TAIWAN KOLIN CORPORATION, LTD., Petitioner, v. KOLIN ELECTRONICS CO., INC., Respondent.

DECISION
VELASCO JR., J.:
Nature of the Case
Before the Court is a petition for review under Rule 45 of the Rules of Court interposed by petitioner Taiwan Kolin
Corporation, Ltd. (Taiwan Kolin), assailing the April 30, 2013 Decision 1 of the Court of Appeals (CA) in CA-G.R. SP No.
122565 and its subsequent November 6, 2013 Resolution. 2 The assailed issuances effectively denied petitioners
trademark application for the use of KOLIN on its television and DVD players.
chanroblesvirtuallawlibrary

The Facts
On February 29, 1996, Taiwan Kolin filed with the Intellectual Property Office (IPO), then Bureau of Patents,
Trademarks, and Technology Transfer, a trademark application, docketed as Application No. 4-1996-106310, for the
use of KOLIN on a combination of goods, including colored televisions, refrigerators, window-type and split-type air
conditioners, electric fans and water dispensers. Said goods allegedly fall under Classes 9, 11, and 21 of the Nice
Classification
(NCL).
Application No. 4-1996-106310 would eventually be considered abandoned for Taiwan Kolins failure to respond to
IPOs Paper No. 5 requiring it to elect one class of good for its coverage. However, the same application was
subsequently revived through Application Serial No. 4-2002-011002, 3 with petitioner electing Class 9 as the subject of
its application, particularly: television sets, cassette recorder, VCD Amplifiers, camcorders and other audio/video
electronic equipment, flat iron, vacuum cleaners, cordless handsets, videophones, facsimile machines, teleprinters,
cellular phones and automatic goods vending machine. The application would in time be duly published. 4

cralawred

On July 13, 2006, respondent Kolin Electronics Co., Inc. (Kolin Electronics) opposed petitioners revived application,
docketed as Inter Partes Case No. 14-2006-00096. As argued, the mark Taiwan Kolin seeks to register is identical, if
not confusingly similar, with its KOLIN mark registered on November 23, 2003, covering the following products under
Class 9 of the NCL: automatic voltage regulator, converter, recharger, stereo booster, AC-DC regulated power supply,
step-down

transformer,

and

PA

AC-DC. 5

amplified

cralawre d

To digress a bit, Kolin Electronics KOLIN registration was, as it turns out, the subject of a prior legal dispute between
the parties in Inter Partes Case No. 14-1998-00050 before the IPO. In the said case, Kolin Electronics own application
was opposed by Taiwan Kolin, being, as Taiwan Kolin claimed, the prior registrant and user of the KOLIN trademark,
having registered the same in Taipei, Taiwan on December 1, 1988. The Bureau of Legal Affairs of the IPO (BLA-IPO),
however, did not accord priority right to Taiwan Kolins Taipei registration absent evidence to prove that it has already
used the said mark in the Philippines as early as 1988. On appeal, the IPO Director General affirmed the BLA-IPOs
Decision. Taiwan Kolin elevated the case to the CA, but without injunctive relief, Kolin Electronics was able to register
the KOLIN trademark on November 23, 2003 for its products. 6 Subsequently, the CA, on July 31, 2006, affirmed 7 the
Decision
of
the
Director
General.
In answer to respondents opposition in Inter Partes Case No. 14-2006-00096, petitioner argued that it should be
accorded the benefits of a foreign-registered mark under Secs. 3 and 131.1 of Republic Act No. 8293, otherwise known
as the Intellectual Property Code of the Philippines (IP Code); 8 that it has already registered the KOLIN mark in the
Peoples Republic of China, Malaysia and Vietnam, all of which are parties to the Paris Convention for the Protection of
Industrial Property (Paris Convention) and the Agreement on Trade-Related Aspects of Intellectual Property Rights
(TRIPS);and that benefits accorded to a well-known mark should be accorded to petitioner. 9

cralawre d

Ruling of the BLA-IPO

By Decision10 dated August 16, 2007, the BLA-IPO denied petitioners application disposing as follows:

chanRoblesvirtualLawlibrary

In view of all the foregoing, the instant Opposition is as, it is hereby SUSTAINED. Accordingly,
application bearing Serial No. 4-1996-106310 for the mark KOLIN filed in the name of TAIWAN

KOLIN., LTD. on February 29, 1996 for goods falling under Class 09 of the International Classification of
Goods such as cassette recorder, VCD, woofer, amplifiers, camcorders and other audio/video electronic
equipment, flat iron, vacuum cleaners, cordless handsets, videophones, facsimile machines, teleprinters,
cellular phones, automatic goods vending machines and other electronic equipment is herebyREJECTED.
Let the file wrapper of KOLIN, subject of this case be forwarded to the Bureau of Trademarks (BOT)
for
appropriate
action
in
accordance
with
this
Decision.
SO ORDERED.

cralawlawlibrary

Citing Sec. 123(d) of the IP Code, 11 the BLA-IPO held that a mark cannot be registered if it is identical with a
registered mark belonging to a different proprietor in respect of the same or closely-related goods. Accordingly,
respondent, as the registered owner of the mark KOLIN for goods falling under Class 9 of the NCL, should then be
protected against anyone who impinges on its right, including petitioner who seeks to register an identical mark to be
used on goods also belonging to Class 9 of the NCL. 12 The BLA-IPO also noted that there was proof of actual confusion
in the form of consumers writing numerous e-mails to respondent asking for information, service, and complaints
about

products.13

petitioners

cralawre d

Petitioner moved for reconsideration but the same was denied on January 26, 2009 for lack of merit. 14Thus, petitioner
appealed the above Decision to the Office of the Director General of the IPO.
chanroblesvirtuallawlibrary

Ruling of the IPO Director General

On November 23, 2011, the IPO Director General rendered a Decision 15 reversing that of the BLA-IPO in the following
wise:
chanRoblesvirt ualLawlibrary

Wherefore, premises considered, the appeal is hereby GRANTED. The Appellants Trademark Application
No. 4-1996-106310 is hereby GIVEN DUE COURSE subject to the use limitation or restriction for the
goods television and DVD player. Let a copy of this Decision as well as the trademark application and
records be furnished and returned to the Director of the Bureau of Legal Affairs for appropriate action.
Further, let the Director of the Bureau of Trademarks and the library of the Documentation, Information
and Technology Transfer Bureau be furnished a copy of this Decision for information, guidance, and
records
purposes.
SO ORDERED.

cralawlawlibrary

In so ruling, the IPO Director General ratiocinated that product classification alone cannot serve as the decisive factor
in the resolution of whether or not the goods are related and that emphasis should be on the similarity of the products
involved and not on the arbitrary classification or general description of their properties or characteristics. As held, 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

Aggrieved, respondent elevated the case to the CA.

others

on

articles

of

different

description. 16

cralawred

chanroblesvirtuallawlibrary

Ruling of the Court of Appeals

In its assailed Decision, the CA found for Kolin Electronics, on the strength of the following premises: (a) the mark
sought to be registered by Taiwan Kolin is confusingly similar to the one already registered in favor of Kolin
Electronics; (b) there are no other designs, special shape or easily identifiable earmarks that would differentiate the
products of both competing companies; 17 and (c) the intertwined use of television sets with amplifier, booster and
voltage regulator bolstered the fact that televisions can be considered as within the normal expansion of Kolin
Electronics,18 and is thereby deemed covered by its trademark as explicitly protected under Sec. 138 19 of the IP
Code.20 Resultantly, the CA granted respondents appeal thusly:

chanRoblesvirtualLawlibrary

WHEREFORE, the appeal is GRANTED. The November 23, 2011 Decision of the Director General of the
Intellectual Property Office in Inter Partes Case No. 14-2006-0096 isREVERSED and SET ASIDE. The
September 17, 2007 Decision of the Bureau of Legal Affairs of the same office is REINSTATED.

SO ORDERED.

cralawlawlibrary

Petitioner moved for reconsideration only to be denied by the CA through its equally assailed November 6, 2013
Resolution. Hence, the instant recourse.
chanroblesvirtuallawlibrary

The Issue
The primordial issue to be resolved boils down to whether or not petitioner is entitled to its trademark registration of
KOLIN over its specific goods of television sets and DVD players. Petitioner postulates, in the main, that its goods are
not closely related to those of Kolin Electronics. On the other hand, respondent hinges its case on the CAs findings that
its and petitioners products are closely-related. Thus, granting petitioners application for trademark registration,
according to respondent, would cause confusion as to the public.
The Courts Ruling
The

petition

Identical
products

is

marks
from

impressed
may

with

be

registered

the

same

merit.
for
classification

To bolster its opposition against petitioners application to register trademark KOLIN, respondent maintains that the
element of mark identity argues against approval of such application,quoting the BLA IPOs ruling in this regard: 21

cralawred

Indubitably, Respondent-Applicants [herein petitioner] mark is identical to the registered mark of herein
Opposer [herein respondent] and the identical mark is used on goods belonging to Class 9 to which
Opposers goods are also classified. On this point alone, Respondent-Applicants application should
already be denied.
cralawlawlibrary

The

argument

is

specious.

The parties admit that their respective sets of goods belong to Class 9 of the NCL, which includes the following: 22
Class

cralawre d

Scientific, nautical, surveying, photographic, cinematographic, optical, weighing, measuring, signalling,

checking (supervision), life-saving and teaching apparatus and instruments; apparatus and instruments
for conducting, switching, transforming, accumulating, regulating or controlling electricity; apparatus for
recording, transmission or reproduction of sound or images; magnetic data carriers, recording discs;
compact discs, DVDs and other digital recording media; mechanisms for coin-operated apparatus; cash
registers, calculating machines, data processing equipment, computers; computer software; fireextinguishing apparatus.
cralawlawlibrary

But mere uniformity in categorization, by itself, does not automatically preclude the registration of what appears to be
an identical mark, if that be the case. In fact, this Court, in a long line of cases,has held that such circumstance does
not necessarily result in any trademark infringement. The survey of jurisprudence cited in Mighty Corporation v. E. & J
Gallo Winery23 is enlightening on this point:

chanRoblesvirtualLawlibrary

(a) in Acoje Mining Co., Inc. vs. Director of Patents,24 we ordered the approval of
Acoje Minings 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, 25 we

upheld the Patent Directors registration of the same trademark CAMIA for Ng
Sams ham under Class 47, despite Philippine Refining Companys 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,26we dismissed Hickoks petition to cancel private respondents HICKOK
trademark registration for its Marikina shoes as against petitioners earlier
registration of the same trademark for handkerchiefs, briefs, belts and
wallets.
cralawlawlibrary

Verily, whether or not the products covered by the trademark sought to be registered by Taiwan Kolin, on the one
hand, and those covered by the prior issued certificate of registration in favor of Kolin Electronics, on the other, fall
under the same categories in the NCL is not the sole and decisive factor in determining a possible violation of Kolin
Electronics intellectual property right should petitioners application be granted. It is hornbook doctrine, as held in the
above-cited cases, that emphasis should be on the similarity of the products involved and not on the arbitrary
classification or general description of their properties or characteristics. The mere fact that one person has adopted
and used a trademark on his goods would not, without more, prevent the adoption and use of the same trademark by
others on unrelated articles of a different kind.27

cralawred

The CA erred in denying petitioners

registration application
Respondent next parlays the idea of relation between products as a factor militating against petitioners application.
Citing Esso Standard Eastern, Inc. v. Court of Appeals,28 respondent argues that the goods covered by petitioners
application and those covered by its registration are actually related belonging as they do to the same class or have
the same physical characteristics with reference to their form, composition, texture, or quality, or if they serve the
same purpose. Respondent likewise draws parallelisms between the present controversy and the following cases: 29

cralawred

(a) In Arce & Sons, Inc. vs. Selecta Biscuit Company, 30 biscuits were held related
to milk because they were both food products;
(b) In Chua Che vs. Phil. Patents Office, 31 soap and perfume, lipstick and nail
polish are held to be similarly related because they are common household
items;
(c) In Ang vs. Teodoro,32 the trademark Ang Tibay for shoes and slippers was
disallowed to be used for shirts and pants because they belong to the same
general class of goods; and
(d) In Khe vs. Lever Bros. Co.,33 soap and pomade, although non-competitive,
were held to be similar or belong to the same class, since both are toilet
articles.
cralawlawlibrary

Respondent avers that Kolin Electronics and Taiwan Kolins products are closely-related not only because both fall
under Class 9 of the NCL, but mainly because they both relate to electronic products, instruments, apparatus, or
appliances.34 Pushing the point, respondent would argue that Taiwan Kolin and Kolin Electronics goods are inherently
similar in that they are all plugged into electric sockets and perform a useful function. 35 Furthermore, respondent

echoes the appellate courts ratiocination in denying petitioners application, viz: 36

cralawred

Significantly, Kolin Electronics goods (automatic voltage regulator; converter; recharger; stereo booster;
AC-DC regulated power supply; step-down transformer; and PA amplified AC-DC) and Taiwan Kolins
television sets and DVD players are both classified under class 9 of the NICE agreement. At first glance, it
is also evident that all these goods are generally described as electrical devices.x x x [T]he goods of both
Kolin Electronics and Taiwan Kolin will inevitably be introduced to the public as KOLIN products and will
be offered for sale in the same channels of trade. Contrary to Taiwan Kolins claim, power supply as well
as audio and stereo equipment like booster and amplifier are not only sold in hardware and electrical
shops. These products are commonly found in appliance stores alongside television sets and DVD players.
With the present trend in todays entertainment of having a home theater system, it is not unlikely to see
a stereo booster, amplifier and automatic voltage regulator displayed together with the television sets
and DVD players. With the intertwined use of these products bearing the identical KOLIN mark, the
ordinary intelligent consumer would likely assume that they are produced by the same manufacturer.
In sum, the intertwined use, the same classification of the products as class 9 under the NICE
Agreement, and the fact that they generally flow through the same channel of trade clearly
establish that Taiwan Kolins television sets and DVD players are closely related to Kolin
Electronics goods. As correctly pointed out by the BLA-IPO, allowing Taiwan Kolins registration
would only confuse consumersas to the origin of the products they intend to purchase. Accordingly,
protection should be afforded to Kolin Electronics, as the registered owner of the KOLIN
trademark.37(emphasis added)
cralawlawlibrary

The CAs approach and reasoning to arrive at the assailed holding that the approval of petitioners application is likely
to cause confusion or deceive fail to persuade.
The products covered by petitioners
application and respondents
registration are unrelated
A certificate of trademark registration confers upon the trademark owner the exclusive right to sue those who have
adopted a similar mark not only in connection with the goods or services specified in the certificate, but also with those
that are related thereto.38

cralawred

In resolving one of the pivotal issues in this casewhether or not the products of the parties involved are relatedthe
doctrine in Mighty Corporation is authoritative. There, the Court held that the goods should be tested against several
factors before arriving at a sound conclusion on the question of relatedness. Among these are:
chanRoblesvirt ualLawlibrary

(a) the business (and its location) to which the goods belong;
(b) the class of product to which the goods belong;
(c) the products 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 form,
composition, texture or quality;
(f) the purpose of the goods;
(g) whether the article is bought for immediate consumption, that is, day-to-day household items;
(h) the fields of manufacture;
(i) the conditions under which the article is usually purchased; and
(j) the channels of trade through which the goods flow, how they are distributed, marketed, displayed
and sold.39
cralawlawlibrary

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 between the goods, for this only accounts for one of many
considerations enumerated in Mighty Corporation. In this case, credence is accorded to petitioners assertions that:40

cralawre d

a. Taiwan Kolins goods are classified as home appliances as opposed to Kolin Electronics goods which are power
supply and audio equipment accessories;
ChanRoblesVirtualawlibrary

b. Taiwan Kolins television sets and DVD players perform distinct function and purpose from Kolin Electronics
power supply and audio equipment; and

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

Clearly then, it was erroneous for respondent to assume over the CA to conclude 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 41 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.42From this sub-classification, it becomes apparent that
petitioners products, i.e., televisions and DVD players, belong to audiovisiual equipment, while that of respondent,
consisting of automatic voltage regulator, converter, recharger, stereo booster, AC-DC regulated power supply, stepdown transformer, and PA amplified AC-DC, generally fall under devices for controlling the distribution and use of
electricity.
The ordinarily intelligent buyer
is not likely to be confused
In trademark cases, particularly in ascertaining whether one trademark is confusingly similar to another, no rigid set
rules can plausible be formulated. Each case must be decided on its merits, with due regard to the goods or services
involved, the usual purchasers character and attitude, among others. In such cases, even more than in any other
litigation, precedent must be studied in the light of the facts of a particular case. That is the reason why in trademark
cases, jurisprudential precedents should be applied only to a case if they are specifically in point. 43

cralawred

For a clearer perspective and as matter of record, the following image on the left 44 is the trademark applied for by
petitioner, while the image juxtaposed to its right45 is the trademark registered by respondent:
(please see image in G.R. No. 209843 page 10)
While both competing marks refer to the word KOLIN written in upper case letters and in bold font, the Court at once
notes the distinct visual and aural differences between them: Kolin Electronics mark is italicized and colored black
while that of Taiwan Kolin is white in pantone red color background. The differing features between the two, though
they
may
appear
minimal,
are
sufficient
to
distinguish
one
brand
from
the
other.
It cannot be stressed enough that the products involved in the case at bar are, generally speaking, various kinds of
electronic products. These are not ordinary consumable household items, like catsup, soy sauce or soap which are of
minimal cost.46 The products of the contending parties are relatively luxury items not easily considered affordable.
Accordingly, the casual buyer is predisposed to be more cautious and discriminating in and would prefer to mull over
his purchase. Confusion and deception, then, is less likely. 47 As further elucidated in Del Monte Corporation v. Court of
Appeals:48

cralawred

x x x Among these, what essentially determines the attitudes of the purchaser, specifically his inclination
to be cautious, is the cost of the goods. To be sure, a person who buys a box of candies will not exercise
as much care as one who buys an expensive watch. As a general rule, an ordinary buyer does not
exercise as much prudence in buying an article for which he pays a few centavos as he does in
purchasing a more valuable thing.Expensive and valuable items are normally bought only after
deliberate, comparative and analytical investigation. But mass products, low priced articles in
wide use, and matters of everyday purchase requiring frequent replacement are bought by the
casual consumer without great care x x x.(emphasis added)
cralawlawlibrary

Respondent has made much reliance on Arce & Sons, Chua Che, Ang, and Khe, oblivious that they involved common
household itemsi.e., biscuits and milk, cosmetics, clothes, and toilet articles, respectivelywhereas the extant case
involves luxury items not regularly and inexpensively purchased by the consuming public. In accord with common

empirical experience, the useful lives of televisions and DVD players last for about five (5) years, minimum, making
replacement purchases very infrequent. The same goes true with converters and regulators that are seldom replaced
despite the acquisition of new equipment to be plugged onto it. In addition, the amount the buyer would be parting
with cannot be deemed minimal considering that the price of televisions or DVD players can exceed todays monthly
minimum wage.In light of these circumstances, it is then expected that the ordinary intelligent buyer would be more
discerning when it comes to deciding which electronic product they are going to purchase, and it is this standard which
this Court applies here in in determining the likelihood of confusion should petitioners application be granted.
To be sure, the

extant

case

is reminiscent

of Emerald

Garment

Manufacturing

Corporation

v. Court

of

Appeals,49 wherein the opposing trademarks are that of Emerald Garment Manufacturing Corporations Stylistic Mr.
Lee and H.D. Lees LEE. In the said case, the appellate court affirmed the decision of the Director of Patents denying
Emerald Garments application for registration due to confusing similarity with H.D. Lees trademark. This Court,
however, was of a different beat and ruled that there is no confusing similarity between the marks, given that the
products covered by the trademark, i.e., jeans, were,at that time, considered pricey, typically purchased by intelligent
buyers familiar with the products and are more circumspect, and, therefore, would not easily be deceived. As held:
chanRoblesvirt ualLawlibrary

Finally, in line with the foregoing discussions, more credit should be given to the ordinary purchaser.
Cast in this particular controversy, the ordinary purchaser is not the completely unwary consumer but is
the
ordinarily
intelligent
buyer
considering
the
type
of
product
involved.
The definition laid down in Dy Buncio v. Tan Tiao Bok50is better suited to the present case. There, the
ordinary purchaser was defined as one accustomed to buy, and therefore to some extent
familiar with, the goods in question. The test of fraudulent simulation is to be found in the likelihood
of the deception of some persons in some measure acquainted with an established design and desirous of
purchasing the commodity with which that design has been associated. The test is not found in the
deception, or the possibility of deception, of the person who knows nothing about the design which has
been counterfeited, and who must be indifferent between that and the other. The simulation, in order
to be objectionable, must be such as appears likely to mislead the ordinary intelligent buyer
who has a need to supply and is familiar with the article that he seeks to
purchase.51 (emphasis added)
cralawlawlibrary

Consistent with the above ruling, this Court finds that the differences between the two marks, subtle as they may be,
are sufficient to prevent any confusion that may ensue should petitioners trademark application be granted.As held
in Esso Standard Eastern, Inc.:52

cralawre d

Respondent court correctly ruled that considering the general appearances of each mark as a whole, the
possibility of any confusion is unlikely. A comparison of the labels of the samples of the goods submitted
by the parties shows a great many differences on the trademarks used. As pointed out by respondent
court in its appealed decision, (A) witness for the plaintiff, Mr. Buhay, admitted that the color of the
ESSO used by the plaintiff for the oval design where the blue word ESSO is contained is the distinct and
unique kind of blue. In his answer to the trial courts question, Mr. Buhay informed the court that the
plaintiff never used its trademark on any product where the combination of colors is similar to the label of
the Esso cigarettes, and Another witness for the plaintiff, Mr. Tengco, testified that generally, the
plaintiffs trademark comes all in either red, white, blue or any combination of the three colors. It is to be
pointed out that not even a shade of these colors appears on the trademark of the appellants cigarette.
The
only
color
that
the
appellant
uses
in
its
trademark
is
green.
Even the lower court, which ruled initially for petitioner, found that a noticeable difference between the
brand ESSO being used by the defendants and the trademark ESSO of the plaintiff is that the former has
a rectangular background, while in that of the plaintiff the word ESSO is enclosed in an oval
background.
cralawlawlibrary

All told, We are convinced that petitioners trademark registration not only covers unrelated good, but is also incapable
of deceiving the ordinary intelligent buyer. The ordinary purchaser must be thought of as having, and credited with, at
least a modicum of intelligence to be able to see the differences between the two trademarks in question. 53
Questions

of

fact

may

still

be

cralawred

entertained

On a final note, the policy according factual findings of courts a quo great respect, if not finality, is not binding where

they have overlooked, misapprehended, or misapplied any fact or circumstance of weight and substance. 54 So it must
be here; the nature of the products involved materially affects the outcome of the instant case. A reversal of the
appellate
courts
Decision
is
then
in
order.
WHEREFORE, in view of the foregoing, the petition is hereby GRANTED. The Decision and the Resolution of the Court
of Appeals in CA-G.R. SP No. 122565, dated April 30, 2013 and November 6, 2013, respectively, are
hereby REVERSED and SET ASIDE. Accordingly, the Decision of the Intellectual Property Office Director General in
Inter
Partes
Case
No.
14-2006-00096,
dated
November
23,
2011,
is
hereby REINSTATED.
SO

ORDERED.

Peralta, Villarama, Jr., Reyes, and Jardeleza, JJ., concur.

Endnotes:

Rollo, pp. 47-58. Penned by Associate Justice Pedro B. Corales and concurred in by Associate Justices
Sesinando
E.
Villon
and
Florito
S.
Macalino.
2

Id.

Filed

at
on

62-63.

December

27,

2002.

Rollo, p.

Id.

Id.

49.

at

49-50.

Id. at 50; citing the Motion for Reconsideration filed by Taiwan Kolin before the CA in CA-G.R. SP No.
80641 entitled Taiwan Kolin Corporation, Ltd. v. Kolin Electronics Co., Inc., CA rollo, pp.854-868.
8

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 131. Priority Right. - 131.1. An application for registration of a mark filed in the Philippines by a
person referred to in Section 3, and who previously duly filed an application for registration of the same
mark in one of those countries, shall be considered as filed as of the day the application was first filed in
the
foreign
country.
9Rollo,
10

p.

Id.

at

11Section

119-133.

Penned

123. Registrability.

- 123.1.

by
A

50.
Director
mark

Estrellita

cannot

be

Beltran-Abelardo.
registered

if

it:
x

(d) Is identical with a registered mark belonging to a different proprietor or a mark with an earlier filing
or
priority
date,
in
respect
of:
(i)
(ii)
(iii)
12

If

Rollo,

it

The
same
Closely
related
nearly resembles such a

goods
goods
mark as to be
pp.

or
or
likely to

services,
services,
deceive or cause

or
or
confusion.
131-132.

cralawlawlibrary

13

Id.

14

Id.

15

Id.

16

Id.

at

70.

17

Id.

at

55.

at

51.

at
at

64-71.

Penned

by

135-137.

Director

General

Ricardo

R.

Blancaflor.

18

Citing McDonalds Corporationv. L.C. Big Mak Burger, Inc., G.R. No. 143993, August 18, 2004, 437
SCRA
10.
19

Sec. 138. Certificates of Registration. A certificate of registration of a mark shall beprima

facie evidence of the validity of the registration, the registrants ownership of the mark, and of the
registrants exclusive right to use the same in connection with the goods or services and those that are
related thereto specified in the certificate.
ROBERTO CO, Petitioner, v. KENG HUAN JERRY YEUNG AND EMMA YEUNG, Respondents.
RESOLUTION
PERLAS-BERNABE, J.:
Before the Court is a petition for review on certiorari1 assailing the Decision2 dated September 16, 2013 and the
Resolution3 dated May 29, 2014 of the Court of Appeals (CA) in CA-G.R. CV No. 93679 which affirmed the
Decision4 dated October 27, 2008 of the Regional Trial Court of Quezon City, Branch 90 (RTC), finding petitioner
Roberto Co (Co), among others, guilty of unfair competition and, thus, liable for damages to respondents KengHuan
Jerry Yeung and Emma Yeung (Sps. Yeung).
The Facts
At the core of the controversy is the product Greenstone Medicated Oil Item No. 16 (Greenstone) which is
manufactured by Greenstone Pharmaceutical, a traditional Chinese medicine manufacturing firm based in Hong Kong
and owned by KengHuan Jerry Yeung (Yeung), and is exclusively imported and distributed in the Philippines by Taka
Trading

owned

by

Yeungs

wife,

Emma

(Emma).5

Yeung

cralawred

On July 27, 2000, Sps. Yeung filed a civil complaint for trademark infringement and unfair competition before the RTC
against Ling Na Lau, her sister Pinky Lau (the Laus), and Co for allegedly conspiring in the sale of counterfeit
Greenstone products to the public. In the complaint, Sps. Yeung averred that on April 24, 2000, Emmas brother, Jose
Ruivivar III (Ruivivar), bought a bottle of Greenstone from Royal Chinese Drug Store (Royal) in Binondo, Manila,
owned by Ling Na Lau. However, when he used the product, Ruivivar doubted its authenticity considering that it had a
different smell, and the heat it produced was not as strong as the original Greenstone he frequently used. Having been
informed by Ruivivar of the same, Yeung, together with his son, John Philip, went to Royal on May 4, 2000 to
investigate the matter, and, there, found seven (7) bottles of counterfeit Greenstone on display for sale. He was then
told by Pinky Lau (Pinky) the stores proprietor that the items came from Co of KiaoAn Chinese Drug Store.
According to Pinky, Co offered the products on April 28, 2000 as Tienchi Fong Sap Oil Greenstone (Tienchi) which she
eventually

availed

from

him.

Upon

Yeungs

prodding,

Pinky

wrote

note

stating

these

events. 6

cralawre d

In defense, Co denied having supplied counterfeit items to Royal and maintained that the stocks of Greenstone came
only from Taka Trading. Meanwhile, the Laus denied selling Greenstone and claimed that the seven (7) items of Tienchi
were left by an unidentified male person at the counter of their drug store and that when Yeung came and threatened
to report the matter to the authorities, the items were surrendered to him. As to Pinkys note, it was claimed that she
was merely forced by Yeung to sign the same.7

cralawred

The RTC Ruling

In a Decision8 dated October 27, 2008, the RTC ruled in favor of Sps. Yeung, and accordingly ordered Co and the Laus
to pay Sps. Yeung: (a) P300,000.00 as temperate damages; (b) P200,000.00 as moral damages; (c) P100,000.00 as

exemplary damages; (d) P100,000.00 as attorneys fees; and (e) costs of suit.9

cralawre d

It found that the Sps. Yeung had proven by preponderance of evidence that the Laus and Co committed unfair
competition through their conspiracy to sell counterfeit Greenstone products that resulted in confusion and deception
not only to the ordinary purchaser, like Ruivivar, but also to the public. 10 It, however, did not find the Laus and Co
liable for trademark infringement as there was no showing that the trademark Greenstone was registered at the time
the acts complained of occurred, i.e., in May 2000.11 Dissatisfied, the Laus and Co appealed to the CA.
The CA Ruling
In a Decision12 dated September 16, 2013, the CA affirmed the RTC Decision, pointing out that in the matter of
credibility of witnesses, the findings of the trial court are given great weight and the highest degree of
respect.13Accordingly, it sustained the RTCs finding of unfair competition, considering that Sps. Yeungs evidence
preponderated over that of the Laus and Co which was observed to be shifty and contradictory. Resultantly, all awards
of damages in favor of Sps. Yeung were upheld.14

cralawre d

The Laus and Co respectively moved for reconsideration but were, however, denied in a Resolution 15dated May 29,
2014, hence, Co filed the instant petition. On the other hand, records are bereft of any showing that the Laus instituted
any appeal before this Court.
The Issue Before the Court
The sole issue for the Courts resolution is whether or not the CA correctly upheld Cos liability for unfair competition.
The Courts Ruling
The petition is without merit.
The Courts review of the present case is via a petition for review under Rule 45 of the Rules of Court, which generally
bars any question pertaining to the factual issues raised. The well-settled rule is that questions of fact are not
reviewable in petitions for review under Rule 45, subject only to certain exceptions, among them, the lack of sufficient
support in evidence of the trial courts judgment or the appellate courts misapprehension of the adduced facts. 16

cralawred

Co, who mainly interposes a denial of the acts imputed against him, fails to convince the Court that any of the
exceptions exists so as to warrant a review of the findings of facts in this case. Factual findings of the RTC, when
affirmed by the CA, are entitled to great weight and respect by the Court and are deemed final and conclusive when
supported by the evidence on record.17 The Court finds that both the RTC and the CA fully considered the evidence
presented by the parties, and have adequately explained the legal and evidentiary reasons in concluding that Co
committed acts of unfair competition.
Unfair competition is defined as the passing off (or palming off) or attempting to pass off upon the public of the goods
or business of one person as the goods or business of another with the end and probable effect of deceiving the public.
This takes place where the defendant gives his goods the general appearance of the goods of his competitor with the
intention of deceiving the public that the goods are those of his competitor.18

cralawred

Here, it has been established that Co conspired with the Laus in the sale/distribution of counterfeit Greenstone
products to the public, which were even packaged in bottles identical to that of the original, thereby giving rise to the
presumption of fraudulent intent.19 In light of the foregoing definition, it is thus clear that Co, together with the Laus,
committed unfair competition, and should, consequently, be held liable therefor. To this end, the Court finds the award
of P300,000.00 as temperate damages to be appropriate in recognition of the pecuniary loss suffered by Sps. Yeung,
albeit its actual amount cannot, from the nature of the case, as it involves damage to goodwill, be proved with
certainty.20 The awards of moral and exemplary damages, attorneys fees, and costs of suit are equally sustained for
the reasons already fully-explained by the courts a quo in their decisions.
Although liable for unfair competition, the Court deems it apt to clarify that Co was properly exculpated from the

charge of trademark infringement considering that the registration of the trademark Greenstone essential as it is in
a trademark infringement case was not proven to have existed during the time the acts complained of were
committed, i.e., in May 2000.In this relation, the distinctions between suits for trademark infringement and unfair
competition prove useful: (a) the former is the unauthorized use of a trademark, whereas the latter is the passing off
of ones goods as those of another; (b) fraudulent intent is unnecessary in the former, while it is essential in the latter;
and (c) in the former, prior registration of the trademark is a pre-requisite to the action, while it is not necessary in the
latter.21

cralawre d

WHEREFORE, the petition is DENIED. The Decision dated September 16, 2013 and the Resolution dated May 29, 2014
of the Court of Appeals in CA-G.R. CV No. 93679 are hereby AFFIRMED.
SO ORDERED.

cralawlaw library

Velasco, Jr.,* Leonardo-De Castro, (Acting Chairperson),** Bersamin, and Perez, JJ., concur.
Endnotes:

Designated Acting Member per Special Order No. 1772 dated August 28, 2014.

**

Per Special Order No. 1771 dated August 28, 2014.

1Rollo,

pp. 8-33.

Id. at 36-55. Penned by Associate Justice Ramon A. Cruz with Associate Justices Noel G. Tijam and
Romeo F. Barza, concurring.
3

Id. at 57-58. Penned by Associate Justice Ramon A. Cruz with Associate Justices Noel G. Tijam and
Socorro B. Inting, concurring.
4

Id. at 75-78. Penned by Presiding Judge Reynaldo B. Daway.

Id. at 37.

See id. at 37-38.

See id. at 38-39.

Id. at 75-78.

Id. at 78.

10

Id. at 77.

11

Id.

12

Id. at 36-55.

13

Id. at 47.

14

See id. at 45-53.

15

Id. at 57-58.

16

See Guevarra v. People, G.R. No. 170462, February 5, 2014.

17

See id.

18

Republic Gas Corporation v. Petron Corporation, G.R. No. 194062, June 17, 2013, 698 SCRA 666, 680681; citations omitted.

19

Section 6, Rule 18 of A.M. No. 10-3-10-SC, or the Rules of Procedure for Intellectual Property Rights
Cases, provides:
SEC. 6. Intent to defraud or deceive. In an action for unfair competition, the intent to
defraud or deceive the public shall be presumed:
a) when the defendant passes off a product as his by using imitative devices,
signs or marks on the general appearance of the goods, which misleads
prospective purchasers into buying his merchandise under the impression that
they
are
buying
that
of
his
competitors;
b) when the defendant makes any false statement in the course of trade to
discredit
the
goods
and
business
of
another;
or
c) where the similarity in the appearance of the goods as packed and offered
for sale is so striking.
20

Article 2224 of the Civil Code provides:

Art. 2224. Temperate or moderate damages, which are more than nominal but less than
compensatory damages, may be recovered when the court finds that some pecuniary loss
has been suffered but its amount can not, from the nature of the case, be proved with
certainty.

21

Del Monte Corporation v. Court of Appeals, 260 Phil. 435, 439-440 (1990).
G.R. No. 190706, July 21, 2014

SHANG PROPERTIES REALTY CORPORATION (FORMERLY THE SHANG GRAND TOWER CORPORATION) AND
SHANG PROPERTIES, INC. (FORMERLY EDSA PROPERTIES HOLDINGS, INC.), Petitioners, v. ST. FRANCIS
DEVELOPMENT CORPORATION, Respondent.
DECISION
PERLAS-BERNABE, J.:
Assailed in this petition for review on certiorari1 is the Decision2 dated December 18, 2009 of the Court of Appeals (CA)
in CA-G.R. SP No. 105425 which affirmed with modification the Decision 3 dated September 3, 2008 of the Intellectual
Property Office (IPO) Director-General. The CA: (a) affirmed the denial of the application for registration of the mark
ST. FRANCIS TOWERS filed by petitioners Shang Properties Realty Corporation and Shang Properties, Inc.
(petitioners); (b) found petitioners to have committed unfair competition for using the marks THE ST. FRANCIS
TOWERS and THE ST. FRANCIS SHANGRI-LA PLACE; (c) ordered petitioners to cease and desist from using ST.
FRANCIS singly or as part of a composite mark; and (d) ordered petitioners to jointly and severally pay respondent
St. Francis Square Development Corporation (respondent) a fine in the amount of ?200,000.00.
The Facts
Respondent a domestic corporation engaged in the real estate business and the developer of the St. Francis Square
Commercial Center, built sometime in 1992, located at Ortigas Center, Mandaluyong City, Metro Manila (Ortigas
Center)4 filed separate complaints against petitioners before the IPO - Bureau of Legal Affairs (BLA), namely: (a) an
intellectual property violation case for unfair competition, false or fraudulent declaration, and damages arising from
petitioners use and filing of applications for the registration of the marks THE ST. FRANCIS TOWERS and THE ST.
FRANCIS SHANGRI-LA PLACE, docketed as IPV Case No. 10-2005-00030 (IPV Case); and (b) an inter partes case
opposing the petitioners application for registration of the mark THE ST. FRANCIS TOWERS for use relative to the
latters business, particularly the construction of permanent buildings or structures for residential and office purposes,
docketed as Inter Partes Case No. 14-2006-00098 (St. Francis Towers IP Case); and (c) an inter partes case
opposing the petitioners application for registration of the mark THE ST. FRANCIS SHANGRI-LA PLACE, docketed as
IPC No. 14-2007-00218 (St. Francis Shangri-La IP Case).5

In its complaints, respondent alleged that it has used the mark ST. FRANCIS to identify its numerous property
development projects located at Ortigas Center, such as the aforementioned St. Francis Square Commercial Center, a
shopping mall called the St. Francis Square, and a mixed-use realty project plan that includes the St. Francis Towers.
Respondent added that as a result of its continuous use of the mark ST. FRANCIS in its real estate business, it has
gained substantial goodwill with the public that consumers and traders closely identify the said mark with its property
development projects. Accordingly, respondent claimed that petitioners could not have the mark THE ST. FRANCIS
TOWERS registered in their names, and that petitioners use of the marks THE ST. FRANCIS TOWERS and THE ST.
FRANCIS SHANGRI-LA PLACE in their own real estate development projects constitutes unfair competition as well as
false or fraudulent declaration.6
Petitioners denied committing unfair competition and false or fraudulent declaration, maintaining that they could
register the mark THE ST. FRANCIS TOWERS and THE ST. FRANCIS SHANGRI-LA PLACE under their names. They
contended that respondent is barred from claiming ownership and exclusive use of the mark ST. FRANCIS because
the same is geographically descriptive of the goods or services for which it is intended to be used. 7 This is because
respondents as well as petitioners real estate development projects are located along the streets bearing the name
St. Francis, particularly, St. Francis Avenue and St. Francis Street (now known as Bank Drive), 8 both within the
vicinity of the Ortigas Center.
The BLA Rulings
On December 19, 2006, the BLA rendered a Decision9 in the IPV Case, and found that petitioners committed acts of
unfair competition against respondent by its use of the mark THE ST. FRANCIS TOWERS but not with its use of the
mark THE ST. FRANCIS SHANGRI-LA PLACE. It, however, refused to award damages in the latters favor, considering
that there was no evidence presented to substantiate the amount of damages it suffered due to the formers acts. The
BLA found that ST. FRANCIS, being a name of a Catholic saint, may be considered as an arbitrary mark capable of
registration when used in real estate development projects as the name has no direct connection or significance when
used in association with real estate. The BLA neither deemed ST. FRANCIS as a geographically descriptive mark,
opining that there is no specific lifestyle, aura, quality or characteristic that the real estate projects possess except for
the fact that they are located along St. Francis Avenue and St. Francis Street (now known as Bank Drive), Ortigas
Center. In this light, the BLA found that while respondents use of the mark ST. FRANCIS has not attained exclusivity
considering that there are other real estate development projects bearing the name St. Francis in other areas, 10 it
must nevertheless be pointed out that respondent has been known to be the only real estate firm to transact business
using such name within the Ortigas Center vicinity. Accordingly, the BLA considered respondent to have gained
goodwill and reputation for its mark, which therefore entitles it to protection against the use by other persons, at least,
to those doing business within the Ortigas Center.11
Meanwhile, on March 28, 2007, the BLA rendered a Decision 12 in the St. Francis Towers IP Case, denying
petitioners application for registration of the mark THE ST. FRANCIS TOWERS. Excluding the word TOWERS in view
of petitioners disclaimer thereof, the BLA ruled that petitioners cannot register the mark THE ST. FRANCIS since it is
confusingly similar to respondents ST. FRANCIS marks which are registered with the Department of Trade and
Industry (DTI). It held that respondent had a better right over the use of the mark ST. FRANCIS because of the
latters appropriation and continuous usage thereof for a long period of time.13
A little over a year after, or on March 31, 2008, the BLA then rendered a Decision 14 in the St. Francis Shangri-La IP
Case, allowing petitioners application for registration of the mark THE ST. FRANCIS SHANGRI-LA PLACE. It found
that respondent cannot preclude petitioners from using the mark ST. FRANCIS as the records show that the formers
use thereof had not been attended with exclusivity. More importantly, it found that petitioners had adequately
appended the word Shangri-La to its composite mark to distinguish it from that of respondent, in which case, the
former had removed any likelihood of confusion that may arise from the contemporaneous use by both parties of the
mark ST. FRANCIS.
Both parties appealed the decision in the IPV Case, while petitioners appealed the decision in the St. Francis Towers
IP Case. Due to the identity of the parties and issues involved, the IPO Director-General ordered the consolidation of
the separate appeals.15 Records are, however, bereft of any showing that the decision in the St. Francis Shangri-La

IP Case was appealed by either party and, thus, is deemed to have lapsed into finality.
The IPO Director-General Ruling
In a Decision16 dated September 3, 2008, then IPO Director-General Adrian S. Cristobal, Jr. affirmed the rulings of the
BLA that: (a) petitioners cannot register the mark THE ST. FRANCIS TOWERS; and (b) petitioners are not guilty of
unfair competition in its use of the mark THE ST. FRANCIS SHANGRI-LA PLACE. However, the IPO Director-General
reversed the BLAs finding that petitioners committed unfair competition through their use of the mark THE ST.
FRANCIS TOWERS, thus dismissing such charge. He found that respondent could not be entitled to the exclusive use
of the mark ST. FRANCIS, even at least to the locality where it conducts its business, because it is a geographically
descriptive mark, considering that it was petitioners as well as respondents intention to use the mark ST. FRANCIS
in order to identify, or at least associate, their real estate development projects/businesses with the place or location
where they are situated/conducted, particularly, St. Francis Avenue and St. Francis Street (now known as Bank Drive),
Ortigas Center. He further opined that respondents registration of the name ST. FRANCIS with the DTI is irrelevant
since what should be controlling are the trademark registrations with the IPO itself. 17 Also, the IPO Director-General
held that since the parties are both engaged in the real estate business, it would be hard to imagine that a
prospective buyer will be enticed to buy, rent or purchase [petitioners] goods or services believing that this is owned
by [respondent] simply because of the name ST. FRANCIS. The prospective buyer would necessarily discuss things
with the representatives of [petitioners] and would readily know that this does not belong to [respondent]. 18
Disagreeing solely with the IPO Director-Generals ruling on the issue of unfair competition (the bone of contention in
the IPV Case), respondent elevated the same to the CA.
In contrast, records do not show that either party appealed the IPO Director-Generals ruling on the issue of the
registrability of the mark THE ST. FRANCIS TOWERS (the bone of contention in the St. Francis Towers IP Case). As
such, said pronouncement is also deemed to have lapsed into finality.
The CA Ruling
In a Decision19 dated December 18, 2009, the CA found petitioners guilty of unfair competition not only with respect to
their use of the mark THE ST. FRANCIS TOWERS but also of the mark THE ST. FRANCIS SHANGRI-LA PLACE.
Accordingly, it ordered petitioners to cease and desist from using ST. FRANCIS singly or as part of a composite mark,
as well as to jointly and severally pay respondent a fine in the amount of P200,000.00.
The CA did not adhere to the IPO Director-Generals finding that the mark ST. FRANCIS is geographically descriptive,
and ruled that respondent which has exclusively and continuously used the mark ST. FRANCIS for more than a
decade, and, hence, gained substantial goodwill and reputation thereby is very much entitled to be protected against
the indiscriminate usage by other companies of the trademark/name it has so painstakingly tried to establish and
maintain. Further, the CA stated that even on the assumption that ST. FRANCIS was indeed a geographically
descriptive mark, adequate protection must still be given to respondent pursuant to the Doctrine of Secondary
Meaning.20
Dissatisfied, petitioners filed the present petition.
The Issue Before the Court
With the decisions in both Inter Partes Cases having lapsed into finality, the sole issue thus left for the Courts
resolution is whether or not petitioners are guilty of unfair competition in using the marks THE ST. FRANCIS TOWERS
and THE ST. FRANCIS SHANGRI-LA PLACE.
The Courts Ruling
The petition is meritorious.
Section 168 of Republic Act No. 8293,21 otherwise known as the Intellectual Property Code of the Philippines (IP
Code), provides for the rules and regulations on unfair competition.

To begin, Section 168.1 qualifies who is entitled to protection against unfair competition. It states that [a] person
who has identified in the mind of the public the goods he manufactures or deals in, his business or services from those
of others, whether or not a registered mark is employed, has a property right in the goodwill of the said goods,
business or services so identified, which will be protected in the same manner as other property rights.
Section 168.2 proceeds to the core of the provision, describing forthwith who may be found guilty of and subject to
an action of unfair competition that is, [a]ny person who shall employ deception or any other means
contrary to good faith by which he shall pass off the goods manufactured by him or in which he deals, or
his business, or services for those of the one having established such goodwill, or who shall commit any
acts calculated to produce said result x x x.
Without limiting its generality, Section 168.3 goes on to specify examples of acts which are considered as constitutive
of unfair competition, viz.:
chanroblesvirtuallawlibrary

168.3. In particular, and without in any way limiting the scope of protection against unfair competition,
the following shall be deemed guilty of unfair competition:
(a) Any person who is selling his goods and gives them the general appearance of goods of
another manufacturer or dealer, either as to the goods themselves or in the wrapping of the
packages in which they are contained, or the devices or words thereon, or in any other
feature of their appearance, which would be likely to influence purchasers to believe that
the goods offered are those of a manufacturer or dealer, other than the actual manufacturer
or dealer, or who otherwise clothes the goods with such appearance as shall deceive the
public and defraud another of his legitimate trade, or any subsequent vendor of such goods
or any agent of any vendor engaged in selling such goods with a like purpose;
(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 service of another who has
identified
such
services
in
the
mind
of
the
public;
or
(c) Any person who shall make any false statement in the course of trade or who shall
commit any other act contrary to good faith of a nature calculated to discredit the goods,
business or services of another.

Finally, Section 168.4 dwells on a matter of procedure by stating that the [t]he remedies provided by Sections
156,22 157,23 and 16124 shall apply mutatis mutandis.
The statutory attribution of the unfair competition concept is well-supplemented by jurisprudential pronouncements. In
the recent case of Republic Gas Corporation v. Petron Corporation,25 the Court has echoed the classic definition of the
term which is the passing off (or palming off) or attempting to pass off upon the public of the goods or business of
one person as the goods or business of another with the end and probable effect of deceiving the public. Passing off
(or palming off) takes place where the defendant, by imitative devices on the general appearance of the goods,
misleads prospective purchasers into buying his merchandise under the impression that they are buying that of his
competitors. [In other words], the defendant gives his goods the general appearance of the goods of his competitor
with the intention of deceiving the public that the goods are those of his competitor.26The true test of unfair
competition has thus been whether the acts of the defendant have the intent of deceiving or are calculated
to deceive the ordinary buyer making his purchases under the ordinary conditions of the particular trade to
which the controversy relates. Based on the foregoing, it is therefore essential to prove the existence of fraud, or
the intent to deceive, actual or probable,27 determined through a judicious scrutiny of the factual circumstances
attendant to a particular case.28
Here, the Court finds the element of fraud to be wanting; hence, there can be no unfair competition. The CAs contrary
conclusion was faultily premised on its impression that respondent had the right to the exclusive use of the mark ST.
FRANCIS, for which the latter had purportedly established considerable goodwill. What the CA appears to have
disregarded or been mistaken in its disquisition, however, is the geographically-descriptive nature of the mark ST.
FRANCIS which thus bars its exclusive appropriability, unless a secondary meaning is acquired. As deftly explained in
the U.S. case of Great Southern Bank v. First Southern Bank:29[d]escriptive geographical terms are in the

public domain in the sense that every seller should have the right to inform customers of the
geographical origin of his goods. A geographically descriptive term is any noun or adjective that designates
geographical location and would tend to be regarded by buyers as descriptive of the geographic location of origin of the
goods or services. A geographically descriptive term can indicate any geographic location on earth, such as
continents, nations, regions, states, cities, streets and addresses, areas of cities, rivers, and any other location
referred to by a recognized name. In order to determine whether or not the geographic term in question is
descriptively used, the following question is relevant: (1) Is the mark the name of the place or region from which
the goods actually come? If the answer is yes, then the geographic term is probably used in a descriptive
sense, and secondary meaning is required for protection.30
In Burke-Parsons-Bowlby Corporation v. Appalachian Log Homes, Inc.,31 it was held that secondary meaning is
established when a descriptive mark no longer causes the public to associate the goods with a particular place, but to
associate the goods with a particular source. In other words, it is not enough that a geographically-descriptive mark
partakes of the name of a place known generally to the public to be denied registration as it is also necessary to
show that the public would make a goods/place association that is, to believe that the goods for which the
mark is sought to be registered originatein that place. To hold such a belief, it is necessary, of course, that the
purchasers perceive the mark as a place name, from which the question of obscurity or remoteness then comes to the
fore.32 The more a geographical area is obscure and remote, it becomes less likely that the public shall have a
goods/place association with such area and thus, the mark may not be deemed as geographically descriptive.
However, where there is no genuine issue that the geographical significance of a term is its primary
significance and where the geographical place is neither obscure nor remote, a public association of the
goods with the place may ordinarily be presumed from the fact that the applicants own goods come from
the geographical place named in the mark.33
Under Section 123.234 of the IP Code, specific requirements have to be met in order to conclude that a
geographically-descriptive mark has acquired secondary meaning, to wit: (a) the secondary meaning must have
arisen as a result of substantial commercial use of a mark in the Philippines; (b)such use must result in the
distinctiveness of the mark insofar as the goods or the products are concerned; and (c) proof of
substantially exclusive and continuous commercial use in the Philippines for five (5) years before the date
on which the claim of distinctiveness is made. Unless secondary meaning has been established, a geographicallydescriptive mark, due to its general public domain classification, is perceptibly disqualified from trademark registration.
Section 123.1(j) of the IP Code states this rule as follows:
chanroblesvirtuallawlibrary

SEC. 123. Registrability.

123.1 A mark cannot be registered if it:
xxxx
(j) Consists exclusively of signs or of indications that may serve in trade to designate the kind, quality,
quantity, intended purpose, value, geographical origin, time or production of the goods or rendering of
the services, or other characteristics of the goods or services; (Emphasis supplied)
xxxx

Cognizant of the foregoing, the Court disagrees with the CA that petitioners committed unfair competition due to the
mistaken notion that petitioner had established goodwill for the mark ST. FRANCIS precisely because said
circumstance, by and of itself, does not equate to fraud under the parameters of Section 168 of the IP Code as abovecited. In fact, the records are bereft of any showing that petitioners gave their goods/services the general appearance
that it was respondent which was offering the same to the public. Neither did petitioners employ any means to induce
the public towards a false belief that it was offering respondents goods/services. Nor did petitioners make any false
statement or commit acts tending to discredit the goods/services offered by respondent. Accordingly, the element of
fraud which is the core of unfair competition had not been established.
Besides, respondent was not able to prove its compliance with the requirements stated in Section 123.2 of the IP Code
to be able to conclude that it acquired a secondary meaning and, thereby, an exclusive right to the ST. FRANCIS

mark, which is, as the IPO Director-General correctly pointed out, geographically-descriptive of the location in which its
realty developments have been built, i.e., St. Francis Avenue and St. Francis Street (now known as Bank Drive).
Verily, records would reveal that while it is true that respondent had been using the mark ST. FRANCIS since 1992,
its use thereof has been merely confined to its realty projects within the Ortigas Center, as specifically mentioned. As
its use of the mark is clearly limited to a certain locality, it cannot be said that there was substantial commercial use of
the same recognized all throughout the country. Neither is there any showing of a mental recognition in buyers and
potential buyers minds that products connected with the mark ST. FRANCIS are associated with the same source 35
that is, the enterprise of respondent. Thus, absent any showing that there exists a clear goods/service-association
between the realty projects located in the aforesaid area and herein respondent as the developer thereof, the latter
cannot be said to have acquired a secondary meaning as to its use of the ST. FRANCIS mark.
In fact, even on the assumption that secondary meaning had been acquired, said finding only accords respondents
protectional qualification under Section 168.1 of the IP Code as above quoted. Again, this does not automatically
trigger the concurrence of the fraud element required under Section 168.2 of the IP Code, as exemplified by the acts
mentioned in Section 168.3 of the same. Ultimately, as earlier stated, there can be no unfair competition without this
element. In this respect, considering too the notoriety of the Shangri-La brand in the real estate industry which dilutes
petitioners propensity to merely ride on respondents goodwill, the more reasonable conclusion is that the formers use
of the marks THE ST. FRANCIS TOWERS and THE ST. FRANCIS SHANGRI-LA PLACE was meant only to identify, or
at least associate, their real estate project/s with its geographical location. As aptly observed by the IPO DirectorGeneral:36
In the case at hand, the parties are business competitors engaged in real estate or property
development, providing goods and services directly connected thereto. The goods or products or
services are real estate and the goods and the services attached to it or directly related to it, like sale
or lease of condominium units, offices, and commercial spaces, such as restaurants, and other
businesses. For these kinds of goods or services there can be no description of its geographical
origin as precise and accurate as that of the name of the place where they are situated.
(Emphasis and underscoring supplied)

Hence, for all the reasons above-discussed, the Court hereby grants the instant petition, and, thus, exonerates
petitioners from the charge of unfair competition in the IPV Case. As the decisions in theInter Partes Cases were not
appealed, the registrability issues resolved therein are hereby deemed to have attained finality and, therefore, are now
executory.
WHEREFORE, the petition is GRANTED. The Decision dated December 18, 2009 of the Court of Appeals in CA-G.R. SP
No. 105425 is hereby REVERSED and SET ASIDE. Accordingly, the Decision dated September 3, 2008 of the
Intellectual Property Office-Director General is REINSTATED.
SO ORDERED.
Carpio, (Chairperson), Brion, Peralta,*and Perez, JJ., concur.

Endnotes:

*
1

Designated Additional Member per Raffle dated July 16, 2014.

Rollo, pp. 3-33.

Id. at 68-95. Penned by Associate Justice Jane Aurora C. Lantion, with Associate Justices Mario L.
Guaria III and Mariflor P. Punzalan Castillo, concurring.
3

Id. at 98-114. Penned by IPO Director-General Adrian S. Cristobal, Jr.

4Rollo,

pp. 69-70.

Id. at 99; See also CA rollo, pp. 341-349.

See id. at 69-72 and 99-101.

See id. at 99-100.

See id. at 104.

CA rollo, pp. 244-266. Penned by Director Estrellita Beltran-Abelardo.

10

The following were stated as examples in the BLAs Decision dated December 19, 2006 in the IPV
Case: Emmaus II St. Francis Village Condominium located at Moonwalk Subdivision, Paraaque City, St.
Francis Village Phase I-B/St. Francis Village Rolling Meadow Phase I and II located at San Bartolome,
Novaliches, Quezon City, and St. Francis Condominium located at Xavier St., Greenhills, San Juan City.
(Id. at 262.)
11

See id. at 259-263.

12

Id. at 559-567.

13

Id. at 564-566.

14

Id. at 341-349.

15

Rollo, p. 78.

16

Id. at 98-114.

17

Id. at 103-106 and 111-112.

18

Id. at 112.

19

Id. at 68-95.

20

See id. at 91-93.

21

Entitled AN ACT PRESCRIBING THE INTELLECTUAL PROPERTY CODE AND ESTABLISHING THE
INTELLECTUAL PROPERTY OFFICE, PROVIDING FOR ITS POWERS AND FUNCTIONS, AND FOR OTHER
PURPOSES.
22

SECTION 156. Actions, and Damages and Injunction for Infringement.

156.1. The owner of a registered mark may recover damages from any person who infringes his rights,
and the measure of the damages suffered shall be either the reasonable profit which the complaining
party would have made, had the defendant not infringed his rights, or the profit which the defendant
actually made out of the infringement, or in the event such measure of damages cannot be readily
ascertained with reasonable certainty, then the court may award as damages a reasonable percentage
based upon the amount of gross sales of the defendant or the value of the services in connection with
which the mark or trade name was used in the infringement of the rights of the complaining party.
156.2. On application of the complainant, the court may impound during the pendency of the action,
sales invoices and other documents evidencing sales.
156.3. In cases where actual intent to mislead the public or to defraud the complainant is shown, in the
discretion of the court, the damages may be doubled.
156.4. The complainant, upon proper showing, may also be granted injunction.
23

SECTION 157. Power of Court to Order Infringing Material Destroyed.

157.1. In any action arising under this Act, in which a violation of any right of the owner of the registered
mark is established, the court may order that goods found to be infringing be, without compensation of
any sort, disposed of outside the channels of commerce in such a manner as to avoid any harm caused to
the right holder, or destroyed; and all labels, signs, prints, packages, wrappers, receptacles and

advertisements in the possession of the defendant, bearing the registered mark or trade name or any
reproduction, counterfeit, copy or colorable imitation thereof, all plates, molds, matrices and other means
of making the same, shall be delivered up and destroyed.
157.2. In regard to counterfeit goods, the simple removal of the trademark affixed shall not be sufficient
other than in exceptional cases which shall be determined by the Regulations, to permit the release of the
goods into the channels of commerce.
24

SECTION 161. Authority to Determine Right to Registration. In any action involving a registered
mark, the court may determine the right to registration, order the cancellation of a registration, in whole
or in part, and otherwise rectify the register with respect to the registration of any party to the action in
the exercise of this. Judgment and orders shall be certified by the court to the Director, who shall make
appropriate entry upon the records of the Bureau, and shall be controlled thereby.
25

G.R. No. 194062, June 17, 2013, 698 SCRA 666.

26

Id. at 680-681.

27Superior

Commercial Enterprises, Inc. v. Kunnan Enterprises Ltd., G.R. No. 169974, April 20, 2010,
618 SCRA 531, 556.
28

See Levi Strauss (Phils.), Inc. v. Lim, 593 Phil. 435, 457 (2008). See also Co Tiong Sa v. Director of
Patents, 95 Phil. 1, 4 (1954).
29

625 So.2d 463 (1993).

30

Id.; emphases and underscoring supplied; brackets and citations omitted.

31

871 F.2d 590 (1989).

32

In re Societe Generale Des Eaux Minerales de Vittel, S.A., 824 F.2d 957, 3 USPQ2d 1450 (Fed. Cir.
1987). See also In re California Pizza Kitchen, Inc., 10 USPQ2d 1704 (TTAB 1988).
33

In re California Pizza Kitchen, Inc., id., citing In re Handler Fenton Westerns, Inc., 214 USPQ 848
(TTAB 1982).
34

123.2 As regards signs or devices mentioned in paragraphs (j), (k), and (l), nothing shall prevent the
registration of any such sign or device which has become distinctive in relation to the goods for which the
registration is requested as a result of the use that have been made of it in commerce in the Philippines.
The Office may accept as prima facie evidence that the mark has become distinctive, as used in
connection with the applicants goods or services in commerce, proof of substantially exclusive and
continuous use thereof by the applicant in commerce in the Philippines for five (5) years before the date
on which the claim of distinctiveness is made. (Emphases and underscoring supplied)
35

See Japan Telecom, Inc. v. Japan Telecom America, Inc., 287 F.3d 866 (2002); Self-Realization
Fellowship Church v. Ananda Church of Self-Realization, 59 F.3d 902, 35 USPQ2d 1342 (Fed Cir.
1995); Levi Strauss & Co. v. Blue Bell, Inc., 632 F.2d 817, 208 USPQ 713 (Fed Cir. 1980).
36

Rollo, p. 104.