents are not substantially supported by evidence nor that any grave abuse of
discretion was committed.
Finally, the Court finds without merit petitioner's argument that the Director of Patents
could not order the cancellation of' its certificate of registration in an interference
proceeding and that the question of whether or not a certificate of registration is to be
cancelled should have been brought in cancellation proceedings. Under Rule 178 of the
Rules of the Patent Office in Trademark Cases, 14 the Director of Patents is expressly
authorized to order the cancellation of a registered mark or trade name or name or other
mark of ownership in an inter partes case, such as the interference proceeding at bar. 15

WHEREFORE, the appealed decision is hereby affirmed. No costs.

 G.R. No. L-75420 November 15, 1991
KABUSHI KAISHA ISETAN, also known and trading as ISETAN CO.,
LTD., petitioner, vs. THE INTERMEDIATE APPELLATE COURT, THE DIRECTOR OF
PATENTS, and ISETANN DEPARTMENT STORE, INC., respondents.
GUTIERREZ, JR., J.:
This is a petition for review on certiorari which seeks to set aside - (1) the decision of the
Court of Appeals dated June 2, 1986 in AC-G.R. SP No. 008873 entitled "Kabushi
Kaisha Isetan, also known and trading as Isetan Company Limited v. Isetann Department
Store, Inc." dismissing the petitioner's appeal from the decision of the Director of Patents;
and (2) the Resolution dated July 11, 1986 denying the petitioner's motion for
reconsideration.
As gathered from the records, the facts are as follows:
Petitioner Kabushi Kaisha Isetan is a foreign corporation organized and existing under
the laws of Japan with business address at 14-1 Shinjuku, 3-Chrome, Shinjuku, Tokyo,
Japan. It is the owner of the trademark "Isetan" and the "Young Leaves Design".
The petitioner alleges that it first used the trademark Isetan on November 5, 1936. It
states that the trademark is a combination of "Ise" taken from "Iseya" the first name of
the rice dealer in Kondo, Tokyo in which the establishment was first located and "Tan"
which was taken from "Tanji Kosuge the First". The petitioner claims to have expanded
its line of business internationally from 1936 to 1974. The trademark "Isetan" and "Young
Leaves Design" were registered in Japan covering more than 34 classes of goods. On
October 3, 1983, the petitioner applied for the registration of "Isetan" and "Young Leaves
Design" with the Philippine Patent Office under Permanent Serial Nos. 52422 and 52423
respectively. (Rollo, p. 43)
Private respondent, Isetann Department Store, on the other hand, is a domestic
corporation organized and existing under the laws of the Philippines with business
address at 423-430 Rizal Avenue, Sta. Cruz, Manila, Philippines.
It claims that it used the word "Isetann" as part of its corporated name and on its
products particularly on shirts in Joymart Department Store sometime in January 1979.
The suffix "Tann" means an altar, the place of offering in Chinese and this was adopted
to harmonize the corporate name and the corporate logo of two hands in cup that
symbolizes the act of offering to the Supreme Being for business blessing.
On May 30, 1980 and May 20, 1980, the private respondent registered "Isetann
Department Store, Inc." and Isetann and Flower Design in the Philippine Patent Office
under SR. Reg. No. 4701 and 4714, respectively, as well as with the Bureau of Domestic
Trade under Certificate of Registration No. 32020. (Rollo, pp. 43-44)
On November 28, 1980, the petitioner filed with the Phil. Patent Office two (2) petitions
for the cancellation of Certificates of Supplemental Registration Nos. SR-4714 and SR-
4701 stating among others that:
. . . except for the additional letter "N" in the word "Isetan", the mark registered by
the registrant is exactly the same as the trademark ISETAN owned by the
petitioner and that the young leaves registered by the registrant is exactly the
same as the young leaves design owned by the petitioner.
The petitioner further alleged that private respondent's act of registering a trademark
which is exactly the same as its trademark and adopting a corporate name similar to that
of the petitioner were with the illegal and immoral intention of cashing in on the long
established goodwill and popularity of the petitioner's reputation, thereby causing great
and irreparable injury and damage to it (Rollo, p. 521). It argued that both the petitioner's
and respondent's goods move in the same channels of trade, and ordinary people will be
misled to believe that the products of the private respondent originated or emanated
from, are associated with, or are manufactured or sold, or sponsored by the petitioner by
reason of the use of the challenged trademark.
The petitioner also invoked the Convention of Paris of March 20, 1883 for the Protection
of Industrial Property of which the Philippines and Japan are both members. The
petitioner stressed that the Philippines' adherence to the Paris Convention committed to
the government to the protection of trademarks belonging not only to Filipino citizens but
also to those belonging to nationals of other member countries who may seek protection
in the Philippines. (Rollo, p. 522)
The petition was docketed as Inter Partes Cases Nos. 1460 and 1461 (Rollo, p. 514)
Meanwhile, the petitioner also filed with the Securities and Exchange Commission (SEC)
a petition to cancel the mark "ISETAN" as part of the registered corporate name of
Isetann Department Store, Inc. which petition was docketed as SEC Case No. 2051
(Rollo, p. 524) On May 17, 1985, this petition was denied in a decision rendered by
SEC's Hearing Officer, Atty. Joaquin C. Garaygay.
On appeal, the Commission reversed the decision of the Hearing Officer on February 25,
1986. It directed the private respondent to amend its Articles of Incorporation within 30
days from finality of the decision.
On April 15, 1986, however, respondent Isetann Department Store filed a motion for
reconsideration. (Rollo, pp. 325-353). And on September 10, 1987, the Commission
reversed its earlier decision dated February 25, 1986 thereby affirming the decision
rendered by the Hearing Officer on May 17, 1985. The Commission stated that since the
petitioner's trademark and tradename have never been used in commerce on the
petitioner's products marketed in the Philippines, the trademark or tradename have not
acquired a reputation and goodwill deserving of protection from usurpation by local
competitors. (Rollo, p. 392).
This SEC decision which denied and dismissed the petition to cancel was submitted to
the Director of Patents as part of the evidence for the private respondent.
On January 24, 1986, the Director of Patents after notice and hearing rendered a joint
decision in Inter Partes Cases Nos. 1460 and 1461, the dispositive portion of which
reads:
WHEREFORE, all the foregoing considered, this Office is constrained to hold
that the herein Petitioner has not successfully made out a case of cancellation.
Accordingly, Inter Partes Cases Nos. 1460 and 1461 are, as they are hereby,
DISMISSED. Hence, Respondent's Certificate of Supplemental Registration No.
4714 issued on May 20, 1980 covering the tradename "ISETANN DEPT.
STORE, INC. & FLOWER DESIGN" are, as they are hereby, ordered to remain
in full force and effect for the duration of their term unless sooner or later
terminated by law.
The corresponding application for registration in the Principal Register of the
Trademark and of the tradename aforesaid are hereby given due course.
Let the records of these cases be transmitted to the Trademark Examining
Division for appropriate action in accordance with this Decision.
On February 21, 1986, Isetan Company Limited moved for the reconsideration of said
decision but the motion was denied on April 2, 1986 (Rollo, pp. 355-359).
From this adverse decision of the Director of Patents, the petitioner appealed to the
Intermediate Appellate Court (now Court of Appeals).
On June 2, 1986, the IAC dismissed the appeal on the ground that it was filed out of
time.
The petitioner's motion for reconsideration was likewise denied in a resolution dated July
11, 1986.
Hence, this petition.
Initially, the Court dismissed the petition in a resolution dated July 8, 1987, on the ground
that it was filed fourteen (14) days late. However, on motion for reconsideration, whereby
the petitioner appealed to this Court on equitable grounds stating that it has a strong and
meritorious case, the petition was given due course in a resolution dated May 19, 1988
to enable us to examine more fully any possible denial of substantive justice. The parties
were then required to submit their memoranda. (Rollo, pp. 2-28; Resolution, pp. 271;
453)
After carefully considering the records of this case, we reiterate our July 8, 1987
resolution dismissing the petition. There are no compelling equitable considerations
which call for the application of the rule enunciated in Serrano v. Court of Appeals (139
SCRA 179 [1985]) and Orata v. Intermediate Appellate Court, et al. (185 SCRA 148
[1990]) that considerations of substantial justice manifest in the petition may relax the
stringent application of technical rules so as not to defeat an exceptionally meritorious
petition.
There is no dispute and the petitioner does not question the fact that the appeal was filed
out of time.
Not only was the appeal filed late in the Court of Appeals, the petition for review was also
filed late with us. In common parlance, the petitioner's case is "twice dead" and may no
longer be reviewed.
The Court of Appeals correctly rejected the appeal on the sole ground of late filing when
it ruled:
Perfection of an appeal within the time provided by law is jurisdictional, and
failure to observe the period is fatal.
The decision sought to be appealed is one rendered by the Philippine Patent
Office, a quasi-judicial body. Consequently, under Section 23(c) of the Interim
Rules of Court, the appeal shall be governed by the provisions of Republic Act
No. 5434, which provides in its Section 2;
Sec. 2. Appeals to Court of Appeals. - Appeals to the Court of Appeals shall be
filed within fifteen (15) days from notice of the ruling, award, order, decision or
judgment or from the date of its last publication, if publication is required by law
for its effectivity; or in case a motion for reconsideration is filed within that period
of fifteen (15) days, then within ten (10) days from notice or publication, when
required by law, of the resolution denying the motion for reconsideration. No
more than one motion for reconsideration shall be allowed any party. If no appeal
is filed within the periods here fixed, the ruling, award, order, decision or
judgment shall become final and may be executed as provided by existing law.
 Attention is invited to that portion of Section 2 which states that in case a motion
for reconsideration is filed, an appeal should be filed within ten (10) days from
notice of the resolution denying the motion for reconsideration.
The petitioner received a copy of the Court of Appeals' resolution denying and received
by us on August 8, 1986, its motion for reconsideration on July 17, 1986. It had only up
to August 1, 1986 to file a petition for review with us. The present petition was posted on
August 2, 1986. There is no question that it was, again, filed late because the petitioner
filed an ex-parte motion for admission explaining the delay.
The decision of the Patent Office has long become final and executory. So has the Court
of Appeal decision.
Regarding the petitioner's claims of substantial justice which led us to give due course,
we decline to disturb the rulings of the Patent Office and the Court of Appeals.
A fundamental principle of Philippine Trademark Law is that actual use in commerce in
the Philippines is a pre-requisite to the acquisition of ownership over a trademark or a
tradename.
The trademark Law, Republic Act No. 166, as amended, under which this case heard
and decided provides:
SEC. 2. What are registrable.- Trademark, tradenames and service marks owned
by persons, corporation, partnerships or associations domiciled in the Philippines
and by persons, corporations, partnerships or associations domicided in any
foreign country may be registered in accordance with the provisions of this Act:
Provided, That said trademarks, tradenames, or service marks are actually in use
in commerce and services not less than two months in the Philippines before the
time the applications for registration are filed: And provided, further, That the
country of which the applicant for registration is a citizen grants by law
substantially similar privileges to citizens of the Philippines, and such fact is
officially certified, with a certified true copy of the foreign law translated into the
English language, by the government of the foreign country to the Government of
the Republic of the Philippines. (As amended by R.A. No. 865).
SEC. 2-A. Ownership of trademarks, tradenames and service marks; how
acquired. - Anyone who lawfully produces or deals in merchandise of any kind or
who engages in any lawful business, or who renders any lawful service in
commerce, by actual use thereof in manufacture or trade, in business, and in the
service rendered, may appropriate to his exclusive use a trademark, a
tradename, or a service mark not so appropriated by another, to distinguish his
merchandise, business or service from the merchandise, business or service of
others. The ownership or possession of a trademark, tradename, service mark,
heretofore or hereafter appropriated, as in this section provided, shall be
recognized and protected in the same manner and to the same extent as are
other property rights known to the law. (As amended by R.A. No. 638)"
These provisions have been interpreted in Sterling Products International, Inc. v.
Farbenfabriken Bayer Actiengesellschaft (27 SCRA 1214 [1969]) in this way:
A rule widely accepted and firmly entrenched because it has come down through
the years is that actual use in commerce or business is a prerequisite to the
acquisition of the right of ownership over a trademark.
x x x           x x x          x x x
... Adoption alone of a trademark would not give exclusive right thereto. Such
right grows out of their actual use. Adoption is not use. One way make
advertisements, issue circulars, give out price lists on certain goods; but these
alone would not give exclusive right of use.For trademark is a creation of use.
The underlying reason for all these is that purchasers have come to understand
the mark as indicating the origin of the wares. Flowing from this is the trader's
right to protection in the trade he has built up and the goodwill he has
accumulated from use of the trademark. ...
In fact, a prior registrant cannot claim exclusive use of the trademark unless it uses it in
commerce.
We ruled in Pagasa Industrial Corporation v. Court of Appeals (118 SCRA 526 [1982]):
3. The Trademark Law is very clear. It requires actual commercial use of the
mark prior to its registration. - There is no dispute that respondent corporation
was the first registrant, yet it failed to fully substantiate its claim that it used in
trade or business in the Philippines the subject mark; it did not present proof to
invest it with exclusive, continuous adoption of the trademark which should
consist among others, of considerable sales since its first use. The invoices
(Exhibits 7, 7-a, and 8-b) submitted by respondent which were dated way back in
1957 show that the zippers sent to the Philippines were to be used as "samples"
and "of no commercial value". The evidence for respondent must be clear,
definite and free from incosistencies. (Sy Ching v. Gaw Lui. 44 SCRA 148-149)
"Samples" are not for sale and therefore, the fact of exporting them to the
Philippines cannot be considered to be equivalent to the "use" contemplated by
the law. Respondent did not expect income from such "samples". "There were no
receipts to establish sale, and no proof were presented to show that they were
subsequently sold in the Philippines." (Pagasa Industrial Corp. v. Court of
Appeals, 118 SCRA 526 [1982]; Emphasis Supplied)
The records show that the petitioner has never conducted any business in the
Philippines. It has never promoted its tradename or trademark in the Philippines. It has
absolutely no business goodwill in the Philippines. It is unknown to Filipinos except the
very few who may have noticed it while travelling abroad. It has never paid a single
centavo of tax to the Philippine government. Under the law, it has no right to the remedy
it seeks.
There can be no question from the records that the petitioner has never used its
tradename or trademark in the Philippines.
The petitioner's witnesses, Mr. Mayumi Takayama and Mr. Hieoya Murakami, admitted
that:
1) The petitioner's company is not licensed to do business in the Philippines;
2) The petitioner's trademark is not registered under Philippine law; and
3) The petitioner's trademark is not being used on products in trade, manufacture, or
business in the Philippines.
It was also established from the testimony of Atty. Villasanta, petitioner's witness, that
the petitioner has never engaged in promotional activities in the Philippines to popularize
its trademark because not being engaged in business in the Philippines, there is no need
for advertising. The claim of the petitioner that millions of dollars have been spent in
advertising the petitioner's products, refers to advertising in Japan or other foreign
places. No promotional activities have been undertaken in the Philippines, by the
petitioner's own admission.
Any goodwill, reputation, or knowledge regarding the name Isetann is purely the work of
the private respondent. Evidence was introduced on the extensive promotional activities
of the private respondent.
It might be pertinent at this point to stress that what is involved in this case is not so
much a trademark as a tradename. Isetann Department Store, Inc. is the name of a store
and not of product sold in various parts of the country. This case must be differentiated
from cases involving products bearing such familiar names as "colgate", "Singer".
"Toyota", or "Sony" where the products are marketed widely in the Philippines. There is
not product with the name "Isetann" popularized with that brand name in the Philippines.
Unless one goes to the store called Isetann in Manila, he would never know what the
name means. Similarly, until a Filipino buyer steps inside a store called "Isetan" in Tokyo
or Hongkong, that name would be completely alien to him. The records show that among
Filipinos, the name cannot claim to be internationally well-known.
The rule is that the findings of facts of the Director of Patents are conclusive on the
Supreme Court, provided they are supported by substantial evidence. (Chua Che v. Phil.
Patent Office, 13 SCRA 67 [1965]; Chung Te v. Ng Kian Giab, 18 SCRA 747 [1966];
Marvex Commercial Co., Inc. v. Petra Hawpia & Co., 18 SCRA 1178 [1966]; Lim Kiah v.
Kaynee, Co. 25 SCRA 485 [1968]; Kee Boc v. Dir. of Patents, 34 SCRA 570 [1970]).
The conclusions of the Director of Patents are likewise based on applicable law and
jurisprudence:
What is to be secured from unfair competition in a given territory is the trade
which one has in that particular territory. There is where his business is carried
on where the goodwill symbolized by the trademark has immediate value; where
the infringer may profit by infringement.
There is nothing new in what we now say. Plaintiff itself concedes (Brief for
Plaintiff-Appellant, p. 88) that the principle of territoriality of the Trademark Law
has been recognized in the Philippines, citing Ingenohl v. Walter E. Olsen, 71 L.
ed. 762. As Callmann puts it, the law of trademarks "rests upon the doctrine of
nationality or territoriality." (2 Callmann, Unfair Competition and Trademarks,
1945 ed., p. 1006) (Sterling Products International, Inc. v. Farbenfabriken Bayer
Aktiengesellachaft, 27 SCRA 1214 [1969]; Emphasis supplied)
The mere origination or adoption of a particular tradename without actual use thereof in
the market is insufficient to give any exclusive right to its use (Johnson Mfg. Co. v.
Leader Filling Stations Corp. 196 N.E. 852, 291 Mass. 394), even though such adoption
is publicly declared, such as by use of the name in advertisements, circulars, price lists,
and on signs and stationery. (Consumers Petrolum Co. v. Consumers Co. of ILL. 169 F
2d 153)
The Paris Convention for the Protection of Industrial Property does not automatically
exclude all countries of the world which have signed it from using a tradename which
happens to be used in one country. To illustrate - If a taxicab or bus company in a town
in the United Kingdom or India happens to use the tradename "Rapid Transportation", it
does not necessarily follow that "Rapid" can no longer be registered in Uganda, Fiji, or
the Philippines.
As stated by the Director of Patents -
Indeed, the Philippines is a signatory to this Treaty and, hence, we must honor
our obligation thereunder on matters concerning internationally known or well
known marks. However, this Treaty provision clearly indicated the conditions
which must exist before any trademark owner can claim and be afforded rights
such as the Petitioner herein seeks and those conditions are that:
a) the mark must be internationally known or well known;
 b) the subject of the right must be a trademark, not a patent or copyright or
anything else;
c) the mark must be for use in the same or similar kinds of goods; and
d) the person claiming must be the owner of the mark (The Parties Convention
Commentary on the Paris Convention. Article by Dr. Bogach, Director General of
the World Intellectual Property Organization, Geneva, Switzerland, 1985)

The respondent registered its trademark in 1979. It has continuously used that name in
commerce. It has established a goodwill through extensive advertising. The people who
buy at Isetann Store do so because of Isetann's efforts. There is no showing that the
Japanese firm's registration in Japan or Hongkong has any influence whatsoever on the
Filipino buying public.

WHEREFORE, premises considered, the petition is hereby DISMISSED.

SO ORDERED.
 G.R. No. 91332 July 16, 1993
PHILIP MORRIS, INC., BENSON & HEDGES (CANADA), INC., AND FABRIQUES OF
TABAC REUNIES, S.A., petitioners vs. THE COURT OF APPEALS AND FORTUNE
TOBACCO CORPORATION, respondents.
MELO, J.:
In the petition before us, petitioners Philip Morris, Inc., Benson and Hedges (Canada),
Inc., and Fabriques of Tabac Reunies, S.A., are ascribing whimsical exercise of the
faculty conferred upon magistrates by Section 6, Rule 58 of the Revised Rules of Court
when respondent Court of Appeals lifted the writ of preliminary injunction it earlier had
issued against Fortune Tobacco Corporation, herein private respondent, from
manufacturing and selling "MARK" cigarettes in the local market.
Banking on the thesis that petitioners' respective symbols "MARK VII", "MARK TEN", and
"LARK", also for cigarettes, must be protected against unauthorized appropriation,
petitioners twice solicited the ancillary writ in the course the main suit for infringement but
the court of origin was unpersuaded.
Before we proceed to the generative facts of the case at bar, it must be emphasized that
resolution of the issue on the propriety of lifting the writ of preliminary injunction should
not be construed as a prejudgment of the suit below. Aware of the fact that the
discussion we are about to enter into involves a mere interlocutory order, a discourse on
the aspect infringement must thus be avoided. With these caveat, we shall now shift our
attention to the events which spawned the controversy.
As averred in the initial pleading, Philip Morris, Incorporated is a corporation organized
under the laws of the State of Virginia, United States of America, and does business at
100 Park Avenue, New York, New York, United States of America. The two other plaintiff
foreign corporations, which are wholly-owned subsidiaries of Philip Morris, Inc., are
similarly not doing business in the Philippines but are suing on an isolated transaction.
As registered owners "MARK VII", "MARK TEN", and "LARK" per certificates of
registration issued by the Philippine Patent Office on April 26, 1973, May 28, 1964, and
March 25, 1964, plaintiffs-petitioners asserted that defendant Fortune Tobacco
Corporation has no right to manufacture and sell cigarettes bearing the allegedly
identical or confusingly similar trademark "MARK" in contravention of Section 22 of the
Trademark Law, and should, therefore, be precluded during the pendency of the case
from performing the acts complained of via a preliminary injunction (p. 75, Court of
Appeals Rollo in AC-G.R. SP No. 13132).
For its part, Fortune Tobacco Corporation admitted petitioners' certificates of registration
with the Philippine Patent Office subject to the affirmative and special defense on
misjoinder of party plaintiffs. Private respondent alleged further that it has been
authorized by the Bureau of Internal Revenue to manufacture and sell cigarettes bearing
the trademark "MARK", and that "MARK" is a common word which cannot be exclusively
appropriated (p.158, Court of Appeals Rollo in A.C.-G.R. SP No. 13132). On March 28,
1983, petitioners' prayer for preliminary injunction was denied by the Presiding Judge of
Branch 166 of the Regional Trial Court of the National Capital Judicial Region stationed
at Pasig, premised upon the following propositions:
Plaintiffs admit in paragraph 2 of the complaint that ". . . they are
not doing business in the Philippines and are suing on an isolated
transaction . . .". This simply means that they are not engaged in the sale,
manufacture, importation, expor[t]ation and advertisement of their
cigarette products in the Philippines. With this admission, defendant
asks: ". . . how could defendant's "MARK" cigarettes cause the former
"irreparable damage" within the territorial limits of the Philippines?"
Plaintiffs maintain that since their trademarks are entitled to protection by
treaty obligation under Article 2 of the Paris Convention of which the
Philippines is a member and ratified by Resolution No. 69 of the Senate
of the Philippines and as such, have the force and effect of law under
Section 12, Article XVII of our Constitution and since this is an action for
a violation or infringement of a trademark or trade name by defendant,
such mere allegation is sufficient even in the absence of proof to support
it. To the mind of the Court, precisely, this is the issue in the main case to
determine whether or not there has been an invasion of plaintiffs' right of
property to such trademark or trade name. This claim of plaintiffs is
disputed by defendant in paragraphs 6 and 7 of the Answer; hence, this
cannot be made a basis for the issuance of a writ of preliminary
injunction.
There is no dispute that the First Plaintiff is the registered owner of
trademar[k] "MARK VII" with Certificate of Registration No. 18723, dated
April 26,1973 while the Second Plaintiff is likewise the registered owner
of trademark "MARK TEN" under Certificate of Registration No. 11147,
dated May 28, 1963 and the Third Plaintiff is a registrant of trademark
"LARK" as shown by Certificate of Registration No. 10953 dated March
23, 1964, in addition to a pending application for registration of trademark
"MARK VII" filed on November 21, 1980 under Application Serial No.
43243, all in the Philippine Patent Office. In same the manner, defendant
has a pending application for registration of the trademark "LARK"
cigarettes with the Philippine Patent Office under Application Serial No.
44008. Defendant contends that since plaintiffs are "not doing business in
the Philippines" coupled the fact that the Director of Patents has not
denied their pending application for registration of its trademark "MARK",
the grant of a writ of preliminary injunction is premature. Plaintiffs contend
that this act(s) of defendant is but a subterfuge to give semblance of
good faith intended to deceive the public and patronizers into buying the
products and create the impression that defendant's goods are identical
with or come from the same source as plaintiffs' products or that the
defendant is a licensee of plaintiffs when in truth and in fact the former is
not. But the fact remains that with its pending application, defendant has
embarked in the manufacturing, selling, distributing and advertising of
"MARK" cigarettes. The question of good faith or bad faith on the part of
defendant are matters which are evidentiary in character which have to
be proven during the hearing on the merits; hence, until and unless the
Director of Patents has denied defendant's application, the Court is of the
opinion and so holds that issuance a writ of preliminary injunction would
not lie.
There is no question that defendant has been authorized by the Bureau
of Internal Revenue to manufacture cigarettes bearing the trademark
"MARK" (Letter of Ruben B. Ancheta, Acting Commissioner addressed to
Fortune Tobacco Corporation dated April 3, 1981, marked as Annex "A",
defendant's "OPPOSITION, etc." dated September 24, 1982). However,
this authority is qualified . . . that the said brands have been accepted
and registered by the Patent Office not later than six (6) months after you
have been manufacturing the cigarettes and placed the same in the
market." However, this grant ". . . does not give you protection against
any person or entity whose rights may be prejudiced by infringement or
unfair competition in relation to your indicated trademarks/brands". As
aforestated, the registration of defendant's application is still pending in
the Philippine Patent Office.
It has been repeatedly held in this jurisdiction as well as in the United
States that the right or title of the applicant for injunction remedy must be
clear and free from doubt. Because of the disastrous and painful effects
of an injunction, Courts should be extremely careful, cautious and
conscionable in the exercise of its discretion consistent with justice,
equity and fair play.
There is no power the exercise of which is more delicate
which requires greater caution, deliberation, and sound
discretion, or (which is) more dangerous in a doubtful
case than the issuing of an injunction; it is the strong arm
of equity that never ought to be extended unless to cases
of great injury, where courts of law cannot afford an
adequate or commensurate remedy in damages. The
right must be clear, the injury impending or threatened, so
as to be averted only by the protecting preventive process
of injunction. (Bonaparte v. Camden, etc. N. Co., 3 F.
Cas. No. 1, 617, Baldw. 205, 217.)
Courts of equity constantly decline to lay down any rule
which injunction shall be granted or withheld. There is
wisdom in this course, for it is impossible to foresee all
exigencies of society which may require their aid to
protect rights and restrain wrongs. (Merced M. Go v.
Freemont, 7 Gal. 317, 321; 68 Am. Dec. 262.)
It is the strong arm of the court; and to render its
operation begin and useful, it must be exercised with
great discretion, and when necessary requires it.
(Attorney-General v. Utica Inc. Co., P. John Ch. (N.Y.)
371.)
Having taken a panoramic view of the position[s] of both parties as
viewed from their pleadings, the picture reduced to its minimum size
would be this: At the crossroads are the two (2) contending parties,
plaintiffs vigorously asserting the rights granted by law, treaty and
jurisprudence to restrain defendant in its activities of manufacturing,
selling, distributing and advertising its "MARK" cigarettes and now comes
defendant who countered and refused to be restrained claiming that it
has been authorized temporarily by the Bureau of Internal Revenue
under certain conditions to do so as aforestated coupled by its pending
application for registration of trademark "MARK" in the Philippine Patent
Office. This circumstance in itself has created a dispute between the
parties which to the mind of the Court does not warrant the issuance of a
writ of preliminary injunction.
It is well-settled principle that courts of equity will refuse
an application for the injunctive remedy where the
principle of law on which the right to preliminary injunction
rests is disputed and will admit of doubt, without a
decision of the court of law establishing such principle
although satisfied as to what is a correct conclusion of law
upon the facts. The fact, however, that there is no such
dispute or conflict does not in itself constitute a justifiable
ground for the court to refuse an application for the
injunctive relief. (Hackensack Impr. Commn. v. New
Jersey Midland P. Co., 22 N.J. Eg. 94.)
 Hence, the status quo existing between the parties prior to the filing of
this case should be maintained. For after all, an injunction, without
reference to the parties, should be violent, vicious nor even vindictive.
(pp. 338-341, Rollo in G.R. No. 91332.)
In the process of denying petitioners' subsequent motion for reconsideration of the order
denying issuance of the requested writ, the court of origin took cognizance of the
certification executed on January 30, 1984 by the Philippine Patent Office attesting to the
fact that private respondent's application for registration is still pending appropriate
action. Apart from this communication, what prompted the trial court judge to entertain
the idea of prematurity and untimeliness of petitioners' application for a writ of preliminary
injunction was the letter from the Bureau of Internal Revenue date February 2, 1984
which reads:
MRS. TERESITA GANDIONGCO OLEDAN
Legal Counsel
Fortune Tobacco Corporation
Madam:
In connection with your letter dated January 25, 1984, reiterating your
query as to whether your label approval automatically expires or
becomes null and void after six (6) months if the brand is not accepted
and by the patent office, please be informed that no provision in the Tax
Code or revenue regulation that requires an applicant to comply with the
aforementioned condition order that his label approved will remain valid
and existing.
Based on the document you presented, it shows that registration of this
particular label still pending resolution by the Patent Office. These being
so , you may therefore continue with the production said brand of
cigarette until this Office is officially notified that the question of
ownership of "MARK" brand is finally resolved.
Very truly yours,
It appears from the testimony of Atty. Enrique Madarang, Chief of the Trademark Division
of the then Philippine Patent Office that Fortune's application for its trademark is still
pending before said office (p. 311, Rollo).
Petitioners thereafter cited supervening events which supposedly transpired since March
28, 1983, when the trial court first declined issuing a writ of preliminary injunction, that
could alter the results of the case in that Fortune's application had been rejected, nay,
barred by the Philippine Patent Office, and that the application had been forfeited by
abandonment, but the trial court nonetheless denied the second motion for issuance of
the injunctive writ on April 22, 1987, thus:
For all the prolixity of their pleadings and testimonial evidence, the
plaintiffs-movants have fallen far short of the legal requisites that would
justify the grant of the writ of preliminary injunction prayed for. For one,
they did not even bother to establish by competent evidence that the
products supposedly affected adversely by defendant's trademark now
subject of an application for registration with the Philippine Patents
Office, are in actual use in the Philippines. For another, they
concentrated their fire on the alleged abandonment and forfeiture by
defendant of said application for registration.
The Court cannot help but take note of the fact that in their complaint
plaintiffs included a prayer for issuance preliminary injunction. The
petition was duly heard, and thereafter matter was assiduously discussed
lengthily and resolved against plaintiffs in a 15-page Order issued by the
undersigned's predecessor on March 28, 1983. Plaintiffs' motion for
reconsideration was denied in another well-argued 8 page Order issued
on April 5, 1984,, and the matter was made to rest.
However, on the strength of supposed changes in the material facts of
this case, plaintiffs came up with the present motion citing therein the
said changes which are: that defendant's application had been rejected
and barred by the Philippine Patents Office, and that said application has
been deemed abandoned and forfeited. But defendant has refiled the
same.

TEODORO D. PAREÑO Plaintiffs' arguments in support of the present motion appear to be a

Chief, Manufactured Tobacco mere rehash of their stand in the first above-mentioned petition which has
Tax Division already been ruled upon adversely against them. Granting that the
TAN-P6531-D2830-A-6 alleged changes in the material facts are sufficient grounds for a motion
seeking a favorable grant of what has already been denied, this motion
just the same cannot prosper.
(p. 348, Rollo.)
 In the first place there is no proof whatsoever that any of plaintiffs'
products which they seek to protect from any adverse effect of the
trademark applied for by defendant, is in actual use and available for
commercial purposes anywhere in the Philippines. Secondly as shown by
plaintiffs' own evidence furnished by no less than the chief of Trademarks
Division of the Philippine Patent Office, Atty. Enrique Madarang, the
abandonment of an application is of no moment, for the same can always
be refiled. He said there is no specific provision in the rules prohibiting
such refiling (TSN, November 21, 1986, pp. 60 & 64, Raviera). In fact,
according to Madarang, the refiled application of defendant is now
pending before the Patents Office. Hence, it appears that the motion has
no leg to stand on. (pp. 350-351, Rollo in G. R. No. 91332.)
Confronted with this rebuff, petitioners filed a previous petition for certiorari before the
Court, docketed as G.R. No. 78141, but the petition was referred to the Court of Appeals.
The Court of Appeals initially issued a resolution which set aside the court of origin's
order dated April 22, 1987, and granted the issuance of a writ of preliminary injunction
enjoining Fortune, its agents, employees, and representatives, from manufacturing,
selling, and advertising "MARK" cigarettes. The late Justice Cacdac, speaking for the
First Division of the Court of Appeals in CA-G.R. SP No. 13132, remarked:
There is no dispute that petitioners are the registered owners of the
trademarks for cigarettes "MARK VII", "MARK TEN", and "LARK".
(Annexes B, C and D, petition). As found and reiterated by the Philippine
Patent Office in two (2) official communications dated April 6, 1983 and
January 24, 1984, the trademark "MARK" is "confusingly similar" to the
trademarks of petitioners, hence registration was barred under Sec. 4 (d)
of Rep. Act. No. 166, as amended (pp. 106, 139, SCA rollo). In a third
official communication dated April 8, 1986, the trademark application of
private respondent for the "MARK" under Serial No. 44008 filed on
February 13, 1981 which was declared abandoned as of February 16,
1986, is now deemed forfeited, there being no revival made pursuant to
Rule 98 of the Revised Rules of Practitioners in Trademark Cases." (p.
107, CA rollo). The foregoing documents or communications mentioned
by petitioners as "the changes in material facts which occurred after
March 28, 1983", are not also questioned by respondents.
Pitted against the petitioners' documentary evidence, respondents
pointed to (1) the letter dated January 30, 1979 (p. 137, CA rollo) of
Conrado P. Diaz, then Acting Commissioner of Internal Revenue,
temporarily granting the request of private respondent for a permit to
manufacture two (2) new brands of cigarettes one of which is brand
"MARK" filter-type blend, and (2) the certification dated September 26,
1986 of Cesar G. Sandico, Director of Patents (p. 138, CA rollo) issued
upon the written request of private respondents' counsel dated
September 17, 1986 attesting that the records of his office would show
that the "trademark MARK" for cigarettes is now the subject of a pending
application under Serial No. 59872 filed on September 16, 1986.
Private respondent's documentary evidence provides the reasons
neutralizing or weakening their probative values. The penultimate
paragraph of Commissioner Diaz' letter of authority reads:
Please be informed further that the authority herein
granted does not give you protection against any person
or entity whose rights may be prejudiced by infringement
or unfair competition in relation to your above-named
brands/trademark.
while Director Sandico's certification contained similar conditions as
follows:
This Certification, however, does not give protection as
against any person or entity whose right may be
prejudiced by infringement or unfair competition in relation
to the aforesaid trademark nor the right to register if
contrary to the provisions of the Trademark Law, Rep. Act
No. 166 as amended and the Revised Rules of Practice in
Trademark Cases.
The temporary permit to manufacture under the trademark "MARK" for
cigarettes and the acceptance of the second application filed by private
respondent in the height of their dispute in the main case were evidently
made subject to the outcome of the said main case or Civil Case No.
47374 of the respondent Court. Thus, the Court has not missed to note
the absence of a mention in the Sandico letter of September 26, 1986 of
any reference to the pendency of the instant action filed on August 18,
1982. We believe and hold that petitioners have shown a prima
facie case for the issuance of the writ of prohibitory injunction for the
purposes stated in their complaint and subsequent motions for the
issuance of the prohibitory writ. (Buayan Cattle Co. vs. Quintillan, 125
SCRA 276)
The requisites for the granting of preliminary injunction are the existence
of the right protected and the facts against which the injunction is to be
directed as violative of said right. (Buayan Cattle Co. vs.
 Quintillan, supra; Ortigas & Co. vs. Ruiz, 148 SCRA 326). It is a writ
framed according to the circumstances of the case commanding an act
which the Court regards as essential to justice and restraining an act it
deems contrary to equity and good conscience (Rosauro vs. Cuneta, 151
SCRA 570). If it is not issued, the defendant may, before final judgment,
do or continue the doing of the act which the plaintiff asks the court to
restrain, and thus make ineffectual the final judgment rendered
afterwards granting the relief sought by the plaintiff (Calo vs. Roldan, 76
Phil. 445). Generally, its grant or denial rests upon the sound discretion
of the Court except on a clear case of abuse (Belish Investment &
Finance Co. vs. State House, 151 SCRA 636). Petitioners' right of
exclusivity to their registered trademarks being clear and beyond
question, the respondent court's denial of the prohibitive writ constituted
excess of jurisdiction and grave abuse discretion. If the lower court does
not grant preliminary injunction, the appellate court may grant the same.
(Service Specialists, Inc. vs. Sheriff of Manila, 145 SCRA 139). (pp. 165-
167, Rollo in G.R. No. 91332.)
After private respondent Fortune's motion for reconsideration was rejected, a motion to
dissolve the disputed writ of preliminary injunction with offer to post a counterbond was
submitted which was favorably acted upon by the Court of Appeals, premised on the
filing of a sufficient counterbond to answer for whatever perjuicio petitioners may suffer
as a result thereof, to wit:
The private respondent seeks to dissolve the preliminary injunction
previously granted by this Court with an offer to file a counterbond. It was
pointed out in its supplemental motion that lots of workers employed will
be laid off as a consequence of the injunction and that the government
will stand to lose the amount of specific taxes being paid by the
private respondent. The specific taxes being paid is the sum total of
P120,120, 295.98 from January to July 1989.
The petitioners argued in their comment that the damages caused by the
infringement of their trademark as well as the goodwill it generates are
incapable of pecuniary estimation and monetary evaluation and not even
the counterbond could adequately compensate for the damages it will
incur as a result of the dissolution of the bond. In addition, the petitioner
further argued that doing business in the Philippines is not relevant as the
injunction pertains to an infringement of a trademark right.
After a thorough re-examination of the issues involved and the arguments
advanced by both parties in the offer to file a counterbond and the
opposition thereto, WE believe that there are sound and cogent reasons
for US to grant the dissolution of the writ of preliminary injunction by the
offer of the private respondent to put up a counterbond to answer for
whatever damages the petitioner may suffer as a consequence of the
dissolution of the preliminary injunction.
The petitioner will not be prejudiced nor stand to suffer irreparably as a
consequence of the lifting of the preliminary injunction considering that
they are not actually engaged in the manufacture of the cigarettes with
the trademark in question and the filing of the counterbond will amply
answer for such damages.
While the rule is that an offer of a counterbond does not operate to
dissolve an injunction previously granted, nevertheless, it is equally true
that an injunction could be dissolved only upon good and valid grounds
subject to the sound discretion of the court. As WE have maintained the
view that there are sound and good reasons to lift the preliminary
injunction, the motion to file a counterbond is granted. (pp. 53-54, Rollo in
G.R. No. 91332.)
Petitioners, in turn, filed their own motion for re-examination geared towards reimposition
of the writ of preliminary injunction but to no avail (p. 55, Rollo in G.R. No. 91332).
Hence, the instant petition casting three aspersions that respondent court gravely
abused its discretion tantamount to excess of jurisdiction when:
I. . . . it required, contrary to law and jurisprudence, that in order that
petitioners may suffer irreparable injury due to the lifting of the injunction,
petitioners should be using actually their registered trademarks in
commerce in the Philippines;
II. . . . it lifted the injunction in violation of section 6 of Rule 58 of the
Rules of Court; and
III. . . . after having found that the trial court had committed grave abuse
of discretion and exceeded its jurisdiction for having refused to issue the
writ of injunction to restrain private respondent's acts that are contrary to
equity and good conscience, it made a complete about face for legally
insufficient grounds and authorized the private respondent to continue
performing the very same acts that it had considered contrary to equity
and good conscience, thereby ignoring not only the mandates of the
Trademark Law, the international commitments of the Philippines, the
judicial admission of private respondent that it will have no more right to
use the trademark "MARK" after the Director of Patents shall have
 rejected the application to register it, and the admonitions of the Supreme
Court. (pp. 24-25, Petition; pp. 25-26, Rollo.)
To sustain a successful prosecution of their suit for infringement, petitioners, as foreign
corporations not engaged in local commerce, rely on section 21-A of the Trademark Law
reading as follows:
Sec. 21-A. Any foreign corporation or juristic person to which a mark or
trade-name has been registered or assigned under this act may bring an
action hereunder for infringement, for unfair competition, or false
designation of origin and false description, whether or not it has been
licensed to do business in the Philippines under Act Numbered Fourteen
hundred and fifty-nine, as amended, otherwise known as the Corporation
Law, at the time it brings complaint: Provided, That the country of which
the said foreign corporation or juristic person is a citizen or in which it is
domiciled, by treaty, convention or law, grants a similar privilege to
corporate or juristic persons of the Philippines. (As inserted by Sec. 7 of
Republic Act No. 638.)
to drive home the point that they are not precluded from initiating a cause
of action in the Philippines on account of the principal perception that
another entity is pirating their symbol without any lawful authority to do
so. Judging from a perusal of the aforequoted Section 21-A, the
conclusion reached by petitioners is certainly correct for the proposition in
support thereof is embedded in the Philippine legal jurisprudence.
Indeed, it was stressed in General Garments Corporation vs. Director of Patents (41
SCRA 50 [1971]) by then Justice (later Chief Justice) Makalintal that:
Parenthetically, it may be stated that the ruling in the Mentholatum case
was subsequently derogated when Congress, purposely to "counteract
the effects" of said case, enacted Republic Act No. 638, inserting Section
21-A in the Trademark Law, which allows a foreign corporation or juristic
person to bring an action in Philippine courts for infringement of a mark or
tradename, for unfair competition, or false designation of origin and false
description, "whether or not it has been licensed to do business in the
Philippines under Act Numbered Fourteen hundred and fifty-nine, as
amended, otherwise known as the Corporation Law, at the time it brings
complaint."
Petitioner argues that Section 21-A militates against respondent's
capacity to maintain a suit for cancellation, since it requires, before a
foreign corporation may bring an action, that its trademark or tradename
has been registered under the Trademark Law. The argument misses the
essential point in the said provision, which is that the foreign corporation
is allowed thereunder to sue "whether or not it has been licensed to do
business in the Philippines" pursuant to the Corporation Law (precisely to
counteract the effects of the decision in the Mentholatum case). (at p.
57.)
However, on May, 21, 1984, Section 21-A, the provision under consideration, was
qualified by this Court in La Chemise Lacoste S.A. vs. Fernandez (129 SCRA 373
[1984]), to the effect that a foreign corporation not doing business in the Philippines may
have the right to sue before Philippine Courts, but existing adjective axioms require that
qualifying circumstances necessary for the assertion of such right should first be
affirmatively pleaded (2 Agbayani Commercial Laws of the Philippines, 1991 Ed., p. 598;
4 Martin, Philippine Commercial Laws, Rev. Ed., 1986, p. 381). Indeed, it is not sufficient
for a foreign corporation suing under Section 21-A to simply allege its alien origin.
Rather, it must additionally allege its personality to sue. Relative to this condition
precedent, it may be observed that petitioners were not remiss in averring their
personality to lodge a complaint for infringement (p. 75, Rollo in AC-G.R. SP No. 13132)
especially so when they asserted that the main action for infringement is anchored on an
isolated transaction (p. 75, Rollo in AC-G.R. SP No. 13132; Atlantic Mutual Ins. Co. vs.
Cebu Stevedoring Co., Inc., 17 SCRA 1037 (1966), 1 Regalado, Remedial Law
Compendium, Fifth Rev. Ed., 1988, p. 103).
Another point which petitioners considered to be of significant interest, and which they
desire to impress upon us is the protection they enjoy under the Paris Convention of
1965 to which the Philippines is a signatory. Yet, insofar as this discourse is concerned,
there is no necessity to treat the matter with an extensive response because adherence
of the Philippines to the 1965 international covenant due to pact sunt servanda had been
acknowledged in La Chemise (supra at page 390).
Given these confluence of existing laws amidst the cases involving trademarks, there
can be no disagreement to the guiding principle in commercial law that foreign
corporations not engaged in business in the Philippines may maintain a cause of action
for infringement primarily because of Section 21-A of the Trademark Law when the legal
standing to sue is alleged, which petitioners have done in the case at hand.
In assailing the justification arrived at by respondent court when it recalled the writ of
preliminary injunction, petitioners are of the impression that actual use of their
trademarks in Philippine commercial dealings is not an indispensable element under
Article 2 of the Paris Convention in that:
(2) . . . . no condition as to the possession of a domicile or establishment
in the country where protection is claimed may be required of persons
entitled to the benefits of the Union for the enjoyment of any industrial
 property of any industrial property rights. (p. 28, Petition; p. 29, Rollo in
G.R. No. 91332.)
Yet petitioners' perception along this line is nonetheless resolved by Sections 2 and 2-A
of the Trademark Law which speak loudly, about necessity of actual commercial use of
the trademark in the local forum:
Sec. 2. What are registrable. — Trademarks, tradenames and service
marks owned by persons, corporations, partnerships or associations
domiciled in the Philippines and by persons, corporations, partnerships or
associations domiciled in any foreign country may be registered in
accordance with the provisions of this Act; Provided, That said
trademarks, tradenames, or service marks are actually in use in
commerce and services not less than two months in the
Philippines before the time the applications for registration are filed; And
provided, further, That the country of which the applicant for registration
is a citizen grants by law substantially similar privileges to citizens of the
Philippines, and such fact is officially certified, with a certified true copy of
the foreign law translated into the English language, by the government
of the foreign country to the Government of the Republic of the
Philippines. (As amended by R.A. No. 865).
Sec. 2-A. Ownership of trademarks, tradenames and service marks; how
acquired. — Anyone who lawfully produces or deals in merchandise of
any kind or who engages in any lawful business, or who renders any
lawful service in commerce, by actual use thereof in manufacture or
trade, in business, and in the service rendered, may appropriate to his
exclusive use a trademark, a tradename, or a service mark not so
appropriated by another, to distinguish his merchandise, business or
service from the merchandise, business or service of others. The
ownership or possession of a trademark, tradename, service mark,
heretofore or hereafter appropriated, as in this section provided, shall be
recognized and protected in the same manner and to the same extent as
are other property rights known to the law. (As amended by R.A. No.
638). (Kabushi Kaisha Isetan vs. Intermediate Appellate Court, 203
SCRA 583 [1991], at pp. 589-590; emphasis supplied.)
Following universal acquiescence and comity, our municipal law on trademarks
regarding the requirement of actual use in the Philippines must subordinate an
international agreement inasmuch as the apparent clash is being decided by a municipal
tribunal (Mortensen vs. Peters, Great Britain, High Court of Judiciary of Scotland, 1906, 8
Sessions 93; Paras, International Law and World Organization, 1971 Ed., p. 20). Withal,
the fact that international law has been made part of the law of the land does not by any
means imply the primacy of international law over national law in the municipal sphere.
Under the doctrine of incorporation as applied in most countries, rules of international law
are given a standing equal, not superior, to national legislative enactments (Salonga and
Yap, Public International Law, Fourth ed., 1974, p. 16).
The aforequoted basic provisions of our Trademark Law, according to Justice Gutierrez,
Jr., in Kabushi Kaisha Isetan vs. Intermediate Appellate Court (203 SCRA 583 [1991]),
have been construed in this manner:
A fundamental principle of Philippine Trademark Law is that actual use in
commerce in the Philippines is a pre-requisite to the acquisition of
ownership over a trademark or a tradename.
xxx xxx xxx
These provisions have been interpreted in Sterling Products
International, Inc. v. Farbenfabriken Bayer Actiengesellschaft (27 SCRA
1214 [1969]) in this way:
A rule widely accepted and firmly entrenched because it
has come down through the years is that actual use in
commerce or business is a prerequisite to the acquisition
of the right of ownership over a trademark.
x x x           x x x          x x x
. . . Adoption alone of a trademark would not give
exclusive right thereto. Such right grows out of their actual
use. Adoption is not use. One may make advertisements,
issue circulars, give out price lists on certain goods; but
these alone would not give exclusive right of use. For
trademark is a creation of use. The underlying reason for
all these is that purchasers have come to understand the
mark as indicating the origin of the wares. Flowing from
this is the trader's right to protection in the trade he has
built up and the goodwill he has accumulated from use of
the trademark. . . .
In fact, a prior registrant cannot claim exclusive use of the trademark
unless it uses it in commerce.
We rule[d] in Pagasa Industrial Corporation v. Court of Appeals (118
SCRA 526 [1982]):
3. The Trademark law is very clear. It requires actual commercial use of
the mark prior to its registration. There is no dispute that respondent
corporation was the first registrant, yet it failed to fully substantiate its
claim that it used in trade or business in the Philippines the subject mark;
it did not present proof to invest it with exclusive, continuous adoption of
the trademark which should consist among others, of considerable sales
since its first use. The invoices (Exhibits 7, 7-a, and 8-b) submitted by
 respondent which were dated way back in 1957 show that the zippers
sent to the Philippines were to be used as "samples" and "of no
commercial value". The evidence for respondent must be clear, definite
and free from inconsistencies. (Sy Ching v. Gaw Lui, 44 SCRA 148-149)
"Samples" are not for sale and therefore, the fact of exporting them to the
Philippines cannot be considered to be equivalent to the "use"
contemplated by the law. Respondent did not expect income from such
"samples". There were no receipts to establish sale, and no proof were
presented to show that they were subsequently sold in the Philippines.
(Pagasa Industrial Corp. v. Court of Appeals, 118 SCRA 526 [1982];
Emphasis Supplied)
The records show that the petitioner has never conducted any business
in the Philippines. It has never promoted its tradename or trademark in
the Philippines. It is unknown to Filipino except the very few who may
have noticed it while travelling abroad. It has never paid a single centavo
of tax to the Philippine government. Under the law, it has no right to the
remedy it seeks. (at pp. 589-591.)
In other words, petitioners may have the capacity to sue for infringement irrespective of
lack of business activity in the Philippines on account of Section 21-A of the Trademark
Law but the question whether they have an exclusive right over their symbol as to justify
issuance of the controversial writ will depend on actual use of their trademarks in the
Philippines in line with Sections 2 and 2-A of the same law. It is thus incongruous for
petitioners to claim that when a foreign corporation not licensed to do business in
Philippines files a complaint for infringement, the entity need not be actually using its
trademark in commerce in the Philippines. Such a foreign corporation may have the
personality to file a suit for infringement but it may not necessarily be entitled to
protection due to absence of actual use of the emblem in the local market.
Going back to the first assigned error, we can not help but notice the manner the
ascription was framed which carries with it the implied but unwarranted assumption of
the existence of petitioners' right to relief. It must be emphasized that this aspect of
exclusive dominion to the trademarks, together with the corollary allegation of irreparable
injury, has yet to be established by petitioners by the requisite quantum of evidence in
civil cases. It cannot be denied that our reluctance to issue a writ of preliminary injunction
is due to judicial deference to the lower courts, involved as there is mere interlocutory
order (Villarosa vs. Teodoro, Sr., 100 Phil. 25 [1956]). In point of adjective law, the
petition has its roots on a remedial measure which is but ancillary to the main action for
infringement still pending factual determination before the court of origin. It is virtually
needless to stress the obvious reality that critical facts in an infringement case are not
before us more so when even Justice Feliciano's opinion observes that "the evidence is
scanty" and that petitioners "have yet to submit copies or photographs of their registered
marks as used in cigarettes" while private respondent has not, for its part, "submitted the
actual labels or packaging materials used in selling its "Mark" cigarettes." Petitioners
therefore, may not be permitted to presume a given state of facts on their so called right
to the trademarks which could be subjected to irreparable injury and in the process,
suggest the fact of infringement. Such a ploy would practically place the cart ahead of
the horse. To our mind, what appears to be the insurmountable barrier to petitioners'
portrayal of whimsical exercise of discretion by the Court of Appeals is the well-taken
remark of said court that:
The petitioner[s] will not be prejudiced nor stand to suffer irreparably as a
consequence of the lifting of the preliminary injunction considering that
they are not actually engaged in the manufacture of the cigarettes with
the trademark in question and the filing of the counterbond will amply
answer for such damages. (p. 54. Rollo in G.R. No. 91332.)
More telling are the allegations of petitioners in their complaint (p. 319, Rollo G.R. No.
91332) as well as in the very petition filed with this Court (p. 2, Rollo in G.R. No. 91332)
indicating that they are not doing business in the Philippines, for these frank
representations are inconsistent and incongruent with any pretense of a right which can
breached (Article 1431, New Civil Code; Section 4, Rule 129; Section 3, Rule 58,
Revised Rules of Court). Indeed, to be entitled to an injunctive writ, petitioner must show
that there exists a right to be protected and that the facts against which injunction is
directed are violative of said right (Searth Commodities Corporation vs. Court of Appeals,
207 SCRA 622 [1992]). It may be added in this connection that albeit petitioners are
holders of certificate of registration in the Philippines of their symbols as admitted by
private respondent, the fact of exclusive ownership cannot be made to rest solely on
these documents since dominion over trademarks is not acquired by the mere fact of
registration alone and does not perfect a trademark right (Unno Commercial Enterprises,
Inc. vs. General Milling Corporation, 120 SCRA 804 [1983]).
Even if we disregard the candid statements of petitioners anent the absence of business
activity here and rely on the remaining statements of the complaint below, still, when
these averments are juxtaposed with the denials and propositions of the answer
submitted by private respondent, the supposed right of petitioners to the symbol have
thereby been controverted. This is not to say, however, that the manner the complaint
was traversed by the answer is sufficient to tilt the scales of justice in favor of private
respondent. Far from it. What we are simply conveying is another basic tenet in remedial
law that before injunctive relief may properly issue, complainant's right or title must be
undisputed and demonstrated on the strength of one's own title to such a degree as to
unquestionably exclude dark clouds of doubt, rather than on the weakness of the
adversary's evidence, inasmuch as the possibility of irreparable damage, without prior
proof of transgression of an actual existing right, is no ground for injunction being
mere damnum absque injuria (Talisay-Silay Milling Co., Inc. vs. CFI of Negros
Occidental, 42 SCRA 577 [1971]; Francisco, Rules of Court, Second ed., 1985, p. 225; 3
Martin, Rules of Court, 1986 ed., p. 82).
On the economic repercussion of this case, we are extremely bothered by the thought of
having to participate in throwing into the streets Filipino workers engaged in the
manufacture and sale of private respondent's "MARK" cigarettes who might be
retrenched and forced to join the ranks of the many unemployed and unproductive as a
result of the issuance of a simple writ of preliminary injunction and this, during the
pendency of the case before the trial court, not to mention the diminution of tax revenues
represented to be close to a quarter million pesos annually. On the other hand, if the
status quo is maintained, there will be no damage that would be suffered by petitioners
inasmuch as they are not doing business in the Philippines.
With reference to the second and third issues raised by petitioners on the lifting of the
writ of preliminary injunction, it cannot be gainsaid that respondent court acted well within
its prerogatives under Section 6, Rule 58 of the Revised Rules of Court:
Sec. 6. Grounds for objection to, or for motion of dissolution of
injunction. — The injunction may be refused or, if granted ex parte, may
be dissolved, upon the insufficiency of the complaint as shown by the
complaint itself, with or without notice to the adverse party. It may also be
refused or dissolved on other grounds upon affidavits on the part of the
defendants which may be opposed by the plaintiff also by affidavits. It
may further be refused or, if granted, may be dissolved, if it appears after
hearing that although the plaintiff is entitled to the injunction, the issuance
or continuance thereof, as the case may be, would cause great damage
to the defendant while the plaintiff can be fully compensated for such
damages as he may suffer, and the defendant files a bond in an amount
fixed by the judge conditioned that he will pay all damages which the
plaintiff may suffer by the refusal or the dissolution of the injunction. If it
appears that the extent of the preliminary injunction granted is too great,
it must be modified.
Modification of the injunction may also be ordered by the court if it
appears that the extent of the preliminary injunction granted is too great.
(3 Martin, Rules of Court, 1986 ed., p. 99; Francisco, supra, at p. 268.)
In view of the explicit representation of petitioners in the complaint that they are not
engaged in business in the Philippines, it inevitably follows that no conceivable damage
can be suffered by them not to mention the foremost consideration heretofore discussed
on the absence of their "right" to be protected. At any rate, and assuming in gratia
argumenti that respondent court erroneously lifted the writ it previously issued, the same
may be cured by appeal and not in the form of a petition for certiorari (Clark vs.
Philippine Ready Mix Concrete Co., 88 Phil. 460 [1951]). Verily, and mindful of the rule
that a writ of preliminary injunction is an interlocutory order which is always under the
control of the court before final judgment, petitioners' criticism must fall flat on the
ground, so to speak, more so when extinction of the previously issued writ can even be
made without previous notice to the adverse party and without a hearing (Caluya vs.
Ramos, 79 Phil. 640 [1974]; 3 Moran, Rules of Court, 1970 ed., p. 81).
WHEREFORE, the petition is hereby DISMISSED and the Resolutions of the Court of
Appeals dated September 14, 1989 and November 29, 1989 are hereby AFFIRMED.
SO ORDERED.

Under the foregoing rule, injunction may be refused, or, if granted, may be dissolved, on
the following instances:

(1) If there is insufficiency of the complaint as shown by the allegations

therein. Refusal or dissolution may be granted in this case with or without
notice to the adverse party.
(2) If it appears after hearing that although the plaintiff is entitled to the
injunction, the issuance or continuance thereof would cause great
damage to the defendant, while the plaintiff can be fully compensated for
such damages as he may suffer. The defendant, in this case, must file a
bond in an amount fixed by the judge conditioned that he will pay all
damages which plaintiff may suffer by the refusal or the dissolution of the
injunction.
(3) On the other grounds upon affidavits on the part of the defendant
which may be opposed by the plaintiff also affidavits.