Republic Act No.

8293             June 6, 1997 e) Patents;

AN ACT PRESCRIBING THE INTELLECTUAL PROPERTY CODE AND ESTABLISHING THE f) Layout-Designs (Topographies) of Integrated Circuits; and
INTELLECTUAL PROPERTY OFFICE, PROVIDING FOR ITS POWERS AND FUNCTIONS, AND FOR
OTHER PURPOSES g) Protection of Undisclosed Information (n, TRIPS).

Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled: 4.2. The term "technology transfer arrangements" refers to contracts or agreements involving the transfer of
systematic knowledge for the manufacture of a product, the application of a process, or rendering of a service
PART I including management contracts; and the transfer, assignment or licensing of all forms of intellectual property
THE INTELLECTUAL PROPERTY OFFICE rights, including licensing of computer software except computer software developed for mass market.

Section 1. Title. - This Act shall be known as the "Intellectual Property Code of the Philippines." 4.3. The term "Office" refers to the Intellectual Property Office created by this Act.

Section 2. Declaration of State Policy. - The State recognizes that an effective intellectual and industrial 4.4. The term "IPO Gazette" refers to the gazette published by the Office under this Act. (n)
property system is vital to the development of domestic and creative activity, facilitates transfer of technology,
attracts foreign investments, and ensures market access for our products. It shall protect and secure the
exclusive rights of scientists, inventors, artists and other gifted citizens to their intellectual property and
creations, particularly when beneficial to the people, for such periods as provided in this Act.

The use of intellectual property bears a social function. To this end, the State shall promote the diffusion of
knowledge and information for the promotion of national development and progress and the common good.

It is also the policy of the State to streamline administrative procedures of registering patents, trademarks and
copyright, to liberalize the registration on the transfer of technology, and to enhance the enforcement of
intellectual property rights in the Philippines. (n)

Section 3. International Conventions and Reciprocity. - Any person who is a national or who is domiciled or
has a real and effective industrial establishment in a country which is a party to any convention, treaty or
agreement relating to intellectual property rights or the repression of unfair competition, to which the
Philippines is also a party, or extends reciprocal rights to nationals of the Philippines by law, shall be entitled
to benefits to the extent necessary to give effect to any provision of such convention, treaty or reciprocal law,
in addition to the rights to which any owner of an intellectual property right is otherwise entitled by this Act. (n)

Section 4. Definitions. - 4.1. The term "intellectual property rights" consists of:

a) Copyright and Related Rights;

b) Trademarks and Service Marks;

c) Geographic Indications;

d) Industrial Designs;
G.R. No. 154342             July 14, 2004
MIGHTY CORPORATION and LA CAMPANA FABRICA DE TABACO, INC., petitioner vs. E. & J. GALLO
WINERY and THE ANDRESONS GROUP, INC., respondents.
CORONA, J.:
In this petition for review on certiorari under Rule 45, petitioners Mighty Corporation and La Campana Fabrica
de Tabaco, Inc. (La Campana) seek to annul, reverse and set aside: (a) the November 15, 2001 decision of
the Court of Appeals (CA) in CA-G.R. CV No. 65175 affirming the November 26, 1998 decision, as modified
2 
by the June 24, 1999 order, of the Regional Trial Court of Makati City, Branch 57 (Makati RTC) in Civil Case
3  Petitioners claim that GALLO cigarettes have been sold in the Philippines since 1973, initially by Tobacco
No. 93-850, which held petitioners liable for, and permanently enjoined them from, committing trademark
infringement and unfair competition, and which ordered them to pay damages to respondents E. & J. Gallo
Winery (Gallo Winery) and The Andresons Group, Inc. (Andresons); (b) the July 11, 2002 CA resolution
denying their motion for reconsideration and (c) the aforesaid Makati RTC decision itself.
4 
I. The Factual Background
Respondent Gallo Winery is a foreign corporation not doing business in the Philippines but organized and
existing under the laws of the State of California, United States of America (U.S.), where all its wineries are
located. Gallo Winery produces different kinds of wines and brandy products and sells them in many
countries under different registered trademarks, including the GALLO and ERNEST & JULIO GALLO wine
trademarks.
Respondent domestic corporation, Andresons, has been Gallo Winery’s exclusive wine importer and
distributor in the Philippines since 1991, selling these products in its own name and for its own account.
5
Gallo Winery’s GALLO wine trademark was registered in the principal register of the Philippine Patent Office
(now Intellectual Property Office) on November 16, 1971 under Certificate of Registration No. 17021 which
was renewed on November 16, 1991 for another 20 years. Gallo Winery also applied for registration of its
6 
ERNEST & JULIO GALLO wine trademark on October 11, 1990 under Application Serial No. 901011-
00073599-PN but the records do not disclose if it was ever approved by the Director of Patents. 7
On the other hand, petitioners Mighty Corporation and La Campana and their sister company, Tobacco
Industries of the Philippines (Tobacco Industries), are engaged in the cultivation, manufacture, distribution
and sale of tobacco products for which they have been using the GALLO cigarette trademark since 1973.  8
The Bureau of Internal Revenue (BIR) approved Tobacco Industries’ use of GALLO 100’s cigarette mark on
September 14, 1973 and GALLO filter cigarette mark on March 26, 1976, both for the manufacture and sale
of its cigarette products. In 1976, Tobacco Industries filed its manufacturer’s sworn statement as basis for
BIR’s collection of specific tax on GALLO cigarettes. 9 Gallo Winery’s wines were totally unrelated products; Gallo Winery’s GALLO trademark registration certificate
On February 5, 1974, Tobacco Industries applied for, but eventually did not pursue, the registration of the
GALLO cigarette trademark in the principal register of the then Philippine Patent Office.
10
In May 1984, Tobacco Industries assigned the GALLO cigarette trademark to La Campana which, on July 16,
1985, applied for trademark registration in the Philippine Patent Office. On July 17, 1985, the National Library
11 
issued Certificate of Copyright Registration No. 5834 for La Campana’s lifetime copyright claim over GALLO
cigarette labels.
12
Subsequently, La Campana authorized Mighty Corporation to manufacture and sell cigarettes bearing the
GALLO trademark. BIR approved Mighty Corporation’s use of GALLO 100’s cigarette brand, under licensing
13 
agreement with Tobacco Industries, on May 18, 1988, and GALLO SPECIAL MENTHOL 100’s cigarette
brand on April 3, 1989. 14
1 
Industries, then by La Campana and finally by Mighty Corporation. 15
On the other hand, although the GALLO wine trademark was registered in the Philippines in 1971,
respondents claim that they first introduced and sold the GALLO and ERNEST & JULIO GALLO wines in the
Philippines circa 1974 within the then U.S. military facilities only. By 1979, they had expanded their Philippine
market through authorized distributors and independent outlets. 16
Respondents claim that they first learned about the existence of GALLO cigarettes in the latter part of 1992
when an Andresons employee saw such cigarettes on display with GALLO wines in a Davao supermarket
wine cellar section. Forthwith, respondents sent a demand letter to petitioners asking them to stop using the
17 
GALLO trademark, to no avail.
II. The Legal Dispute
On March 12, 1993, respondents sued petitioners in the Makati RTC for trademark and tradename
infringement and unfair competition, with a prayer for damages and preliminary injunction.
Respondents charged petitioners with violating Article 6bis of the Paris Convention for the Protection of
Industrial Property (Paris Convention) and RA 166 (Trademark Law), specifically, Sections 22 and 23 (for
18  19 
trademark infringement), 29 and 30 (for unfair competition and false designation of origin) and 37 (for
20  21 
tradename infringement). They claimed that petitioners adopted the GALLO trademark to ride on Gallo
22 
Winery’s GALLO and ERNEST & JULIO GALLO trademarks’ established reputation and popularity, thus
causing confusion, deception and mistake on the part of the purchasing public who had always associated
GALLO and ERNEST & JULIO GALLO trademarks with Gallo Winery’s wines. Respondents prayed for the
issuance of a writ of preliminary injunction and ex parte restraining order, plus P2 million as actual and
compensatory damages, at least P500,000 as exemplary and moral damages, and at least P500,000 as
attorney’s fees and litigation expenses. 23
In their answer, petitioners alleged, among other affirmative defenses, that: petitioner’s GALLO cigarettes and
covered wines only, not cigarettes; GALLO cigarettes and GALLO wines were sold through different channels
of trade; GALLO cigarettes, sold at P4.60 for GALLO filters and P3 for GALLO menthols, were low-cost items
compared to Gallo Winery’s high-priced luxury wines which cost between P98 to P242.50; the target market
of Gallo Winery’s wines was the middle or high-income bracket with at least P10,000 monthly income while
GALLO cigarette buyers were farmers, fishermen, laborers and other low-income workers; the dominant
feature of the GALLO cigarette mark was the rooster device with the manufacturer’s name clearly indicated
as MIGHTY CORPORATION while, in the case of Gallo Winery’s wines, it was the full names of the founders-
owners ERNEST & JULIO GALLO or just their surname GALLO; by their inaction and conduct, respondents
were guilty of laches and estoppel; and petitioners acted with honesty, justice and good faith in the exercise
of their right to manufacture and sell GALLO cigarettes.
In an order dated April 21, 1993, the Makati RTC denied, for lack of merit, respondent’s prayer for the
24 
issuance of a writ of preliminary injunction, holding that respondent’s GALLO trademark registration
25  (iv) the cost of suit.
certificate covered wines only, that respondents’ wines and petitioners’ cigarettes were not related goods and
respondents failed to prove material damage or great irreparable injury as required by Section 5, Rule 58 of
the Rules of Court.26
On August 19, 1993, the Makati RTC denied, for lack of merit, respondents’ motion for reconsideration. The
court reiterated that respondents’ wines and petitioners’ cigarettes were not related goods since the likelihood
of deception and confusion on the part of the consuming public was very remote. The trial court emphasized
that it could not rely on foreign rulings cited by respondents "because the[se] cases were decided by foreign
courts on the basis of unknown facts peculiar to each case or upon factual surroundings which may exist only
within their jurisdiction. Moreover, there [was] no showing that [these cases had] been tested or found
applicable in our jurisdiction."
27
On February 20, 1995, the CA likewise dismissed respondents’ petition for review on certiorari, docketed as
CA-G.R. No. 32626, thereby affirming the Makati RTC’s denial of the application for issuance of a writ of
preliminary injunction against petitioners.
28
After trial on the merits, however, the Makati RTC, on November 26, 1998, held petitioners liable for, and
permanently enjoined them from, committing trademark infringement and unfair competition with respect to
the GALLO trademark:
WHEREFORE, judgment is rendered in favor of the plaintiff (sic) and against the defendant (sic), to
wit:
a. permanently restraining and enjoining defendants, their distributors, trade outlets, and all
persons acting for them or under their instructions, from (i) using E & J’s registered
trademark GALLO or any other reproduction, counterfeit, copy or colorable imitation of said
trademark, either singly or in conjunction with other words, designs or emblems and other
acts of similar nature, and (ii) committing other acts of unfair competition against plaintiffs
by manufacturing and selling their cigarettes in the domestic or export markets under the
GALLO trademark.
b. ordering defendants to pay plaintiffs –
(i) actual and compensatory damages for the injury and prejudice and impairment
of plaintiffs’ business and goodwill as a result of the acts and conduct pleaded as
basis for this suit, in an amount equal to 10% of FOURTEEN MILLION TWO
HUNDRED THIRTY FIVE THOUSAND PESOS (PHP14,235,000.00) from the
filing of the complaint until fully paid;
(ii) exemplary damages in the amount of PHP100,000.00;
(iii) attorney’s fees and expenses of litigation in the amount of PHP1,130,068.91;
SO ORDERED." 29
On June 24, 1999, the Makati RTC granted respondent’s motion for partial reconsideration and increased the
award of actual and compensatory damages to 10% of P199,290,000 or P19,929,000. 30
On appeal, the CA affirmed the Makati RTC decision and subsequently denied petitioner’s motion for
reconsideration.
III. The Issues
Petitioners now seek relief from this Court contending that the CA did not follow prevailing laws and
jurisprudence when it held that: [a] RA 8293 (Intellectual Property Code of the Philippines [IP Code]) was
applicable in this case; [b] GALLO cigarettes and GALLO wines were identical, similar or related goods for
the reason alone that they were purportedly forms of vice; [c] both goods passed through the same channels
of trade and [d] petitioners were liable for trademark infringement, unfair competition and damages. 31
Respondents, on the other hand, assert that this petition which invokes Rule 45 does not involve pure
questions of law, and hence, must be dismissed outright.
IV. Discussion
THE EXCEPTIONAL CIRCUMSTANCES
IN THIS CASE OBLIGE THE COURT TO REVIEW
THE CA’S FACTUAL FINDINGS
As a general rule, a petition for review on certiorari under Rule 45 must raise only "questions of law" (that is,
32 
the doubt pertains to the application and interpretation of law to a certain set of facts) and not "questions of
fact" (where the doubt concerns the truth or falsehood of alleged facts), otherwise, the petition will be denied.
33 
We are not a trier of facts and the Court of Appeals’ factual findings are generally conclusive upon us. 34
This case involves questions of fact which are directly related and intertwined with questions of law. The
resolution of the factual issues concerning the goods’ similarity, identity, relation, channels of trade, and acts
of trademark infringement and unfair competition is greatly dependent on the interpretation of applicable laws.
The controversy here is not simply the identity or similarity of both parties’ trademarks but whether or not
infringement or unfair competition was committed, a conclusion based on statutory interpretation.
Furthermore, one or more of the following exceptional circumstances oblige us to review the evidence on
record:35
(1) the conclusion is grounded entirely on speculation, surmises, and conjectures;
(2) the inference of the Court of Appeals from its findings of fact is manifestly mistaken, absurd and
impossible;
(3) there is grave abuse of discretion;
(4) the judgment is based on a misapprehension of facts;
(5) the appellate court, in making its findings, went beyond the issues of the case, and the same are
contrary to the admissions of both the appellant and the appellee;
(6) the findings are without citation of specific evidence on which they are based;
(7) the facts set forth in the petition as well as in the petitioner's main and reply briefs are not
disputed by the respondents; and
(8) the findings of fact of the Court of Appeals are premised on the absence of evidence and are
contradicted [by the evidence] on record. 36
In this light, after thoroughly examining the evidence on record, weighing, analyzing and balancing all factors
to determine whether trademark infringement and/or unfair competition has been committed, we conclude
that both the Court of Appeals and the trial court veered away from the law and well-settled jurisprudence.
Thus, we give due course to the petition.
THE TRADEMARK LAW AND THE PARIS
CONVENTION ARE THE APPLICABLE LAWS,
NOT THE INTELLECTUAL PROPERTY CODE
We note that respondents sued petitioners on March 12, 1993 for trademark infringement and unfair
competition committed during the effectivity of the Paris Convention and the Trademark Law.
Yet, in the Makati RTC decision of November 26, 1998, petitioners were held liable not only under the
aforesaid governing laws but also under the IP Code which took effect only on January 1, 1998, or about five
37  ground of his competitor’s unfairness or fraud. Conduct constitutes unfair competition if the effect is to pass
years after the filing of the complaint:
Defendants’ unauthorized use of the GALLO trademark constitutes trademark infringement pursuant
to Section 22 of Republic Act No. 166, Section 155 of the IP Code, Article 6bis of the Paris
Convention, and Article 16 (1) of the TRIPS Agreement as it causes confusion, deception and
mistake on the part of the purchasing public. (Emphasis and underscoring supplied)
38 
The CA apparently did not notice the error and affirmed the Makati RTC decision:
In the light of its finding that appellants’ use of the GALLO trademark on its cigarettes is likely to
create confusion with the GALLO trademark on wines previously registered and used in the
Philippines by appellee E & J Gallo Winery, the trial court thus did not err in holding that
appellants’ acts not only violated the provisions of the our trademark laws (R.A. No. 166 and R.A.
Nos. (sic)  8293) but also Article 6bis of the Paris Convention. (Emphasis and underscoring supplied)
39 
We therefore hold that the courts a quo erred in retroactively applying the IP Code in this case.
It is a fundamental principle that the validity and obligatory force of a law proceed from the fact that it has first
been promulgated. A law that is not yet effective cannot be considered as conclusively known by the
populace. To make a law binding even before it takes effect may lead to the arbitrary exercise of the
legislative power. Nova constitutio futuris formam imponere debet non praeteritis. A new state of the law
40 
ought to affect the future, not the past. Any doubt must generally be resolved against the retroactive
operation of laws, whether these are original enactments, amendments or repeals. There are only a few
41 
instances when laws may be given retroactive effect, none of which is present in this case.
42 
The IP Code, repealing the Trademark Law, was approved on June 6, 1997. Section 241 thereof expressly
43 
decreed that it was to take effect only on January 1, 1998, without any provision for retroactive application.
Thus, the Makati RTC and the CA should have limited the consideration of the present case within the
parameters of the Trademark Law and the Paris Convention, the laws in force at the time of the filing of the
complaint.
DISTINCTIONS BETWEEN
TRADEMARK INFRINGEMENT
AND UNFAIR COMPETITION
Although the laws on trademark infringement and unfair competition have a common conception at their root,
that is, a person shall not be permitted to misrepresent his goods or his business as the goods or business of
another, the law on unfair competition is broader and more inclusive than the law on trademark infringement.
The latter is more limited but it recognizes a more exclusive right derived from the trademark adoption and
registration by the person whose goods or business is first associated with it. The law on trademarks is thus a
specialized subject distinct from the law on unfair competition, although the two subjects are entwined with
each other and are dealt with together in the Trademark Law (now, both are covered by the IP Code). Hence,
even if one fails to establish his exclusive property right to a trademark, he may still obtain relief on the
off on the public the goods of one man as the goods of another. It is not necessary that any particular means
should be used to this end. 44
In Del Monte Corporation vs. Court of Appeals, we distinguished trademark infringement from unfair
45 
competition:
 (1) Infringement of trademark is the unauthorized use of a trademark, whereas unfair competition is
the passing off of one's goods as those of another.
(2) In infringement of trademark fraudulent intent is unnecessary, whereas in unfair competition
fraudulent intent is essential.
(3) In infringement of trademark the prior registration of the trademark is a prerequisite to the action,
whereas in unfair competition registration is not necessary.
Pertinent Provisions on Trademark
Infringement under the Paris
Convention and the Trademark Law
Article 6bis of the Paris Convention, an international agreement binding on the Philippines and the United
46  goods, business or services or in connection with which such use is likely to cause confusion or
States (Gallo Winery’s country of domicile and origin) prohibits "the [registration] or use of a trademark which
constitutes a reproduction, imitation or translation, liable to create confusion, of a mark considered by the
competent authority of the country of registration or use to be well-known in that country as being already the
mark of a person entitled to the benefits of the [Paris] Convention and used for identical
or similar goods. [This rule also applies] when the essential part of the mark constitutes a reproduction of any
such well-known mark or an imitation liable to create confusion therewith." There is no time limit for seeking
the prohibition of the use of marks used in bad faith.
47
Thus, under Article 6  of the Paris Convention, the following are the elements of trademark infringement:
bis
(a) registration or use by another person of a trademark which is a reproduction, imitation or
translation liable to create confusion,
(b) of a mark considered by the competent authority of the country of registration or use to be well-
48  have been registered and are in actual commercial use in the Philippines. Following universal acquiescence
known in that country and is already the mark of a person entitled to the benefits of the Paris
Convention, and
(c) such trademark is used for identical or similar goods.
On the other hand, Section 22 of the Trademark Law holds a person liable for infringement when, among
others, he "uses without the consent of the registrant, any reproduction, counterfeit, copy or colorable
imitation of any registered mark or tradename in connection with the sale, offering for sale, or advertising of
any goods, business or services or in connection with which such use is likely to cause confusion or mistake
or to deceive purchasers or others as to the source or origin of such goods or services, or identity of such
business; or reproduce, counterfeit, copy or colorably imitate any such mark or tradename and apply such
reproduction, counterfeit, copy or colorable imitation to labels, signs, prints, packages, wrappers, receptacles
or advertisements intended to be used upon or in connection with such goods, business or
services." Trademark registration and actual use are material to the complaining party’s cause of action.
49 
Corollary to this, Section 20 of the Trademark Law considers the trademark registration certificate as prima
50  GALLO WINE TRADEMARK.
facie evidence of the validity of the registration, the registrant’s ownership and exclusive right to use the
trademark in connection with the goods, business or services as classified by the Director of Patents and as
51 
specified in the certificate, subject to the conditions and limitations stated therein. Sections 2 and 2-A of the
52 
Trademark Law emphasize the importance of the trademark’s actual use in commerce in the Philippines prior
to its registration. In the adjudication of trademark rights between contending parties, equitable principles of
laches, estoppel, and acquiescence may be considered and applied. 53
Under Sections 2, 2-A, 9-A, 20 and 22 of the Trademark Law therefore, the following constitute the elements
of trademark infringement:
(a) a trademark actually used in commerce in the Philippines and registered in the principal register
of the Philippine Patent Office
(b) is used by another person in connection with the sale, offering for sale, or advertising of any
mistake or to deceive purchasers or others as to the source or origin of such goods or services, or
identity of such business; or such trademark is reproduced, counterfeited, copied or colorably
imitated by another person and such reproduction, counterfeit, copy or colorable imitation is applied
to labels, signs, prints, packages, wrappers, receptacles or advertisements intended to be used
upon or in connection with such goods, business or services as to likely cause confusion or mistake
or to deceive purchasers,
(c) the trademark is used for identical or similar goods, and
(d) such act is done without the consent of the trademark registrant or assignee.
In summary, the Paris Convention protects well-known trademarks only (to be determined by domestic
authorities), while the Trademark Law protects all trademarks, whether well-known or not, provided that they
and comity, in case of domestic legal disputes on any conflicting provisions between the Paris Convention
(which is an international agreement) and the Trademark law (which is a municipal law) the latter will prevail. 54
Under both the Paris Convention and the Trademark Law, the protection of a registered trademark is limited
only to goods identical or similar to those in respect of which such trademark is registered and only when
there is likelihood of confusion. Under both laws, the time element in commencing infringement cases is
material in ascertaining the registrant’s express or implied consent to another’s use of its trademark or a
colorable imitation thereof. This is why acquiescence, estoppel or laches may defeat the registrant’s
otherwise valid cause of action.
Hence, proof of all the elements of trademark infringement is a condition precedent to any finding of liability.
THE ACTUAL COMMERCIAL USE IN THE
PHILIPPINES OF GALLO CIGARETTE
TRADEMARK PRECEDED THAT OF
By respondents’ own judicial admission, the GALLO wine trademark was registered in the Philippines in
November 1971 but the wine itself was first marketed and sold in the country only in 1974 and only within the
former U.S. military facilities, and outside thereof, only in 1979. To prove commercial use of the GALLO wine
trademark in the Philippines, respondents presented sales invoice no. 29991 dated July 9, 1981 addressed to
Conrad Company Inc., Makati, Philippines and sales invoice no. 85926 dated March 22, 1996 addressed to
Andresons Global, Inc., Quezon City, Philippines. Both invoices were for the sale and shipment of GALLO
wines to the Philippines during that period. Nothing at all, however, was presented to evidence the alleged
55 
sales of GALLO wines in the Philippines in 1974 or, for that matter, prior to July 9, 1981.
On the other hand, by testimonial evidence supported by the BIR authorization letters, forms and
manufacturer’s sworn statement, it appears that petitioners and its predecessor-in-interest, Tobacco
Industries, have indeed been using and selling GALLO cigarettes in the Philippines since 1973 or before July
9, 1981. 56
In Emerald Garment Manufacturing Corporation vs. Court of Appeals, we reiterated our rulings in Pagasa
57 
Industrial Corporation vs. Court of Appeals, Converse Rubber Corporation vs. Universal Rubber Products,
58 
Inc., Sterling Products International, Inc. vs. Farbenfabriken Bayer Aktiengesellschaft, Kabushi Kaisha
59  60 
Isetan vs. Intermediate Appellate Court, and  Philip Morris vs. Court of Appeals, giving utmost importance to
61  62 
the actual commercial use of a trademark in the Philippines prior to its registration, notwithstanding the
provisions of the Paris Convention:
xxx xxx xxx
In addition to the foregoing, we are constrained to agree with petitioner's contention that private
respondent failed to prove prior actual commercial use of its "LEE" trademark in the
Philippines before filing its application for registration with the BPTTT and hence, has not
acquired ownership over said mark.
Actual use in commerce in the Philippines is an essential prerequisite for the acquisition of
ownership over a trademark pursuant to Sec. 2 and 2-A of the Philippine Trademark Law (R.A.
No. 166) x x x
xxx xxx xxx
The provisions of the 1965 Paris Convention for the Protection of Industrial Property relied upon
by private respondent and Sec. 21-A of the Trademark Law (R.A. No. 166) were sufficiently
expounded upon and qualified in the recent case of Philip Morris, Inc. v. Court of Appeals (224
SCRA 576 [1993]):
xxx xxx xxx
Following universal acquiescence and comity, our municipal law on trademarks
regarding the requirement of actual use in the Philippines must subordinate an
international agreement inasmuch as the apparent clash is being decided by a
municipal tribunal (Mortisen vs. Peters, Great Britain, High Court of Judiciary of Scotland,
1906, 8 Sessions, 93; Paras, International Law and World Organization, 1971 Ed., p. 20).
Withal, the fact that international law has been made part of the law of the land does not by
any means imply the primacy of international law over national law in the municipal sphere.
Under the doctrine of incorporation as applied in most countries, rules of international law
are given a standing equal, not superior, to national legislative enactments.
xxx xxx xxx
In other words, (a foreign corporation) may have the capacity to sue for infringement
irrespective of lack of business activity in the Philippines on account of Section 21-A
of the Trademark Law but the question of whether they have an exclusive right over
their symbol as to justify issuance of the controversial writ will depend on actual use
of their trademarks in the Philippines in line with Sections 2 and 2-A of the same
law. It is thus incongruous for petitioners to claim that when a foreign corporation not
licensed to do business in the Philippines files a complaint for infringement, the entity need
not be actually using the 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.
xxx xxx xxx
Undisputably, private respondent is the senior registrant, having obtained several registration
certificates for its various trademarks "LEE," "LEE RIDERS," and "LEESURES" in both the
supplemental and principal registers, as early as 1969 to 1973. However, registration alone will
not suffice. In Sterling Products International, Inc. v. Farbenfabriken Bayer
Aktiengesellschaft (27 SCRA 1214 [1969]; Reiterated in Kabushi Isetan vs. Intermediate Appellate
Court  (203 SCRA 583 [1991]) we declared:
xxx xxx xxx
A rule widely accepted and firmly entrenched because it has come down through the years
is that actual use in commerce or business is a prerequisite in the acquisition of the
right of ownership over a trademark.
xxx xxx xxx
The credibility placed on a certificate of registration of one's trademark, or its weight as evidence of
validity, ownership and exclusive use, is qualified. A registration certificate serves merely
as prima facie evidence. It is not conclusive but can and may be rebutted by controverting
evidence.
xxx xxx xxx
 In the case at bench, however, we reverse the findings of the Director of Patents and the Court of
Appeals. After a meticulous study of the records, we observe that the Director of Patents and
the Court of Appeals relied mainly on the registration certificates as proof of use by private
respondent of the trademark "LEE" which, as we have previously discussed are not
sufficient. We cannot give credence to private respondent's claim that its "LEE" mark first
reached the Philippines in the 1960's through local sales by the Post Exchanges of the U.S.
Military Bases in the Philippines (Rollo, p. 177) based as it was solely on the self-serving
statements of Mr. Edward Poste, General Manager of Lee (Phils.), Inc., a wholly owned
subsidiary of the H.D. Lee, Co., Inc., U.S.A., herein private respondent. (Original Records, p.
52) Similarly, we give little weight to the numerous vouchers representing various advertising
expenses in the Philippines for "LEE" products. It is well to note that these expenses were
incurred only in 1981 and 1982 by LEE (Phils.), Inc. after it entered into a licensing agreement
with private respondent on 11 May 1981. (Exhibit E)
On the other hand, petitioner has sufficiently shown that it has been in the business of selling
jeans and other garments adopting its "STYLISTIC MR. LEE" trademark since 1975 as
evidenced by appropriate sales invoices to various stores and retailers. (Exhibit 1-e to 1-o)
Our rulings in Pagasa Industrial Corp. v. Court of Appeals  (118 SCRA 526 [1982])  and  Converse
Rubber Corp. v. Universal Rubber Products, Inc., (147 SCRA 154 [1987]),  respectively, are
instructive:
The Trademark Law is very clear. It requires actual commercial use of the mark prior to its
registration. There is no dispute that respondent corporation was the first registrant,
yet it failed to fully substantiate its claim that it used in trade or business in the
Philippines the subject mark; it did not present proof to invest it with exclusive,
continuous adoption of the trademark which should consist among others, of
considerable sales since its first use. The invoices submitted by respondent which
were dated way back in 1957 show that the zippers sent to the Philippines were to be
used as "samples" and "of no commercial value." The evidence for respondent must be
clear, definite and free from inconsistencies. "Samples" are not for sale and therefore, the
fact of exporting them to the Philippines cannot be considered to be equivalent to the "use"
contemplated by law. Respondent did not expect income from such "samples." There were
no receipts to establish sale, and no proof were presented to show that they were
subsequently sold in the Philippines.
xxx xxx xxx
For lack of adequate proof of actual use of its trademark in the Philippines prior to
petitioner's use of its own mark and for failure to establish confusing similarity between said
trademarks, private respondent's action for infringement must necessarily fail. (Emphasis
supplied.)
In view of the foregoing jurisprudence and respondents’ judicial admission that the actual commercial use of
the GALLO wine trademark was subsequent to its registration in 1971 and to Tobacco Industries’ commercial
use of the GALLO cigarette trademark in 1973, we rule that, on this account, respondents never enjoyed the
exclusive right to use the GALLO wine trademark to the prejudice of Tobacco Industries and its successors-
in-interest, herein petitioners, either under the Trademark Law or the Paris Convention.
Respondents’ GALLO trademark
registration is limited to wines only
We also note that the GALLO trademark registration certificates in the Philippines and in other countries
expressly state that they cover wines only, without any evidence or indication that registrant Gallo Winery
expanded or intended to expand its business to cigarettes. 63
Thus, by strict application of Section 20 of the Trademark Law, Gallo Winery’s exclusive right to use the
GALLO trademark should be limited to wines, the only product indicated in its registration certificates. This
strict statutory limitation on the exclusive right to use trademarks was amply clarified in our ruling in Faberge,
Inc. vs. Intermediate Appellate Court:64
Having thus reviewed the laws applicable to the case before Us, it is not difficult to discern from the
foregoing statutory enactments that private respondent may be permitted to register the trademark
"BRUTE" for briefs produced by it notwithstanding petitioner's vehement protestations of unfair
dealings in marketing its own set of items which are limited to: after-shave lotion, shaving cream,
deodorant, talcum powder and toilet soap. Inasmuch as petitioner has not ventured in the
production of briefs, an item which is not listed in its certificate of registration, petitioner
cannot and should not be allowed to feign that private respondent had invaded petitioner's
exclusive domain. To be sure, it is significant that petitioner failed to annex in its Brief the so-called
"eloquent proof that petitioner indeed intended to expand its mark ‘BRUT’ to other goods" (Page 27,
Brief for the Petitioner; page 202, Rollo). Even then, a mere application by petitioner in this aspect
does not suffice and may not vest an exclusive right in its favor that can ordinarily be protected by
the Trademark Law. In short, paraphrasing Section 20 of the Trademark Law as applied to the
documentary evidence adduced by petitioner, the certificate of registration issued by the
Director of Patents can confer upon petitioner the exclusive right to use its own symbol only
to those goods specified in the certificate, subject to any conditions and limitations stated
therein. This basic point is perhaps the unwritten rationale of Justice Escolin in Philippine
Refining Co., Inc. vs. Ng Sam  (115 SCRA 472 [1982]), when he stressed the principle enunciated
by the United States Supreme Court in American Foundries vs. Robertson (269 U.S. 372, 381, 70 L
ed 317, 46 Sct. 160) that one who has adopted and used a trademark on his goods does not
prevent the adoption and use of the same trademark by others for products which are of a
different description. Verily, this Court had the occasion to observe in the 1966 case of George W.
Luft Co., Inc. vs. Ngo Guan  (18 SCRA 944 [1966]) that no serious objection was posed by the
petitioner therein since the applicant utilized the emblem "Tango" for no other product than hair
pomade in which petitioner does not deal.
This brings Us back to the incidental issue raised by petitioner which private respondent sought to
belie as regards petitioner's alleged expansion of its business. It may be recalled that petitioner
claimed that it has a pending application for registration of the emblem "BRUT 33" for briefs (page
25, Brief for the Petitioner; page 202, Rollo) to impress upon Us the Solomonic wisdom imparted by
Justice JBL Reyes in Sta. Ana vs. Maliwat  (24 SCRA 1018 [1968]), to the effect that dissimilarity
of goods will not preclude relief if the junior user's goods are not remote from any other
 product which the first user would be likely to make or sell  (vide, at page 1025). Commenting
on the former provision of the Trademark Law now embodied substantially under Section 4(d) of
Republic Act No. 166, as amended, the erudite jurist opined that the law in point "does not require
that the articles of manufacture of the previous user and late user of the mark should possess the
same descriptive properties or should fall into the same categories as to bar the latter from
registering his mark in the principal register." (supra at page 1026).
Yet, it is equally true that as aforesaid, the protective mantle of the Trademark Law extends
only to the goods used by the first user as specified in the certificate of registration following
the clear message conveyed by Section 20.
How do We now reconcile the apparent conflict between Section 4(d) which was relied upon
by Justice JBL Reyes in the Sta. Ana case and Section 20? It would seem that Section 4(d)
does not require that the goods manufactured by the second user be related to the goods
produced by the senior user while Section 20 limits the exclusive right of the senior user only
to those goods specified in the certificate of registration. But the rule has been laid down that
the clause which comes later shall be given paramount significance over an anterior proviso upon
the presumption that it expresses the latest and dominant purpose. (Graham Paper Co. vs. National
Newspapers Asso. (Mo. App.) 193 S.W. 1003; Barnett vs. Merchant's L. Ins. Co., 87 Okl. 42; State
ex nel Atty. Gen. vs. Toledo, 26 N.E., p. 1061; cited by Martin, Statutory Construction Sixth ed.,
1980 Reprinted, p. 144). It ineluctably follows that Section 20 is controlling and, therefore,
private respondent can appropriate its symbol for the briefs it manufactures because as aptly
remarked by Justice Sanchez in Sterling Products International Inc. vs. Farbenfabriken
Bayer (27 SCRA 1214 [1969]):
"Really, if the certificate of registration were to be deemed as including goods not
specified therein, then a situation may arise whereby an applicant may be tempted to
register a trademark on any and all goods which his mind may conceive even if he
had never intended to use the trademark for the said goods. We believe that such
omnibus registration is not contemplated by our Trademark Law." (1226).
NO LIKELIHOOD OF CONFUSION, MISTAKE
OR DECEIT AS TO THE IDENTITY OR SOURCE
OF PETITIONERS’ AND RESPONDENTS’
GOODS OR BUSINESS
A crucial issue in any trademark infringement case is the likelihood of confusion, mistake or deceit as to the
identity, source or origin of the goods or identity of the business as a consequence of using a certain mark.
Likelihood of confusion is admittedly a relative term, to be determined rigidly according to the particular (and
sometimes peculiar) circumstances of each case. Thus, in trademark cases, more than in other kinds of
litigation, precedents must be studied in the light of each particular case. 
65
There are two types of confusion in trademark infringement. The first is "confusion of goods" when an
otherwise prudent purchaser is induced to purchase one product in the belief that he is purchasing another, in
which case defendant’s goods are then bought as the plaintiff’s and its poor quality reflects badly on the
plaintiff’s reputation. The other is "confusion of business" wherein the goods of the parties are different but
the defendant’s product can reasonably (though mistakenly) be assumed to originate from the plaintiff, thus
deceiving the public into believing that there is some connection between the plaintiff and defendant which, in
fact, does not exist.
66
In determining the likelihood of confusion, the Court must consider: [a] the resemblance between the
trademarks; [b] the similarity of the goods to which the trademarks are attached; [c] the likely effect on the
purchaser and [d] the registrant’s express or implied consent and other fair and equitable considerations.
Petitioners and respondents both use "GALLO" in the labels of their respective cigarette and wine products.
But, as held in the following cases, the use of an identical mark does not, by itself, lead to a legal conclusion
that there is trademark infringement:
(a) in Acoje Mining Co., Inc. vs. Director of Patent, we ordered the approval of Acoje Mining’s
67 
application for registration of the trademark LOTUS for its soy sauce even though Philippine Refining
Company had prior registration and use of such identical mark for its edible oil which, like soy sauce,
also belonged to Class 47;
(b) in Philippine Refining Co., Inc. vs. Ng Sam and Director of Patents, we upheld the Patent
68 
Director’s registration of the same trademark CAMIA for Ng Sam’s ham under Class 47, despite
Philippine Refining Company’s prior trademark registration and actual use of such mark on its lard,
butter, cooking oil (all of which belonged to Class 47), abrasive detergents, polishing materials and
soaps;
(c) in Hickok Manufacturing Co., Inc. vs. Court of Appeals and Santos Lim Bun Liong, we dismissed
69 
Hickok’s petition to cancel private respondent’s HICKOK trademark registration for its Marikina
shoes as against petitioner’s earlier registration of the same trademark for handkerchiefs, briefs,
belts and wallets;
(d) in Shell Company of the Philippines vs. Court of Appeals, in a minute resolution, we dismissed
70 
the petition for review for lack of merit and affirmed the Patent Office’s registration of the trademark
SHELL used in the cigarettes manufactured by respondent Fortune Tobacco Corporation,
notwithstanding Shell Company’s opposition as the prior registrant of the same trademark for its
gasoline and other petroleum products;
(e) in Esso Standard Eastern, Inc. vs. Court of Appeals, we dismissed ESSO’s complaint for
71 
trademark infringement against United Cigarette Corporation and allowed the latter to use the
trademark ESSO for its cigarettes, the same trademark used by ESSO for its petroleum products,
and
(f) in Canon Kabushiki Kaisha vs. Court of Appeals and NSR Rubber Corporation, we affirmed the
72 
rulings of the Patent Office and the CA that NSR Rubber Corporation could use the trademark
CANON for its sandals (Class 25) despite Canon Kabushiki Kaisha’s prior registration and use of the
same trademark for its paints, chemical products, toner and dyestuff (Class 2).
Whether a trademark causes confusion and is likely to deceive the public hinges on "colorable Also, as admitted by respondents themselves, on the side of the GALLO cigarette packs are the words
86 

imitation" which has been defined as "such similarity in form, content, words, sound, meaning, special
73 
"MADE BY MIGHTY CORPORATION," thus clearly informing the public as to the identity of the manufacturer
arrangement or general appearance of the trademark or tradename in their overall presentation or in their of the cigarettes.
essential and substantive and distinctive parts as would likely mislead or confuse persons in the ordinary
course of purchasing the genuine article."74
On the other hand, GALLO Winery’s wine and brandy labels are diverse. In many of them, the labels are
embellished with sketches of buildings and trees, vineyards or a bunch of grapes while in a few, one or two
Jurisprudence has developed two tests in determining similarity and likelihood of confusion in trademark small roosters facing right or facing each other (atop the EJG crest, surrounded by leaves or ribbons), with
resemblance: 75
additional designs in green, red and yellow colors, appear as minor features thereof. Directly below or above
87 

these sketches is the entire printed name of the founder-owners, "ERNEST & JULIO GALLO" or just their
(a) the Dominancy Test applied in Asia Brewery, Inc. vs. Court of Appeals and other cases, and
76  77  surname "GALLO," which
88 
appears in different fonts, sizes, styles and labels, unlike
petitioners’ uniform casque-font bold-lettered GALLO mark.
(b) the Holistic or Totality Test used in Del Monte Corporation vs. Court of Appeals and its 78 

preceding cases. 79 Moreover, on the labels of Gallo Winery’s wines are printed the words "VINTED AND BOTTLED BY ERNEST
& JULIO GALLO, MODESTO, CALIFORNIA." 89

The Dominancy Test focuses on the similarity of the prevalent features of the competing trademarks which
might cause confusion or deception, and thus infringement. If the competing trademark contains the main, The many different features like color schemes, art works and other markings of both products drown out the similarity
essential or dominant features of another, and confusion or deception is likely to result, infringement takes between them – the use of the word “GALLO” ― a family surname for the Gallo Winery’s wines and a Spanish word
place. Duplication or imitation is not necessary; nor is it necessary that the infringing label should suggest an for rooster for petitioners’ cigarettes.
effort to imitate. The question is whether the use of the marks involved is likely to cause confusion or mistake
in the mind of the public or deceive purchasers. 80
WINES AND CIGARETTES ARE NOT
IDENTICAL, SIMILAR, COMPETING OR
On the other hand, the Holistic Test requires that the entirety of the marks in question be considered in RELATED GOODS
resolving confusing similarity. Comparison of words is not the only determining factor. The trademarks in their
entirety as they appear in their respective labels or hang tags must also be considered in relation to the Confusion of goods is evident where the litigants are actually in competition; but confusion of business may
goods to which they are attached. The discerning eye of the observer must focus not only on the predominant arise between non-competing interests as well. 90

words but also on the other features appearing in both labels in order that he may draw his conclusion
whether one is confusingly similar to the other.
81
In comparing the resemblance or colorable imitation of marks, various factors have been considered, such as
the dominant color, style, size, form, meaning of letters, words, designs and emblems used, the likelihood of
Thus, apart from the strict application of Section 20 of the Trademark Law and Article 6 bis of the Paris
Convention which proscribe trademark infringement not only of goods specified in the certificate of
registration but also of identical or similar goods, we have also uniformly recognized and applied the modern
concept of "related goods." Simply stated, when goods are so related that the public may be, or is actually,
91 

deception of the mark or name's tendency to confuse and the commercial impression likely to be conveyed
82 
deceived and misled that they come from the same maker or manufacturer, trademark infringement occurs. 92

by the trademarks if used in conjunction with the respective goods of the parties.83

Non-competing goods may be those which, though they are not in actual competition, are so related to each
Applying the Dominancy and Holistic Tests, we find that the dominant feature of the GALLO cigarette other that it can reasonably be assumed that they originate from one manufacturer, in which case, confusion
trademark is the device of a large rooster facing left, outlined in black against a gold background. The of business can arise out of the use of similar marks. They may also be those which, being entirely unrelated,
93 

rooster’s color is either green or red – green for GALLO menthols and red for GALLO filters. Directly below cannot be assumed to have a common source; hence, there is no confusion of business, even though similar
the large rooster device is the word GALLO. The rooster device is given prominence in the GALLO cigarette marks are used. Thus, there is no trademark infringement if the public does not expect the plaintiff to make or
94 

packs in terms of size and location on the labels. 84

sell the same class of goods as those made or sold by the defendant. 95

The GALLO mark appears to be a fanciful and arbitrary mark for the cigarettes as it has no relation at all to In resolving whether goods are related, several factors come into play:
96 

the product but was chosen merely as a trademark due to the fondness for fighting cocks of the son of
petitioners’ president. Furthermore, petitioners adopted GALLO, the Spanish word for rooster, as a cigarette (a) the business (and its location) to which the goods belong
trademark to appeal to one of their target markets, the sabungeros (cockfight aficionados). 85

(b) the class of product to which the goods belong

(c) the product's quality, quantity, or size, including the nature of the package, wrapper or container  97
(d) the nature and cost of the articles 98
(e) the descriptive properties, physical attributes or essential characteristics with reference to their form,
composition, texture or quality
(f) the purpose of the goods 99
(g) whether the article is bought for immediate consumption, that is, day-to-day household items
100  101
(h) the fields of manufacture 102
(i) the conditions under which the article is usually purchased and 103  related forms of vice, harmful when taken in excess, and used for pleasure and relaxation" and (2) "they are
(j) the channels of trade through which the goods flow, how they are distributed, marketed, displayed and
104 
sold.105
The wisdom of this approach is its recognition that each trademark infringement case presents its own unique
set of facts. No single factor is preeminent, nor can the presence or absence of one determine, without
analysis of the others, the outcome of an infringement suit. Rather, the court is required to sift the evidence
relevant to each of the criteria. This requires that the entire panoply of elements constituting the relevant
factual landscape be comprehensively examined. It is a weighing and balancing process. With reference to
106 
this ultimate question, and from a balancing of the determinations reached on all of the factors, a conclusion
is reached whether the parties have a right to the relief sought. 107
A very important circumstance though is whether there exists a likelihood that an appreciable number of
ordinarily prudent purchasers will be misled, or simply confused, as to the source of the goods in
question. The "purchaser" is not the "completely unwary consumer" but is the "ordinarily intelligent buyer"
108 
considering the type of product involved. He is "accustomed to buy, and therefore to some extent familiar
109 
with, the goods in question. The test of fraudulent simulation is to be found in the likelihood of the deception
of some persons in some measure acquainted with an established design and desirous of purchasing the
commodity with which that design has been associated. The test is not found in the deception, or the
possibility of deception, of the person who knows nothing about the design which has been counterfeited, and
who must be indifferent between that and the other. The simulation, in order to be objectionable, must be
such as appears likely to mislead the ordinary intelligent buyer who has a need to supply and is familiar with
the article that he seeks to purchase." 110
Hence, in the adjudication of trademark infringement, we give due regard to the goods’ usual purchaser’s
character, attitude, habits, age, training and education.  111
Applying these legal precepts to the present case, petitioner’s use of the GALLO cigarette trademark is not
likely to cause confusion or mistake, or to deceive the "ordinarily intelligent buyer" of either wines or
cigarettes or both as to the identity of the goods, their source and origin, or identity of the business of
petitioners and respondents.
Obviously, wines and cigarettes are not identical or competing products. Neither do they belong to the same
class of goods. Respondents’ GALLO wines belong to Class 33 under Rule 84[a] Chapter III, Part II of the
Rules of Practice in Trademark Cases while petitioners’ GALLO cigarettes fall under Class 34.
We are mindful that product classification alone cannot serve as the decisive factor in the resolution of
whether or not wines and cigarettes are related goods. Emphasis should be on the similarity of the products
involved and not on the arbitrary classification or general description of their properties or characteristics. But
the mere fact that one person has adopted and used a particular trademark for his goods does not prevent
the adoption and use of the same trademark by others on articles of a different description.  112
Both the Makati RTC and the CA held that wines and cigarettes are related products because: (1) "they are
grouped or classified in the same section of supermarkets and groceries."
We find these premises patently insufficient and too arbitrary to support the legal conclusion that wines and
cigarettes are related products within the contemplation of the Trademark Law and the Paris Convention.
First, anything –- not only wines and cigarettes ― can be used for pleasure and relaxation and can be harmful when
taken in excess. Indeed, it would be a grave abuse of discretion to treat wines and cigarettes as similar or related
products likely to cause confusion just because they are pleasure-giving, relaxing or potentially harmful. Such reasoning
makes no sense.
Second, it is common knowledge that supermarkets sell an infinite variety of wholly unrelated products and
the goods here involved, wines and cigarettes, have nothing whatsoever in common with respect to their
essential characteristics, quality, quantity, size, including the nature of their packages, wrappers or
containers. 113
Accordingly, the U.S. patent office and courts have consistently held that the mere fact that goods are sold in
one store under the same roof does not automatically mean that buyers are likely to be confused as to the
goods’ respective sources, connections or sponsorships. The fact that different products are available in the
same store is an insufficient standard, in and of itself, to warrant a finding of likelihood of confusion. 114
In this regard, we adopted the Director of Patents’ finding in Philippine Refining Co., Inc. vs. Ng Sam and the
Director of Patents: 115
In his decision, the Director of Patents enumerated the factors that set respondent’s products apart
from the goods of petitioner. He opined and we quote:
"I have taken into account such factors as probable purchaser attitude and habits,
marketing activities, retail outlets, and commercial impression likely to be conveyed by the
trademarks if used in conjunction with the respective goods of the parties, I believe that
ham on one hand, and lard, butter, oil, and soap on the other are products that would
 not move in the same manner through the same channels of trade. They pertain to
unrelated fields of manufacture, might be distributed and marketed under dissimilar
conditions, and are displayed separately even though they frequently may be sold
through the same retail food establishments. Opposer’s products are ordinary day-to-
day household items whereas ham is not necessarily so. Thus, the goods of the parties are
not of a character which purchasers would likely attribute to a common origin.
The observations and conclusion of the Director of Patents are correct. The particular goods of the
parties are so unrelated that consumers, would not, in any probability mistake one as the source of
origin of the product of the other. (Emphasis supplied).
The same is true in the present case. Wines and cigarettes are non-competing and are totally unrelated
products not likely to cause confusion vis-à-vis the goods or the business of the petitioners and respondents.
Wines are bottled and consumed by drinking while cigarettes are packed in cartons or packages and
smoked. There is a whale of a difference between their descriptive properties, physical attributes or essential
characteristics like form, composition, texture and quality.
GALLO cigarettes are inexpensive items while GALLO wines are not. GALLO wines are patronized by
middle-to-high-income earners while GALLO cigarettes appeal only to simple folks like farmers, fishermen,
laborers and other low-income workers. Indeed, the big price difference of these two products is an
116 
important factor in proving that they are in fact unrelated and that they travel in different channels of trade.
There is a distinct price segmentation based on vastly different social classes of purchasers.117
GALLO cigarettes and GALLO wines are not sold through the same channels of trade. GALLO cigarettes are
Philippine-made and petitioners neither claim nor pass off their goods as imported or emanating from Gallo
Winery. GALLO cigarettes are distributed, marketed and sold through ambulant and sidewalk vendors, small
local sari-sari stores and grocery stores in Philippine rural areas, mainly in Misamis Oriental, Pangasinan,
Bohol, and Cebu. On the other hand, GALLO wines are imported, distributed and sold in the Philippines
118 
through Gallo Winery’s exclusive contracts with a domestic entity, which is currently Andresons. By
respondents’ own testimonial evidence, GALLO wines are sold in hotels, expensive bars and restaurants,
and high-end grocery stores and supermarkets, not through sari-sari  stores or ambulant vendors. 119
Furthermore, the Makati RTC and the CA erred in relying on Carling Brewing Company vs. Philip Morris,
Inc. to support its finding that GALLO wines and GALLO cigarettes are related goods. The courts a
120 
quo  should have taken into consideration the subsequent case of IDV North America, Inc. and R & A Bailey
Co. Limited vs. S & M Brands, Inc.: 121
IDV correctly acknowledges, however, that there is no per se  rule that the use of the same mark on
alcohol and tobacco products always will result in a likelihood of confusion. Nonetheless, IDV relies
heavily on the decision in John Walker & Sons, Ltd. vs. Tampa Cigar Co.,  124 F. Supp. 254, 256
(S.D. Fla. 1954), aff’d, 222 F. 2d 460 (5th Cir. 1955), wherein the court enjoined the use of the mark
"JOHNNIE WALKER" on cigars because the fame of the plaintiff’s mark for scotch whiskey and
because the plaintiff advertised its scotch whiskey on, or in connection with tobacco products. The
court, in John Walker & Sons, placed great significance on the finding that the infringers use
was a deliberate attempt to capitalize on the senior marks’ fame. Id.  At 256.  IDV also relies
on Carling Brewing Co. v. Philip Morris, Inc., 297 F. Supp. 1330, 1338 (N.D. Ga. 1968), in
which the court enjoined the defendant’s use of the mark "BLACK LABEL" for cigarettes
because it was likely to cause confusion with the plaintiff’s well-known mark "BLACK
LABEL" for beer.
xxx xxx xxx
Those decisions, however, must be considered in perspective of the principle that tobacco
products and alcohol products should be considered related only in cases involving special
circumstances. Schenley Distillers, Inc. v. General Cigar Co.,  57C.C.P.A. 1213, 427 F. 2d 783,
785 (1970). The presence of special circumstances has been found to exist where there is a
finding of unfair competition or where a ‘famous’ or ‘well-known mark’ is involved  and there
is a demonstrated intent to capitalize on that mark. For example, in John Walker & Sons, the
court was persuaded to find a relationship between products, and hence a likelihood of confusion,
because of the plaintiff’s long use and extensive advertising of its mark and placed great emphasis
on the fact that the defendant used the trademark ‘Johnnie Walker with full knowledge of its fame
and reputation and with the intention of taking advantage thereof.’ John Walker & Sons, 124 F.
Supp. At 256; see Mckesson & Robbins, Inc. v. P. Lorillard Co.,  1959 WL 5894, 120 U.S.P.Q. 306,
307 (1959) (holding that the decision in John Walker & Sons  was ‘merely the law on the particular
case based upon its own peculiar facts’); see also Alfred Dunhill, 350 F. Supp. At 1363 (defendant’s
adoption of ‘Dunhill’ mark was not innocent). However, in Schenley, the court noted that the relation
between tobacco and whiskey products is significant where a widely known arbitrary mark has long
been used for diversified products emanating from a single source and a newcomer seeks to use
the same mark on unrelated goods. Schenley,  427 F.2d. at 785. Significantly, in Schenley,  the court
looked at the industry practice and the facts of the case in order to determine the nature and extent
of the relationship between the mark on the tobacco product and the mark on the alcohol product.
The record here establishes conclusively that IDV has never advertised BAILEYS liqueurs in
conjunction with tobacco or tobacco accessory products and that IDV has no intent to do so. And,
unlike the defendant in Dunhill, S & M Brands does not market bar accessories, or liqueur related
products, with its cigarettes. The advertising and promotional materials presented a trial in this
action demonstrate a complete lack of affiliation between the tobacco and liqueur products bearing
the marks here at issue.
xxx xxx xxx
Of equal significance, it is undisputed that S & M Brands had no intent, by adopting the family
name ‘Bailey’s’ as the mark for its cigarettes, to capitalize upon the fame of the ‘BAILEYS’ mark for
liqueurs. See Schenley, 427 F. 2d at 785. Moreover, as will be discussed below, and as found
in Mckesson & Robbins,  the survey evidence refutes the contention that cigarettes and
alcoholic beverages are so intimately associated in the public mind that they cannot under
any circumstances be sold under the same mark without causing confusion. See Mckesson
& Robbins, 120 U.S.P.Q. at 308.
Taken as a whole, the evidence here demonstrates the absence of the ‘special circumstances’ in
which courts have found a relationship between tobacco and alcohol products sufficient to tip the
 similarity of goods analysis in favor of the protected mark and against the allegedly infringing
mark. It is true that BAILEYS liqueur, the world’s best selling liqueur and the second best
selling in the United States, is a well-known product. That fact alone, however, is insufficient
to invoke the special circumstances connection here where so much other evidence and so
many other factors disprove a likelihood of confusion. The similarity of products analysis,
therefore, augers against finding that there is a likelihood of confusion. (Emphasis supplied).
In short, tobacco and alcohol products may be considered related only in cases involving special
circumstances which exist only if a famous mark is involved and there is a demonstrated intent to capitalize
on it. Both of these are absent in the present case.
THE GALLO WINE TRADEMARK IS NOT A
WELL-KNOWN MARK IN THE CONTEXT
OF THE PARIS CONVENTION IN THIS CASE
SINCE WINES AND CIGARETTES ARE NOT
IDENTICAL OR SIMILAR GOODS
First, the records bear out that most of the trademark registrations took place in the late 1980s and the
1990s, that is, after Tobacco Industries’ use of the GALLO cigarette trademark in 1973 and petitioners’ use of
the same mark in 1984.
GALLO wines and GALLO cigarettes are neither the same, identical, similar nor related goods, a requisite
element under both the Trademark Law and the Paris Convention.
Second, the GALLO trademark cannot be considered a strong and distinct mark in the Philippines.
Respondents do not dispute the documentary evidence that aside from Gallo Winery’s GALLO trademark
registration, the Bureau of Patents, Trademarks and Technology Transfer also issued on September 4, 1992
Certificate of Registration No. 53356 under the Principal Register approving Productos Alimenticios Gallo,
S.A’s April 19, 1990 application for GALLO trademark registration and use for its "noodles, prepared food or
canned noodles, ready or canned sauces for noodles, semolina, wheat flour and bread crumbs, pastry,
confectionery, ice cream, honey, molasses syrup, yeast, baking powder, salt, mustard, vinegar, species and
ice."
122
Third and most important, pursuant to our ruling in Canon Kabushiki Kaisha vs. Court of Appeals and NSR
Rubber Corporation, "GALLO" cannot be considered a "well-known" mark within the contemplation and
123  with the third requirement of the said memorandum that is the mark must be for use
protection of the Paris Convention in this case since wines and cigarettes are not identical or similar goods:
We agree with public respondents that the controlling doctrine with respect to the applicability of
Article 8 of the Paris Convention is that established in Kabushi Kaisha Isetan vs. Intermediate
Appellate Court (203 SCRA 59 [1991]).  As pointed out by the BPTTT:
"Regarding the applicability of Article 8 of the Paris Convention, this Office believes
that there is no automatic protection afforded an entity whose tradename is alleged
to have been infringed through the use of that name as a trademark by a local entity.
In Kabushiki Kaisha Isetan vs. The Intermediate Appellate Court, et. al., G.R. No. 75420,
15 November 1991, the Honorable Supreme Court held that:
‘The Paris Convention for the Protection of Industrial Property does not
automatically exclude all countries of the world which have signed it from
using a tradename which happens to be used in one country. To illustrate —
if a taxicab or bus company in a town in the United Kingdom or India
happens to use the tradename ‘Rapid Transportation,’ it does not
necessarily follow that ‘Rapid’ can no longer be registered in Uganda, Fiji, or
the Philippines.
This office is not unmindful that in (sic)  the Treaty of Paris for the Protection of Intellectual
Property regarding well-known marks and possible application thereof in this case.
Petitioner, as this office sees it, is trying to seek refuge under its protective mantle, claiming
that the subject mark is well known in this country at the time the then application of NSR
Rubber was filed.
However, the then Minister of Trade and Industry, the Hon. Roberto V. Ongpin, issued a
memorandum dated 25 October 1983 to the Director of Patents, a set of guidelines in the
implementation of Article 6bis of the Treaty of Paris. These conditions are:
a) the mark must be internationally known;
b) the subject of the right must be a trademark, not a patent or copyright or
anything else;
c) the mark must be for use in the same or similar kinds of goods; and
d) the person claiming must be the owner of the mark (The Parties Convention
Commentary on the Paris Convention. Article by Dr. Bogsch, Director General of
the World Intellectual Property Organization, Geneva, Switzerland, 1985)’
From the set of facts found in the records, it is ruled that the Petitioner failed to comply
in the same or similar kinds of goods. The Petitioner is using the mark "CANON" for
products belonging to class 2 (paints, chemical products) while the Respondent is
using the same mark for sandals (class 25).
Hence, Petitioner's contention that its mark is well-known at the time the Respondent
filed its application for the same mark should fail." (Emphasis supplied.)
Consent of the Registrant and
Other air, Just and Equitable
Considerations
Each trademark infringement case presents a unique problem which must be answered by weighing the respondents. There is no evidence of bad faith or fraud imputable to petitioners in using their GALLO
conflicting interests of the litigants.
124
cigarette mark.

Respondents claim that GALLO wines and GALLO cigarettes flow through the same channels of trade, that
is, retail trade. If respondents’ assertion is true, then both goods co-existed peacefully for a considerable
period of time. It took respondents almost 20 years to know about the existence of GALLO cigarettes and sue
petitioners for trademark infringement. Given, on one hand, the long period of time that petitioners were
engaged in the manufacture, marketing, distribution and sale of GALLO cigarettes and, on the other,
respondents’ delay in enforcing their rights (not to mention implied consent, acquiescence or negligence) we
hold that equity, justice and fairness require us to rule in favor of petitioners. The scales of conscience and
reason tip far more readily in favor of petitioners than respondents.
All told, after applying all the tests provided by the governing laws as well as those recognized by
jurisprudence, we conclude that petitioners are not liable for trademark infringement, unfair competition or
damages.
WHEREFORE, finding the petition for review meritorious, the same is hereby GRANTED. The questioned
decision and resolution of the Court of Appeals in CA-G.R. CV No. 65175 and the November 26, 1998
decision and the June 24, 1999 order of the Regional Trial Court of Makati, Branch 57 in Civil Case No. 93-
850 are hereby REVERSED and SET ASIDE and the complaint against petitioners DISMISSED.

Moreover, there exists no evidence that petitioners employed malice, bad faith or fraud, or that they intended Costs against respondents.
to capitalize on respondents’ goodwill in adopting the GALLO mark for their cigarettes which are totally
unrelated to respondents’ GALLO wines. Thus, we rule out trademark infringement on the part of petitioners.
SO ORDERED.
PETITIONERS ARE ALSO NOT LIABLE
FOR UNFAIR COMPETITION

Under Section 29 of the Trademark Law, any person who employs deception or any other means contrary to
good faith by which he passes off the goods manufactured by him or in which he deals, or his business, or
services for those of the one having established such goodwill, or who commits any acts calculated to
produce said result, is guilty of unfair competition. It includes the following acts:

(a) Any person, who in selling his goods shall give them the general appearance of goods of another
manufacturer or dealer, either as to the goods themselves or in the wrapping of the packages in
which they are contained, or the devices or words thereon, or in any other feature of their
appearance, which would be likely to influence purchasers to believe that the goods offered are
those of a manufacturer or dealer other than the actual manufacturer or dealer, or who otherwise
clothes the goods with such appearance as shall deceive the public and defraud another of his
legitimate trade, or any subsequent vendor of such goods or any agent of any vendor engaged in
selling such goods with a like purpose;

(b) Any person who by any artifice, or device, or who employs any other means calculated to induce
the false belief that such person is offering the services of another who has identified such services
in the mind of the public;

(c) Any person who shall make any false statement in the course of trade or who shall commit any
other act contrary to good faith of a nature calculated to discredit the goods, business or services of
another.

The universal test question is whether the public is likely to be deceived. Nothing less than conduct tending to
pass off one man’s goods or business as that of another constitutes unfair competition. Actual or probable
deception and confusion on the part of customers by reason of defendant’s practices must always
appear. On this score, we find that petitioners never attempted to pass off their cigarettes as those of
125 

G.R. No. 204605 July 19, 2016
INTELLECTUAL PROPERTY ASSOCIATION OF THE PHILIPPINES, Petitioner, vs. HON. PAQUITO
OCHOA, IN HIS CAPACITY AS EXECUTIVE SECRETARY, HON. ALBERT DEL ROSARIO, IN HIS
CAPACITY AS SECRETARY OF THE DEPARTMENT OF FOREIGN AFFAIRS, AND HON. RICARDO
BLANCAFLOR, IN HIS CAPACITY AS THE DIRECTOR GENERAL OF THE INTELLECTUAL PROPERTY
OFFICE OF THE PHILIPPINES, Respondents.
DECISION
BERSAMIN, J.:
In this special civil action for certiorari and prohibition, the Intellectual Property Association of the Philippines
(IPAP) seeks to declare the accession of the Philippines to the Protocol Relating to the Madrid Agreement
Concerning the International Registration of Marks (Madrid Protocol)  unconstitutional on the ground of the
lack of concurrence by the Senate, and in the alternative, to declare the implementation thereof as
unconstitutional because it conflicts with Republic Act No. 8293, otherwise known as the Intellectual Property
Code of the Philippines (IP Code). 1
We find and declare that the President's ratification is valid and constitutional because the Madrid
Protocol,  being an executive agreement as determined by the Department of Foreign Affairs, does not
require the concurrence of the Senate.
Antecedents
The Madrid System for the International Registration of Marks (Madrid System), which is the centralized
system providing a one-stop solution for registering and managing marks worldwide, allows the trademark
owner to file one application in one language, and to pay one set of fees to protect his mark in the territories
of up to 97 member-states.  The Madrid System is governed by the Madrid Agreement, concluded in 1891,
2
and the Madrid Protocol,  concluded in 1989. 3
The Madrid Protocol, which was adopted in order to remove the challenges deterring some countries from
acceding to the Madrid Agreement,  has two objectives, namely: (1) to facilitate securing protection for marks;
and (2) to make the management of the registered marks easier in different countries. 4
In 2004; the Intellectual Property Office of the Philippines (IPOPHL), the government agency mandated to
administer the intellectual property system of the country and to implement the state policies on intellectual
property; began considering the country's accession to the Madrid Protocol.  However, based on its
assessment in 2005, the IPOPHL needed to first improve its own operations before making the
recommendation in favor of accession. The IPOPHL thus implemented reforms to eliminate trademark
backlogs and to reduce the turnaround time for the registration of marks. 5
In the meanwhile, the IPOPHL mounted a campaign for information dissemination to raise awareness of
the Madrid Protocol. It launched a series of consultations with stakeholders and various business groups
regarding the Philippines' accession to the Madrid Protocol.  It ultimately arrived at the conclusion that
accession would benefit the country and help raise the level of competitiveness for Filipino brands. Hence, it
recommended in September 2011 to the Department of Foreign Affairs (DFA) that the Philippines should
accede to the Madrid Protocol. 6
After its own review, the DFA endorsed to the President the country's accession to the Madrid
Protocol. Conformably with its express authority under Section 9 of Executive Order No. 459 (Providing for
the Guidelines in the Negotiation of International Agreements and its Ratification) dated November 25, 1997,
the DFA determined that the Madrid Protocol  was an executive agreement.  The IPOPHL, the Department of
1âwphi1
Science and Technology, and the Department of Trade and Industry concurred in the recommendation of the
DFA. 7
On March 27, 2012, President Benigno C. Aquino III ratified the Madrid Protocol through an instrument of
accession, The instrument of accession was deposited with the Director General of the World Intellectual
Property Organization (WIPO) on April 25, 2012.  The Madrid Protocol  entered into force in the Philippines on
8
July 25, 2012.9
Petitioner IP AP, an association of more than 100 law firms and individual practitioners in Intellectual Property
Law whose main objective is to promote and protect intellectual property rights in the Philippines through
constant assistance and involvement in the legislation of intellectual property law,  has commenced this
10
special civil action for certiorari and prohibition  to challenge the validity of the President's accession to
11
the Madrid Protocol without the concurrence of the Senate. Citing Pimentel, Jr. v. Office of the Executive
Secretary, the IPAP has averred:
Nonetheless, while the President has the sole authority to negotiate and enter into treaties, the Constitution
provides a limitation to his power by requiring the concurrence of 2/3 of all the members of the Senate for the
validity of the treaty entered into by him. Section 21, Article VII of the 1987 Constitution provides that "no
treaty or international agreement shall be valid and effective unless concurred in by at least two-thirds of all
the Members of the Senate." The 1935 and the 1973 Constitution also required the concurrence by the
legislature to the treaties entered into by the executive.
12
According to the IPAP, the Madrid Protocol is a treaty, not an executive agreement; hence, respondent DFA
Secretary Albert Del Rosario acted with grave abuse of discretion in determining the Madrid Protocol  as an
executive agreement. 13
The IPAP has argued that the implementation of the Madrid Protocol in the Philippines; specifically the
processing of foreign trademark applications, conflicts with the IP Code,  whose Section 125 states:
14
Sec. 125. Representation; Address for Service.  - If the applicant is not domiciled or has no real and
effective commercial establishment in the Philippines; he shall designate by a written document filed in the
office, the name and address of a Philippine resident who may be served notices or process in proceedings
affecting the mark. Such notices or services may be served upon the person so designated by leaving a copy
thereof at the address specified in the last designation filed. If the person so designated cannot be found at
the address given in the last designation, such notice or process may be served upon the Director. (Sec. 3;
R.A. No. 166 a)
It has posited that Article 2 of the Madrid Protocol  provides in contrast:
Article 2
Securing Protection through International Registration
(1) Where an application for the registration of a mark has been filed with the Office of a Contracting Party, or
where a mark has been registered in the register of the Office of a Contracting Party, the person in whose
name that application (hereinafter referred to as "the basic application;') or that registration (hereinafter
referred to as "the basic registration") stands may, subject to the provisions of this Protocol secure protection
for his mark in the territory of the Contracting Parties, by obtaining the registration of that mark in the register
of the International Bureau of the World Intellectual Property Organization (hereinafter referred to as "the
international registration," "the International Register," "the International Bureau" and "the Organization'',
respectively), provided that,
(i) where the basic application has been filed with the Office of a Contracting State or where the basic
registration has been made by such an Office, the person in whose name that application or registration
stands is a national of that Contracting State, or is domiciled, or has a real and effective industrial or
commercial establishment, in the said Contracting State,
(ii) where the basic application has been filed with the Office of a Contracting Organization or where the basic
registration has been made by such an Office, the person in whose name that application or registration
stands is a national of a State member of that Contracting Organization, or is domiciled, or has a real and
effective industrial or commercial establishment, in the territory of the said Contracting Organization.
(2) The application for international registration (hereinafter referred to as "the international application") shall
be filed with the International Bureau through the intermediary of the Office with which the basic application
was filed or by which the basic registration was made (hereinafter referred to as "the Office of origin"), as the
case may be.
(3) Any reference in this Protocol to an "Office" or an "Office of a Contracting Party" shall be construed as a
reference to the office that is in charge, on behalf of a Contracting Party, of the registration of marks, and any
reference in this Protocol to "marks" shall be construed as a reference to trademarks and service marks.
(4) For the purposes of this Protocol, "territory of a Contracting Party" means, where the Contracting Party is
a State, the territory of that State and, where the Contracting Party is an intergovernmental organization, the
territory in which the constituting treaty of that intergovernmental organization applied.
The IPAP has insisted that Article 2 of the Madrid Protocol means that foreign trademark applicants may file
their applications through the International Bureau or the WIPO, and their applications will be automatically
granted trademark protection without the need for designating their resident agents in the country. 15
Moreover, the IPAP has submitted that the procedure outlined in the Guide to the International Registration of
Marks  relating to representation before the International Bureau is the following, to wit:
Rule 3(1)(a)  09.02 References in the Regulations, Administrative Instructions or in this Guide to
representation relate only to representation before the International Bureau. The questions of the need for a
representative before the Office of origin or the Office of a designated Contracting Party (for example, in the
event of a refusal of protection issued by such an Office), who may act as a representative in such cases and
the method of appointment, are outside the scope of the Agreement, Protocol and Regulations and are
governed by the law and practice of the Contracting Party concerned.
which procedure is in conflict with that under Section 125 of the IP Code, and constitutes in effect an
amendment of the local law by the Executive Department. 16
The IPAP has prayed that the implementation of the Madrid Protocol  in the Philippines be restrained in order
to prevent future wrongs considering that the IP AP and its constituency have a clear and unmistakable right
not to be deprived of the rights granted them by the IP Code and existing local laws. 17
In its comment in behalf of the respondents, the Office of the Solicitor General (OSG) has stated that the
IPAP does not have the locus standi to challenge the accession to the Madrid Protocol; that the IPAP cannot
invoke the Court's original jurisdiction absent a showing of any grave abuse of discretion on the part of the
respondents; that the President's ratification of the Madrid Protocol  as an executive agreement is valid
because the Madrid Protocol  is only procedural, does not create substantive rights, and does not require the
amendment of the IP Code; that the IPAP is not entitled to the restraining order or injunction because it
suffers no damage from the ratification by the President, and there is also no urgency for such relief; and the
IPAP has no clear unmistakable right to the relief sought. 18
Issues
The following issues are to be resolved, namely:
I. Whether or not the IP AP has locus standi to challenge the President's ratification of the Madrid Protocol;
II. Whether or not the President's ratification of the Madrid Protocol  is valid and constitutional; and
III. Whether or not the Madrid Protocol is in conflict with the IP Code.
Ruling of the Court
The petition for certiorari and prohibition is without merit.
A.
The issue of legal standing to sue, or locus standi
The IPAP argues in its reply  that it has the locus standi  to file the present case by virtue of its being an
19
association whose members stand to be injured as a result of the enforcement of the Madrid Protocol in the
Philippines; that the injury pertains to the acceptance and approval of applications submitted through
the Madrid Protocol  without local representation as required by Section 125 of the IP Code;  and that such
20
will diminish the rights granted by the IP Code to Intellectual Property Law practitioners like the members of
the IPAP. 21
The argument of the IPAP is untenable.
Legal standing refers to "a right of appearance in a court of justice on a given question."  According to Agan,
22
Jr. v. Philippine International Air Terminals Co., Inc., standing is "a peculiar concept in constitutional law
23
because in some cases, suits are not brought by parties who have been personally injured by the operation
of a law or any other government act but by concerned citizens, taxpayers or voters who actually sue in the
public interest."
The Court has frequently felt the need to dwell on the issue of standing in public or constitutional litigations to
sift the worthy from the unworthy public law litigants seeking redress or relief. The following elucidation in De
Castro v. Judicial and Bar Council offers the general understanding of the context of legal standing, or locus
24
standi  for that purpose, viz.  :
In public or constitutional litigations, the Court is often burdened with the determination of the locus standi of
the petitioners due to the ever-present need to regulate the invocation of the intervention of the Court to
correct any official action or policy in order to avoid obstructing the efficient functioning of public officials and
offices involved in public service. It is required, therefore, that the petitioner must have a personal stake in the
outcome of the controversy, for, as indicated in Agan, Jr. v. Philippine International Air Terminals Co., Inc.:
The question on legal standing is whether such parties have "'alleged such a personal stake in the
outcome of the controversy as to assure that concrete adverseness which sharpens the presentation
of issues upon which the court so largely depends for illumination of difficult constitutional
questions," Accordingly, it has been held that the interest of a person assailing the constitutionality
of a statute must be direct and personal. He must be able to show, not only that the law or any
government act is invalid, but also that he sustained or is in imminent danger of sustaining some
direct injury as a result of its enforcement, and not merely that he suffers thereby in some indefinite
way. It must appear that the person complaining has been or is about to be denied some right or
privilege to which he is lawfully entitled or that he is about to be subjected to some burdens or
penalties by reason of the statute or act complained of.
It is true that as early as in 1937, in People v. Vera, the Court adopted the direct injury test for determining
whether a petitioner in a public action had locus standi. There, the Court held that the person who would
assail the validity of a statute must have "a personal and substantial interest in the case such that he has
sustained, or will sustain direct injury as a result." Vera was followed in Custodio v. President of the Senate,
Manila Race Horse Trainers' Association v. De la Fuente, Anti-Chinese League of the Philippines v.
Felix,  and Pascual v. Secretary of Public Works.
Yet, the Court has also held that the requirement of locus standi,  being a mere procedural technicality, can
be waived by the Court in the exercise of its discretion. For instance, in 1949, in Araneta v. Dinglasan,  the
Court liberalized the approach when the cases had "transcendental importance." Some notable controversies
whose petitioners did not pass the direct injury test  were allowed to be treated in the same way as in Araneta
v. Dinglasan.
In the 1975 decision in Aquino v. Commission on Elections,  this Court decided to resolve the issues raised by
the petition due to their "farreaching implications,'; even if the petitioner had no personality to file the suit. The
liberal approach of Aquino v. Commission on Elections has been adopted in several notable cases,
permitting ordinary citizens, legislators, and civic organizations to bring their suits involving the
constitutionality or validity of laws, regulations, and rulings.
However, the assertion of a public right as a predicate for challenging a supposedly illegal or unconstitutional
executive or legislative action rests on the theory that the petitioner represents the public in general. Although
such petitioner may not be as adversely affected by the action complained against as are others, it is enough
that he sufficiently demonstrates in his petition that he is entitled to protection or relief from the Court in the
vindication ofa public right.
25
The injury that the IPAP will allegedly suffer from the implementation of the Madrid Protocol is imaginary,
incidental and speculative as opposed to a direct and material injury required by the foregoing tenets
on locus standi.  Additionally, as the OSG points out in the comment,  the IPAP has misinterpreted Section
26
125 of the IP Code on the issue of representation. The provision only states that a foreign trademark
applicant "shall designate by a written document filed in the office, the name and address of a Philippine
resident who may be served notices or process in proceedings affecting the mark;" it does not grant anyone
in particular the right to represent the foreign trademark applicant. Hence, the IPAP cannot justly claim that it
will suffer irreparable injury or diminution of rights granted to it by Section 125 of the IP Code from the
implementation of the Madrid Protocol.
Nonetheless, the IPAP also emphasizes that the paramount public interest involved has transcendental
importance because its petition asserts that the Executive Department has overstepped the bounds of its
authority by thereby cutting into another branch's functions and responsibilities.  The assertion of the IPAP
27
may be valid on this score. There is little question that the issues raised herein against the implementation of
the Madrid Protocol are of transcendental importance. Accordingly, we recognize IPAP's locus standi to bring
the present challenge. Indeed, the Court has adopted a liberal attitude towards locus standi  whenever the
issue presented for consideration has transcendental significance to the people, or whenever the issues
raised are of paramount importance to the public. 28
B.
Accession to the
Madrid Protocol was constitutional
The IP AP submits that respondents Executive Secretary and DFA Secretary Del Rosario gravely abused
their discretion in determining that there was no need for the Philippine Senate's concurrence with the Madrid
Protocol;  that the Madrid Protocol involves changes of national policy, and its being of a permanent character
requires the Senate's concurrence,  pursuant to Section 21, Article VII of the Constitution, which states that
29
"no treaty or international agreement shall be valid and effective unless concurred in by at least two-thirds of
all the Members of the Senate."
Before going further, we have to distinguish between treaties and international agreements, which require the
Senate's concurrence, on one hand, and executive agreements, which may be validly entered into without the
Senate's concurrence. Executive Order No. 459, Series of 1997,  notes the following definitions, to wit:
30
Sec. 2. Definition of Terms.
a. International agreement - shall refer to a contract or understanding, regardless of nomenclature, entered
into between the Philippines and another government in written form and governed by international law,
whether embodied in a single instrument or in two or more related instruments.
b. Treaties  - international agreements entered into by the Philippines which require legislative concurrence
after executive ratification. This term may include compacts like conventions, declarations, covenants and
acts.
c. Executive Agreements - similar to treaties except that they do not require legislative concurrence.
The Court has highlighted the difference between treaties and executive agreements in Commissioner of
Customs v. Eastern Sea Trading,  thusly:
31
International agreements involving political issues or changes of national policy and those involving
international arrangements of a permanent character usually take the form of treaties. But international
agreements embodying adjustments of detail carrying out well-established national policies and traditions
and those involving arrangements of a more or less temporary  nature usually take the form of executive
agreements.
In the Philippines, the DFA, by virtue of Section 9, Executive Order No. 459,  is initially given the power to
32
determine whether an agreement is to be treated as a treaty or as an executive agreement. To determine the
issue of whether DFA Secretary Del Rosario gravely abused his discretion in making his determination
relative to the Madrid Protocol, we review the jurisprudence on the nature of executive agreements, as well
as the subject matters to be covered by executive agreements.
The pronouncement in Commissioner of Customs v. Eastern Sea Trading is instructive, to wit:
33
x x x The concurrence of said House of Congress is required by our fundamental law in the making of
"treaties" (Constitution of the Philippines; Article VII, Section 10[7]), which are, however, distinct and different
from "executive agreements," which may be validly entered into without such concurrence.
"Treaties are formal documents which require ratification with the approval of two thirds of the Senate.
Executive agreements become binding through executive action without  the need of a vote by the Senate or
by Congress.
xxxx
"x x x the right of the Executive to enter into binding agreements without  the necessity of subsequent
Congressional approval has been confirmed by long usage. From the earliest days of our history we have
entered into executive agreements covering such subjects as commercial and consular relations, most-
favored-nation rights, patent rights, trademark and copyright protection, postal and navigation
arrangements and the settlement of claims. The validity of these has never been seriously questioned by our
courts.
xxxx
Agreements with respect to the registration of trademarks have been concluded by the Executive with
various countries under the Act of Congress of March 3, 1881 (21 Stat. 502), x x x
xxxx
In this connection, Francis B. Sayre, former U.S. High Commissioner to the Philippines, said in his work on
"The Constitutionality of Trade Agreement Acts":
Agreements concluded by the President which fall short of treaties are commonly referred to as executive
agreements and are no less common in our scheme of government than are the more formal instruments -
treaties and conventions. They sometimes take the form of exchanges of notes and at other times that or
more formal documents denominated 'agreements' or 'protocols'. The point where ordinary correspondence
between this and other governments ends and agreements - whether denominated executive agreements or
exchanges of notes or otherwise - begin, may sometimes be difficult of ready ascertainment. It would be
useless to undertake to discuss here the large variety of executive agreements as such, concluded from time
to time. Hundreds of executive agreements, other than those entered into under the trade-agreements act,
have been negotiated with foreign governments. x x x It would seem to be sufficient, in order to show that the
trade agreements under the act of 1934 are not anomalous in character, that they are not treaties, and that
they have abundant precedent in our history, to refer to certain classes of agreements heretofore entered into
by the Executive without the approval of the Senate. They cover such subjects as the inspection of
vessels, navigation dues, income tax on shipping profits, the admission of civil aircraft, customs
matters, and commercial relations generally, international claims, postal matters, the registration of
trademarks and copyrights, etcetera. Some of them were concluded not by specific congressional
authorization but in conformity with policies declared in acts of Congress with respect to the general
subject matter, such as tariff acts; while still others, particularly those with respect of the settlement of
claims against foreign governments, were concluded independently of any legislation. (Emphasis ours)
As the foregoing pronouncement indicates, the registration of trademarks and copyrights have been the
subject of executive agreements entered into without the concurrence of the Senate. Some executive
agreements have been concluded in conformity with the policies declared in the acts of Congress with
respect to the general subject matter.
It then becomes relevant to examine our state policy on intellectual property in general, as reflected in
Section 2 of our IP Code, to wit:
Section 2. Declaration of State Policy.  - The State recognizes that an effective intellectual and industrial
property system is vital to the development of domestic and creative activity, facilitates transfer of
technology, attracts foreign investments, and ensures market access for our products. It shall protect
and secure the exclusive rights of scientists, inventors, artists and other gifted citizens to their
intellectual property and creations, particularly when beneficial to the people, for such periods as
provided in this Act.
The use of intellectual property bears a social function. To this end, the State shall promote the diffusion of
knowledge and information for the promotion of national development and progress and the common good.
It is also the policy of the State to streamline administrative procedures of registering patents,
trademarks and copyright, to liberalize the registration on the transfer of technology; and to enhance the
enforcement of intellectual property rights in the Philippines.
In view of the expression of state policy having been made by the Congress itself, the IPAP is plainly
mistaken in asserting that "there was no Congressional act that authorized the accession of the Philippines to
the Madrid Protocol."34
Accordingly, DFA Secretary Del Rosario’s determination and treatment of the Madrid Protocol  as an
executive agreement; being in apparent contemplation of the express state policies on intellectual property as
well as within his power under Executive Order No. 459, are upheld. We observe at this point that there are
no hard and fast rules on the propriety of entering into a treaty or an executive agreement on a given subject
as an instrument of international relations. The primary consideration in the choice of the form of agreement
is the parties' intent and desire to craft their international agreement in the form they so wish to further their
respective interests. The matter of form takes a back seat when it comes to effectiveness and binding effect
of the enforcement of a treaty or an executive agreement; inasmuch as all the parties; regardless of the form,
become obliged to comply conformably with the time-honored principle of pacta sunt servanda. The principle
35
binds the parties to perform in good faith their parts in the agreements.36
c.
There is no conflict between the
Madrid Protocol  and the IP Code.
The IPAP also rests its challenge on the supposed conflict between the Madrid Protocol  and the IP Code,
contending that the Madrid Protocol  does away with the requirement of a resident agent under Section 125 of
the IP Code; and that the Madrid Protocol is unconstitutional for being in conflict with the local law, which it
cannot modify.
The IPAP's contentions stand on a faulty premise. The method of registration through the IPOPHL, as laid
down by the IP Code, is distinct and separate from the method of registration through the WIPO, as set in
the Madrid Protocol.  Comparing the two methods of registration despite their being governed by two separate
systems of registration is thus misplaced.
In arguing that the Madrid Protocol conflicts with Section 125 of the IP Code, the IP AP highlights the
importance of the requirement for the designation of a resident agent. It underscores that the requirement is
intended to ensure that non-resident entities seeking protection or privileges under Philippine Intellectual
Property Laws will be subjected to the country's jurisdiction. It submits that without such resident agent, there
will be a need to resort to costly, time consuming and cumbersome extraterritorial service of writs and
processes. 37
The IPAP misapprehends the procedure for examination under the Madrid Protocol,  The difficulty, which the
IPAP illustrates, is minimal, if not altogether inexistent. The IPOPHL actually requires the designation of the
resident agent when it refuses the registration of a mark. Local representation is further required in the
submission of the Declaration of Actual Use, as well as in the submission of the license contract.  The Madrid
38
Protocol accords with the intent and spirit of the IP Code, particularly on the subject of the registration of
trademarks. The Madrid Protocol  does not amend or modify the IP Code on the acquisition of trademark
rights considering that the applications under the Madrid Protocol  are still examined according to the relevant
national law,  In that regard, the IPOPHL will only grant protection to a mark that meets the local registration
requirements.
WHEREFORE, this Court DISMISSES the petition for certiorari and prohibition for lack of merit;
and ORDERS the petitioner to pay the costs of suit.
SO ORDERED.

G.R. No. 148222               August 15, 2003
PEARL & DEAN (PHIL.), INCORPORATED, Petitioner, vs. SHOEMART, INCORPORATED, and NORTH
EDSA MARKETING, INCORPORATED, Respondents.
DECISION
CORONA, J.:
In the instant petition for review on certiorari under Rule 45 of the Rules of Court, petitioner Pearl & Dean
(Phil.) Inc. (P & D) assails the May 22, 2001 decision of the Court of Appeals reversing the October 31, 1996
1 
decision of the Regional Trial Court of Makati, Branch 133, in Civil Case No. 92-516 which declared private
2 
respondents Shoemart Inc. (SMI) and North Edsa Marketing Inc. (NEMI) liable for infringement of trademark
and copyright, and unfair competition.
FACTUAL ANTECEDENTS
The May 22, 2001 decision of the Court of Appeals contained a summary of this dispute:
3 
"Plaintiff-appellant Pearl and Dean (Phil.), Inc. is a corporation engaged in the manufacture of advertising
display units simply referred to as light boxes. These units utilize specially printed posters sandwiched
between plastic sheets and illuminated with back lights. Pearl and Dean was able to secure a Certificate of
Copyright Registration dated January 20, 1981 over these illuminated display units. The advertising light
boxes were marketed under the trademark "Poster Ads". The application for registration of the trademark was
filed with the Bureau of Patents, Trademarks and Technology Transfer on June 20, 1983, but was approved
only on September 12, 1988, per Registration No. 41165. From 1981 to about 1988, Pearl and Dean
employed the services of Metro Industrial Services to manufacture its advertising displays.
Sometime in 1985, Pearl and Dean negotiated with defendant-appellant Shoemart, Inc. (SMI) for the lease
and installation of the light boxes in SM City North Edsa. Since SM City North Edsa was under construction at
that time, SMI offered as an alternative, SM Makati and SM Cubao, to which Pearl and Dean agreed. On
September 11, 1985, Pearl and Dean’s General Manager, Rodolfo Vergara, submitted for signature the
contracts covering SM Cubao and SM Makati to SMI’s Advertising Promotions and Publicity Division
Manager, Ramonlito Abano. Only the contract for SM Makati, however, was returned signed. On October 4,
1985, Vergara wrote Abano inquiring about the other contract and reminding him that their agreement for
installation of light boxes was not only for its SM Makati branch, but also for SM Cubao. SMI did not bother to
reply.
Instead, in a letter dated January 14, 1986, SMI’s house counsel informed Pearl and Dean that it was
rescinding the contract for SM Makati due to non-performance of the terms thereof. In his reply dated
February 17, 1986, Vergara protested the unilateral action of SMI, saying it was without basis. In the same
letter, he pushed for the signing of the contract for SM Cubao.
Two years later, Metro Industrial Services, the company formerly contracted by Pearl and Dean to fabricate
its display units, offered to construct light boxes for Shoemart’s chain of stores. SMI approved the proposal
and ten (10) light boxes were subsequently fabricated by Metro Industrial for SMI. After its contract with Metro
Industrial was terminated, SMI engaged the services of EYD Rainbow Advertising Corporation to make the
light boxes. Some 300 units were fabricated in 1991. These were delivered on a staggered basis and
installed at SM Megamall and SM City.
Sometime in 1989, Pearl and Dean, received reports that exact copies of its light boxes were installed at SM
City and in the fastfood section of SM Cubao. Upon investigation, Pearl and Dean found out that aside from
the two (2) reported SM branches, light boxes similar to those it manufactures were also installed in two (2)
other SM stores. It further discovered that defendant-appellant North Edsa Marketing Inc. (NEMI), through its
marketing arm, Prime Spots Marketing Services, was set up primarily to sell advertising space in lighted
display units located in SMI’s different branches. Pearl and Dean noted that NEMI is a sister company of SMI.
In the light of its discoveries, Pearl and Dean sent a letter dated December 11, 1991 to both SMI and NEMI
enjoining them to cease using the subject light boxes and to remove the same from SMI’s establishments. It
also demanded the discontinued use of the trademark "Poster Ads," and the payment to Pearl and Dean of
compensatory damages in the amount of Twenty Million Pesos (P20,000,000.00).
Upon receipt of the demand letter, SMI suspended the leasing of two hundred twenty-four (224) light boxes
and NEMI took down its advertisements for "Poster Ads" from the lighted display units in SMI’s stores.
Claiming that both SMI and NEMI failed to meet all its demands, Pearl and Dean filed this instant case for
infringement of trademark and copyright, unfair competition and damages.
In denying the charges hurled against it, SMI maintained that it independently developed its poster panels
using commonly known techniques and available technology, without notice of or reference to Pearl and
Dean’s copyright. SMI noted that the registration of the mark "Poster Ads" was only for stationeries such as
letterheads, envelopes, and the like. Besides, according to SMI, the word "Poster Ads" is a generic term
which cannot be appropriated as a trademark, and, as such, registration of such mark is invalid. It also
stressed that Pearl and Dean is not entitled to the reliefs prayed for in its complaint since its advertising
display units contained no copyright notice, in violation of Section 27 of P.D. 49. SMI alleged that Pearl and
Dean had no cause of action against it and that the suit was purely intended to malign SMI’s good name. On
this basis, SMI, aside from praying for the dismissal of the case, also counterclaimed for moral, actual and
exemplary damages and for the cancellation of Pearl and Dean’s Certification of Copyright Registration No.
PD-R-2558 dated January 20, 1981 and Certificate of Trademark Registration No. 4165 dated September 12,
1988.
NEMI, for its part, denied having manufactured, installed or used any advertising display units, nor having
engaged in the business of advertising. It repleaded SMI’s averments, admissions and denials and prayed for
similar reliefs and counterclaims as SMI."
The RTC of Makati City decided in favor of P & D:
Wherefore, defendants SMI and NEMI are found jointly and severally liable for infringement of copyright
under Section 2 of PD 49, as amended, and infringement of trademark under Section 22 of RA No. 166, as
amended, and are hereby penalized under Section 28 of PD 49, as amended, and Sections 23 and 24 of RA
166, as amended. Accordingly, defendants are hereby directed:
(1) to pay plaintiff the following damages:
(a) actual damages - ₱16,600,000.00,
representing profits
derived by defendants
as a result of infringe-
ment of plaintiff’s copyright
from 1991 to 1992
(b) moral damages - ₱1,000.000.00
(c) exemplary damages - ₱1,000,000.00
(d) attorney’s fees - ₱1,000,000.00
plus
(e) costs of suit;
(2) to deliver, under oath, for impounding in the National Library, all light boxes of SMI which were
fabricated by Metro Industrial Services and EYD Rainbow Advertising Corporation;
(3) to deliver, under oath, to the National Library, all filler-posters using the trademark "Poster Ads",
for destruction; and
(4) to permanently refrain from infringing the copyright on plaintiff’s light boxes and its trademark
"Poster Ads".
Defendants’ counterclaims are hereby ordered dismissed for lack of merit.
SO ORDERED. 4
On appeal, however, the Court of Appeals reversed the trial court:
Since the light boxes cannot, by any stretch of the imagination, be considered as either prints, pictorial
illustrations, advertising copies, labels, tags or box wraps, to be properly classified as a copyrightable class
"O" work, we have to agree with SMI when it posited that what was copyrighted were the technical drawings
only, and not the light boxes themselves, thus:
42. When a drawing is technical and depicts a utilitarian object, a copyright over the drawings like plaintiff-
appellant’s will not extend to the actual object. It has so been held under jurisprudence, of which the leading
case is Baker vs. Selden (101 U.S. 841 (1879). In that case, Selden had obtained a copyright protection for a
book entitled "Selden’s Condensed Ledger or Bookkeeping Simplified" which purported to explain a new
system of bookkeeping. Included as part of the book were blank forms and illustrations consisting of ruled
lines and headings, specially designed for use in connection with the system explained in the work. These
forms showed the entire operation of a day or a week or a month on a single page, or on two pages following
each other. The defendant Baker then produced forms which were similar to the forms illustrated in Selden’s
copyrighted books. The Court held that exclusivity to the actual forms is not extended by a copyright. The
reason was that "to grant a monopoly in the underlying art when no examination of its novelty has ever been
made would be a surprise and a fraud upon the public; that is the province of letters patent, not of copyright."
And that is precisely the point. No doubt aware that its alleged original design would never pass the rigorous
examination of a patent application, plaintiff-appellant fought to foist a fraudulent monopoly on the public by
conveniently resorting to a copyright registration which merely employs a recordal system without the benefit
of an in-depth examination of novelty.
The principle in Baker vs. Selden was likewise applied in Muller vs. Triborough Bridge Authority [43 F. Supp.
298 (S.D.N.Y. 1942)]. In this case, Muller had obtained a copyright over an unpublished drawing entitled
"Bridge Approach – the drawing showed a novel bridge approach to unsnarl traffic congestion". The
defendant constructed a bridge approach which was alleged to be an infringement of the new design
illustrated in plaintiff’s drawings. In this case it was held that protection of the drawing does not extend to the
unauthorized duplication of the object drawn because copyright extends only to the description or expression
of the object and not to the object itself. It does not prevent one from using the drawings to construct the
object portrayed in the drawing.
In two other cases, Imperial Homes Corp. v. Lamont, 458 F. 2d 895 and Scholtz Homes, Inc. v. Maddox, 379
F. 2d 84, it was held that there is no copyright infringement when one who, without being authorized, uses a
copyrighted architectural plan to construct a structure. This is because the copyright does not extend to the
structures themselves.
In fine, we cannot find SMI liable for infringing Pearl and Dean’s copyright over the technical drawings of the
latter’s advertising display units.
xxx xxx xxx
The Supreme Court trenchantly held in Faberge, Incorporated vs. Intermediate Appellate Court that the
protective mantle of the Trademark Law extends only to the goods used by the first user as specified in the
certificate of registration, following the clear mandate conveyed by Section 20 of Republic Act 166, as
amended, otherwise known as the Trademark Law, which reads:
SEC. 20. Certification of registration prima facie evidence of validity.- A certificate of registration of a mark or
trade-name shall be prima facie evidence of the validity of the registration, the registrant’s ownership of the
mark or trade-name, and of the registrant’s exclusive right to use the same in connection with the goods,
business or services specified in the certificate, subject to any conditions and limitations stated therein."
(underscoring supplied)
The records show that on June 20, 1983, Pearl and Dean applied for the registration of the trademark "Poster
Ads" with the Bureau of Patents, Trademarks, and Technology Transfer. Said trademark was recorded in the
Principal Register on September 12, 1988 under Registration No. 41165 covering the following products:
stationeries such as letterheads, envelopes and calling cards and newsletters.
With this as factual backdrop, we see no legal basis to the finding of liability on the part of the defendants-
appellants for their use of the words "Poster Ads", in the advertising display units in suit. Jurisprudence has
interpreted Section 20 of the Trademark Law as "an implicit permission to a manufacturer to venture into the
production of goods and allow that producer to appropriate the brand name of the senior registrant on goods
other than those stated in the certificate of registration." The Supreme Court further emphasized the
restrictive meaning of Section 20 when it stated, through Justice Conrado V. Sanchez, that:
Really, if the certificate of registration were to be deemed as including goods not specified therein, then a
situation may arise whereby an applicant may be tempted to register a trademark on any and all goods which
his mind may conceive even if he had never intended to use the trademark for the said goods. We believe
that such omnibus registration is not contemplated by our Trademark Law.
While we do not discount the striking similarity between Pearl and Dean’s registered trademark and
defendants-appellants’ "Poster Ads" design, as well as the parallel use by which said words were used in the
parties’ respective advertising copies, we cannot find defendants-appellants liable for infringement of
trademark. "Poster Ads" was registered by Pearl and Dean for specific use in its stationeries, in contrast to
defendants-appellants who used the same words in their advertising display units. Why Pearl and Dean
limited the use of its trademark to stationeries is simply beyond us. But, having already done so, it must stand
by the consequence of the registration which it had caused.
xxx xxx xxx
We are constrained to adopt the view of defendants-appellants that the words "Poster Ads" are a simple
contraction of the generic term poster advertising. In the absence of any convincing proof that "Poster Ads"
has acquired a secondary meaning in this jurisdiction, we find that Pearl and Dean’s exclusive right to the use
of "Poster Ads" is limited to what is written in its certificate of registration, namely, stationeries.
Defendants-appellants cannot thus be held liable for infringement of the trademark "Poster Ads".
There being no finding of either copyright or trademark infringement on the part of SMI and NEMI, the
monetary award granted by the lower court to Pearl and Dean has no leg to stand on.
xxx xxx xxx
WHEREFORE, premises considered, the assailed decision is REVERSED and SET ASIDE, and another is
rendered DISMISSING the complaint and counterclaims in the above-entitled case for lack of merit. 5
Dissatisfied with the above decision, petitioner P & D filed the instant petition assigning the following errors
for the Court’s consideration:
A. THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT NO COPYRIGHT
INFRINGEMENT WAS COMMITTED BY RESPONDENTS SM AND NEMI;
B. THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT NO INFRINGEMENT OF
PEARL & DEAN’S TRADEMARK "POSTER ADS" WAS COMMITTED BY RESPONDENTS SM
AND NEMI;
C. THE HONORABLE COURT OF APPEALS ERRED IN DISMISSING THE AWARD OF THE
TRIAL COURT, DESPITE THE LATTER’S FINDING, NOT DISPUTED BY THE HONORABLE
COURT OF APPEALS, THAT SM WAS GUILTY OF BAD FAITH IN ITS NEGOTIATION OF
ADVERTISING CONTRACTS WITH PEARL & DEAN.
D. THE HONORABLE COURT OF APPEALS ERRED IN NOT HOLDING RESPONDENTS SM
AND NEMI LIABLE TO PEARL & DEAN FOR ACTUAL, MORAL & EXEMPLARY DAMAGES,
ATTORNEY’S FEES AND COSTS OF SUIT. 6
ISSUES
In resolving this very interesting case, we are challenged once again to put into proper perspective four main
concerns of intellectual property law — patents, copyrights, trademarks and unfair competition arising from
infringement of any of the first three. We shall focus then on the following issues:
 (1) if the engineering or technical drawings of an advertising display unit (light box) are granted
copyright protection (copyright certificate of registration) by the National Library, is the light box
depicted in such engineering drawings ipso facto also protected by such copyright?
(2) or should the light box be registered separately and protected by a patent issued by the Bureau
of Patents Trademarks and Technology Transfer (now Intellectual Property Office) — in addition to
the copyright of the engineering drawings?
(3) can the owner of a registered trademark legally prevent others from using such trademark if it is
a mere abbreviation of a term descriptive of his goods, services or business?
ON THE ISSUE OF COPYRIGHT INFRINGEMENT
Petitioner P & D’s complaint was that SMI infringed on its copyright over the light boxes when SMI had the
units manufactured by Metro and EYD Rainbow Advertising for its own account. Obviously, petitioner’s
position was premised on its belief that its copyright over the engineering drawings extended ipso facto to the
light boxes depicted or illustrated in said drawings. In ruling that there was no copyright infringement, the
Court of Appeals held that the copyright was limited to the drawings alone and not to the light box itself. We
agree with the appellate court.
First, petitioner’s application for a copyright certificate — as well as Copyright Certificate No. PD-R2588
issued by the National Library on January 20, 1981 — clearly stated that it was for a class "O" work under
Section 2 (O) of PD 49 (The Intellectual Property Decree) which was the statute then prevailing. Said Section
2 expressly enumerated the works subject to copyright:
SEC. 2. The rights granted by this Decree shall, from the moment of creation, subsist with respect to any of
the following works:
x x x           x x x          x x x
(O) Prints, pictorial illustrations, advertising copies, labels, tags, and box wraps;
x x x           x x x          x x x
Although petitioner’s copyright certificate was entitled "Advertising Display Units" (which depicted the box-
type electrical devices), its claim of copyright infringement cannot be sustained.
Copyright, in the strict sense of the term, is purely a statutory right. Being a mere statutory grant, the rights
are limited to what the statute confers. It may be obtained and enjoyed only with respect to the subjects and
by the persons, and on terms and conditions specified in the statute. Accordingly, it can cover only the works
7 
falling within the statutory enumeration or description. 8
P & D secured its copyright under the classification class "O" work. This being so, petitioner’s copyright
protection extended only to the technical drawings and not to the light box itself because the latter was not at
all in the category of "prints, pictorial illustrations, advertising copies, labels, tags and box wraps." Stated
otherwise, even as we find that P & D indeed owned a valid copyright, the same could have referred only to
the technical drawings within the category of "pictorial illustrations." It could not have possibly stretched out to
include the underlying light box. The strict application of the law’s enumeration in Section 2 prevents us from
9 
giving petitioner even a little leeway, that is, even if its copyright certificate was entitled "Advertising Display
Units." What the law does not include, it excludes, and for the good reason: the light box was not a literary or
artistic piece which could be copyrighted under the copyright law. And no less clearly, neither could the lack
of statutory authority to make the light box copyrightable be remedied by the simplistic act of entitling the
copyright certificate issued by the National Library as "Advertising Display Units."
In fine, if SMI and NEMI reprinted P & D’s technical drawings for sale to the public without license from P & D,
then no doubt they would have been guilty of copyright infringement. But this was not the case. SMI’s and
NEMI’s acts complained of by P & D were to have units similar or identical to the light box illustrated in the
technical drawings manufactured by Metro and EYD Rainbow Advertising, for leasing out to different
advertisers. Was this an infringement of petitioner’s copyright over the technical drawings? We do not think
so.
During the trial, the president of P & D himself admitted that the light box was neither a literary not an artistic
work but an "engineering or marketing invention." Obviously, there appeared to be some confusion regarding
10 
what ought or ought not to be the proper subjects of copyrights, patents and trademarks. In the leading case
of Kho vs. Court of Appeals, we ruled that these three legal rights are completely distinct and separate from
11 
one another, and the protection afforded by one cannot be used interchangeably to cover items or works that
exclusively pertain to the 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. In relation thereto,
a trade name means the name or designation identifying or distinguishing an enterprise. Meanwhile, the
scope of a copyright is confined to literary and artistic works which are original intellectual creations in the
literary and artistic domain protected from the moment of their creation. Patentable inventions, on the other
hand, refer to any technical solution of a problem in any field of human activity which is new, involves an
inventive step and is industrially applicable.
ON THE ISSUE OF PATENT INFRINGEMENT
This brings us to the next point: if, despite its manufacture and commercial use of the light boxes without
license from petitioner, private respondents cannot be held legally liable for infringement of P & D’s copyright
over its technical drawings of the said light boxes, should they be liable instead for infringement of patent?
We do not think so either.
For some reason or another, petitioner never secured a patent for the light boxes. It therefore acquired no
patent rights which could have protected its invention, if in fact it really was. And because it had no patent,
petitioner could not legally prevent anyone from manufacturing or commercially using the contraption.
In Creser Precision Systems, Inc. vs. Court of Appeals, we held that "there can be no infringement of a
12 
patent until a patent has been issued, since whatever right one has to the invention covered by the patent
arises alone from the grant of patent. x x x (A)n inventor has no common law right to a monopoly of his
invention. He has the right to make use of and vend his invention, but if he voluntarily discloses it, such as by
offering it for sale, the world is free to copy and use it with impunity. A patent, however, gives the inventor the
right to exclude all others. As a patentee, he has the exclusive right of making, selling or using the
invention. On the assumption that petitioner’s advertising units were patentable inventions, petitioner
13 
revealed them fully to the public by submitting the engineering drawings thereof to the National Library.
To be able to effectively and legally preclude others from copying and profiting from the invention, a patent is
a primordial requirement. No patent, no protection. The ultimate goal of a patent system is to bring new
designs and technologies into the public domain through disclosure. Ideas, once disclosed to the public
14 
without the protection of a valid patent, are subject to appropriation without significant restraint. 15
On one side of the coin is the public which will benefit from new ideas; on the other are the inventors who
must be protected. As held in Bauer & Cie vs. O’Donnel, "The act secured to the inventor the exclusive right
16 
to make use, and vend the thing patented, and consequently to prevent others from exercising like privileges
without the consent of the patentee. It was passed for the purpose of encouraging useful invention and
promoting new and useful inventions by the protection and stimulation given to inventive genius, and was
intended to secure to the public, after the lapse of the exclusive privileges granted the benefit of such
inventions and improvements."
The law attempts to strike an ideal balance between the two interests:
"(The p)atent system thus embodies a carefully crafted bargain for encouraging the creation and disclosure of
new useful and non-obvious advances in technology and design, in return for the exclusive right to practice
the invention for a number of years. The inventor may keep his invention secret and reap its fruits indefinitely.
In consideration of its disclosure and the consequent benefit to the community, the patent is granted. An
exclusive enjoyment is guaranteed him for 17 years, but upon the expiration of that period, the knowledge of
the invention inures to the people, who are thus enabled to practice it and profit by its use." 17
The patent law has a three-fold purpose: "first, patent law seeks to foster and reward invention; second, it
promotes disclosures of inventions to stimulate further innovation and to permit the public to practice the
invention once the patent expires; third, the stringent requirements for patent protection seek to ensure that
ideas in the public domain remain there for the free use of the public." 18
It is only after an exhaustive examination by the patent office that a patent is issued. Such an in-depth
investigation is required because "in rewarding a useful invention, the rights and welfare of the community
must be fairly dealt with and effectively guarded. To that end, the prerequisites to obtaining a patent are
strictly observed and when a patent is issued, the limitations on its exercise are equally strictly enforced. To
begin with, a genuine invention or discovery must be demonstrated lest in the constant demand for new
appliances, the heavy hand of tribute be laid on each slight technological advance in art." 19
There is no such scrutiny in the case of copyrights nor any notice published before its grant to the effect that
a person is claiming the creation of a work. The law confers the copyright from the moment of creation and 20 
the copyright certificate is issued upon registration with the National Library of a sworn ex-parte claim of
creation.
Therefore, not having gone through the arduous examination for patents, the petitioner cannot exclude others
from the manufacture, sale or commercial use of the light boxes on the sole basis of its copyright certificate
over the technical drawings.
Stated otherwise, what petitioner seeks is exclusivity without any opportunity for the patent office (IPO) to
scrutinize the light box’s eligibility as a patentable invention. The irony here is that, had petitioner secured a
patent instead, its exclusivity would have been for 17 years only. But through the simplified procedure of
copyright-registration with the National Library — without undergoing the rigor of defending the patentability
of its invention before the IPO and the public — the petitioner would be protected for 50 years. This situation
could not have been the intention of the law.
In the oft-cited case of Baker vs. Selden , the United States Supreme Court held that only the expression of
21 
an idea is protected by copyright, not the idea itself. In that case, the plaintiff held the copyright of a book
which expounded on a new accounting system he had developed. The publication illustrated blank forms of
ledgers utilized in such a system. The defendant reproduced forms similar to those illustrated in the plaintiff’s
copyrighted book. The US Supreme Court ruled that:
"There is no doubt that a work on the subject of book-keeping, though only explanatory of well known
systems, may be the subject of a copyright; but, then, it is claimed only as a book. x x x. But there is a clear
distinction between the books, as such, and the art, which it is, intended to illustrate. The mere statement of
the proposition is so evident that it requires hardly any argument to support it. The same distinction may be
predicated of every other art as well as that of bookkeeping. A treatise on the composition and use of
medicines, be they old or new; on the construction and use of ploughs or watches or churns; or on the
mixture and application of colors for painting or dyeing; or on the mode of drawing lines to produce the effect
of perspective, would be the subject of copyright; but no one would contend that the copyright of the treatise
would give the exclusive right to the art or manufacture described therein. The copyright of the book, if not
pirated from other works, would be valid without regard to the novelty or want of novelty of its subject matter.
The novelty of the art or thing described or explained has nothing to do with the validity of the copyright. To
give to the author of the book an exclusive property in the art described therein, when no examination
of its novelty has ever been officially made, would be a surprise and a fraud upon the public. That is
the province of letters patent, not of copyright. The claim to an invention of discovery of an art or
manufacture must be subjected to the examination of the Patent Office before an exclusive right
therein can be obtained; and a patent from the government can only secure it.
The difference between the two things, letters patent and copyright, may be illustrated by reference to the
subjects just enumerated. Take the case of medicines. Certain mixtures are found to be of great value in the
healing art. If the discoverer writes and publishes a book on the subject (as regular physicians
generally do), he gains no exclusive right to the manufacture and sale of the medicine; he gives that
to the public. If he desires to acquire such exclusive right, he must obtain a patent for the mixture as
a new art, manufacture or composition of matter. He may copyright his book, if he pleases; but that
only secures to him the exclusive right of printing and publishing his book. So of all other inventions
or discoveries.
The copyright of a book on perspective, no matter how many drawings and illustrations it may contain, gives
no exclusive right to the modes of drawing described, though they may never have been known or used
before. By publishing the book without getting a patent for the art, the latter is given to the public.
xxx
Now, whilst no one has a right to print or publish his book, or any material part thereof, as a book intended to
convey instruction in the art, any person may practice and use the art itself which he has described and
illustrated therein. The use of the art is a totally different thing from a publication of the book
explaining it. The copyright of a book on bookkeeping cannot secure the exclusive right to make, sell and
use account books prepared upon the plan set forth in such book. Whether the art might or might not have
been patented, is a question, which is not before us. It was not patented, and is open and free to the use of
the public. And, of course, in using the art, the ruled lines and headings of accounts must necessarily be used
as incident to it.
The plausibility of the claim put forward by the complainant in this case arises from a confusion of ideas
produced by the peculiar nature of the art described in the books, which have been made the subject of
copyright. In describing the art, the illustrations and diagrams employed happened to correspond more
closely than usual with the actual work performed by the operator who uses the art. x x x The description of
the art in a book, though entitled to the benefit of copyright, lays no foundation for an exclusive claim
to the art itself. The object of the one is explanation; the object of the other is use. The former may be
secured by copyright. The latter can only be secured, if it can be secured at all, by letters
patent." (underscoring supplied)
ON THE ISSUE OF TRADEMARK INFRINGEMENT
This issue concerns the use by respondents of the mark "Poster Ads" which petitioner’s president said was a
contraction of "poster advertising." P & D was able to secure a trademark certificate for it, but one where the
goods specified were "stationeries such as letterheads, envelopes, calling cards and newsletters." Petitioner
22  himself could not associate "Poster Ads" with petitioner P & D because it was "too generic" definitely
admitted it did not commercially engage in or market these goods. On the contrary, it dealt in electrically
operated backlit advertising units and the sale of advertising spaces thereon, which, however, were not at all
specified in the trademark certificate.
Under the circumstances, the Court of Appeals correctly cited Faberge Inc. vs. Intermediate Appellate
Court, where we, invoking Section 20 of the old Trademark Law, ruled that "the certificate of registration
23 
issued by the Director of Patents can confer (upon petitioner) the exclusive right to use its own symbol only to
those goods specified in the certificate, subject to any conditions and limitations specified in the certificate x x
x. One who has adopted and used a trademark on his goods does not prevent the adoption and use of the
same trademark by others for products which are of a different description." Faberge, Inc. was correct and
24 
was in fact recently reiterated in Canon Kabushiki Kaisha vs. Court of Appeals. 25
Assuming arguendo that "Poster Ads" could validly qualify as a trademark, the failure of P & D to secure a
trademark registration for specific use on the light boxes meant that there could not have been any trademark
infringement since registration was an essential element thereof. 1âwphi1
ON THE ISSUE OF UNFAIR COMPETITION
If at all, the cause of action should have been for unfair competition, a situation which was possible even if P
& D had no registration. However, while the petitioner’s complaint in the RTC also cited unfair competition,
26 
the trial court did not find private respondents liable therefor. Petitioner did not appeal this particular point;
hence, it cannot now revive its claim of unfair competition.
But even disregarding procedural issues, we nevertheless cannot hold respondents guilty of unfair
competition.
By the nature of things, there can be no unfair competition under the law on copyrights although it is
applicable to disputes over the use of trademarks. Even a name or phrase incapable of appropriation as a
trademark or tradename may, by long and exclusive use by a business (such that the name or phrase
becomes associated with the business or product in the mind of the purchasing public), be entitled to
protection against unfair competition. In this case, there was no evidence that P & D’s use of "Poster Ads"
27 
was distinctive or well-known. As noted by the Court of Appeals, petitioner’s expert witnesses himself had
testified that " ‘Poster Ads’ was too generic a name. So it was difficult to identify it with any company, honestly
speaking." This crucial admission by its own expert witness that "Poster Ads" could not be associated with P
28 
& D showed that, in the mind of the public, the goods and services carrying the trademark "Poster Ads" could
not be distinguished from the goods and services of other entities.
This fact also prevented the application of the doctrine of secondary meaning. "Poster Ads" was generic and
incapable of being used as a trademark because it was used in the field of poster advertising, the very
business engaged in by petitioner. "Secondary meaning" means that a word or phrase originally incapable of
exclusive appropriation with reference to an article in the market (because it is geographically or otherwise
descriptive) might nevertheless have been used for so long and so exclusively by one producer with
reference to his article that, in the trade and to that branch of the purchasing public, the word or phrase has
come to mean that the article was his property. The admission by petitioner’s own expert witness that he
29 
precluded the application of this exception.
Having discussed the most important and critical issues, we see no need to belabor the rest.
All told, the Court finds no reversible error committed by the Court of Appeals when it reversed the Regional
Trial Court of Makati City.
WHEREFORE, the petition is hereby DENIED and the decision of the Court of Appeals dated May 22, 2001
is AFFIRMED in toto. SO ORDERED.
 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.

After due hearing on the application for preliminary injunction, the trial court granted the same in an Order
dated February 10, 1992, the dispositive portion of which reads:

ACCORDINGLY, the application of plaintiff Elidad C. Kho, doing business under the style of KEC
Cosmetic Laboratory, for preliminary injunction, is hereby granted. Consequentially, plaintiff is
required to file with the Court a bond executed to defendants in the amount of five hundred thousand
G.R. No. 115758      March 19, 2002
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
ELIDAD C. KHO, doing business under the name and style of KEC COSMETICS LABORATORY, petitioner, thereto.
vs. HON. COURT OF APPEALS, SUMMERVILLE GENERAL MERCHANDISING and
COMPANY, and ANG TIAM CHAY, respondents.
SO ORDERED.3

DE LEON, JR., J.:
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.
1âwphi1.nêt
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.
SECOND DIVISION
G.R. No. 221732, August 23, 2017
FERNANDO U. JUAN, Petitioner, v. ROBERTO U. JUAN (SUBSTITUTED BY HIS SON JEFFREY C.
JUAN) AND LAUNDROMATIC CORPORATION, Respondents.
DECISION
PERALTA, J.:
For this Court's resolution is the Petition for Review on  Certiorari under Rule 45 of the Rules of Court dated
January 25, 2016, of petitioner Fernando U. Juan that seeks to reverse and set aside the Decision 1 dated
May 7, 2015 and Resolution2 dated December 4, 2015 of the Court of Appeals (CA) dismissing his appeal for
failure to comply with the requirements of Section 13, Rule 44 and Section 1, Rule 50 of the Rules of Court.
The facts follow.
Respondent Roberto U. Juan claimed that he began using the name and mark "Lavandera Ko" in his laundry
business on July 4, 1994. He then opened his laundry store at No. 119 Alfaro St., Salcedo St., Makati City in
1995. Thereafter, on March 17, 1997, the National Library issued to him a certificate of copyright over said
name and mark. Over the years, the laundry business expanded with numerous franchise outlets in Metro
Manila and other provinces. Respondent Roberto then formed a corporation to handle the said business,
hence, Laundromatic Corporation (Laundromatic) was incorporated in 1997, while "Lavandera Ko" was
registered as a business name on November 13, 1998 with the Department of Trade and Industry (DTI).
Thereafter, respondent Roberto discovered that his brother, petitioner Fernando was able to register the
name and mark "Lavandera Ko" with the Intellectual Property Office  (IPO) on October 18, 2001, the
registration of which was filed on June 5, 1995. Respondent Roberto also alleged that a certain Juliano
Nacino (Juliano) had been writing the franchisees of the former threatening them with criminal and civil cases
if they did not stop using the mark and name "Lavandera Ko." It was found out by respondent Roberto that
petitioner Fernando had been selling his own franchises.
Thus, respondent Roberto filed a petition for injunction, unfair competition, infringement of copyright,
cancellation of trademark and name with/and prayer for TRO and Preliminary Injunction with the Regional
Trial Court (RTC) and the case was raffled off at Branch 149, Makati City. The RTC issued a writ of
preliminary injunction against petitioner Fernando in Order dated June 10, 2004. On July 21, 2008, due to the
death of respondent Roberto, the latter was substituted by his son, Christian Juan (Christian). Pre-trial
conference was concluded on July 13, 2010 and after the presentation of evidence of both parties, the RTC
rendered a Resolution dated September 23, 2013, dismissing the petition and ruling that neither of the parties
had a right to the exclusive use or appropriation of the mark "Lavandera Ko" because the same was the
original mark and work of a certain Santiago S. Suarez (Santiago). According to the RTC, the mark in
question was created by Suarez in 1942 in his musical composition called, "Lavandera Ko" and both parties
of the present case failed to prove that they were the originators of the same mark. The dispositive portion of
the RTC's resolution reads as follows:
WHEREFORE, premises considered, this court finds both the plaintiff-Roberto and defendant-Fernando guilty
of making misrepresentations before this court, done under oath, hence, the Amended Petition and the
Answer with their money claims prayed for therein are hereby DISMISSED.
Therefore, the Amended Petition and the Answer are hereby DISMISSED for no cause of action, hence, the
prayer for the issuance of a writ of injunction is hereby DENIED for utter lack of merit; and the Writ of
Preliminary Injunction issued on June 10, 2004 is hereby LIFTED AND SET ASIDE.
Finally, the National Library is hereby ordered to cancel the Certificate of Registration issued to Roberto U.
Juan on March 17, 1997 over the word "Lavandera Ko," under certificate no. 97-362. Moreover, the
Intellectual Property Office is also ordered to cancel Certificate of Registration No. 4-1995-102749, Serial No.
100556, issued on October 18, 2001, covering the work LAVANDERA KO AND DESIGN, in favor of
Fernando U. Juan.
The two aforesaid government agencies are hereby requested to furnish this Court of the copy of their
cancellation.
Cost de oficio.
SO ORDERED.3
Herein petitioner elevated the case to the CA through a notice of appeal. In his appeal, petitioner contended
that a mark is different from a copyright and not interchangeable. Petitioner Fernando insisted that he is the
owner of the service mark in question as he was able to register the same with the IPO pursuant to Section
122 of R.A. No. 8293. Furthermore, petitioner Fernando argued that the RTC erred in giving credence to the
article of information it obtained from the internet stating that the Filipino folk song "Lavandera Ko" was a
composition of Suarez in 1942 rather than the actual pieces of evidence presented by the parties. As such,
according to petitioner, such information acquired by the RTC is hearsay because no one was presented to
testify on the veracity of such article.
Respondent Roberto, on the other hand, contended that the appeal should be dismissed outright for raising
purely questions of law. He further raised as a ground for the dismissal of the appeal, the failure of the
petitioner to cite the page references to the record as required in Section 13, paragraphs (a), (c), (d) and (f) of
Rule 44 of the Rules of Court and petitioner's failure to provide a statement of facts. Respondent also argued
that assuming that the Appellant's Brief complied with the formal requirements of the Rules of Court, the RTC
still did not err in dismissing the petitioner's answer with counterclaim because he cannot be declared as the
owner of "Lavandera Ko," since there is prior use of said mark by another person.
The CA, in its Decision dated May 7, 2015, dismissed the petitioner's appeal based on technical grounds,
thus:
WHEREFORE, premises considered, the instant appeal is DISMISSED for failure to comply with the
requirements of Section 13, Rule 44 and Section 1, Rule 50 of the Rules of Court.
SO ORDERED.4
Hence, the present petition after the denial of petitioner Fernando's motion for reconsideration. Petitioner
Fernando raises the following issues:
A.
WHETHER OR NOT THE DISMISSAL OF THE APPEAL BY THE COURT OF APPEALS ON PURELY
TECHNICAL GROUNDS WAS PROPER CONSIDERING THAT THE CASE BEFORE IT CAN BE
RESOLVED BASED ON THE BRIEF ITSELF.
B.
WHETHER OR NOT A MARK IS THE SAME AS A COPYRIGHT.
C.
WHETHER OR NOT FERNANDO U. JUAN IS THE OWNER OF THE MARK "LAVANDERA KO."
D.
WHETHER OR NOT AN INTERNET ARTICLE IS SUPERIOR THAN ACTUAL EVIDENCE SUBMITTED BY
THE PARTIES.5
According to petitioner Fernando, the CA should have considered that the rules are there to promote and not
to defeat justice, hence, it should have decided the case based on the merits and not dismiss the same
based on a mere technicality. The rest of the issues are similar to those that were raised in petitioner's appeal
with the CA.
In his Comment6 dated April 22, 2016, respondent Roberto insists that the CA did not commit an error in
dismissing the appeal considering that the formal requirements violated by the petitioner in the Appellant's
Brief are basic, thus, inexcusable and that petitioner did not proffer any valid or substantive reason for his
non-compliance with the rules. He further argues that there was prior use of the mark "Lavandera Ko" by
another, hence, petitioner cannot be declared the owner of the said mark despite his subsequent registration
with the IPO.
The petition is meritorious.
Rules of procedure must be used to achieve speedy and efficient administration of justice and not derail
it.7 Technicality should not be allowed to stand in the way of equitably and completely resolving the rights and
obligations of the parties.8 It is, [thus] settled that liberal construction of the rules may be invoked in situations
where there may be some excusable formal deficiency or error in a pleading, provided that the same does
not subvert the essence of the proceeding and it at least connotes a reasonable attempt at compliance with
the rules.9 In Aguam v. CA,10 this Court ruled that:
x x x Technicalities, however, must be avoided. The law abhors technicalities that impede the cause of
justice. The court's primary duty is to render or dispense justice. "A litigation is not a game of technicalities."
"Law suits, unlike duels, are not to be won by a rapier's thrust. Technicality, when it deserts its proper office
as an aid to justice and becomes its great hindrance and chief enemy, deserves scant consideration from
courts." Litigations must be decided on their merits and not on technicality. Every party litigant must be
afforded the amplest opportunity for the proper and just determination of his cause, free from the
unacceptable plea of technicalities. Thus, dismissal of appeals purely on technical grounds is frowned upon
where the policy of the court is to encourage hearings of appeals on their merits and the rules of procedure
ought not to be applied in a very rigid, technical sense; rules of procedure are used only to help secure, not
override substantial justice. It is a far better and more prudent course of action for the court to excuse a
technical lapse and afford the parties a review of the case on appeal to attain the ends of justice rather than
dispose of the case on technicality and cause a grave injustice to the parties, giving a false impression of
speedy disposal of cases while actually resulting in more delay, if not a miscarriage of justice.
In this case, this Court finds that a liberal construction of the rules is needed due to the novelty of the issues
presented. Besides, petitioner had a reasonable attempt at complying with the rules. After all, the ends of
justice are better served when cases are determined on the merits, not on mere technicality.11
The RTC, in dismissing the petition, ruled that neither of the parties are entitled to use the trade name
"Lavandera Ko" because the copyright of "Lavandera Ko", a song composed in 1942 by Santiago S. Suarez
belongs to the latter. The following are the RTC's reasons for such ruling:
The resolution of this Court - NO ONE OF THE HEREIN PARTIES HAS THE RIGHT TO USE AND ENJOY
"LAVANDERA KO"!
Based on the date taken from the internet - References: CCP encyclopedia of Philippine art, vol. 6
http://www.himig.coin.ph (http://kahimyang.info / kauswagan/articles/1420/today - in - philippine -history this
information was gathered: "In 1948, Cecil Lloyd established the first Filipino owned record company, the
Philippine Recording System, which featured his rendition of Filipino folk songs among them the "Lavandera
ko" (1942) which is a composition of Santiago S. Suarez". Thus, the herein parties had made
misrepresentation before this court, to say the least, when they declared that they had coined and created the
subject mark and name. How can the herein parties have coined and created the subject mark and work
when these parties were not yet born; when the subject mark and work had been created and used in 1942.
The heirs of Mr. Santiago S. Suarez are the rightful owners of subject mark and work - "Lavandera ko".
Therefore, the writ of injunction issued in the instant case was quite not proper, hence the same shall be lifted
and revoked. This is in consonance with the finding of this court of the origin of the subject mark and
work, e.g., a music composition of one Santiago S. Suarez in 1942.
Moreover, Section 171.1 of R.A. 8293 states: "Author" is the natural person who has created the work." And,
Section 172.1 of R.A. No. 8293 provides: Literary and artistic works, hereinafter referred to as "works", are
original intellectual creations in the literary and artistic domain protected from the moment of their creation
and shall include in particular:
(d) Letters;
(f) Musical compositions, with or without words;”
Thus, the subject mark and work was created by Mr. Santiago S. Suarez, hence, the subject mark and work
belong to him, alone.
The herein parties are just false claimants, done under oath before this court (paragraph 4 of Roberto's
affidavit, Exhibit A TRO, page 241, Vol. I and paragraph 2 of Fernando's affidavit, Exhibit 26 TRO, page 354,
Vol. I), of the original work of Mr. Santiago S. Suarez created in 1942.
Furthermore, Section 21 of R.A. 8293 declares: "Patentable Inventions - any technical solution of a problem
in any field of human activity which is new, involves an inventive step and is industrially applicable shall be
patentable. It may be, or may relate to, a product, or process, or an improvement of any of the foregoing."
Thus, the herein subject mark and work can never be patented for the simple reason that it is not an
invention. It is a title of a music composition originated from the mind of Mr. Santiago S. Suarez in 1942.
Thus, the proper and appropriate jurisprudence applicable to this instant case is the wisdom of the High Court
in the case of Pearl & Dean (Phil.), Incorporation v. Shoemart, Incorporated (G.R. No. 148222, August 15,
2003), the Supreme Court ruled: "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."
The Supreme Court concluded: "The description of the art in a book, though entitled to the benefit of
copyright, lays no foundation for an exclusive claim to the art itself. The object of the one is explanation; the
object of the other is use. The former may be secured by copyright. The latter can only be secured, if it can
be secured at all, by letters patent." (Pearl & Dean v. Shoemart, supra., citing the case of Baker v. Selden,
101 U.S. 99; 1879 U.S. Lexis 1888; 25 L. Ed. 841; 11 Otto 99, October, 1879 Term).
It is noted that the subject matter of Exhibit "5" (Annex 5) Of Fernando (IPO certificate of registration) and
Exhibit B of Roberto (Certificate of Copyright Registration) could not be considered as a literary and artistic
work emanating from the creative mind and/or hand of the herein parties for the simple reason that the
subject work was a creation of the mind of Mr. Santiago S. Suarez in 1942. Thus, neither of the herein parties
has an exclusive right over the subject work "Lavandera Ko" for the simple reason that herein parties were
not the maker, creator or the original one who conceptualized it. Section 171.1 defines the author as the
natural person who has created the work. (R.A. No. 8293). Therefore, it can be said here, then and now, that
said registrations of the word "Lavandera Ko" by the herein parties cannot be protected by the law, Republic
Act No. 8293. Section 172.2 (R.A. No. 8293) is quite crystal clear on this point, it declares: "Works are
protected by the sole fact of their creation, irrespective of their mode or form of expressions, as well as of
their content, quality and purpose." Herein parties were not the creators of the subject word. It was a creation
of Santiago S. Suarez in 1942.
Finally, in the case of Wilson Ong Ching Kian Chuan v. Court of Appeals and Lorenzo Tan (G.R. No. 130360,
August 15, 2001), the Supreme Court ruled: "A person to be entitled to a copyright must be the original
creator of the work. He must have created it by his own skill, labor and judgment without directly copying or
evasively imitating the work of another." Again, herein parties, both, miserably failed to prove and establish
on how they have created this alleged work before registering it with the National Library and the Intellectual
Property Office, hence their claim of ownership of the word "Lavandera Ko" is not conclusive or herein parties
are both great pretenders and imitators. Therefore, it is hereby declared that registration with the IPO by
Fernando is hereby cancelled, for one and many others stated herein, because of the admission of Fernando
that he coined the name from the lyrics of a song popularized in the 1950's by singer Ruben Tagalog.
Admission is admissible without need of evidence. (Section 4, Rule 129 of the Revised Rules of Court).
Considering that herein parties had made misrepresentations before this court, hence, both the herein parties
came to this court with unclean hands. Thus, no damage could be awarded to anyone of the herein parties.12
The above ruling is erroneous as it confused trade or business name with copyright.
The law on trademarks, service marks and trade names are found under Part III of Republic Act (R.A.) No.
8293, or the Intellectual Code of the Philippines, while Part IV of the same law governs copyrights.
"Lavandera Ko," the mark in question in this case is being used as a trade name or specifically, a service
name since the business in which it pertains involves the rendering of laundry services. Under Section 121.1
of R.A. No. 8293, "mark" is defined as any visible sign capable of distinguishing the goods (trademark) or
services (service mark) of an enterprise and shall include a stamped or marked container of goods. As such,
the basic contention of the parties is, who has the better right to use "Lavandera Ko" as a service name
because Section 165.213 of the said law, guarantees the protection of trade names and business names even
prior to or without registration, against any unlawful act committed by third parties. A cause of action arises
when the subsequent use of any third party of such trade name or business name would likely mislead the
public as such act is considered unlawful. Hence, the RTC erred in denying the parties the proper
determination as to who has the ultimate right to use the said trade name by ruling that neither of them has
the right or a cause of action since "Lavandera Ko" is protected by a copyright.
By their very definitions, copyright and trade or service name are different. Copyright is the right of literary
property as recognized and sanctioned by positive law.14 An intangible, incorporeal right granted by statute to
the author or originator of certain literary or artistic productions, whereby he is invested, for a limited period,
with the sole and exclusive privilege of multiplying copies of the same and publishing and selling
them.15 Trade name, on the other hand, is any designation which (a) is adopted and used by person to
denominate goods which he markets, or services which he renders, or business which he conducts, or has
come to be so used by other, and (b) through its association with such goods, services or business, has
acquired a special significance as the name thereof, and (c) the use of which for the purpose stated in (a) is
prohibited neither by legislative enactment nor by otherwise defined public policy.16
Section 172.1 of R.A. 8293 enumerates the following original intellectual creations in the literary and artistic
domain that are protected from the moment of their creation, thus:
172.1 Literary and artistic works, hereinafter referred to as "works", are original intellectual creations in the
literary and artistic domain protected from the moment of their creation and shall include in particular:
(a) Books, pamphlets, articles and other writings;
(b) Periodicals and newspapers;
(c) Lectures, sermons, addresses, dissertations prepared for oral delivery, whether or not reduced in writing
or other material form;
(d) Letters;
(e) Dramatic or dramatico-musical compositions; choreographic works or entertainment in dumb shows;
(f) Musical compositions, with or without words;
(g) Works of drawing, painting, architecture, sculpture, engraving, lithography or other works of art; models or
designs for works of art;
(h) Original ornamental designs or models for articles of manufacture, whether or not registrable as an
industrial design, and other works of applied art;
(i) Illustrations, maps, plans, sketches, charts and three-dimensional works relative to geography,
topography, architecture or science;
(j) Drawings or plastic works of a scientific or technical character;
(k) Photographic works including works produced by a process analogous to photography; lantern slides;
(l) Audiovisual works and cinematographic works and works produced by a process analogous to
cinematography or any process for making audio-visual recordings;
(m) Pictorial illustrations and advertisements;
(n) Computer programs; and
(o) Other literary, scholarly, scientific and artistic works.
As such, "Lavandera Ko," being a musical composition with words is protected under the copyright law (Part
IV, R.A. No. 8293) and not under the trademarks, service marks and trade names law (Part III, R.A. No.
8293).
In connection therewith, the RTC's basis or source, an article appearing in a website,17 in ruling that the song
entitled "Lavandera Ko" is protected by a copyright, cannot be considered a subject of judicial notice that
does not need further authentication or verification. Judicial notice is the cognizance of certain facts that
judges may properly take and act on without proof because these facts are already known to them.18 Put
differently, it is the assumption by a court of a fact without need of further traditional evidentiary support. The
principle is based on convenience and expediency in securing and introducing evidence on matters which are
not ordinarily capable of dispute and are not bona fide disputed. 19 In Spouses Latip v. Chua,20 this Court
expounded on the nature of judicial notice, thus:
Sections 1 and 2 of Rule 129 of the Rules of Court declare when the taking of judicial notice is mandatory or
discretionary on the courts, thus:
SECTION 1. Judicial notice, when mandatory. - A court shall take judicial notice, without the introduction of
evidence, of the existence and territorial extent of states, their political history, forms of government and
symbols of nationality, the law of nations, the admiralty and maritime courts of the world and their seals, the
political constitution and history of the Philippines, the official acts of the legislative, executive and judicial
departments of the Philippines, the laws of nature, the measure of time, and the geographical divisions.
SEC. 2. Judicial notice, when discretionary. - A court may take judicial notice of matters which are of public
knowledge, or are capable of unquestionable demonstration or ought to be known to judges because of their
judicial functions.
On this point, State Prosecutors v. Muro is instructive:
I. The doctrine of judicial notice rests on the wisdom and discretion of the courts. The power to take judicial
notice is to be exercised by courts with caution; care must be taken that the requisite notoriety exists; and
every reasonable doubt on the subject should be promptly resolved in the negative.
Generally speaking, matters of judicial notice have three material requisites: (1) the matter must be one of
common and general knowledge; (2) it must be well and authoritatively settled and not doubtful or uncertain;
and (3) it must be known to be within the limits of the jurisdiction of the court. The principal guide in
determining what facts may be assumed to be judicially known is that of notoriety. Hence, it can be said that
judicial notice is limited to facts evidenced by public records and facts of general notoriety.
To say that a court will take judicial notice of a fact is merely another way of saying that the usual form of
evidence will be dispensed with if knowledge of the fact can be otherwise acquired. This is because the court
assumes that the matter is so notorious that it will not be disputed. But judicial notice is not judicial
knowledge. The mere personal knowledge of the judge is not the judicial knowledge of the court, and he is
not authorized to make his individual knowledge of a fact, not generally or professionally known, the basis of
his action. Judicial cognizance is taken only of those matters which are "commonly" known.
within the territorial jurisdiction of the trial court; or (2) capable of accurate and ready determination by
resorting to sources whose accuracy cannot reasonably be questionable.
Things of "common knowledge," of which courts take judicial notice, may be matters coming to the knowledge
of men generally in the course of the ordinary experiences of life, or they may be matters which are generally
accepted by mankind as true and are capable of ready and unquestioned demonstration. Thus, facts which
are universally known, and which may be found in encyclopedias, dictionaries or other publications, are
judicially noticed, provided, they are such of universal notoriety and so generally understood that they may be
regarded as forming part of the common knowledge of every person. As the common knowledge of man
ranges far and wide, a wide variety of particular facts have been judicially noticed as being matters of
common knowledge. But a court cannot take judicial notice of any fact which, in part, is dependent on the
existence or non-existence of a fact of which the court has no constructive knowledge.
The article in the website cited by the RTC patently lacks a requisite for it to be of judicial notice to the court
because such article is not well and authoritatively settled and is doubtful or uncertain. It must be
remembered that some articles appearing in the internet or on websites are easily edited and their sources
are unverifiable, thus, sole reliance on those articles is greatly discouraged.
Considering, therefore, the above premise, this Court deems it proper to remand the case to the RTC for its
proper disposition since this Court cannot, based on the records and some of the issues raised by both
parties such as the cancellation of petitioner's certificate of registration issued by the Intellectual Property
Office, make a factual determination as to who has the better right to use the trade/business/service name,
"Lavandera Ko."
WHEREFORE, the Petition for Review on Certiorari under Rule 45 of the Rules of Court dated January 25,
2016, of petitioner Fernando U. Juan is GRANTED. Consequently, the Decision dated May 7, 2015 and
Resolution dated December 4, 2015 of the Court of Appeals are REVERSED andSET ASIDE. This Court,
however, ORDERS the REMAND of this case to the RTC for its prompt disposition.

Things of "common knowledge," of which courts take judicial notice, may be matters coming to the knowledge SO ORDERED.
of men generally in the course of the ordinary experiences of life, or they may be matters which are generally
accepted by mankind as true and are capable of ready and unquestioned demonstration. Thus, facts which
are universally known, and which may be found in encyclopedias, dictionaries or other publications, are
judicially noticed, provided they are of such universal notoriety and so generally understood that they may be
regarded as forming part of the common knowledge of every person.

We reiterated the requisite of notoriety for the taking of judicial notice in the recent case of Expertravel &
Tours, Inc. v. Court of Appeals, which cited State Prosecutors:

Generally speaking, matters of judicial notice have three material requisites: (1) the matter must be one of
common and general knowledge; (2) it must be well and authoritatively settled and not doubtful or uncertain;
and (3) it must be known to be within the limits of the jurisdiction of the court. The principal guide in
determining what facts may be assumed to be judicially known is that of notoriety. Hence, it can be said that
judicial notice is limited to facts evidenced by public records and facts of general notoriety. Moreover, a
judicially noticed fact must be one not subject to a reasonable dispute in that it is either: (1) generally known
 G.R. Nos. 211820-21, June 06, 2018

KENSONIC, INC., Petitioner, v. UNI-LINE MULTI-RESOURCES, INC., (PHIL.), Respondent.

G.R. Nos. 211834-35, June 06, 2018

UNI-LINE MULTI-RESOURCES, INC., Petitioner, v. KENSONIC, INC., Respondent.

BERSAMIN, J.:

The case concerns the cancellation of the registration of the trademark SAKURA for the goods
of Uni-Line Multi Resources, Inc. (Phils.) (Uni-Line) being sought by Kensonic, Inc. (Kensonic)
on the ground that the latter had prior use and registration of the SAKURA mark.

The Case

Under consideration are the consolidated appeals urging the review and reversal of the decision
promulgated on July 30, 20131 and the amended decision promulgated on March 19,
2014,2 whereby the Court of Appeals (CA) affirmed the decision rendered on June 11, 2012 by
the Director General of the Intellectual Property Office (IPO) upholding the cancellation of the
application of Uni-Line for the registration of the SAKURA mark for goods falling under Class 09
of the Nice International Classification of Goods (Nice Classification), and allowing the
registration of Uni-Line's SAKURA mark registration for goods falling under Class 07 and Class
11 of the Nice Classification.3

Antecedents

The CA summarized the following factual and procedural antecedents, viz.:

On June 15, 1999, Uni-Line filed an application for the registration of the mark "SAKURA" for
amplifier, speaker, cassette, cassette disk, video cassette disk, car stereo, television, digital
video disk, mini component, tape deck, compact disk charger, VHS, and tape rewinder falling
under Class 9 of the Nice International Classification of Goods. Kensonic opposed Uni-Line's
application which was docketed as IPC No. 14-2004-00160 (IPC 1). The Director of the Bureau
of Legal Affairs (BLA) rendered Decision No. 2005-01 dated November 29, 2005 finding that
Kensonic was the first to adopt and use the mark SAKURA since 1994 and thus rejecting Uni-
Line's application. On January 19, 2006, said Decision became final and executory.

While IPC Case 1 was pending, Uni-Line filed an application and was issued a certificate of
registration for the mark "SAKURA & FLOWER DESIGN" for use on recordable compact disk
(CD-R) computer, computer parts and accessories falling under Class 9. On September 7,
2006, Kensonic filed a petition for cancellation docketed as IPC No. 14-2006-00183 (IPC 2) of
Uni-Line's registration. In Decision No. 08-113 dated August 7, 2008, the BLA Director held
that Uni-Line's goods are related to Kensonic's goods and that the latter was the first user of
the mark SAKURA used on products under Class 9. The BLA Director thus cancelled Uni-Line's
THIRD DIVISION
certificate of registration. Uni-Line moved for reconsideration of the BLA Director's Decision
which is pending resolution to date. compact disk chargers, VHS and tape rewinders), Kensonic had acquired ownership of the
SAKURA mark, and should be legally protected thereon. The dispositive portion reads:
On June 6, 2002, Uni-Line filed an application for the registration of the trademark SAKURA for
use on the following: WHEREFORE, premises considered, the Verified Petition for Cancellation is hereby GRANTED.
Accordingly, Certificate of Registration No. 4-2002-004572 issued on 18 March 2006 for the
Goods Nice Classification trademark "SAKURA" in the name of Uni-Line Multi Resources, Inc. Phils., is hereby
Washing machines, high pressure washers, Class 07 ordered CANCELLED.
vacuum cleaners, floor polishers, blender,
Let the file wrapper of this case be forwarded to the Bureau of Trademark (BOT) for
electric mixer, electrical juicer
appropriate action in accordance with this Decision.
Television sets, stereo components, DVD/VCD Class 09
players, voltage regulators, portable generators, SO ORDERED.6
switch breakers, fuse
Refrigerators, air conditioners, oven toaster, Class 11 Decision of the Director General, IPO
turbo broiler, rice cooker, microwave oven,
coffee maker, sandwich/waffle maker, electric On appeal,7 the Director General of the IPO modified the decision of the BLR by upholding Uni-
stove, electric fan, hot & cold water dispenser, Line's registration of the SAKURA mark as to goods classified as Class 07 and Class 11, thereby
airpot, electric griller and electric hot pot effectively reversing the BLR, but affirmed the BLR as regards the treatment of the SAKURA
mark that covered the goods falling under Class 09. The Director General clarified that the
marks of Uni-Line and Kensonic were similar if not identical; that considering that Inter Partes
Uni-Line's application was thereafter published, and there being no opposition thereto,
Case No. 14-2004-00160 (IPC 1) already effectively ruled that the products registered by Uni-
Certificate of Registration No. 4-2002-004572 for the mark SAKURA effective March 18, 2006
Line were goods related to those covered by the registration of Kensonic, the registration of
was issued.
Uni-Line insofar as those products sought to be registered under Class 09 were concerned (i.e.,
television sets, stereo components, DVD/VCD players, voltage regulators, portable generators,
On September 7, 2006, Kensonic filed with the BLA a Petition for Cancellation of Uni-Line's
switch breakers, fuse) was correctly cancelled; that the registration of products of Uni-Line
Certificate of Registration alleging that in October 1994, it introduced the marketing of SAKURA
falling under Class 07 and Class 11 should not be cancelled because the products were different
products in the Philippines and that it owned said SAKURA products and was the first to use,
from the goods registered under Class 09 in the name of Kensonic; that there should be
introduce and distribute said products. Kensonic also alleged that in IPC 1, it opposed Uni-
evidence showing how the continued registration of the SAKURA mark of Uni-Line would cause
Line's application to register SAKURA and was already sustained by the Director General, which
damage to Kensonic; and that the goods covered by the SAKURA registration of Uni-Line and
Decision is now final and executory. Kensonic further alleged that it is the owner of a copyright
the SAKURA registration of Kensonic should be distinguished because:
for SAKURA and that since 1994, has maintained and established a good name and goodwill
over the SAKURA products.
In addition, the ordinary purchaser must be thought of, as having, and credited with, at least a
modicum of intelligence. It does not defy common sense to assert that a purchaser would be
Kensonic filed its Supplemental Petition for Cancellation and its Reply to Uni-Line's Answer. Uni-
cognizant of the product he is buying. As a general rule, an ordinary buyer does not exercise as
Line filed its Rejoinder thereto.4
much pendence in buying an article for which he pays a few centavos as he does in purchasing
Decision of the Bureau of Legal Affairs (BLA), IPO
a more valuable thing. Expensive and valuable items are normally bought only after deliberate,
comparative and analytical investigation.
After due proceedings, the BLA issued Decision No. 2008-149 dated August 11, 2008,5 whereby
it ruled in favor of Kensonic and against Uni-Line, and directed the cancellation of Registration
In this instance, the products of the Appellants under Classes 7 and 11 are home appliances
No. 4-2002-004572 of the latter's SAKURA mark. It observed that an examination of the
which are not the ordinary everyday goods the public buys and consumes. These products are
SAKURA mark of Kensonic and that of Uni-Line revealed that the marks were confusingly
not inexpensive items and a purchaser would ordinarily examine carefully the features and
similar with each other; that the goods sought to be covered by the SAKURA registration of
characteristics of the same. It is, therefore, farfetched that the purchasing public would be
Uni-Line were related to the goods of Kensonic, thereby necessitating the cancellation of the
misled or be deceived as to the source or origin of the products. Furthermore, there is nothing
registration of Uni-Line's mark; and that considering that Kensonic had used the SAKURA mark
in the records that indicate any plans by the Appellee to enter into business transactions or to
as early as 1994 in Class 09 goods (namely: amplifiers, speakers, cassette disks, video
the manufacture and distribution of goods similar to the products of the Appellants under
cassette disks, car stereos, televisions, digital video disks, mini components, tape decks,
Classes 7 and 11.

The Director General of the IPO decreed as follows:
Wherefore, premises considered, the appeal is hereby dismissed in so far as the cancellation of
the Appellant's Cert. of Reg. No. 4-2002- 004572 for goods enumerated and falling under Class
9 is concerned. However, the appeal is hereby granted in so far as the cancellation of Cert. of
Reg. No. 4-2002-004572 for goods enumerated and falling under Classes 7 and 11 is
concerned.
Accordingly, Cert. of Reg. No. 4-2002-004572 issued in favor of the Appellant for the mark
SAKURA is hereby amended. The registration of goods enumerated under Class 9, namely
television sets, stereo components, DVD/VCD players, voltage regulators, portable generators,
switch breakers, fuse is hereby cancelled.
Let a copy of this Decision as well as the records of this case be furnished and returned to the
Director of the Bureau of Legal Affairs for appropriate action. Further, let also the Director of
the Bureau of Trademarks and the library of Documentation, Information and Technology
Transfer Bureau be furnished a copy of this Decision for information, guidance, and records
purposes.
SO ORDERED.
Judgment of the CA
Both parties appealed to the CA, which promulgated its decision on July 30, 2013 dismissing
the appeal of Kensonic (C.A.-G.R. SP No. 125420) and granting Uni-Line's appeals (C.A.-G.R.
SP No. 125424). The CA upheld Kensonic's ownership of the SAKURA mark based on its
showing of its use of the mark since 1994, but ruled that despite the identical marks of
Kensonic and Uni-Line, Kensonic's goods under Class 09 were different from or unrelated to
Uni-Line's goods under Class 07 and Class 11. It observed that the protection of the law
regarding the SAKURA mark could only extend to television sets, stereo components, DVD and
VCD players but not to Uni-Line's voltage regulators, portable generators, switch breakers and
fuses due to such goods being unrelated to Kensonic's goods; that Kensonic's registration only
covered electronic audio-video products, not electrical home appliances; and that the similarity
of the marks would not confuse the public because the products were different and unrelated.
It ruled:
WHEREFORE, the Petition filed by Kensonic, Inc., in C.A.G.R. SP No. 125420 is DENIED and
the Petition filed by Uni-Line Multi Resources, Inc. (Phils.) is GRANTED.
Accordingly, the Decision dated June 11, 2012 of Director General Ricardo R. Blancaflor of the
Intellectual Property Office is MODIFIED such that Uni-Line's Appeal insofar as the cancellation
of its Certificate of Registration No. 4-2002-004572 for goods enumerated and falling under
Class 9 is GRANTED but DELETING therefrom the goods television sets, stereo components,
DVD players and VCD players. The Decision dated June 11, 2012 of the Director General is
hereby UPHELD insofar as it granted Uni-Line's Appeal on the cancellation of its Certificate of
Registration No. 4-2002-004572 for goods enumerated and falling under Class 7 and Class 11.
SO ORDERED.
Kensonic sought partial reconsideration, submitting that voltage regulators, portable
generators, switch breakers and fuse were closely related to its products; that maintaining the
two SAKURA marks would cause confusion as to the source of the goods; and that Uni-Line's
goods falling under Class 07 and Class 11 were closely related to its goods falling under Class
09.
In the assailed amended decision promulgated on March 19, 2014,11 the CA sided with
Kensonic, and reverted to the ruling by the Director General of IPO cancelling the registration
of the SAKURA mark covering all the goods of Uni-Line falling under Class 09 on the basis that
all the goods belonged to the general class of goods. The CA decreed:
WHEREFORE, the Motion for Partial Reconsideration filed by Kensonic Inc. is PARTIALLY
GRANTED. Uni-Line is prohibited from using the mark SAKURA for goods falling under Class 9,
but is allowed to use the mark SAKURA for goods falling under Classes 7 and 11. Thus, the
DENlAL of Uni-Line's Appeal insofar as the cancellation of its Certificate of Registration No. 4-
2002-004572 for goods enumerated and falling under Class 9 is UPHELD. The Decision dated
June 11, 2012 of the Director General is AFFIRMED in toto.
SO ORDERED.
Issues
Hence, this appeal by both parties.
Kensonic (G.R. Nos. 211820-21) insists that the CA erred in not considering that Uni-Line's
goods under Class 07 and Class 11 were related to its goods falling under Class 09; and that all
the agencies below were unanimous in declaring that the marks were identical, and, as such,
the use of the SAKURA marks would lead to confusion about the source of the goods.
Uni-Line (G.R. Nos. 211834-35) contends that the SAKURA mark could not be appropriated
because it simply referred to cherry blossom in Japanese and was thus a generic name that
was not copyrightable; that it was grave error for the IPO and the CA to rule that Kensonic
owned the mark; and that voltage regulators, portable generators, switch breakers and fuse
were unrelated to Kensonic's products because Uni-Line's products were not electronic.
The following issues are, therefore, to be resolved:
(1) Is the SAKURA mark capable of appropriation?
(2) Are Kensonic's goods falling under Class 09 related to UniLine's goods falling under Class 07

and Class 11?; and
(3) Are Uni-Line's goods falling under Class 9, namely: voltage regulators, portable generators,
switch breakers and fuses, related to Kensonic's goods falling under Class 9?
Ruling of the Court
The appeal of Kensonic in G.R. Nos. 211820-21 is dismissed but the petition in G.R. Nos.
211834-35 is partially granted.
I.
The SAKURA mark can be appropriated
Uni-Line's opposition to Kensonic's ownership of the SAKURA mark insists that the: SAKURA
mark is not copyrightable for being generic. Such insistence is unacceptable.
To be noted is that the controversy revolves around the SAKURA mark which is not a copyright.
The distinction is significant. A mark is any visible sign capable of distinguishing the goods
(trademark) or services (service mark) of an enterprise, and includes a stamped or marked
container of goods.13 In contrast, a copyright is the right to literary property as recognized and
sanctioned by positive law; it is an intangible, incorporeal right granted by statute to the author
or originator of certain literary or artistic productions, whereby he or she is invested, for a
specific period, with the sole and exclusive privilege of multiplying copies of the same and
publishing and selling them.14 Obviously, the SAKURA mark is not an artistic or literary work
but a sign used to distinguish the goods or services of one enterprise from those of another.
An examination of the pertinent laws also reveals that Uni-Line mistakenly argues that the
SAKURA mark was not capable of registration for being generic.
Section 123(h) of the Intellectual Property Code prohibits the registration of a trademark that
consists exclusively of signs that are generic for the goods or services that they seek to
identify. It is clear from the law itself, therefore, that what is prohibited is not having a generic
mark but having such generic mark being identifiable to the good or service. In Asia Brewery,
Inc., v. Court of Appeals,15 the Court ruled that there was no infringement of San Miguel
Brewery's Pale Pilsen trademark because Pale Pilsen could not be appropriated. The Court
explained:
The fact that the words pale pilsen are part of ABI's trademark does not constitute an
infringement of SMC's trademark: SAN MIGUEL PALE PILSEN, for "pale pilsen" are generic
words descriptive of the color ("pale"), of a type of beer ("pilsen"), which is a light bohemian
beer with a strong hops flavor that originated in the City of Pilsen in Czechoslovakia and
became famous in the Middle Ages. (Webster's Third New International Dictionary of the
English Language, Unabridged Edited by Philip Babcock Gove. Springfield, Mass.: G & C
Merriam Co., c) 1976, page 1716.) "Pilsen" is a "primarily geographically descriptive word,"
(Sec. 4, subpar. [e] Republic Act No. 166, as inserted by Sec. 2 of R.A. No. 638) hence, non-
registerable and not appropriable by any beer manufacturer. The Trademark Law provides:
"Sec. 4.... The owner of trade-mark, trade-name or service-mark used to distinguish his goods,
business or services from the goods, business or services of others shall have the right to
register the same [on the principal register], unless it:
xxx   xxx  xxx
"(e) Consists of a mark or trade-name which, when applied to or used in connection with the
goods, business or services of the applicant is merely descriptive or deceptively misdescriptive
of them, or when applied to or used in connection with the goods, business or services of the
applicant is primarily geographically descriptive or deceptively misdescriptive of them, or is
primarily merely a surname." (Emphasis supplied.)"
The words "pale pilsen" may not be appropriated by SMC for its exclusive use even if they are
part of its registered trademark: SAN MIGUEL PALE PILSEN, any more than such descriptive
words as "evaporated milk," "tomato ketchup," "cheddar cheese," "com flakes" and "cooking
oil" may be appropriated by any single manufacturer of these food products, for no other
reason than that he was the first to use them in his registered trademark. In Masso Hermanos,
S.A. vs. Director of Patents, 94 Phil. 136, 139 (1953), it was held that a dealer in shoes cannot
register "Leather Shoes" as his trademark because that would be merely descriptive and it
would be unjust to deprive other dealers in leather shoes of the right to use the same words
with reference to their merchandise. No one may appropriate generic or descriptive words.
They belong to the public domain (Ong Ai Gui vs. Director of Patents, 96 Phil. 673, 676 
[1955]).
"A word or a combination of words which is merely descriptive of an article of trade, or of its
composition, characteristics, or qualities, cannot be appropriated and protected as a trademark
to the exclusion of its use by others . . . inasmuch as all persons have an equal right to produce
and vend similar articles, they also have the right to describe them properly and to use any
appropriate language or words for that purpose, and no person can appropriate to himself
exclusively any word or expression, properly descriptive of the article, its qualities, ingredients
or characteristics, and thus limit other persons in the use of language appropriate to the
description of their manufactures, the right to the use of such language being common to all.
This rule excluding descriptive terms has also been held to apply to trade-names. As to
whether words employed fall within this prohibition, it is said that the true test is not whether
they are exhaustively descriptive of the article designated, but whether in themselves, and as
they are commonly used by those who understand their meaning, they are reasonably
indicative and descriptive of the thing intended. If they are thus descriptive, and not arbitrary,
they cannot be appropriated from general use and become the exclusive property of anyone.
(52 Am. Jur. 542-543.)
 
". . . Others may use the same or similar descriptive word in connection with their own wares,
provided they take proper steps to prevent the public being deceived. (Richmond Remedies Co.
vs. Dr. Miles Medical Co., 16 E. [2d] 598.)
". . . A descriptive word may be admittedly distinctive, especially if the user is the first creator
of the article. It will, however, be denied protection, not because it lacks distinctiveness, but
rather because others are equally entitled to its use. (2 Callman, Unfair Competition and
Trademarks, pp. 869-870.)"
This, however, is not the situation herein. Although SAKURA refers to the Japanese flowering
cherry16 and is, therefore, of a generic nature, such mark did not identify Kensonic's goods
unlike the mark in Asia Brewery, Inc., v. Court of Appeals. Kensonic's DVD or VCD players and
other products could not be identified with cherry blossoms. Hence, the mark can be
appropriated.
Kensonic's prior use of the mark since 1994 made it the owner of the mark, and its ownership
cannot anymore be challenged at this stage of the proceedings. Seeking the review of
Kensonic's ownership would entail the examination of facts already settled by the lower
tribunals. Uni-Line's challenge to the ownership of the SAKURA mark should stop here because
the Court cannot act on a factual matter in this appeal by petition for review on certiorari,
which is limited to the consideration of questions of law. Section 1, Rule 45 of the Rules of
Court specifically so provides:
Section 1. Filing of petition with Supreme Court. - A party desiring to appeal by certiorari from
a judgment or final order or resolution of the Court of Appeals, the Sandiganbayan, the Court
of Tax Appeals, the Regional Trial Court or other courts whenever authorized by law, may file
with the Supreme Court a verified petition for review on certiorari. The petition may include an
application for a writ of preliminary injunction or other provisional remedies and shall raise only
questions of law which must be distinctly set forth. The petitioner may seek the same
provisional remedies by verified motion filed in the same action or proceeding lat any time
during its pendency.
The distinction between a question of law and a question of fact is well defined. According
to Tongonan Holdings and Development Corporation v. Escaño, Jr.:
A question of law arises when there is doubt as to what the law is on a certain state of facts,
while there is a question of fact when the doubt arises as to the truth or falsity of the alleged
facts. For a question to be one of law, the same must not involve an examination of the
probative value of the evidence presented by the litigants or any of them. The resolution of the
issue must rest solely on what the law provides on the given set of circumstances. Once it is
clear that the issue invites a review of the evidence presented, the question posed is one of
fact. Thus, the test of whether a question is one of law or of fact is not the appellation given to
such question by the party raising the same; rather, it is whether the appellate court can
determine the issue raised without reviewing or evaluating the evidence, in which case, it is a
question of law; otherwise it is a question of fact.
It is timely to remind, too, that the Court is not a trier of facts. Hence, the factual findings of
the quasi-judicial body like the IPO, especially when affirmed by the CA, are binding on the
Court.18 Jurisprudence has laid down certain exceptions to the rule of bindingness,19 but, alas,
Uni-Line did not discharge its burden to show how its urging for a review of the factual findings
came within any of the exceptions.
II.
Uni-Line's goods classified under Class 07 and Class 11 were not related to
Kensonic's goods registered under Class 09
The CA did not err in allowing the registration of Uni-Line's products falling under Class 07 and
Class 11, for, indeed, those products - as found by the lower tribunals were unrelated to the
goods of Kensonic registered under Class 09.
Still, Kensonic contends that the goods of Uni-Line classified under Class 07 and Class 11 were
covered by the prohibition from registration for being within the normal potential expansion of
Kensonic.
The contention is unwarranted.
The prohibition under Section 123 of the Intellectual Property Code extends to goods that are
related to the registered goods, not to goods that the registrant may produce in the future. To
allow the expansion of coverage is to prevent future registrants of goods from securing a
trademark on the basis of mere possibilities and conjectures that may or may not occur at all.
Surely, the right to a trademark should not be made to depend on mere possibilities and
conjectures.
In Mighty Corporation v. E. & J. Gallo Winery,20 the Court has identified the different factors by
which to determine whether or not goods are related to each other for purposes of registration:
Non-competing goods may be those which, though they are not in actual competition, are so
related to each other that it can reasonably be assumed that they originate from one
manufacturer, in which case, confusion of business can arise out of the use of similar marks.
They may also be those which, being entirely unrelated, cannot be assumed to have a common
source; hence, there is no confusion of business, even though similar marks are used. Thus,
there is no trademark infringement if the public does not expect the plaintiff to make or sell the
same class of goods as those made or sold by the defendant.
In resolving whether goods are related, several factors come into play:
(a) the business (and its location) to which the goods belong
(b) the class of product to which the goods belong
(c) the product's quality, quantity, or size, including the nature of the package, wrapper or
container
(d) the nature and cost of the articles
 (e) the descriptive properties, physical attributes or essential characteristics with reference to their equipment subclass, but Uni-Line's goods pertained to the apparatus and devices for controlling
form, composition, texture or quality the distribution of electricity sub-class. Also, the Class 09 goods of Kensonic were final products
(f) the purpose of the goods but Uni-Line's Class 09 products were spare parts. In view of these distinctions, the Court
agrees with Uni-Line that its Class 09 goods were unrelated to the Class 09 goods of Kensonic.
(g) whether the article is bought for immediate consumption, that is, day-to-day household items
(h) the fields of manufacture WHEREFORE, the Court DENIES the petition for review on certiorari in G.R. No. 211820-
(i) the conditions under which the article is usually purchased and 21; PARTIALLY GRANTS the petition for review on certiorari in G.R. No. 211834-
(j) the channels of trade through which the goods flow, how they are distributed, marketed, 35; REVERSES and SETS ASIDE the amended decision promulgated on March 19,
displayed and sold. (Citations omitted) 2014; PARTIALLY REINSTATES the decision promulgated on July 30, 2013 insofar as it
allowed the registration by Uni-Line Multi-Resources, Inc. under the SAKURA mark of its
An examination of the foregoing factors reveals that the goods of Uni-Line were not related to voltage regulators, portable generators, switch breakers and fuses; and ORDERS Kensonic,
the goods of Kensonic by virtue of their differences in class, the descriptive attribues, the Inc. to pay the costs of suit.
purposes and the conditions of the goods.
SO ORDERED.
In Taiwan Kolin Corporation, Ltd. v. Kolin Electronics, Co., Inc.,21 the Court has opined tht the
mere fact that goods belonged to the same class does not necessarily mean that they are
related; and that the factors listed in Mighty Corporation v. E. & J. Gallo Winery should be
taken into consideration, to wit:

As mentioned, the classification of the products under the NCL is merely part and parcel of the
factors to be considered in ascertaining whether the goods are related. It is not sufficient to
state that the goods involved herein are electronic products under Class 9 in order to establish
relatedness petween the goods, for this only accounts for one of many considerations
enumerated in Mighty Corporation. Xxx

Clearly then, it was erroneous for respondent to assume over the CA to condude that all
electronic products are related and that the coverage of one electronic product necessarily
precludes the registration of a similar; mark over another. In this digital age wherein electronic
products have not only diversified by leaps and bounds, and are geared towards
interoperability, it is difficult to assert readily, as respondent simplistically did, that all devices
that require plugging into sockets are necessarily related goods.

It bears to stress at this point that the list of products included in Class 9 can be sub-
categorized into five (5) classifications, namely: (1) apparatus and instruments for scientific or
research purposes, (2) information technology and audiovisual equipment, (3) apparatus and
devices for controlling the distribution and use of electricity, (4) optical apparatus and
instruments, and (5) safety equipment. From this subclassification, it becomes apparent that
petitioner's products, i.e., televisions and DVD players, belong to audiovisual equipment, while
that of respondent, consisting of automatic voltage regulator, converter, recharger, stereo
booster, AC-DC regulated power supply, step-down transformer, and PA amplified AC-DC,
generally fall under devices for controlling the distribution and use of electricity.

Based on the foregoing pronouncement in Taiwan Kolin Corporation, Ltd. v. Kolin Electronics,
Co., Inc., there are other sub-classifications present even if the goods are classified under Class
09. For one, Kensonic's goods belonged to the information technology and audiovisual