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ANDRES ROMERO, petitioner

vs.
MAIDEN FORM BRASSIERE CO., INC., and THE DIRECTOR OF PATENTS, respondents.

No. L-18289. March 31, 1964.

Trademarks; Registrability; "Adagio" as a musical term, not a common descriptive name for brassieres.
The trademark "Adagio" is a musical term, which means slowly or in an easy manner, and when
applied to brassieres is used in an arbitrary (fanciful) sense, not being a common descriptive name of
a particular style of brassieres, and is therefore registrable.

Same; Same; Long continuous use of trademark does not render it descriptive of a product. A
company's long and continuous use of a trademark does not by itself render it merely descriptive of the
product.

Same; Same; Using trademark for one type of the product does not affect its validity as a trademark.
Where a product is usually of different types or styles and the manufacturer has used different
trademarks for every type as shown by its labels, the mere fact that said manufacturer uses a trademark,
like "Adagio", for one type or style, does not affect the validity of such word as a trademark.

Same; Abandonment; Temporary non-use occasioned by government restrictions not deemed


abandonment. Temporary nonuse of a trademark occasioned by government restrictions. not being
permanent, intentional and voluntary, does not affect the right to a trademark.

Same; Foreign trademarks; May be availed of in the Philippines despite lack of actual use only when
the Philippines is a party to a trademark treaty. Section 37 of Republic Act No. 166 can be availed
of only where the Philippines is a party to an international convention or treaty relating to trademarks,
in which case the trademark sought to be registered need not be in use in the Philippines.

APPEAL from a decision of the Director of Patents.

The facts are stated in the opinion of the Court.

Alafriz Law Office for petitioner.

Ross, Selph & Carrascoso for respondent Maiden Form Brassiere Co., Inc.

Solicitor General and Tiburcio S. Evalle for respondent Director of Patents.

BARRERA, J.:

From the decision of the Director of Patents (of January 17, 1961) dismissing his petition for cancellation
of the registration of the trademark "Adagio" for brassieres manufactured by respondent Maiden Form
Brassiere Co., Inc., petitioner Andres Romero, interposed this appeal.

On February 12, 1957, respondent company, a foreign corporation, filed with respondent Director of
Patents an application for registration (pursuant to Republic Act No. 166) of the trademark "Adagio" for
the brassieres manufactured by it. In its application, respondent company alleged that said trademark
was first used by it in the United States on October 26, 1937, and in the Philippines on August 31, 1946;
that it had been continuously used by it in trade in, or with the Philippines for over 30 years; that said
trademark "is on the date of this application, actually used by respondent company on the following
goods, classified according to the official classification of goods (Rule 82)Brassieres, Class 40"; and
that said trademark is applied or affixed by respondent to the goods by placing thereon a woven label
on which the trademark is shown.

Acting on said application, respondent Director, on August 13, 1957, approved for publication in the
Official Gazette said trademark of respondent company, in accordance with Section 7 of Republic Act
No. 166 (Trademark Law), having found, inter alia, that said trademark is "a fanciful and arbitrary use
of a foreign word adopted by applicant as a trademark for its product; that it is neither a surname nor a
geographical term, nor any that comes within the purview of Section 4 of Republic Act No. 166; and that
the mark as used by respondent company convincingly shows that it identifies and distinguishes
respondent company's goods from others."

On October 17, 1957, respondent Director issued to respondent company a certificate of registration of
its trademark "Adagio".

On February 26, 1958, petitioner filed with respondent Director a petition for cancellation of said
trademark, on the grounds that it is a common descriptive name of an article or substance on which the
patent has expired; that its registration was obtained fraudulently or contrary to the provisions of Section
4, Chapter II of Republic Act No. 166; and that the application for its registration was not filed in
accordance with the provisions of Section 37, Chapter XI of the same Act. Petitioner also alleged that
said trademark has not become distinctive of respondent company's goods or business; that it has been
used by respondent company to classify the goods (the brassieres) manufactured by it, in the same
manner as petitioner uses the same; that said trademark has been used by petitioner for almost 6 years;
that it has become a common descriptive name; and that it is not registered in accordance with the
requirements of Section 37 (a), Chapter XI of Republic Act No. 166.

Issues having been joined, the case was heard and, after hearing, respondent Director (on January 17,
1961) rendered the decision above adverted to.

Petitioner filed a motion for reconsideration of said decision, on the grounds that (1) it is contrary to the
evidence, and (2) it is contrary to law. Said motion was denied by respondent Director by resolution of
March 7, 1961.

Hence, this appeal.

Appellant claims that the trademark "Adagio" has become a common descriptive name of a particular
style of brassiere and is, therefore, unregistrable. It is urged that said trademark had been used by local
brassiere manufacturers since 1948, without objection on the part of respondent company.

This claim is without basis in fact. The evidence shows that the trademark "Adagio" is a musical term,
which means slowly or in an easy manner, and was used as a trademark by the owners thereof (the
Rosenthals of Maiden Form Co., New York) because they are musically inclined. Being a musical term,
it is used in an arbitrary (fanciful) sense as a trademark for brassieres manufactured by respondent
company. It also appears that respondent company has, likewise, adopted other musical terms such as
"Etude" (Exh. W-2), "Chansonette" (Exh.W-3), "Pre-lude" (Exh. W-4), "Over-ture" (Exh. W-6), and
"Concerto" (Exh. V), to identify, as a trademark, the different styles or types of its brassieres. As
respondent Director pointed out, "the fact that said mark is used also to designate a particular style of
brassiere, does not affect its registrability as a trademark" (Kiekhaefer Corp. v. Willys-Overland Motors,
Inc., 111 USPQ 105).

It is not true that respondent company did not object to the use of said trademark by petitioner and other
local brassiere manufacturers. The records show that respondent company's agent, Mr. Schwartz,
warned the Valleson Department Store to desist from the sale of the "Adagio" Royal Form brassieres
manufactured by petitioner (t.s.n., pp. 27-28, Oct. 7, 1958), and even placed an advertisement (Exhs.
3 & 4) in the local newspapers (Manila Daily Bulletin, Manila Times, Fookien Times, and others) warning
the public against unlawful use of said trademark (t.s.n., p. 15, Aug. 17, 1959). The advertisement (Exh.
U) in the Manila Times made by respondent company on February 9, 1958, was brought to petitioner's
attention (t.s.n., p. 24, Oct. 7, 1958), which must have prompted him to file this present petition for
cancellation, on February 26, 1958.

On the other hand, respondent company's long and continuous use of the trademark "Adagio" has not
rendered it merely descriptive of the product. In Winthrop Chemical Co. v. Blackman (268 NYS 653), it
was held that widespread dissemination does not justify the defendants in the use of the trademark.

"Veronal has been widely sold in this country by the plaintiff; over 5,250,000 packages have been sold
since 1919. This is a consequence of the long and continued use by the plaintiff of this trademark and
is the result of its efforts to inform the profession and the public of its product. This widespread
dissemination does not justify the defendants in the use of this trade-mark. If this argument were sound,
then every time a plaintiff obtained the result of having the public purchase its article, that fact act of
itself would destroy a trademark. Arbitrary trademarks cannot become generic in this way. Jacobs v.
Beecham, 221 U.S. 263, 31 S. Ct. 555, 55 L. Ed. 729; Coca-Cola Co. v. Koke Co. of American, 254
U.S. 143, 41 S. Ct. 113, 65 L. Ed. 189." (Italics supplied.)

Appellant next contends that the trademark "Adagio" at the time it was registered (in the Philippines) on
October 17, 1957, had long been used by respondent company, only "to designate a particular style or
quality of brassiere and, therefore, is unregistrable as a trademark." In support of the contention, he
alleges that the sentence "Maidenform bras are packaged for your quick shopping convenience. For
other popular Maidenform styles write for free style booklet to: Maiden Form Brassiere Co., Inc., 200
Madison Avenue, New York 16, N.Y." printed on the package (Exh. W), shows that the trademark
"Adagio" is used to designate a particular style or quality of brassiere. He also cites portions of the
testimonies of his witnesses Bautista and Barro, to the effect that said trademark refers to the style of
brassieres sold in the stores of which they are salesmen.

This contention is untenable. Said sentence appearing on the package (Exh. W), standing alone, does
not conclusively indicate that the trademark "Adagio" is merely a style of brassiere. The testimony of
Mr. Schwartz, witness of respondent company, belies petitioner's claim:

"Q. There is a statement at the bottom of Exhibit W which reads, 'There is a Maidenform for every type
of figure'. As you stated you are very familiar with these bras manufactured by Maidenform Brassiere
Company, what are these types of figures this Exhibit W refer to?

"A. This is a product sold primarily in the United States, they have cold climate there, and a style to suit
the climate and we have different here. This kind of bra very seldom comes here. This type is very
expensive and sold primarily in the United States. We do not sell it here; it is very expensive and import
restrictions do not allow our dollar allocations for such sort."

As to the testimonies of Bautista and Barro, they are mere conclusions of said witnesses. Note that
when Bautista was asked why he considered the trademark "Adagio" as a style, he replied that the
brand "Adagio" is attached to distinguish the style. He stated as follows:

"Q. You said that those bras mentioned by you such as Adagio, Prelude, Alloette, are styles, will you
please tell us the reason why you said that those are styles?

"A. You know his brand like Adagio, Alloette are just attached to the bras just to distinguish the style: It
is not the main brand."

Barro, on the other hand, said that "Adagio" is & mark. She declared as follows:

"Q. You state that you used to sell brassieres in the store in which you work; when customers come to
your store and ask for brassieres, what do they usually ask from you?

"A. Well, I tell you there are so many types and certain types of people ask for certain brassiere. There
are people who ask for Royal Form Adagio, and there are others who ask for Duchess Ideal Form, and
so many kinds of marks."

Brassieres are usually of different types or styles, and appellee has used different trademarks for every
type as shown by its labels, Exhibits W-2 (Etude), W-3 (Chansonette), W-4 (Pre-lude), W-5
(Maidenette), and W-6, (Overture). The mere fact that appellee uses "Adagio" for one type or style,
does not affect the validity of such word as a trademark. In the case of Kiekhaefer Corp. v. Willys-
Overland Motors, 111 USPQ 105, it was held that the fact that the word "Hurricane" was used to
designate only one model of automobile, did not affect the validity of that word .as a trademark. In
Minnesota Mining Co. v. Motloid Co., 74 USPQ 235, the applicant sought to register the letters "MM" in
diagonal relationship within a circle. Applicant admitted that this mark was used only for its medium
price and medium quality denturebase materials. The Assistant Commissioner of Patents held:

"It clearly appears, however, that the mark serves to indicate origin of applicant's goods; and the fact
that it is used on only one of several types or grades does not affect its registrability as a trade mark."
Appellant also claims that respondent Director erred in registering the trademark in question, despite
appellee's non-compliance with Section 37, paragraphs 1 and 4 (a) of Republic Act No. 166.

This contention flows from a misconception of the application for registration of trademark of
respondent. As we see it, respondent's application was filed under the provisions of Section 2 of
Republic Act No. 166 as amended by Section 1 of Republic Act 865 which reads as follows:

"SEC. 2. What are registrable. Trademarks, x x x owned by persons, corporations, partnerships or


associations domiciled x x x in any foreign country may be registered in accordance with the provisions
of this Act: Provided, That said trademarks, trade-names, or service marks are actually in use in
commerce and services not less than two months in the Philippines before the time the applications for
registration are filed: x x x"

Section 37 of Republic Act No. 166 can be availed of only where the Philippines is a party to an
international convention or treaty relating to trademarks, in which case the trade-mark sought to be
registered need not be in use in the Philippines. The applicability of Section 37 has been commented
on by the Director of Patents, in this wise:

"Trademark rights in the Philippines, without actual use of the trademark in this country can, of course,
be created artificially by means of a treaty or convention with another country or countries. Section 37
of the present Philippine Trademark Law, Republic Act No. 166 (incorporated as Rule 82 in the Rules
of Practice for Registration of Trademarks) envisions the eventual entrance of the Philippines into such
convention or treaty. It is provided in said section that applications filed thereunder need not allege use
in the Philippines of the trademark sought to be registered. The Philippines has, however, not yet
entered into any such treaty or convention and, until she does, actual use in the Philippines of the
trademark sought to be registered and allegation in the application of such fact, will be required in all
applications for original or renewal registration submitted to the Philippine Patent Office". (Circular
Release No. 8.)

Appellant, likewise, contends that the registration of the trademark in question was fraudulent or
contrary to Section 4 of Republic Act No. 166. There is no evidence to show that the registration of the
trademark "Adagio" was obtained fraudulently by appellee. The evidence on record shows, on the other
hand, that the trademark "Adagio" was first used exclusively in the Philippines by appellee in the year
1932. There being no evidence of use of the mark by others before 1932, or that appellee abandoned
use thereof, the registration of the mark was made in accordance with the Trademark Law. Granting
that appellant used the mark when appellee stopped using it during the period of time that the
Government imposed restrictions on importation of respondent's brassiere bearing the trademark, such
temporary non-use did not affect the rights of appellee because it was occasioned by government
restrictions and was not permanent, intentional, and voluntary.

"To work an abandonment, the disuse must be permanent and not ephemeral; it must be intentional
and voluntary, and not involuntary or even compulsory. There must be a thoroughgoing discontinuance
of any trade-mark use of the mark in question" (Callman, Unfair Competition and Trademark, 2nd Ed.,
p. 1341).

The use of the trademark by other manufacturers did not indicate an intention on the part of appellee
to abandon it.

"The instances of the use by others of the term 'Budweiser, cited by the defendant, fail, even when
liberally construed, to indicate an intention upon the part of the complainant to abandon its rights to that
name. To establish the defense of abandonment, it is necessary to show not only acts indicating a
practical abandonment, but an actual intention to abandon. Saxlehner v. Eisener & Mendelson Co., 179
U.S. 19, 21 S. Ct. 7 (45 L. Ed. 60)." (Anheuser-Busch, Inc. v. Budweiser Malt Products Corp., 287 F.
245.)

Appellant next argues that respondent Director erred in declaring illegal the appropriation in the
Philippines of the trademark in question by appellant and, therefore, said appropriation did not affect
appellee's right thereto and the subsequent registration thereof. Appellant urges that its appropriation
of the trademark in question cannot be considered illegal under Philippine laws, because of non-
compliance by appellee of Section 37 of Republic Act No. 166. But we have already shown that Section
37 is not the provision invoked by respondent because the Philippines is not as yet a party to any
international convention or treaty relating to trademarks. The case of United Drug Co. v. Rectanus, 248
U.S. 90, 39 S. Ct. 48, 63 L. Ed. 141, cited by appellant, is not applicable to the present case, as the
records show that appellee was the first user of the trademark in the Philippines, whereas appellant
was the later user. Granting that appellant used the trademark at the time appellee stopped using it due
to government restrictions on certain importations, such fact did not, as heretofore stated, constitute
abandonment of the trademark as to entitle anyone to its free use.

"Non-use because of legal restrictions is not evidence of an intent to abandon. Non-use of their ancient
trade-mark and the adoption of new marks by the Carthusian Monks after they had been compelled to
leave France was consistent with an intention to retain their right to use their old mark. Abandonment
will not be inferred from a disuse over a period of years occasioned by statutory restrictions on the name
of liquor." (Nims, Unfair Competition and Trade-Mark, p. 1269.)

IN VIEW OF ALL THE FOREGOING, we are of the opinion and so hold, that respondent Director of
Patents did not err in dismissing the present petition for cancellation of the registered trademark of
appellee company, and the decision appealed from is therefore hereby affirmed, with costs against the
appellant. So ordered.

Bengzon, C.J., Padilla, Bautista Angelo, Labrador, Reyes, J.B.L., Paredes, Dizon, Regala and
Makalintal, JJ., concur.

Concepcion, J., took no part.

Decision affirmed.

Notes. "Modern law recognizes that the protection to which the owner of a trademark is entitled is
not limited to guarding his good or business from actual market competition with identical or similar
products of the parties, but extends to all cases in which the use by a junior appropriator of a trademark
or tradename is likely to lead to a confusion of source, as where prospective purchasers would be
misled into thinking that the complaining party has extended his business into the field (See 148 ALR
56 et seq; 52 Am. Jur. 576) or is in any way connected with the activities of the infringer; or when it
forestalls the normal potential expansion of his business (V. 148 ALR 77, 84; 52 Am. Jur. 576, 577). It
is on this basis that the respondent Director of Patents adverted to the practice 'among local tailors and
haberdashers to branch out into articles of manufacture which have some direct relationship' x x x 'to
garments or attire to complete one's wardrobe." Sta. Ana v. Maliwat, L-23023, Aug. 31, 1968, 24 SCRA
1018, 1025.

"Since 1949 up to the present time, commercial relations with Japan had existed and continued, and
the importations of commodities bearing the trademark in question into the Philippines had taken place.
The lawful entry into the Philippines of goods bearing the trademark since 1949 should entitle the owner
of the trademark to the right to use the same to the exclusion of others. Modern trade and commerce
demands that depredations on legitimate trademarks of non-nations should not be countenanced. The
strict condition imposed in the decision of the Director of Patents that a formal agreement between two
nations exists before the trademark of one may be recognized in the other, is inconsistent with the
freedom of trade recognized in modern times." Asari Toko Co., Ltd. v. Kee Boc. L-14086, Jan. 20, 1961,
1 SCRA 1, 6.

The doctrine of "colorable imitation" is also a ground for opposing and denying the registration of a
trademark or tradename. See annotation in 16 SCRA 502.

See also annotation on "Registration of Trademarks", 1 SCRA 6.

o0o

Ana L. Ang, petitioner


vs.
Toribio Teo-doro, respondent.

[No. 48226. December 14, 1942]


1.Trade-Marks and Trade-Names; Act No. 666.Respondent has continuously used "Ang Tibay,"
both as a trade-mark and as a trade-name, in the manufacture and sale of slippers, shoes, and indoor
baseballs since 1910. He formally registered it as a trade-mark on September 29, 1915, and as a trade-
name on January 3, 1933. Pe-titioner registered the same trade-mark "Ang Tibay" for pants and shirts
on April 11, 1932, and established a factory for the manufacture of said articles in the year 1937. Held:
That petitioner's registration of the trade-mark "Ang Tibay" should be cancelled, and that she should be
perpet-ually enjoined from using said trade-mark on goods manufactured and sold by her.

2.Id.; Id.; Term "Ang Tibay," not Being Geographic or Descriptive, is Capable of Exclusive Appropriation
as a Trade Mark.An inquiry into the etymology and meaning of the Tagalog words "Ang Tibay," made
in the decision, shows that the phrase is never used adjectively to define or describe an object. It is,
there-fore, not a descriptive term within the meaning of the Trade-mark Law but rather a fanciful or
coined phrase which may properly and legally be appropriated as a trade-mark or trade-name. Hence,
it was originally capable of exclusive appro-priation as a trade-mark by the respondent.

3.Id.; Id.; Id.; Function op a Trade-Mark; Doctrine of "Secondary Meaning."The function of a trade-
mark is to point dis-tinctively, either by its own meaning or by association, to the origin or ownership of
the wares to which it is applied. "Ang Tibay," as used by the respondent to des-ignate his wares, had
exactly performed that function for twenty-two years before the petitioner adopted it as a trade-mark in
her own business. "Ang Tibay" shoes and slippers are, by association, known throughout the Philippines
as products of the "Ang Tibay" factory owned and oper-ated by the respondent. Even if "Ang Tibay,"
therefore, were not capable of ex-clusive appropriation as a trade-mark, the application of the doctrine
of secondary meaning could nevertheless be fully sus-tained because, in any event, by respondent's
long and exclusive use of said phrase with reference to his products and his business, it has acquired
a proprietary connotation. This doctrine is to the effect that a word or phrase originally incapable of
exclusive appropriation with reference to an article on the market, because geo-graphically or otherwise
descriptive, might nevertheless have been used so long and so exclusively by one producer with
ref-erence to his article that, in that trade and to that branch of the purchasing- pub-lic, the word or
phrase has come to mean that the article was his product.

4.Id.; Id.; Id.; Id.; Test of whether Noncompeting Goods Are or Are not of the Same Class.In the
present stage of de-velopment of the law on trade-marks, unfair competition, and unfair trading, the test
employed by the courts to deter-mine whether noncompeting goods are or are not of the same class is
confusion as to the origin of the goods of the second user. Although two noncompeting arti-cles may
be classified under two different classes by the Patent Office because they are deemed not to possess
the same de-scriptive properties, they would neverthe-less be held by the courts to belong to the same
class if the simultaneous use on them of identical or closely similar trade-marks would be likely to cause
confusion as to the origin, or personal source, of the sec-ond user's goods. They would be consid-ered
as not falling under the same class only if they are so dissimilar or so foreign to each other as to make
it unlikely that the purchaser would think the first user made the second user's goods. Such con-struction
of the law is induced by cogent reasons of equity and fair dealing dis-cussed in the decision.

5.Id.; Id.; Id.; Id.; Id.Tested by the foregoing rule, and in the light of other considera-tions set out in
greater detail in the deci-sion, Held: That pants and shirts are goods similar to shoes and slippers within
the meaning of sections 3, 7, 11, 13, and 20 of the Trade-mark Law (Act No. 666).

PETITION for review on certiorari.

The facts are stated in the opinion of the court.

Cirilo Lim for petitioner.

Martial P. Lichauco and Manuel M. Mejia for respondent.

Ozaeta, J.:

Petitioner has appealed to this Court by certiorari to reverse the judgment of the Court of Appeals
reversing that of the Court of First Instance of Manila and directing the Director of Commerce to cancel
the registration of the trade-mark "Ang Tibay" in favor of said petitioner, and perpetually enjoining the
latter from using said trade-mark on goods manufac-tured and sold by her.

Respondent Toribio Teodoro, at first in partnership with Juan Katindig and later as sole proprietor, has
continuously used "Ang Tibay," both as a trade-mark and as a trade-name, in the manufacture and sale
of slippers, shoes, and indoor base-balls since 1910. He formally registered it as a trade-mark on
September 29, 1915, and as a trade-same on January 3, 1933. The growth of his business is a thrilling
epic of Filipino industry and business capacity. Starting in an ob-scure shop in 1910 with a modest
capital of P210 but with tireless industry and un-limited perseverance, Toribio Teodoro, then an
unknown young man making slippers with his own hands but now a prominent business magnate and
manu-facturer with a large factory operated with modern machinery by a great number of employees,
has steadily grown with his business to which he has de-dicated the best years of his life and which he
has expanded to such propor-tions that his gross sales from 1918 to 1938 aggregated P8,787,025.65.
His sales in 1937 amounted to Pl,299,343.10 and in 1938, Pl,133,165.77. His expenses for
advertisement from 1919 to 1938 ag-gregated P210,641.56.

Petitioner (defendant below) registered the same trade-mark "Ang Tibay" for pants and shirts on April
11, 1932, and established a factory for the manufac-ture of said articles in the year 1937.

In the following year (1938) her gross sales amounted to P422.682.09. Neither the decision of the trial
court nor that of the Court of Appeals shows how much petitioner has spent for advertisement.

But respondent in his brief says that petitioner "was unable to prove that she had spent a single centavo
advertising 'Ang Tibay' shirts and pants prior to 1938. In that year she advertised the factory which she
had just built and it was when this was brought to the atten-tion of the appellee that he consulted his
attorneys and eventually brought the present suit."

The trial court (Judge Quirico Abeto presiding) absolved the defendant from the complaint, with costs
against the plain-tiff, on the grounds that the two trade--marks are dissimilar * and are used on different
and non-competing goods; that there had been no exclusive use of the trade-mark by the plaintiff; and
that there had been no fraud in the use of the said trade-mark by the defendant be-cause the goods on
which it is used are essentially different from those of the plaintiff. The second division of the Court of
Appeals, composed of Justices Bengson, Padilla, Lopez Vito, Tuason, and Alex Reyes, with Justice
Padilla as ponente, reversed that judgment, holding that by uninterrupted and exclusive use since 1910
in the manufacture of slippers and shoes, respondent's trade-mark has acquired a secondary meaning;
that the goods or articles on which the two trade-marks are used are similar or belong to the same
class; and that the use bv pe-titioner of said trade-mark constitutes a violation of sections 3 and 7 of
Act No. 666. The defendant Director of Commerce did not appeal from the deci-sion of the Court of
Appeals.

First. Counsel for the petitioner, in a well-written brief, makes a frontal sledge-hammer attack on the
validity of respondent's trade-mark "Ang Tibay." He contends that the phrase "Ang Tibay" as employed
by the respondent on the articles manufactured by him is a de-scriptive term because, "freely translated
in English," it means "strong, durable, lasting." He invokes section 2 of Act No. 666, which provides that
words or devices which relate only to the name,quality, or description of the merchandise cannot be the
subject of a trade-mark. He cites among others the case of Baxter vs. Zuazua (5 Phil., 160), which
involved the trade-mark "Agua de Kananga" used on toilet water, and in which this Court held that the
word "Kananga," which is the name of a well-known Philippine tree or its flower, could not be
appropriated as a trade-mark any more than could the words "sugar," "tobacco," or "coffee." On the
other hand, counsel for the re-spondent, in an equally well-prepared and exhaustive brief, contend that
the words "Ang Tibay" are not descriptive but merely suggestive and may properly be regarded as
fanciful or arbitrary in the legal sense. They cite several cases in which similar words have been
sus-tained as valid trade-marks, such as "Holeproof" for hosiery, "Ideal" for tooth brushes, and
"Fashionknit" for neckties and sweaters.

We find it necessary to go into the ety-mology and meaning of the Tagalog words "Ang Tibay" to
determine whether they are a descriptive term, i. e., whether they relate to the quality or description of
the merchandise to which respondent has ap-plied them as a trade-mark. The word "ang" is a definite
article meaning "the" in English. It is also used as an adverb, a contraction of the word "anong" (what
or how). For instance, instead of say-ing, "Anong ganda!" ("How beautiful!"), we ordinarily say, "Ang
ganda!" Tibay is a root word from which are derived the verb magpatibay (to strengthen); the nouns
pagkamatibay (strength, durability), katibayan (proof, support, strength), katibaytibayan (superior
strength); and the adjectives matibay (strong, durable, lasting), napakatibay (very strong), kasintibay or
magkasinti-bay (as strong as, or of equal strength). The phrase "Ang Tibay" is an exclamation denoting
admiration of strength or durability. For instance, one who tries hard but fails to break an object
exclaims, "Ang tibay!" ("How strong!") It may also be used in a sentence thus, "Ang tibay ng sapatos
mo!" ("How durable your shoes are!") The phrase "ang tibay" is never used adjectively to define or
describe an object. One does not say, "ang tibay sa-patos" or "sapatos ang tibay" to mean "durable
shoes," but "matibay na sapatos" or "sapatos na matibay."

From all of this we deduce that "Ang Tibay" is not a descriptive term within the meaning of the Trade-
Mark Law but rather a fanciful or coined phrase which may properly and legally be appropriated as a
trade-mark or trade-name. In this connection we do not fail to note that when the petitioner herself took
the trouble and expense of securing the reg-istration of these same words as a trade-mark of her
products she or her attorney as well as the Director of Commerce was undoubtedly convinced that said
words (Ang Tibay) were not a descriptive term and hence could be legally used and va-lidly registered
as a trade-mark. It seems stultifying and puerile for her now to contend otherwise, suggestive of the
story of sour grapes. Counsel for the petitioner says that the function of a trade-mark is to point
distinctively, either by its own meaning or by association, to the origin or ownership of the wares to
which it is applied. That is correct, and we find that "Ang Tibay," as used by the respondent to designate
his wares, had exactly performed that function for twenty-two years before the petitioner adopted it as
a trade-mark in her own business. Ang Tibay shoes and slippers are, by association, known throughout
the Philippines as products of the Ang Tibay factory owned and operated by the respondent Toribio
Teodoro.

Second. In her second assignment of error petitioner contends that the Court of Appeals erred in holding
that the words "Ang Tibay" had acquired a sec-ondary meaning. In view of the conclusion we have
reached upon the first assignment of error, it is unnecessary to apply here the doctrine of "secondary
meaning" in trade-mark parlance. This doctrine is to the effect that a word or phrase originally incapable
of exclusive appropriation with reference to an article on the market, because geographically or
otherwise descriptive, might nevertheless have been used so long and so exclusively by one producer
with reference to his article that, in that trade and to that branch of the purchasing public, the word or
phrase has come to mean that the article was his product. (G. & C. Merriam Co. vs. Saalfield, 198 F.,
369, 373.) We have said that the phrase "Ang Tibay," being neither geographic nor de-scriptive, was
originally capable of ex-clusive appropriation as a trade-mark. But were it not so, the application of the
doctrine of secondary meaning made by the Court of Appeals could nevertheless be fully sustained
because, in any event, by respondent's long and exclusive use of said phrase with reference to his
prod-ucts and his business, it has acquired a proprietary connotation. (Landers, Frary, and Clark vs.
Universal Cooler Corporation, 85 F. [2d], 46.)

Third. Petitioner's third assignment of error is, that the Court of Appeals erred in holding that pants and
shirts are goods similar to shoes and slippers within the meaning of sections 3 and 7 of Act No. 666.
She also contends under her fourth assignment of error (which we deem convenient to pass upon
together with the third) that there can neither be infringement of trade-mark under section 3 nor unfair
competition under section 7 through her use of the words "Ang Tibay" in connection with pants and
shirts, be-cause those articles do not belong to the same class of merchandise as shoes and slippers.

The question raised by petitioner in-volve the scope and application of sec-tions 3, 7, 11, 13, and 20 of
the Trade-Mark Law (Act No. 666). Section 3 provides that "any person entitled to the exclusive use of
a trade-mark to designate the origin or ownership of goods he has made or deals in, may recover dam-
ages in a civil action from any person who has sold goods of a similar kind, bearing such trade-mark *
* * The complaining party * * * may have a preliminary injunction, * * * and such injunction upon
final hearing, if the complainant's property in the trade-mark and the defendant's violation thereof shall
be fully established, shall be made per-petual, and this injunction shall be part of the judgment for
damages to be ren-dered in the same cause." Section 7 provides that any person who, in selling his
goods, shall give them the general appearance of the goods of another either in the wrapping of the
packages, or in the devices or words thereon, or in any other feature of their appearance, which would
be likely to influence purchasers to believe that the goods offered are those of the complainant, shall
be guilty of unfair competition, and shall be liable to an action for damages and to an in-junction, as in
the cases of trade-mark infringement under section 3. Section 11 requires the applicant for registra-tion
of a trade-mark to state, among others, "the general class of merchandise to which the trade-mark
claimed has been appropriated." Section 13 provides that no alleged trade-mark or trade-name shall
be registered which is iden-tical with a registered or known trade-mark owned by another and
appropriate to the same class of merchandise, or which so nearly resembles another per-son's lawful
trade-mark or trade-name as to be likely to cause confusion or mis-take in the mind of the public, or to
deceive purchasers. And section 20 au-thorizes the Director of Commerce to establish classes of
merchandise for the purpose of the registration of trade-marks and to determine the particular
descrip-tion of articles included in each class; it also provides that "an application for registration of a
trade-mark shall be reg-istered only for one class of articles and only for the particular description of
ar-ticles mentioned in said application."

We have underlined the key words used in the statute: "goods of a similar kind," "general class of
merchandise," "same class of merchandise," "classes of merchandise," and "class of articles," because
it is upon their implications that the result of the case hinges. These phrases, which refer to the same
thing, have the same meaning as the phrase "merchandise of the same descriptive properties" used in
the statutes and juris-prudence of other jurisdictions.

The burden of petitioner's argument is that under sections 11 and 20 the regis-tration by respondent of
the trade-mark "Ang Tibay" for shoes and slippers is no safe-guard against its being used by pe-titioner
for pants and shirts because the latter do not belong to the same class of merchandise or articles as
the former; that she cannot be held guilty of infringe-ment of trade-mark under section 3 be-cause
respondent's mark is not a valid trade-mark, nor has it acquired a sec-ondary meaning; that pants and
shirts do not possess the same descriptive prop-erties as shoes and slippers; that neither can she be
held guilty of unfair competi-tion under section 7 because the use by her of the trade-mark "Ang Tibay"
upon pants and shirts is not likely to mislead the general public as to their origin or ownership; and that
there is no showing that she is unfairly or fraudulently using the mark "Ang Tibay" against the
re-spondent. If we were interpreting the statute for the first time and in the first decade of the twentieth
century, when it was enacted, ,and were to construe it strictly and literally, we might uphold petitioner's
contentions. But law and jurisprudence must keep abreast with the progress of mankind, and the courts
must breathe life into the statutes if they are to serve their purpose. Our Trade-mark Law, enacted
nearly forty years ago, has grown in its implications and practical application, like a constitution, in virtue
of the life continually breathed into it. It is not of merely local application; it has its counterpart in other
jurisdictions of the civilized world from whose juris-prudence it has also received vitalizing nourishment.
We have to apply this law as it has grown and not as it was born. Its growth or development abreast
with that of sister statutes and jurispru-dence in other jurisdictions is reflected in the following
observation of a well-known author:

"This fundamental change in attitude first manifested itself in the year 1915-1917. Until about then, the
courts had proceeded on the theory that the same trade-mark, used on unlike goods, could not cause
confusion in trade and that, therefore, there could be no objection to the use and registration of a well-
known mark by a third party for a different class of goods. Since 1916 however, a growing senti-ment
began to arise that in the selection of a famous mark by a third party, there was gen-erally the hidden
intention to 'have a free ride' on the trade-mark owner's reputation and good will." (Derenberg, Trade-
Mark Protection & Unfair Trading, 1936 edition, p. 409.)

In the present state of development of the law on Trade-Marks, Unfair Compe-tition, and Unfair Trading,
the test em-ployed by the courts to determine whether noncompeting goods are or are not of the same
class is confusion as to the origin of the goods of the second user. Although two noncompeting articles
may be classified under two different classes by the Patent Office because they are deemed not to
possess the same descriptive prop-erties, they would, nevertheless, be held by the courts to belong to
the same class if the simultaneous use on them of iden-tical or closely similar trade-marks would be
likely to cause confusion as to the origin, or personal source, of the second user's goods. They would
be considered as not falling under the same class only if they are so dissimilar or so foreign to each
other as to make it unlikely that the purchaser would think the first user made the second user's goods.

Such construction of the law is induced by cogent reasons of equity and fair deal-ing. The courts have
come to realize that there can be unfair competition or unfair trading even if the goods are non-
competing, and that such unfair trading can cause injury or damage to the first user of a given trade-
mark, first, by pre-vention of the natural expansion of his business and, second, by having his busi-ness
reputation confused with and put at the mercy of the second user. When noncompetitive products are
sold under the same mark, the gradual whittling away or dispersion of the identity and hold upon the
public mind of the mark created by its first user, inevitably re-sults. The original owner is entitled to the
preservation of the valuable link be-tween him and the public that has been created by his ingenuity
and the merit of his wares or services. Experience has demonstrated that when a well-known trade-
mark is adopted by another even for a totally different class of goods, it is done to get the benefit of the
reputation and advertisements of the originator of said mark, to convey to the public a false impression
of some supposed connection between the manufacturer of the article sold under the original mark and
the new articles being tendered to the public under the same or similar mark. As trade has developed
and commercial changes have come about, the law of un-fair competition has expanded to keep pace
with the times and the element of strict competition in itself has ceased to be the determining factor.
The owner of a trade-mark or trade-name has a prop-erty right in which he is entitled to pro-tection,
since there is damage to him from confusion of reputation or goodwill in the mind of the public as well
as from confusion of goods. The modern trend is to give emphasis to the unfairness of the acts and to
classify and treat the issue as a fraud.

A few of the numerous cases in which the foregoing doctrines have been laid down in one form or
another will now be cited: (1) In Teodoro Kalaw Ng Khevs. Lever Brothers Company (G. R. No.

46817), decided by this Court on April 18, 1941, the respondent company (plain-tiff below) was granted
injunctive relief against the use by the petitioner of the trade-mark "Lux" and "Lifebuoy" for hair pomade,
they having been origi-nally used by the respondent for soap; the Court held in effect that although said
articles are noncompetitive, they are sim-ilar or-belong to the same class. (2) In Lincoln Motor Co. vs.
Lincoln Automo-bile Co. (44 F. [2d"|, 812), the manufac-turer of the well-known Lincoln auto-mobile was
granted injunctive relief against the use of the word "Lincoln" by another company as part of its firm
name. (3) The case of Aunt Jemima Mills Co. vs. Rigney & Co. (247 F., 407), involved the trade-mark
"Aunt Jemima," originally used on flour, which the de-fendant attempted to use on syrup, and there the
court held that the goods, though different, are so related as to fall within the mischief which equity
should prevent. (4) In Tiffany & Co. vs. Tif-fany Productions, Inc. (264 N. Y. S., 459; 23 Trade-mark
Reporter, 183), the plain-tiff, a jewelry concern, was granted in-junctive relief against the defendant, a
manufacturer of motion pictures, from using the name "Tiffany." Other famous cases cited on the
margin, wherein the courts granted injunctive relief, involved the following trade-marks or trade-names
"Kodak," for cameras and photographic supplies, against its use for bicycles;1 "Penslar," for medicines
and toilet ar-ticles, against its use for cigars;2 "Rolls-Royce," for automobiles, against its use for radio
tubes;3 "Vogue," as the name of a magazine, against its use for hats;4 "Kotex," for sanitary napkins,
against the use of "Rotex" for vaginal syringes;'' "Sun-Maid," for raisins, against its use for flour;" "Yale,"
for locks and keys, against its use for electric flashlights;1 and "Waterman," for fountain pens, against
its use for razor blades.2

Against this array of famous cases, the industry of counsel for the petitioner has enabled him to cite on
this point only the following cases: (1) Mohawk Milk Products vs. General Distilleries Corpo-ration (95
F. [2d], 334), wherein the court held that gin and canned milk and cream do not belong to the same
class; (2) Fawcett Publications, Inc. vs. Pop-ular Mechanics Co. (80 F. [2d], 194), wherein the court
held that the words "Popular Mechanics" used as the title of a magazine and duly registered as a trade-
mark were not infringed by de-fendant's use of the words "Modern Me-chanics and Inventions" on a
competitive magazine, because the word "mechanics" is merely a descriptive name; and (3) Oxford
Book Co. us. College Entrance Book Co. (98 F. [2d], 688), wherein the plaintiff unsuccessfully attempted
to enjoin the defendant from using the word "Visualized" in connection with history books, the court
holding that said word is merely descriptive. These cases cited and relied upon by petitioner are
ob-viously of no decisive application to the case at bar.

We think reasonable men may not dis-agree that shoes and shirts are not as unrelated as fountain pens
and razor blades, for instance. The mere relation or association of the articles is not con-trolling. As
may readily be noted from what we have heretofore said, the pro-prietary connotation that a trade-mark
or trade-name has acquired is of more paramount consideration. The Court of Appeals found in this
case that by un-interrupted and exclusive use since 1910 of respondent's registered trade-mark on
slippers and shoes manufactured by him, it has come to indicate the origin and ownership of said goods.
It is cer-tainly not farfetched to surmise that the selection by petitioner of the same trade-mark for pants
and shirts was motivated by a desire to get a free ride on the repu-tation and selling power it has
acquired at the hands of the respondent. As ob-served in another case,3 the field from which a person
may select a trade-mark is practically unlimited, and hence there is no excuse for impinging upon or
even closely approaching the mark of a busi-ness rival. In the unlimited field of choice, what could have
been petitioner's purpose in selecting "Ang Tibay" if not for its fame?

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

The judgment of the Court of Appeals is affirmed, with costs against the peti-tioner in the three
instances. So ordered.

Yulo, C.J., Moran, Paras, and Bocobo, J J., concur.

Judgment affirmed.

o0o

E. SPINNER & COMPANY, plaintiff and appellant


vs.
NEUSS HESSLEIN CORPORATION, defendant and appellee.

No. 31380, January 13, 1930

1. TRADE-MARKS; INFRINGEMENT OF TRADE-MARK RIGHT; UNFAIR COMPETITION


DISTINGUISHED.Though the law concerning infringement of trade-marks and that concerning unfair
competition have a common conception at their root, which is that one person shall not be permitted to
misrepresent that his goods or his business are the goods or the business of another, the law
concerning unfair competition is broader and more inclusive. On the other hand, the law concerning the
infringement of trade-mark is of more limited range, but within 'its narrower range recognizes a more
exclusive right derived from the adoption and registration of the trade-mark by the person whose goods
or business are first associated therewith. One who has identified a peculiar symbol or mark with his
goods thereby acquires a property right in such symbol or mark, and if another infringes the trade-mark
he thereby invades this property right. Unfair competition cannot be placed on the plane of invasion of
property right. The tort is strictly one of fraud.

2. ID. ; WHAT CONSTITUTES UNFAIR COMPETITION ; DEVICES BY WHICH UNFAIR


COMPETITION MAY BE ACCOMPLISHED.As the tort of unfair competition is broader than the wrong
involved in the infringement of a trade-mark, one who fails to establish the exclusive property right which
is essential to the validity of a trade-mark, may yet frequently obtain relief on the ground of his
competitor's unfairness or fraud. Any conduct may be said to constitute unfair competition if the effect
is to pass 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. The most usual devices are the simulation of labels and
the reproduction of the form, color and general appearance of the package used by the pioneer
manufacturer or dealer. But unfair competition is not limited to these forms. As stated in section 7 of Act
No. 666, a person is guilty of unfair competition who "in selling his goods shall give them the general
appearance of goods of another manufacturer or dealer, either 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."

3. ID.; INFRINGEMENT OF TRADE-MARK AND UNFAIR COMPETITION; CASE AT BAR.The


plaintiff, a manufacturer and seller of khaki, introduced the word " Wigan" to indicate a particular quality
of khaki sold by it in various parts of the world. This word was contained in the plaintiff's trade-mark and
also commonly stenciled upon the bolts of khaki of the particular quality with which said word was
identified. The defendant, using a different trade-mark, stamped the same word on bolts of khaki of
inferior grade and different shades of color sold by it. Held, that such use of the word "Wigan" by the
defendant was not only unfair competition but an infringement of the plaintiff's registered trade-mark in
which this word was incorporated.

4. ID.; ID.; PERSON DECEIVED.The circumstance that retail dealers are informed as to the exact
origin and quality of the goods bearing false labels which are purchased by them from a manufacturer
guilty of unfair competition will not prevent the injured party from obtaining relief, where it appears that
the casual purchaser and ultimate consumer, who knows the goods only by name, is likely to be
deceived as to the quality of the goods purchased by him.

5. ID.; ID.; INFRINGEMENT OF TRADE-MARK BY REPRODUCTION OF PART.The illegitimate


use of only one word in a registered trade-mark constitutes an infringement of the trade-mark. It is not
necessary that all the -words used in the trade-mark should be reproduced by the infringer.

6. ID. ; ID. ; ARTIFICIAL USE OF WORDS.An artificial word used to indicate quality must not be
pirated by a competitor for the purpose of selling an inferior product as the product of another dealer or
manufacturer who has first associated such artificial word with his own superior product. The same rule
applies to geographical terms which are artificially used to indicate quality.

7. ID.; ID.; DAMAGES; ACCOUNTING FOR PROFITS; ELECTION OF REM-EDY.A plaintiff who
elects to sue for the damages resulting to his business from infringement of a trade-mark or from the
unfair competition of another and who fails to prove any assessable damage is not entitled to an
accounting for the profits obtained by the defendant upon goods sold by him in violation of the plaintiff's
right. The right to recover damages and the right to an accounting are different remedies; and the
election to sue for the first is a waiver of the second.

APPEAL from a judgment of the Court of First Instance of Manila. Revilla, J.

The facts are stated in the opinion of the court.

Benj. S. Ohnick and John R. McFie, jr., for appellant.

Camus & Delgado for appellee.

STREET, J.:

This action was instituted in the Court of First Instance of Manila on November 23, 1926, by E. Spinner
& Co., of .Manchester, England, for the purpose of restraining the defendant, the Neuss Hesslein
Corporation, organized under the laws of the Philippine Islands, from using the word "Wigan," as applied
to khaki textiles sold by the defendant in the Philippine Islands, and to recover damages for violation of
the plaintiff's trade-mark right in the word "Wigan" and for alleged unfair competition committed by the
defendant in the use of the same. 'Upon hearing the cause the trial court absolved the defendant from
the complaint, with costs against the plaintiff, and the plaintiff appealed.

There is little or no dispute upon the determinative facts of the case which are substantially these: E.
Spinner & Co. is a co-partnership with head offices in Manchester, England, and Bombay, India, being
represented in the Philippine Islands by Wise & Co., a domestic corporation with principal office in the
City of Manila; while the defendant is a corporation organized in December, 1922, under the laws of the
Philippine Islands, with its principal office in the City of Manila. .The defendant is a subsidiary of Neuss
Hesslein & Co., Inc., of New York City, U. S. A., for whom it acts as selling agent in the Philippine
Islands. The plaintiff, E. Spinner & Co., has long been engaged in the manufacture and sale of textile
fabrics, including khaki cloth, with distributing business connections in different parts of the world. Soon
after the American occupation of the Philippine Islands, or about 1900, the plaintiff began exporting its
khaki into the Philippine Islands through local firms, notable Holliday, Wise & Co. (now Wise & Co.),
Smith, Bell & Co., Ltd., and others. Because of the superior qualities of its goods, such as the fastness
of its color, the consistency of its texture, and its proven durability, the plaintiff's khaki made favorable
impression in the Philippine market, enjoying a popular favor and preference which resulted in a
lucrative trade. Among the brands of khaki enjoying such favor was the grade indicated by the
manufacturer as "Wigan." A higher grade was marketed by the plaintiff under the brand "Stockport;"
while still other grades were put upon the market under the brands "Jackton" and "Ashford."
All of these different grades of khaki were marketed by the plaintiff under a common trade-mark, which
was first registered in the Bureau of Patents, Copyrights, and Trade-Marks of the Philippine Government
in the year 1905. This trade-mark consists of a large label representing the profiles of two elephant
heads placed close to each other in the upper middle center of the label and looking in opposite
directions, with trunks extending respectively to the right and left. This device has for its rectangular
border a garland of leaves; while over the point of union between the two heads appear several flags.
Inside the space formed by the trunks of the elephants and the garland of leaves appears a label
consisting of the following words:

LEEMANN & GATTY'S


ORIGINAL
PATENTED FAST
KHAKI DRILL.

Agents: Messrs. E. SPINNER & Co.,


MANCHESTER & BOMBAY
Quality: ................................Yds.

REGISTERED
No. 50,275.

This label was pasted on the outside of each bolt of khaki sold by the plaintiff, the different grades being
indicated by the words "Wigan," "Stockport," etc., inserted with stencil in the blank space following the
word "Quality." The trade-mark proper, as thus used, was a general mark covering various brands. This
practice was followed for more than twenty years, but the plaintiff learned in 1924 that the defendant,
the Neuss Hesslein Corporation, was selling a brand of khaki in the Philippine Islands with the word
"Wigan" stenciled on the bolts below the defendant's own trade-mark. As thus employed by the
defendant, the word "Wigan" purports to show the color of the defendant's khaki, but the proof shows
that the word was thus used by the defendant upon khaki of different shades. After discovering this fact,
the plaintiff, in April, 1925, caused its trade-mark, consisting of the two elephant heads, to be again
registered in the Bureau of Commerce and Industry, as per certificate No. 4807. In its essential features,
this trade-mark is identical with the trade-mark registered by the plaintiff in 1905, but in the latter trade-
mark the word "Wigan" is inserted after the word "Quality." The purpose of this registration was of
course to incorporate the word "Wigan" as an integral part of the registered trade-mark.

As already stated, the defendant, the Neuss Hesslein Corporation, was organized in the Philippine
Islands in December, 1922, as a subsidiary of Neuss Hesslein & Co., Inc., of New York; and beginning
with 1923, the defendant has been marketing khaki in the Philippine Islands for the New York house.
But before the organization of the defendant the New York house had, for several years, been selling
its khaki in the Philippine Islands, under two different brands. These were known respectively as the
"Five Soldiers" and the "Four Soldiers," the last named being also known as the "Wide Awake" brand.
The "Five Soldiers" trade-mark was registered in the Bureau of Commerce and Industry in 1916, and
the "Four Soldiers" trade-mark in February, 1923. These two grades of khaki are marketed at a much
lower price than plaintiff s "Wigan," since it appears that the plaintiff's "Wigan" is sold in the Philippine
market by Wise & Co. for 71 centavos per yard, and by other firms at 70 centavos a yard, while
defendant's "Five Soldiers" sells at from 54 centavos to 55 centavos, and its "Four Soldiers" from 35
centavos to 40 centavos a yard.

After the defendant corporation had assumed the agency in the Philippine Islands for the products of
the New York house, the manager of the defendant, at the request of Chinese customers, began to give
orders to the New York house for the printing of the word "Wigan" conspicuously upon the bolts of khaki
intended for sale in the Philippine Islands; and in the latter part of 1923 or in the early part of the year
1924, the defendant's khaki began to be marketed here with the word "Wigan" thereon.

It appears that the words "Wigan," "Stockport," "Jackton," and "Ashford," adopted by the plaintiff to
indicate different qualities of khaki, are the names of manufacturing towns of minor importance in
England; but the brand of khaki with which the defendant associates the name "Wigan" does not appear
to be manufactured in the town of Wigan. It also appears that the term "Wigan" is used in commercial
parlance as the name of a canvass-like cotton fabric used to stiffen parts of garments. But it is clear
that in adopting the word "Wigan" to indicate a brand of khaki, the plaintiff did not use the word "Wigan"
either in its geographical sense or in the trade sense of a material for stiffening. The use made by the
plaintiff of the term "Wigan" is therefore arbitrary and artificial, in that it departs from any previously
accepted sense.

It will be noted that the plaintiff uses the word "Wigan" to indicate quality, while the defendant purports
to use the term to indicate color, though the defendant's practice in this usage is somewhat loose. There
is some proof in the record tending to show that American dealers are accustomed to use the word
"Wigan" to indicate a color or certain shades of color of khaki cloth. But it is evident that the plaintiff first
adopted the word "Wigan" in connection with khaki cloth, and this was done for the purpose of indicating
quality. In this sense the word "Wigan" has accompanied the plaintiff's khaki for years in the different
markets of the world, and the term has become associated in the minds of merchants Who deal in this
material with the standard of quality maintained by the plaintiff in the "Wigan" brand.

This action involves a question of trade-mark right and a further question of unfair competition, and the
problem is to determine whether, upon the facts above stated, the defendant corporation has a right to
use the word "Wigan" on khaki sold by it in the Philippine Islands. The law governing trade-mark rights
as well as unfair competition in this jurisdiction is found in Act No. 666 of the Philippine Commission,
which is a reduction to statutory form of the jurisprudence developed by the courts of England and the
United States in connection with the subjects mentioned; and to the summary of substantive law
expressed in the statute are added the provisions relative to the registration of trade-marks. Act No.
666 has been from time to time amended, but none of the amendatory provisions adopted prior to the
beginning of this lawsuit have any bearing on the problem before us.

Though the law concerning infringement of trade-marks and that concerning unfair competition have a
common conception at their root, which is that one person shall not be permitted to misrepresent that
his goods or his business are the goods or the business of another, the law concerning unfair
competition is broader and more inclusive. On the other hand, the law concerning the infringement of
trademark is of more limited range, but within its narrower range recognizes a more exclusive right
derived from the adoption and registration of the trade-mark by the person whose goods or business
are first associated therewith. One who has identified a peculiar symbol or mark with his goods thereby
acquires a property right in such symbol or mark, and if another infringes the trade-mark he thereby
invades this property right. Unfair competition cannot be placed on the plane of invasion of property
right. The tort is strictly one of fraud. It results that the law of trademarks is specialized subject distinct
from the law of unfair competition, though, as stated above, the two subjects are entwined with each
other and are dealt with together in Act No. 666. Inasmuch as the principles applicable to trade-marks
were precisely defined at an earlier date than the principles applicable to unfair competition, it is not
surprising that confusion should be found in the earlier decisions between the legal doctrines relating
to the two subjects. Of late years, however, the term "trade-mark" has been restricted to its proper
technical meaning and the term "unfair competition" is used to include wrongful acts of competition not
involving any violation of trade-mark right proper. As the tort of unfair competition is broader than the
wrong involved in the infringement of a trademark, one who fails to establish the exclusive property right
which is essential to the validity of a trade-mark, may yet frequently obtain relief on the ground of his
competitor's unfairness or fraud. Any conduct may be said to constitute unfair competition if the effect
is to pass 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. The most usual devices are the simulation of labels and
the reproduction of the form, color and general appearance of the package used by the pioneer
manufacturer or dealer. But unfair competition is not limited to these forms. The general principle
underlying the law of unfair competition is that a competitor in business cannot be permitted to do acts
which have deceived, or are reasonably designed to deceive, the public into buying his goods as those
of another.

As stated in section 7 of Act No. 666, a person is guilty of unfair competition who "in selling his goods
shall give them the general appearance of goods of another manufacturer or dealer, either 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," etc. This
language is very broad; and as applied to the case before us it is evident that, in using the word "Wigan"
on the khaki cloth sold by it, the defendant has appropriated a word likely to lead purchasers to believe
that the goods sold by the defendant are those of the plaintiff. The representation that the khaki sold by
the defendant is of the kind known to the trade as "Wigan" directly tends to deceive the purchaser and,
therefore, constitutes unfair competition as against the plaintiff.

It is no doubt true that the adoption of the word "Wigan" by the defendant does not deceive merchants
or tailors buying from the defendant. But the person most to be considered in this connection is the
consumer, and when the word "Wigan" is found upon a bolt of khaki, the ultimate buyer, or consumer,
would naturally be led to suppose that the goods sold under this name is the goods sold by the plaintiff.
In the case before us it is revealed that the word "Wigan" was first stamped upon the khaki sold by the
defendant at the suggestion or request of a Chinese customer, presumably a tailor or merchant, and
the purpose behind the suggestion undoubtedly was that, if this term were found stamped upon the
khaki thus sold it could be represented to the ultimate purchaser that the khaki thus sold was the
plaintiff's "Wigan." In this connection it should be noted that, in the action to enjoin unf fair competition,
the fraudulent intention on the part of the defendant may be inferred from the similarity of the goods
offered for sale by him to the goods of the plaintiff (Act No. 666, sec. 7, end). In the case before us the
use of the word "Wigan," stamped by the defendant upon the bolts of khaki sold by it, sufficiently
discloses an intention to mislead the consumer. Moreover, as was observed by the Court of Appeals of
the Third Circuit in Barton vs. Rex-Oil Co., (40 A. L. R., 424), it makes no difference that dealers in the
article are not deceived. They are informed and usually know what they are buying. The law concerns
itself with the casual purchaser who knows the commodity only by its name. In obtaining what he asks
for he is entitled to protection against unfair dealing. (Citing National Biscuit Co. vs. Baker, 95 Fed.,
135; Eli Lilly & Co. vs. Wm. R. Warner & Co., 275 Fed., 752; William R. Warner & Co. vs. Eli Lilly & Co.,
265 U. S., 526.)

With respect to the question of infringement of trademark right, it is clear that the appropriation by the
defendant of the word "Wigan" for use in the sale of its khaki did not constitute a violation of trade-mark
prior to April, 1925, when the word "Wigan" was first incorporated in the plaintiff's registered trade-mark;
but after that date it was certainly illegal for the defendant to use the word 'Wigan" stamped upon the
khaki sold by it; and this act was an infringement of trade-mark right. It is true that the plaintiff's trade-
mark proper consisted of a pictorial representation of the heads of two elephants, embellished by
leaves, and the word "Wigan" was only a part of said trade-mark. Nevertheless, the misappropriation of
this word by the competitor was a violation of the plaintiff's right. It has been held in the Supreme Court
of the United States that the use of only one of the words constituting a trade-mark may be sufficient to
constitute an infringement, and it is not necessary to this end that all of the words comprising the trade-
mark should be appropriated (Saxlehner vs. Eisner & Mendelson Co., 179 U, S., 20; 45 Law. ed., 60).

In section 2 of Act No. 666 it is declared that a designation or part of a designation which relates only
to the name, quality, or description of the merchandise, or geographical place of its production or origin,
cannot be made the subject of a trade-mark; and it seems to be supposed by the defendant that this
provision disables the plaintiff from complaining of the use made of the word "Wigan" by the defendant.
But it will be noted that the word "Wigan" as applied to quality, is not an English word in common use
for describing quality. The word "Wigan" is here used in an entirely artificial sense and its association
with quality had its origin exclusively in the use which the plaintiff has made of it. The designation of
name, quality, or description, as used in the statute, has reference to linguistic terms in common use.
In words of this character no particular manufacturer can acquire an exclusive property right. Again, it
will be noted that, although "Wigan," being the name of a town, was an original geographical term, it is
not used upon the plaintiff's khaki to indicate the geographical place of production of the product. Even
geographical terms can be used in an arbitrary and artificial sense, and when so used by one
manufacturer the improper appropriation of the same term by another may be enjoined as an invasion
of trade-mark right. Of course, if the defendant were manufacturing its khaki in the town of "Wigan," it
would be entitled to use that name to indicate the place of manufacture of its goods. But such is not the
-case here.

From what has been said it follows that the plaintiff is entitled to an injunction for the purpose of
restraining the defendant from using the word "Wigan" upon the bolts of khaki sold by it, whether the
wrongful act of the defendant be considered as an act of unfair competition or as an infringement of the
trade-mark registered by the plaintiff in April, 1925. But the plaintiff further seeks to recover damages
in the estimated amount of P15,000 for the injury sustained by the plaintiff. As in Forbes, Munn & Co.
vs, Ang San To (43 Phil., 724), the provision in the complaint referring to damages should, we think, be
interpreted as a prayer for an assessment of the compensation to which the plaintiff might be entitled
for the damage done to its business. The proof, however, shows that the plaintiff's business has shown
a healthy growth during the period covered by the wrongful acts which are the subject of this action,
and it is not proved that any assessable damage has been inflicted upon the plaintiff by the wrongful
acts of the defendant, though the infringement of legal right is clear. We are therefore of the opinion
that no damages should be awarded to the plaintiff. It will be noted that Act No. 666 gives the plaintiff a
right to elect between the recovery of damages for the harm done to the plaintiff's business and the
enforcement of an accounting against the defendant for the profits which may be shown to have accrued
to it by reason of the sales made in violation of the plaintiff's right. But these two remedies are different
and, where the plaintiff has elected to sue for damages and no damages are proved, none can be
awarded. This makes it unnecessary to analyze the proof with a view to discovering the profits which
the defendant may have earned by the illegitimate sales.

The judgment appealed from will therefore be modified, and the defendant and its agents will be
enjoined, as they are hereby enjoined, from using the word "Wigan" upon the khaki sold by it in the
Philippine Islands, and from otherwise representing its khaki to be of the "Wigan" brand. In absolving
the defendant from the claim for damages, the judgment will be affirmed. So ordered, without costs.

Ostrand, Johns, Romualdez, and Villa-Real, JJ., concur.

AVANCEA, C. J., and MALCOLM, J., dissenting:

A question of fact was submitted in this case in the lower court for resolution. That question of fact was
resolved not alone by one Judge of First Instance but by two Judges of First Instance against the
pretensions of the plaintiff. The facts which the court found established were "by a great preponderance
of the evidence." The pronouncements of the trial court on this issue of fact should accordingly be here
respected.

In regard to the facts, it is noted that in the year 1905 the plaintiff partnership registered its trade-mark
but without including therein the word "Wigan." Thereafter, American khaki came into the Philippine
market and made use of the word "Wigan" to indicate the particular color of khaki. This was done openly,
and without any attempt at deception. In 1925, the plaintiff partnership amended its former trade-mark
by including in the same, among others, the word "Wigan." In relation with these undisputed facts, it
should further be mentioned that the plaintiff did not present even one witness to establish that any
person had ever been deceived by buying the khaki cloth of the defendant, believing the same to be
the khaki cloth of the plaintiff. On the contrary, the purchasing agent of the Government testified that
there has never been any confusion between the khaki cloth of the plaintiff and the khaki cloth of the
defendant.

The law does not prohibit every similarity in the manufacture and labeling of merchandise (Alhambra
Cigar & Cigarette Manufacturing Co. vs. Compaa Gral. de Tabacos [1916], 35 Phil., 62). As the word
"Wigan" had become common in the khaki trade in the Philippines to designate a particular color of
American manufactured khaki cloth, and had also become common to designate a certain quality or
grade of English manufactured khaki cloth, there was similarity but not deceitful similarity.

This is a case of competition. It is not a case of unfair competition. Accordingly, the decision of the trial
court, agreeing in all respects with the decision of another branch of the same court, should be sustained
and confirmed by absolving the defendant from the complaint. That is our vote.

Judgment modified.

o0o

INCHAUSTI & COMPANY, plaintiffs and appellees


vs.
SONG Fo & COMPANY ET AL., defendants and appellants

No. 6623. January 26, 1912

1. TRADE-MARKS; CERTAIN SYMBOLS, STANDING ALONE, NOT ADMISSIBLE AS MARKS.


As a rule a symbol which represents something in universal use by the public generally, or by a
particular class of the people, is not a proper subject of an exclusive trade-mark.
2. ID.; SYMBOLS, IN COMBINATION WITH OTHER DISTINGUISHING FEATURES,
ADMISSIBLE.While the symbol of a demijohn, by itself, may not be the subject of an exclusive trade-
mark under the foregoing rule, held that the demijohn used in plaintiff s trade-mark in combination with
the other distinguishing elements therein may fairly be made the subject of such a trademark.

3. ID.; RULE FOR DETERMINING ADMISSIBILITY OF MARKS.In seeking to determine whether


a certain design may be made the subject of an exclusive trade-mark we must examine the design as
a whole, and as a combination of its component elements, which can not be considered separately and
apart from the whole of which they form a part.

4. ID.; ACTION FOR INFRINGEMENT.Unless there is such a close resemblance between two
designs used as trade-marks that they may be considered one and the same, an action does not lie in
favor of the owner of one of these trade-marks against the owner of the other for the infringement under
section 3 of Act No. 666.

5. ID.; ACTION FOR UNFAIR COMPETITION.Where use is made of a trade-mark, similar but not
substantially identical with a duly registered trade-mark, the proper action is one for unfair competition
under section 7 of the Act.

APPEAL from a judgment of the Court of First Instance of Manila. Araullo, J.

The facts are stated in the opinion of the court.

Chicote & Miranda, for appellants.

Hamsermann, Cohn & Fisher, for appellees.

CARSON, J.:

This is a suit brought under the provisions of Act No. 666 of the Philippine Commission, in which the
plaintiffs seek to enjoin the defendants in the use of a certain trademark, and for damages consequent
upon the alleged illegal use of the same. The plaintiff company is a general partnership duly organized
under the laws of the Philippine Islands and is the owner of a distillery in the city of Manila known as
the "Destilera de Tanduay." The defendants are the members of a general partnership duly organized
according to the provisions of law, and are the owners and operators of a distillery in the city of Manila
known as the "Destilera La Tondea." Both firms are extensively engaged in the manufacture and sale
of alcoholic liquors.

On October 6, 1903, plaintiffs caused to be registered in the division of archives, patents, copyrights
and trade-marks of the Government of the Philippine Islands a trade-mark for "anisados y alcoholes"
as shown by Exhibit B. A sample or facsimile of this trade-mark is a part of the record and is marked
"Exhibit A." It is shown to be a circular design inclosed within two concentric circles with the symbol of
a demijohn in the center; across the face of the design, running in a horizontal direction are two parallel
lines, and between these lines the word "Tanduay" is placed thus: TANDUAY; this horizontal design
serves to divide the trade-mark into an upper and lower section; in the upper part between the two
circles appears the word "Inchausti" and in the lower arc of the design in a similar position is the word
"Compaa." "Y" appears just underneath the symbol of the demijohn within the smaller circle. Labels
bearing this trade-mark were affixed to the corks used by plaintiffs in the bottling of their products.

The defendants since 1906 have been using, among other labels, affixed to the corks used in the
bottling of their products, a circular label bearing a design substantially similar to the registered trade-
mark of plaintiffs. It is a label of practically the same size as that of plaintiffs. Its main features are two
concentric circles having the symbol of a demijohn in the center; running across the face of the inner
circle is a horizontal design similar to that in plaintiffs' registered trade-mark in which is written the
abbreviation for factory, thus: FACT. The main difference in the two horizontal designs lies in the fact
that in plaintiffs' registered trade-mark the horizontal .design passes across the entire face of both
circles, while in the trade-mark used by defendants the horizontal design passes only across the face
of the inner circle. The wording of the two designs is different, but the general position of the wording is
the same in both designs. The trade-marks appear to have been used in different colors and for the
same purpose by both parties. The trade-mark used by defendants is shown in Exhibits C, CC, and
CCC of the record. These trademarks are the same in general design, but vary in color and wording.

Reference to the certificate of registration (Exhibit B) which was granted to the plaintiff company by the
division of archives, patents, copyrights and trade-marks of the Government of the Philippine Islands
and to the facsimile copy of the trade-mark filed therewith shows that all the requirements of law were
duly complied with, and that all the statements and declarations relating thereto, together with facsimile
copies of the trade-mark, were duly registered. We have before us a certified copy of all the registration,
proceedings. The facsimile of the trade-mark which was presented for registration and which is affixed
to the copy of the registration proceedings (Exhibit B) is substantially identical in all respects to the
trade-mark shown in Exhibit A. It is maintained with considerable zeal in appellants' brief that the
description of the trademark as shown in the registration proceedings is not an accurate description of
all details of the trade-mark claimed by appellees (Exhibit A) and that the granting of a certificate of
registration for the trade-mark described in Exhibit B would not cover plaintiffs' trade-mark (Exhibit A).
To determine this point we do not look alone to the description given in the registration proceedings;
we must look to the whole record. A facsimile copy of the trademark sought to be registered was filed
with the registration office, and it is now a part of the certified copy of the registration proceedings
(Exhibit B) before us. As we have already stated, this facsimile copy which is an integral part of the
registration records is substantially identical in all respects to plaintiffs' trade-mark (Exhibit A). We do
not feel therefore that it is necessary to discuss appellants' contention that the description as given in
the registration proceedings does not in all of its details cover plaintiffs' Exhibit A. The certified facsimile
speaks for itself, and this together with the description is conclusive upon this point.

Defendants' counsel insist that Inchausti & Co. did not have the right to adopt as their exclusive trade-
mark the design shown in Exhibit A, and that it was error on the part of the lower court to adjudge that
they had such a right.

In support of this contention they rely upon the generally accepted rule that a symbol which represents
something in universal use by the public generally, or by a particular class of the people, is not the
subject of an exclusive trademark. It is shown by Exhibit 9 that many other firms and business houses
in the Philippine Islands use circular labels; some of these having designs of which two or more
concentric circles form a constituent element, others having horizontal lines across the face of a circular
design somewhat similar to plaintiffs' design in this respect. It is urged that the demijohn is the only
distinguishing element in plaintiffs' trade-mark upon which they could have been granted an exclusive
trade-mark; and it is further contended that a demijohn being a well-known and generally used
receptacle for alcoholic liquors, and being universally used by the distilling trade, plaintiffs for that
reason are not entitled to the use of the same as a distinguishing symbol and trade-mark for their
products. Many citations are given in support of this contention, and we do not question the soundness
of the doctrine laid down in most of these cases.

But that plaintiffs are entitled to the exclusive use of the above-described trade-mark upon their products
does' not seem to us to be open to question. While the symbol of a demijohn alone might not be the
subject of an exclusive trade-mark, yet we think that a demijohn used as it is in plaintiffs' trade-mark in
combination with the other distinguishing elements therein may fairly be made the subject of an
exclusive trade-mark. The component elements of a design are not to be considered separate and
apart; we must look to the design as a whole; to the combination of those component elements. We are
of opinion that the design shown in Exhibit A is the subject of an exclusive trade-mark, and that the
plaintiffs have the exclusive ownership and right of use in the same by reason of the registration thereof
and their use of this trade-mark in the sale of their products for many years.

We come now to a consideration of the question whether or not the trade-marks used by defendants
shown in Exhibits C, CC, and CCC are infringements of plaintiffs' registered trade-mark. The court
below predicated its decision upon sections 3 and 4 of Act No. 666 of the Philippine Commission. These
sections relate to the violation of trade-mark rights and to remedies thereunder. Among other provisions
of section 3 of the trade-mark law is the following:

"* * * any person entitled to the exclusive use of a trade-mark to designate the origin or ownership of
goods he has made or deals in may recover damages in a civil action from any person who has sold
goods of a similar kind, bearing such trade-mark, * * *."
The section further provides for the method of determining the damages, and also concedes to the
injured party the right to have an injunction restraining the further use of the trade-mark. The court below
was evidently of the opinion that the trade-mark used by the defendants not only closely simulated the
registered trade-mark of plaintiffs, but that they were in reality one and the same trademark and that
the defendants were guilty of selling goods of a similar kind to those sold by plaintiffs and bearing the
registered trade-mark used by plaintiffs. An examination of the two trade-marks in question reveals a
striking similarity in the two designs, but we are not prepared to say that the likeness is such that the
two designs could be considered one and the same trade-mark. And unless there is such a close
resemblance as to result in this conclusion the action does not properly fall within the provisions 'of
section 3 of the Trade-Mark Law. The reasoning of the opinion of the trial judge, however, does not in
any way affect the merits of the issues involved in the case submitted, nor the judgment actually entered
by him. Section 7 of the Trade-Mark Law provides as follows:

"Any person who in selling his goods shall give them the general appearance of the goods of another
manufacturer or dealer, either 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, and who clothes the goods with such appearance for the purpose of deceiving
the public and defrauding another of his legitimate trade * * * shall be guilty of unfair competition, and
shall be liable to an action for damages * * * and in order that the action shall lie under this section,
actual intent to deceive the public and defraud a competitor shall affirmatively appear on the part of the
person sought to be made liable, but such intent may be inferred from similarity in the appearance of
the goods as packed or offered for sale to those of the complaining party."

It will be seen that the measure of damages is to be determined in the same way as that provided in
section 3, and the right of the complaining party to an injunction is the same as that provided for in
cases of the violation of a trade-mark. The facts alleged in the complaint and proven at the trial sustain
a judgment under either of these sections of Act No. 666. Section 3 relates to the actual use of the
trade-mark of another, while section 7 relates to unfair competition, where a manufacturer or dealer
either by the wrappings on a package, or by the words or devices thereon, or by any other feature of
their appearance gives his goods the appearance of those of another manufacturer or dealer with the
intent to deceive the public or defraud such other dealer or manufacturer out of his legitimate trade. For
reasons already stated we are of opinion that the present case comes within the provisions of section
7 of the Trade-Mark Law.

We come now to apply the facts of the case to the provisions of law as they are set forth in section 7 of
said Act No. 666. An examination of the labels used by the parties to this action shows that they are
strikingly similar in their general design and appearance. We have already had occasion in the course
of this opinion to give a rather minute description of both designs, and as facsimile copies of the same
appear in the record we have had the opportunity to examine them. There are some details in which
the two trade-marks vary, but in many and indeed in most important and essential details they are
identical. Both designs have the demijohn as a central figure surrounded by two concentric circles. The
horizontal planes which pass over the face of both designs differ only in length; in plaintiffs' design this
plane terminates in the circumference of the outer circle, while in that of the defendants it terminates in
the circumference of the inner circle. We can not escape the conclusion that the two trade-marks are
so nearly alike in design and general appearance that only the most careful examination could detect
that they were not in fact the same. Such an examination discloses the points of difference, but it is to
be remembered that the purchasing public has, ordinarily, no such opportunity to make such an
examination nor is there any reason to impose such an obligation on the public. In the case of U. S. vs.
Manuel (7 Phil. Rep., 221) this court said:

"The true test of unfair competition is whether certain goods have been intentionally clothed with an
appearance which is likely to deceive the ordinary purchaser exercising ordinary care, and not whether
a certain limited class of purchasers with special knowledge not possessed by the ordinary purchaser
could avoid mistake by the exercise of this special knowledge."

A person thoroughly familiar with the details of design in plaintiffs' trade-mark, and exercising special
care in examining the goods offered for sale and the wording used on the trade-mark, would hardly be
deceived by the trade-mark used by the defendants. It certainly could be only in the exercise of such
careful scrutiny as this, however, that an intending purchaser could assure himself that the two labels
were different. We are satisfied beyond a reasonable doubt that the similarity of the two labels, and the
further fact that they are affixed in the same way by both parties to the corks used in the bottling of their
products, would be the means of influencing the purchaser to believe that the goods offered by the
defendants were those of plaintiff's manufacture. We are of opinion that the charge of unfair competition
is fully sustained by the record. The similarity in the appearance of the goods as packed and offered for
sale is so striking that we are unable to attribute this fact to anything other than an intent on the part of
defendants to deceive the public and defraud plaintiffs out of their legitimate trade, and in this case we
infer such intent from the likeness of the goods so packed and offered for sale.

The lower court directed that the defendants render an account to the plaintiffs of the profits which they
had derived from the sale of their alcoholic liquors under the trade-mark in question, in accordance with
the provisions of the Trade-Mark Law. It appears, however, that the parties hereto have agreed, for the
purpose of this appeal, that the measure of profits shall be reckoned at the sum of P1,000. The judgment
of the lower court is therefore affirmed, except in so far as it makes provision for the taking of an account,
and in so far as it thus provides for the taking of an account, the judgment, in accord with the agreement
of the parties on appeal, is modified by substituting therefor judgment in favor of the plaintiffs and against
the defendants for the sum of P1,000. The costs of the proceedings in both instances are allowed in
favor of the plaintiff company and against the defendants.

Torres, Mapa, Johnson, Moreland, and Trent, JJ., concur.

Judgment modified.

o0o

ETEPHA, A.G., petitioner, vs. DIRECTOR OF PATENTS and WESTMONT PHARMACEUTICALS,


INC, respondents.

No. L-20635. March 31, 1966

Objects of trademarks. The objects of a trademark are to point out distinctly the origin or ownership
of the article to which it is affixed, to secure to him, who has been instrumental in bringing into market
a superior article of merchandise, the fruit of his industry and skill, and to prevent fraud and imposition.

Same; Infringement of trademarks; Colorable imitation explained. The validity of a cause for
infringement is predicated upon colorable imitation. The phrase colorable imitation denotes such a
close or ingenious imitation as to be calculated to deceive ordinary persons, or such a resemblance to
the original as to deceive an ordinary purchaser giving such attention as a purchaser usually gives, and
to cause him to purchase the one supposing it to be the other. (87 C.J.S. 287.)

Same; Word Tussin in combination with another word or phrase may be used as a trademark.
Tussin is merely descriptive; it is generic; it furnishes to the buyer no indication of the origin of the
goods; it is open for appropriation by anyone. It is accordingly barred from registration as a trademark.
But while Tussin by itself cannot thus be used exclusively to identify ones goods, it may properly
become the subject of a trademark by combination with another word or phrase. (Annotations,
Lawyers Reports, Annotated, 1918 A, p. 966.)

Same; How similarity and dissimilarity of trademarks is determined. A practical approach to the
problem of similarity or dissimilarity is to go into the whole of the two trademarks pictured in their manner
of display. Inspection should be undertaken from the viewpoint of prospective buyer. The trademark
complained of should be compared and contrasted with the purchasers memory (not in juxtaposition)
of the trademark said to be infringed. (87 C.J.S. 288-291.) Some such factors as sound; appearance;
form, style, shape, size or format; color; ideas connoted by marks; the meaning, spelling, and
pronunciation of words used and the setting in which the words appears may be considered. (87 C.J.S.
291-292.) For, indeed, trademark infringement is a form of unfair competition. (Clarke vs. Manila Candy
Co., 36 Phil. 100, 106; Co Tiong Sa vs. Director of Patents, 95 Phil. 1, 4.)

Same; When there is confusion between trademarks. Confusion is likely between trademarks only if
their overall presentations in any of the particulars of sound, appearance, or meaning are such as would
lead the purchasing public into believing that the products to which the marks are applied emanated
from the same source.

Same; Pertussin and Atussin are different. Considering the two labels in questionPertussin and
Atussin.as they appear on the respective labels, these words are presented to the public in different
styles of writing and methods of design. The horizontal plain, block letters of Atussin and the diagonally
and artistically upward writing of Pertussin leave distinct visual impressions. One look is enough to
denude the mind of that illuminating similarity so essential for a trademark infringement case to prosper.
Moreover, the two words do not sound alikewhen pronounced. There is not much phonetic similarity
between the two. In Pertussin the pronunciation of the prefix Per, whether correct or incorrect, includes
a combination of three letters P, e and r; whereas, in Atussin the whole words starts with the single
letter A added to the suffix tussin. Appeals to the ear are dissimilar. And this, because in a word-
combination, the part that comes first is the most pronounced.

Same; In the solution of trademark infringement problem, the class of persons who buy the product
should be considered. In the solution of a trademark infringement problem, regard too should be
given to the class of persons who buy the particular product and the circumstances ordinarily attendant
to its acquisition (87 C.J.S. 295). The medicinal preparations, clothed with the trademarks in question,
are unlike articles of everyday use such as candies, ice cream, milk, soft drinks and the like which may
be freely obtained by anyone, anytime, anywhere. Petitioners and respondents products are to be
dispensed upon medical prescription. An intending buyer must have to go first to a licensed doctor of
medicine; he receives instructions as to what to purchase; he examines the product sold to him; he
checks to find out whether it conforms to the medical prescription. Similarly, the pharmacist or druggist
verifies the medicine sold. The margin of error in the acquisition of one for the other is quite remote. It
is possible that buyers might be able to obtain Pertussin or Atussin without prescription. When this
happens, then the buyer must be one thoroughly familiar with what he intends to get, else he would not
have the temerity to ask for a medicinespecifically needed to cure a given ailment. For a person who
purchases with open eyes is hardly the man to be deceived.

PETITION for review of a decision of the Director of Patents.

The facts are stated in the opinion of the Court.

McClure, Salas & Gonzalez, for petitioner.

Sycip, Salazar, Manalo, Luna & Associates for respondent.

SANCHEZ, J.:

To the question: May trademark ATUSSIN be registered, given the fact that PERTUSSIN, another
trademark, had been previously registered in the Patent Office? the Director of Patents answered
affirmatively. Hence this appeal.

On April 23, 1959, respondent Westmont Pharmaceuticals, Inc., a New York corporation, sought
registration of trademark Atussin placed on its medicinal preparation of expectorant antihistaminic,
bronchodilator sedative, ascorbic acid (Vitamin C) used in the treatment of cough. The trademark is
used exclusively in the Philippines since January 21, 1959.1

Petitioner, Etepha, A. G., a Liechtenstin (principal-ity) corporation, objected. Petitioner claims that it will
be damaged because Atussin is so confusedly similar to its Pertussin (Registration No. 6089, issued
on Septem-ber 25,, 1957) used on a preparation for the treatment of coughs, that the buying public will
be misled into believing that Westmonts product is that of petitioners which allegedly enjoys goodwill.

1. The objects of a trademark are to point out distinctly the origin or ownership of the articles to which
it is affixed, to secure to him who has been instrumental in bringing into market a superior article or
merchandise the fruit of his industry and skill, and to prevent fraud and imposition. Our over-all task
then is to ascertain whether or not Atussin so resembles Pertussin as to be likely, when applied to or
used in connection with the goods x x x of the applicant, to cause confusion or mistake or to deceive
purchasers.3 And, we are to be guided by the rule that the validity of a cause for infringement is
predicated upon colorable imitation. The phrase colorable imitation denotes such a close or ingenious
imitation as to be calculated to deceive ordinary persons, or such a resemblance to the original as to
deceive an ordinary purchaser giving such attention as a purchaser usually gives, and to cause him to
purchase the one supposing it to be the other.4

2. That the word tussin figures as a component of both trademarks is nothing to wonder at. The
Director of Patents aptly observes that it is the common practice in the drug and pharmaceutical
industries to fabricate marks by using syllables or words suggestive of the ailments for which they are
intended and adding thereto distinctive prefixes or suffixes.5 And appropriately to be considered now
is the fact that, concededly, the tussin (in Pertussin and Atussin) was derived from the Latin root-word
tussis meaning cough,

Tussin is merely descriptive; it is generic; it furnishes to the buyer no indication of the origin of the
goods; it is open for appropriation by anyone. It is accordingly barred from registration as trademark.
With jurisprudence holding the line, we feel safe in making the statement that any other conclusion
would result in appellant having practically a monopoly of the word tussin in a trademark. While
tussin by itself cannot thus be used exclusively to identify ones goods, it may properly become the
subject of a trademark by combination with another word or phrase.9 And this union of words is
reflected in petitioners Pertussin and respondents Atussin, the first with prefix Per and the second
with Prefix A.

3. A practical approach to the problem of similarity or dissimilarity is to go into the whole of the two
trademarks pictured in their manner of display. Inspection should be undertaken from the viewpoint of
a prospective buyer. The trademark complained of should be compared and contrasted with the
purchasers memory (not in juxtaposition) of the trademark said to be infringed.10 Some such factors
as sound; appearance; form, style, shape, size or format; color; ideas connoted by marks; the meaning,
spelling, and pronunciation of words used; and the setting in which the words appear may be
considered.11 For, indeed, trademark infringement is a form of unfair competition.12

We take a casual look at the two labelswithout spelling out the detailsbearing in mind the easy-to-
remember earmarks thereof. Respondents label underscores the trademark Atussin in bold, block
letters horizontally written. In petitioners, on the other hand, Per-tussin is printed diagonally upwards
and across in semiscript style with flourishes and with only the first letter P capitalized. Each label
plainly shows the source of the medicine: petitioners at the foot bears Etepha Ltd. Schaan F1, and
on top, Apothecary E. Taeschners; respondents projects Westmont Pharmaceuticals, Inc. New
York, USA at the bottoms, and on the lower left side the word Westmont upon a white diamond
shaped enclosure and in red inka color different from that of the words above and below it. Printed
prominently along the left, bottom and right edges of petitioners label are indications of the use: for
bronchial catarrhwhopping-coughcoughs and asthma. Respondents for its part briefly represents
what its produce actually isa cough syrup. The two labels are entirely different in colors, contents,
arrangement of words thereon, sizes, shapes and general appearance. The contrasts in pictorial effects
and appeals to the eye is so pronounced that the label of one cannot be mistaken for that of the other,
not even by persons unfamiliar with the two trademarks.13

On this point the following culled from a recent decision of the United States Court of Customs and
Patent Appeals (June 15, 1955) is persuasive:14

Confusion is likely between trademarks, however, only if their over-all presentations in any of the
particulars of sound, appearance, or meaning are such as would lead the purchasing public into
believing that the products to which the marks are applied emanated from the same source. In testing
this issue, fixed legal rules existif not in harmony, certainly in abundancebut, in the final analysis,
the application of these rules in any given situation necessarily reflects a matter of individual judgment
largely predicated on opinion. There is, however, and can be no disagreement with the rule that the
purchaser is confused, if at all, by the marks as a whole.

4. We now consider exclusively the two wordsPertussin and Atussinas they appear on the
respective labels. As previously adverted to, these words are presented to the public in different styles
of writing and methods of design. The horizontal plain, block letters of Atussin and the diagonally and
artistically upward writing of Pertussin leave distinct visual impressions. One look is enough to denude
the mind of that illuminating similarity so essential for a trademark infringement case to prosper.
5. As we take up Pertussin and Atussin once again, we cannot escape notice of the fact that the two
words do not sound alikewhen pronounced. There is not much phonetic similarity between the two.
The Solicitor General well-observed that in Pertussis the pronunciation of the prefix Per, whether
correct or incorrect, includes a combination of three letters P, e and r; whereas, in Atussin the whole
starts with the single letter A added to suffix tussin. Appeals to the ear are dissimilar. And this, because
in a word combination, the part that comes first is the most pronounced. An expositor of the applicable
rule here is the decision in the Syrocol-Cheracol controversy.15 There, the ruling is that trademark
Syrocol (a cough medicine preparation) is not confusedly similar to trademark Cheracol (also a cough
medicine preparation). Reason: the two words do not look or sound enough alike to justify a holding of
trademark infringement, and the only similarity is in the last syllable, and that is not uncommon in
names given drug compounds.

6. In the solution of a trademark infringement problem, regard too should be given to the class of
persons who buy the particular product and the circumstances ordinarily attendant to its acquisition.16
The medicinal preparation clothed with the trademarks in question, are unlike articles of everyday use
such as candies, ice cream, milk, soft drinks and the like which may be freely obtained by anyone,
anytime, anywhere. Petitioners and respondents products are to be dispensed upon medical
prescription. The respective labels say so. An intending buyer must have to go first to a licensed doctor
of medicine; he receives instructions as to what to purchase; he reads the doctors prescription; he
knows what he is to buy. He is not of the incautious, unwary, unobservant or unsuspecting type; he
examines the product sold to him; he checks to find out whether it conforms to the medical prescription.
The common trade channel is the pharmacy or the drugstore. Similarly, the pharmacist or druggist
verifies the medicine sold. The margin of error in the acquisition of one for the other is quite remote.

We concede the possibility that buyers might be able to obtain Pertussin or Atussin without prescription.
When this happens, then the buyer must be one thoroughly familiar with what he intends to get, else
he would not have the temerity to ask for a medicinespecifically needed to cure a given ailment. In
which case, the more improbable it will be to palm off one for the other. For a person who purchases
with open eyes is hardly the man to be deceived.

For the reasons given, the appealed decision of respondent Director of Patentsgiving due course to
the application for the registration of trademark ATUSSIN is hereby affirmed. Costs against petitioner.
So ordered.

Chief Justice Bengzon and Justices Bautista Angelo, Concepcion, J.B.L. Reyes, Barrera, Regala,
Makalintal, J.P. Bengzon and Zaldivar, concur.

Mr. Justice Dizon took no part.

Decision affirmed.

o0o

ARCE SONS AND COMPANY, petitioner


vs.
SELECTA BISCUIT COMPANY, INC., ET AL., respondents

No. L-14761. January 28, 1961

ARCE SONS AND COMPANY, plaintiff-appellee


vs.
SELECTA BISCUIT COMPANY, INC., defendant-appellant

No. L-17981. January 28, 1961

Trademark; Definition.A trademark is a distinctive mark of authenticity through which the merchandise
of a particular producer or manufacturer may be distinguished from that of others, and its sole function
is to designate distinctively the origin of the products to which it is attached.
Same; Trademark "Selecta".Where the petitioner and its predecessor have used since 1933 the
name "Selecta" as the name of its restaurant and as the mark for its dairy and bakery products, the
conclusion is that it has used that name as a trademark to distinguish its products from those sold by
other merchants or businessmen. The Director of Patents erred in holding that the petitioner used the
word merely as a tradename.

Same; Secondary meaning of "Selecta".The word "Selecta" may be an ordinary or common word in
the sense that it may be used or employed by anyone in promoting his business or enterprise, but once
adopted as an emblem, sign or device to characterize its products, or as a badge of authenticity, it may
acquire a secondary meaning as to be exclusively associated with the user's products and business.

Same; Rule as to secondary meaning.A word or phrase originally incapable of exclusive appropriation
with reference to an article on the market, because geographically or otherwise descriptive, might
nevertheless have been used so long and so exclusively by one producer with reference to his article
that, in that trade and to that branch of the purchasing public, the word or phrase has come to mean
that the article was his product.

PETITION for review of a decision of the Director of Patents and APPEAL from a decision of the Court
of First Instance of Manila.

The facts are stated in the opinion of the Court.

Manuel O. Chan and Ramon S. Ereeta for plaintiff. appellee.

E. Voltaire Garcia for defendant-appellant.

BAUTISTA ANGELO, J.:

On August 31, 1955, Selecta Biscuit Company, Inc., hereinafter referred to as respondent, filed with the
Philippine Patent Office a petition for the registration of the word "SELECTA" as trade-mark to be used
on its bakery products alleging that it is in actual use thereof for not less than two months before said
date and that "no other person, partnership, corporation, or association x x x has the right to use said
trade-mark in the Philippines, either in the identical form or in any such near resemblance thereto, as
might be calculated to deceive." Its petition was referred to an examiner for study who found that the
trade-mark sought to be registered resembles the word "SELECTA" used by Arce Sons and Company,
hereinafter referred to as petitioner, in its milk and ice cream products so that its use by respondent will
cause confusion as to the origin of their respective goods. Consequently, he recommended that the
application be refused. However, upon reconsideration, the Patent Office ordered the publication of the
application for purposes of opposition.

In due time, petitioner filed its opposition thereto on several grounds, among which are: (1) that the
mark "SELECTA" had been continuously used by petitioner in the manufacture and sale of its products,
including cakes, bakery products, milk and ice cream from the time of its organization and even prior
thereto by its predecessor-in-interest, Ramon Arce; (2) that the mark "SELECTA" has already become
identified with the name of petitioner and its business; (3) that petitioner had warned respondent not to
use said mark because it was already being used by the former, but that the latter ignored said warning;
(4) that respondent is using the word "SELECTA" as a trademark in bakery products in unfair
competition with the products of petitioner thus resulting in confusion in trade; (5) that the mark to which
the application of respondent refers has striking resemblance, both in appearance and

meaning, to petitioner's mark as to be mistaken therefor by the public and cause respondent's goods
to be sold as petitioner's; and (6) that actually a complaint has been filed by petitioner against
respondent for unfair competition in the Court of First Instance of Manila asking for damages and f or
the issuance of a writ of Injunction against respondent enjoining the latter from continuing with the use
of said mark.

On September 28, 1958, the Court of First Instance of Manila rendered decision in the unfair competition
case perpetually enjoining respondent from using the name "SELECTA" as a trade-mark on the goods
manufactured and/or sold by it and ordering it to pay petitioner by way of damages all the profits it may
have realized by the use of said name, plus the sum of P5,000.00 as attorney's fees and costs of suit.
From this decision, respondent brought the matter on appeal to the Court of Appeals wherein the case
was docketed as CA-G.R. No. 24017-R.

Inasmuch as the issues of facts in the case of unfair competition are substantially identical with those
raised before the Patent Office, the parties, at the hearing thereof, agreed to submit the evidence they
have introduced before the Court of First Instance of Manila to said office, and on the strength thereof,
the Director of Patents, on December 7, 1958, rendered decision dismissing petitioner's opposition and
stating that the registration of the trademark "SELECTA" in favor of applicant Selecta Biscuit Company,
Inc. will not cause confusion or mistake nor will deceive the purchasers as to cause damage to
petitioner. Hence, petitioner interposed the present petition f or review.

On September 7, 1960, this Court issued a resolution of the following tenor:

"In G.R. No. L-14761 (Arce Sons and Company vs. Selecta Biscuit Company, Inc., et al.), considering
that the issues raised and evidence presented in this appeal are the same as those involved and
presented in Civil Case No. 32907, entitled Arce Sons and Company vs. Selecta Biscuit Company, Inc.
of the Court of First Instance of Manila, presently pending appeal in the Court of Appeals, docketed as
CA-G.R. No. 24017-R, the Court resolved to require the parties, or their counsel, to inform this Court
why the appeal pending before the Court of Appeals should not be forwarded to this Court in order that
the two cases may be consolidated and jointly decided, to avoid any conflicting decision, pursuant to
the provisions of section 17, paragraph 5, of the Judiciary Act of 1948 (Republic Act No. 296)."

And having both petitioner and respondent manifested in writing that they do not register any objection
that the case they submitted on appeal to the Court of Appeals be certified to this Court so that it may
be consolidated with the present case, the two cases are now before us for consolidated decision.

The case for petitioner is narrated in the decision of the court a quo as follows:

"In 1933, Ramon Arce, predecessor in interest of the plaintiff, started a milk business in Novaliches,
Rizal, using the name 'SELECTA' as a trade-name as well as a trade-mark. He began selling and
distributing his products to different residences, restaurants and offices, in bottles on the caps of which
were inscribed the words 'SELECTA FRESH MILK.' As his business prospered, he thought of
expanding and, in fact, he expanded his business by establishing a store at Nos. 711-713 Lepanto
Street. While there, he began to cater, in addition to milk, ice cream, sandwiches and other food
products. As his catering and ice cream business prospered in a big way, he placed a sign signboard
in his establishment with the name 'SELECTA' inscribed thereon. This signboard was placed right in
front of the said store. For the sake of efficiency, the Novaliches place was made the pasteurizing plant
and its products were distributed through the Lepanto store. Special containers made of tin cans with
the word 'SELECTA' written on their covers and 'embossed or blown' on the bottles themselves were
used. Similarly, exclusive bottles for milk products were ordered from Getz Brothers with the word
'SELECTA' blown on them. The sandwiches which were sold and distributed were wrapped in carton
boxes with covers bearing the name 'SELECTA'. To the ordinary cars being used for the delivery of his
products to serve outside orders were added to. a fleet of five (5) delivery trucks with the word 'Selecta'
prominently painted on them. Sales were made directly at the Lepanto store or by means of deliveries
to specified addresses, restaurants and offices inside Manila and its suburbs and sometimes to
customers in the provinces. As time passed, new products were produced for sale, which as cheese
(cottage cheese) with special containers especially ordered from the Philippine Education Company
with the name 'Selecta' written on their covers.

"The war that broke out on December 8, 1941, did not stop Ramon Arce from continuing with his
business. After a brief interruption of about a month, that is, during the end of January, 1942, and early
February, 1942, he resumed his business using the same trade-name and trade-mark, but this time, on
a larger scale. He entered the restaurant business. Dairy products, ice cream, milk, sandwiches
continued to be sold and distributed by him. However, Ramon Arce was again forced to discontinue the
business on October, 1944, because time was beginning to be" precarious. American planes started to
bomb Manila and one of his sons, Eulalio Arce, who was managing the business, was seized and jailed
by the Japanese. Liberation came and immediately thereafter, Ramon Arce once more resumed his
business, even more actively, by adding another store located at the corner of Lepanto and Azcarraga
Streets. Continuing to use the name 'Selecta,' he added bakery products to his: line of business. With
a f irewood type of oven, about one-half the ' size of the courtroom, he made his own bread, cookies,
pastries and assorted bakery products. Incidentally, Arce's bakery was transferred to Balintawak,
Quezon Cityanother expansion of his businesswhere the bakery products are now being baked
thru the use of firewood, electric and gas oven. These bakery products, like his other products, are
being sold at the store itself and/or delivered to people ordering them in Manila and its suburbs, and
even Baguio. Like the other products, special carton boxes in different sizes, according to the sizes of
the bakery products, with the name 'Selecta' on top of the covers are provided for these bakery products.
For the cakes, special boxes and labels reading 'Selecta Cakes for all occasions' are made. For the
milk products, special bottle caps and bottles with the colored words 'Quality Always Selecta Fresh Milk,
One Pint' inscribed and blown on the sides of the bottlesan innovation from the old bottles and caps
used formerly. Similar, special boxes with the name 'Selecta' are provided for fried Chicken sold to
customers.

"Business being, already well established, Ramon Arce decided to retire, so that his children can go on
with the business. For this purpose, he transferred and leased to them all his rights, interests and
participations in the business, including the use of the name of 'Selecta', sometime in the year 1950, at
a monthly rental of P10,000.00, later reduced to P6,500.00. He further wrote the Bureau of Commerce
letter dated February 10, 1950, requesting cancellation of the business name 'Selecta Restaurant' to
give way to the registration of the name 'Selecta' and asked that the same be registered in the name of
Arce Sons & Company, a co-partnership entered into by and among his children on February 10, 1950.
Said co-partnership was organized, so its articles of co-partnership state, 'to conduct a first class
restaurant business; to engage in the manufacture and sale of ice cream, milk, cakes and other dairy
and bakery products; and to carry on such other legitimate business as may produce profit ; Arce Sons
& Company has thus continued the lucrative business of their predecessor in interest. It is now, and
has always been, engaged in the restaurant business, the sale of milk, and the production and sale of
cakes, dairy products and bakery products. Arce Sons & Company are now making bakery products
like bread rolls, pan de navaro, pan de sal, and other new types of cookies and biscuits of the round,
hard and other types, providing therefor special boxes with the name "Selecta'.

"Pursuing the policy of expansion ion adopted by their predecessor, Arce Sons & Company established
another storethe now famous 'Selecta Dewey Boulevard', with seven (7) delivery trucks with the name
'Selecta' conspicuously painted on them, to serve, deliver, and cater to customers in and outside of
Manila."

The case for respondent, on the other hand, is expressed as follows:

"Defendant was organized and registered as a corporation under the name and style of Selecta Biscuit
Company, Inc. on March 2, 1955 (Exhibit 2; Exhibit 2-A; t.s.n., p. 3, April 17, 1958) but which started
operation as a biscuit factory on June 20, 1955 (t.s.n., p. 3, id). The name 'Selecta' was chosen by the
organizers of defendant who are Chinese citizens as a translation of the Chinese word 'Ching Suan'
which means 'mapili' in Tagalog, and 'Selected' in English (t.s.n., p, 4, id.). Thereupon, the Articles of
Incorporation of Selecta Biscuit Company, Inc. were registered with the Securities and Exchange
Commission (t.s.n., p. 5. id.), and at the same time registered as a business name with the Bureau of
Commerce which issued certificate of registration No. 55594 (Exhibit 3; Exhibit 3-A). The same name
Selecta Biscuit Company, Inc. was also subsequently registered with the Bureau of Internal Revenue
which issued Registration Certificate No. 35764 (Exhibit 4, t.s.n., p. 6 id.). Inquiries were also made with
the Patent Office of the Philippines in connection with the registration of the name 'Selecta'; after an
official of the Patent referred to index cards information was furnished to the effect that defendant could
register the name 'Selecta' with the Bureau of Patents (t.s.n., p. 7, id.). Accordingly, the corresponding
petition for registration of trade-mark was filed (Exhs. 5, 5-A, Exhibit 5-B). Defendant actually operated
its business factory on June 20, 1955, while the petition for registration of trade-mark 'Selecta' was filed
with the Philippine Patent Office only on September 1, 1955, for the reason that the Patent Office
informed the defendant that the name should first be used before registration (t.s.n., p, 8, id.). The
factory of defendant is located at Tuason Avenue, Northern Hills, Malabon, Rizal. showing plainly on its
wall facing the streets the name 'SELECTA BISCUIT COMPANY, INC.' (Exhs. 6, 6-A 6-B, t.s.n., p. 9,
id.). It is significant to note that Eulalio Arce, Managing Partner of the plaintiff resided and resides near
the defendant's factory, only around 150 meters away; in fact, Eulalio Arce used to pass in front of the
factory of defendant while still under construction and up to the present time (t.s.n., pp. 9, 10, id.).
Neither Eulalio Arce nor any other person in representation of the plaintiff complained to the defendant
about the use of the name 'Selecta Biscuit' until the filing of the present complaint.
"There are other factories using 'Selecta' as trade-mark for biscuits (t.s.n., p. 12; Exhs. 7, 7-A, 7-B;
Exhibits 8, 8-A, 8-B; Exhibits 9, 9-A, 9-B); defendant in fact uses different kinds of trade-marks (Exhibits
10, 10-A, to 10-W, t.s.n., p. 17).

"The biscuits, cookies, and crackers manufactured and sold by defendant are-wrapped in cellophane
pouches and placed inside tin can (Exh. 11; t.s.n., p. 19); the products of defendant are sold through
the length and breadth of the Philippines through agents with more than 600 stores as customers buying
on credit (t.s.n.,) pp. 19, 20, Exh. 12; t.s.n., p. 10, June 20, 1958). Defendant employs more than one
hundred (100) laborers and employees presently although it started with around seventy (70)
employees and laborers (t.s.n., p. 24); its present capitalization fully paid for is Two Hundred Thirty Four
Thousand Pesos (P234,000.00) additional capitalizations were duly authorized by the Securities and
Exchange Commission (Exhs. 13, 13-A) there was no complaint whatsoever from plaintiff until plaintiff
saw defendant's business growing bigger and bigger and flourishing (t.s.n., p. 21) when plaintiff filed its
complaint.

"Defendant advertises its products through radio broadcasts and spot announcements (Exhs. 14, 14-A
to 14-L; inclusive Exhs. 15, 15-A, 15-B, 15-C; Exhs. 16, 16-A, 16-B to 16-E, inclusive; Exhs. 17, 17-A
to 17-L, inclusive); the broadcasts scripts announced therein through the radio clearly show, among
others, that Selecta Biscuits are manufactured by Selecta Company, Inc. at Tuason Avenue, Northern
Hills, Malabon, Rizal, with Telephone No. 2-13-27 (Exhs. 23-A, 23-B, 23-D, 23-E, 23-F). '

"Besides the signboard, Selecta Biscuit Company, Inc.' on the building itself, defendant has installed
signboard along the highways to indicate the location of the factory of defendant (Exhs. 18, 18-A) ;
delivery trucks of defendant are plainly carrying signboards Selecta Biscuit Company, Inc., Tuason
Avenue, Northern Hills, Malabon, Rizal, Telephone No. 2-13-27 (Exhs. 19, 19-A, 19-B, 19-C, 19-D, 19-
E, 19-F). Defendant is using modern machineries in its biscuit factory (Exhs. 20, 20-A, 20-B, 20-C, 20-
D, 20-E). The defendant sells its products throughout the Philippines, including Luzon, Visayas,
Mindanao; its customers count, among others, 600 stores buying on credit; its stores buying on cash
number around 50 (t.s.n., p. 10). Sales in Manila and suburbs are minimal, (Exh. 12). Defendant is a
wholesaler and not a retailer of biscuits, cookies, and crackers. This is the nature of the operation of
the business of the defendant."

At the outset one cannot but note that in the two cases appealed before us which involve the same
parties and the same issues of fact and law, the court a quo and the Director of Patents have rendered
contradictory decisions. While the former is of the opinion that the word "SELECTA" has been used by
petitioner, or its predecessor-in-interest, as a trade-mark in the sale and distribution of its dairy and
bakery products as early as 1933 to the extent that it has acquired a proprietary connotation 60 that to
allow respondent to use it now as a trade-mark in its business would be a usurpation of petitioner's
goodwill and an infringement of its property right, the Director of Patents entertained a contrary opinion.
He believes that the word as used by petitioner functions only to point to the -place of business or
location of its restaurant while the same word as used by respondent points to the origin of the products
it manufactures and sells and he predicates this distinction upon the fact that while the goods of
petitioner are only served within its restaurant or sold only on special orders in the City of Manila,
respondent's goods are ready-made and are for sale throughout the length and breadth of the country.
He is of the opinion that the use of said trade-mark by respondent has not resulted in confusion in trade
contrary to the finding of the court a quo. Which of these opinions is correct is the issue now for
determination.

It appears that Ramon Arce, predecessor-in-interest of petitioner, started his milk business as early as
1933. He sold his milk products in bottles covered by caps on which the words "SELECTA FRESH
MILK" were inscribed. Expanding his business, he established a store at Lepanto Street, City of Manila,
where he sold, in addition to his milk products, ice cream, sandwiches and other food products, placing
right in front of his establishment a signboard with the name "SELECTA" inscribed thereon. Special
containers made of tin cans with the word "SELECTA" written on their covers were used for his products.
Bottles with the same word embossed on their sides were used for his milk products. The sandwiches
he sold and distributed were wrapped in carton boxes with covers bearing the same name. He used
several cars and trucks for delivery purposes on the sides of which were written the same word. As new
products were produced for sale, the same were placed in containers with the same name written on
their covers. After the war, he added to his business such items as cakes, bread, cookies, pastries and
assorted bakery products. Then his business was acquired by petitioner, a co-partnership organized by
his sons, the purposes of which are "to conduct a first class restaurant business; to engage in the
manufacture and sale of ice cream, milk, cakes and other dairy and bakery products; and to carry on
such other legitimate business as may produce profit."

The foregoing unmistakably show that petitioner, through its predecessor-in-interest, had made use of
the word "SELECTA" not only as a trade-name indicative of the location of the restaurant where it
manufactures and sells Its products, but as trade-mark to indicate the goods it offers for sale to the
public. No other conclusion can be drawn. This is the very meaning or essence in which a trade-mark
is used. This is not only in accordance with its general acceptation but with our law on the matter.

" 'Trade-mark' or 'trade-name,' distinction being highly technical, is sign, device, or mark by which
articles produced are dealt in by particular person or organization are distinguished or distinguishable
from those produced or dealt in by others." (Church of God v. Tomlinson Church of God, 247 SW 2d,
63, 64)

"A 'trade-mark' is a distinctive mark of authenticity through which the merchandise of a particular
producer or manufacturer may be distinguished from that of others, and its sole function is to designate
distinctively the origin of the products to which it is attached." (Reynolds & Reynolds Co. v. Norick, et
al., 114 F 2d, 278)

"The term trade-mark' includes any word, name, symbol, emblem, sign or device or any combination
thereof adopted and used by a manufacturer or merchant to identify his goods and distinguish them
from those manufactured, sold or dealt in by others." (Section 38, Republic Act No. 166).

Verily, the word "SELECTA" has been chosen by petitioner and has been inscribed on all its products
to serve not only as a sign or symbol that may indicate that they are manufactured and sold by it but as
a mark of authenticity that may distinguish them from the products manufactured and sold by other
merchants or businessmen. The Director of Patents, therefore, erred in holding that petitioner made
use of that word merely as a trade-name and not as a trade-mark within the meaning of the law.1

The word "SELECTA", it is true, may be an ordinary or common word in the sense that it may be used
or employed by any one in promoting his business or enterprise, but once adopted or coined in
connection with one's business as an emblem, sign or device to characterize its products, or as a badge
of authenticity, it may acquire a secondary meaning as to be exclusively associated with its products
and business.2 In this sense, its use by another may lead to confusion in trade and cause damage to
its business. And this is the situation of petitioner when it used the word "SELECTA" as a trade-mark.
In this sense, the law gives it protection and guarantees its use to the exclusion of all others (G. & C.
Merriam Co. v. Saalfield, 198 F. 369, 373). And it is also in this sense that the law postulates that "The
ownership or possession of a trade-mark, x x x shall be recognized and protected in the same manner
and to the same extent, as are other property rights known to the law," thereby giving to any person
entitled to the exclusive use of such trade-mark the right to recover damages in a civil action from any
person who may have sold goods of similar kind bearing such trade-mark (Sections 2-A and 23,
Republic Act No. 166, as amended).

The term "SELECTA" may be placed at par with the words "Ang Tibay" which this Court has considered
not merely as a descriptive term within the meaning of the Trade-mark Law but as a fanciful or coined
phrase, or a trade-mark. In that case, this Court found that respondent has constantly used the term
"Ang Tibay", both as a trademark and a trade-name, in the manufacture and sale of slippers, shoes and
indoor baseballs for twenty-two years before petitioner registered it as a trade-name for pants and shirts
so that it has performed during that period the function of a trade-mark to point distinctively, or by its
own meaning or by association, to the origin or ownership of the wares to which it applies. And in holding
that respondent was entitled to protection in the use of that trademark, this Court made the following
comment:

"The function of a trade-mark is to point distinctively, either by its own meaning or by association, to the
origin or ownership of the wares to which it is applied. 'Ang Tibay,' as used by the respondent to
designate his wares, had exactly performed that function for twenty-two years before the petitioner
adopted it as a trade-mark in her own business. 'Ang Tibay' shoes and slippers are, by association,
known throughout the Philippines as products of the 'Ang Tibay' factory owned and operated by the
respondent. Even if 'Ang Tibay,' therefore, were not capable of exclusive appropriation as a trade-mark,
the application of the doctrine of secondary meaning could nevertheless be fully sustained because, in
any event, by respondent's long and exclusive use of said phrase with reference to his products and
his business, it has acquired a proprietary connotation. This doctrine is to the effect that a word or
phrase originally incapable of exclusive appropriation with reference to an article on the market,
because geographically or otherwise descriptive, might nevertheless have been used so long and so
exclusively by
one producer with reference to his article that, in that trade and to that branch of the purchasing public,
the word or phrase has -come to mean that the article was his product. (G. & C. Merriam Co. vs.
Saalfield, 198 F. 369, 373.)" (Ang v. Teodoro, 74 Phil. 50, 53).

The rationale in the Ang Tibay case applies on all fours to the case of petitioner.

But respondent claims that it adopted the trade-mark "SELECTA" in good faith and not precisely to
engage in unfair competition with petitioner. It tried to establish that respondent was organized as a
corporation under the name of Selecta Biscuit Company, Inc. on March 2, 1955 and started operations
as a biscuit factory on June 20, 1955; that the name "SELECTA" was chosen by the organizers of
respondent who are Chinese citizens as a translation of the Chinese word "Ching Suan" which means
"mapili" in Tagalog, and "Selected" in English; that, thereupon, it registered its articles of incorporation
with the Securities and Exchange Commission and the name "SELECTA" as a business name with the
Bureau of Commerce which issued to it Certificate of Registration No. 55594; and that it also registered
the same trade-name with the Bureau of Internal Revenue and took steps to obtain a patent from the
Patent Office by filing with it an application for the registration of said trade-name.

The suggestion that the name "SELECTA" was chosen by the organizers of respondent merely as a
translation from a Chinese word "Ching Suan" meaning "mapili" in the dialect is betrayed by the very
manner of its selection, for if the only purpose is to make an English translation of that word and not to
complete with the business of petitioner, why choose the word "SELECTA", a Spanish word, and not
"Selected", the English equivalent thereof, as was done by other well-known enterprises? In the words
of petitioner's counsel, "Why with all the words in the English dictionary and all the words in the Spanish
dictionary and all the phrases that could be coined, should defendant-appellant (respondent) choose
'SELECTA' if its purpose was not and is not to fool the people and to damage plaintiff-appellee?" In this
respect, we find appropriate the following comment of the trial court:

"Eventually, like the plaintiff, one is tempted to ask as to why with the richness in words of the English
language and with the affluence of the Spanish vocabulary or, for that matter, of our own dialects,
should the defendant choose the controverted word 'Selecta,' which has already acquired a secondary
meaning by virtue of plaintiff's prior and continued use of the same as a trade-mark or trade-name for
its products? The explanation given by Sy Hap, manager of the defendant, that the word 'Selecta' was
chosen for it3 bakery products by the organizers of said company from the Chinese Word 'Ching Suan'
meaning 'mapili,' which in English means 'Selected,' and that they chose 'selecta,' being the English
translation, is, to say the least, very weak and untenable. Sy Hap himself admitted that he had known
Eulalio Arce, the person managing plaintiff's business, since 1954; that since he began to reside at 10th
Avenue, Grace Park, he had known the Selecta Restaurant on Azcarraga street; that at the time he
established the defendant company, he knew that the word 'Selecta' was being employed in connection
with the business of Eulalio Arce; that he had seen signboards of 'Selecta' on Azcarraga Street and
Dewey Boulevard and that he even had occasion to eat in one of the restaurants of the plaintiff. All of
these circumstances tend to conspire in inducing one to doubt defendant's motive for using the same
word 'Selecta' for its bakery products. To allow the defendant here to use the word 'Selecta' in spite of
the fact that this word has already been adopted and exploited by Ramon Arce and by his family thru
the organization of Arce Sons and Company, for the maintenance of its goodwill, for which said plaintiff
and its predecessor have spent time, effort, and fortune, is to permit business pirates and buccaneers
to appropriate for themselves and to their profit and advantage the trade names and trademarks of well-
established merchants with all their attendant good will and commercial benefit. Certainly, this cannot
be allowed, and it becomes the duty of the court to protect the legitimate owners of said trade-names
and trade-marks, for under the law, the same constitute one kind of property right entitled to the
necessary legal protection."

Other points raised by respondent to show that the trial court erred in holding that the adoption by it of
the word "SELECTA" is tantamount to unfair competition are: (1) that its products are biscuits, crackers
and cookies, wrapped in cellophane packages, placed in tin containers, and that its products may last
a year without spoilage, while the ice cream, milk, cakes and other bakery products which. petitioner
matiufactUres last only for two or three days; (2) that the sale and distribution of petitioner's products
are on retail basis, limited to the City of Manila and suburbs, and its place of business is localized at
Azcarraga, corner of Lepanto Street and at Dewey Boulevard, Manila, while that of respondent is on a
wholesale basis, extending throughout the length and breadth of the Philippines; (3) that petitioner's
signboard on its place of business reads "SELECTA" and on its delivery trucks "Selecta, Quality Always,
Restaurant and Caterer, Azcarraga, Dewey Boulevard, Balintawak and Telephone number", in contrast
with respondent's signboard on 'its factory which reads "Selecta Biscuit Company, Inc.," and on its
delivery trucks "Selecta Biscuit Company, Inc., Tuason Avenue, Malabon, Rizal, Telephone No. 2-13-
27; (4) that the business name of petitioner is different from the business name of respondent; (5) that
petitioner has only a capital investment of P25,000.00 whereas respondent has a fully paid-up stock in
the amount of P234,000.00 out of the P500.000.00 authorized capital, and (6) that the use of the name
"SELECTA" by respondent cannot lead to confusion in the business operation of the parties.

We have read carefully the reasons advanced in support of the points raised by counsel in an effort to
make inroads into the findings of the court a quo on unfair competition, but we believe them to be
insubstantial and untenable. They appear to be well answered and refuted by counsel for petitioner in
his brief, which refutation we do not need to repeat here. Suffice it to state that we agree with the
authorities and reasons advanced therein which incidentally constitute the best support of the decision
of the court a quo.

With regard to the claim that petitioner failed to present sufficient evidence on the contract of lease of
the business from its predecessor-in-interest, we find that under the circumstances secondary evidence
is admissible.

In view of the foregoing, we hold that the Director of Patents committed an error in dismissing the
opposition of petitioner and in holding that the registration of the trade-mark "SELECTA" in favor of
respondent will not cause damage to petitioner, and, consequently, we hereby reverse his decision.

Consistently with this finding, we hereby affirm the decision of the court a quo rendered in G.R. No. L-
17981 No costs.

o0o

PHILIPPINE NUT INDUSTRY, INC., petitioner, vs. STANDARD BRANDS INCORPORATED and
TIBURCIO S. EVALLE, as Director of Patents, respondents.

No. L-23035. July 31, 1975

Trademarks; Infringement of; Marks likely to cause confusion, mistake or even deception. There is
infringement of trademark when the use of the mark involved would be likely to cause confusion or
mistake in the mind of the public or to deceive purchasers as to the origin or source of the commodity.

Same; Same; Determination of infringement a question of fact; Test of dominancy.Whether or not a


trademark causes confusion and is likely to deceive the public is a question of fact which is to be
resolved by applying the test of dominancy, meaning, if the competing trademark contains the main,
or essential or dominant features of another by reason of which confusion and deception are likely to
result, then infringement takes place; that duplication or imitation is not necessary a similarity in the
dominant features of the trademarks would be sufficient.

Same; Same; Same; Same; Word PLANTERS considered the dominant feature of trademark; Case at
bar.While it is true that PLANTERS is an ordinary word, nevertheless it is used in the labels not to
describe the nature of the product, but to project the source or origin of the salted peanuts contained in
the cans, the word PLANTERS printed across the upper portion of the label in bold letters easily attracts
and catches the eye of the ordinary consumer and it is that word and none other that sticks in his mind
when he thinks of salted peanuts.

Same; Same; Intent to pass to public ones product as that of another; Similarity of coloring scheme,
layout of words, and type and size of lettering. No producer or manufacturer may have a monopoly
of any color scheme or form of words in a label. But when a competitor adopts a distinctive or dominant
mark or feature of anothers trademark and with it makes use of the same color ensemble, employs
similar words written in a style, type and size of lettering almost identical with those found in the other
trademark, the intent to pass to the public his product as that of the other is quite obvious.

Same: Same; Same Insignificant differences in trademarks; Effect of; Case at bar. The merchandize
or goods being sold by the parties herein are very ordinary commodities purchased by the average
person and many times by the ignorant and unlettered and these are the persons who will not as a rule
examine the printed small letterings on the container but will simply be guided by the presence of the
striking mark PLANTERS on the label. Differences there will always be, but whatever differences exist,
these pale into insignificance in the face of an evident similarity in the dominant feature and overall
appearance of the labels of the parties.

Same; Same; Doctrine of secondary meaning. The doctrine is to the effect that a word or phrase
originally incapable of exclusive appropriation with reference to an article on the market, because
geographically or otherwise descriptive, might nevertheless have been used so long and so exclusively
by one producer with reference to his article that, in that trade and to that branch of the purchasing
public, the word or phrase has come to mean that the article was his product.

Same; Same; Same; Preferential right to adoption of trademark by priority of use; Case at bar. There
is evidence to show that the term PLANTERS has become a distinctive mark or symbol insofar as salted
peanuts are concerned, and by priority of use dating as far back as 1938, respondent Standard Brands
has acquired a preferential right to its adoption as its trademark warranting protection against its
usurpation by another. Ubi jus ibi remedium. Where there is a right there is a remedy.

Same; Same; Same; Temporary non-use of trademark; Effect of. Non-use of a trademark on an
article of merchandize due to legal restrictions or circumstances beyond ones control is not to be
considered as an abandonment.

Same; Same; Same; Abandonment of use of trademark; Abandonment must be permanent, intentional
and voluntary. To work an abandonment, the disuse must be permanent and not ephemeral; it must
be intentional and voluntary, and not involuntary or even compulsory. There must be a thorough-going
discontinuance of any trade-mark use of the mark in question.

Same; Findings of facts of Director of Patents conlusive on Supreme Court. Findings of fact by the
Director of Patents are conclusive and binding on the Supreme Court provided they are supported by
substantial evidence.

PETITION for review of the decision of the Director of Patents.

The facts are stated in the opinion of the Court.

Perfecta E. De Vera for petitioner.

Paredes, Poblador, Cruz & Nazareno for private respondent.

Solicitor General Arturo A. Alafriz, Acting Assistant Solicitor General Isidro C. Borromeo and Solicitor
Francisco J. Bautista for respondent Director.

MUOZ PALMA, J.:

Challenged in this petition for review is the decision of respondent Director of Patents which orders the
cancellation of Certificate of Registration No. SR-416 issued in favor of herein petitioner Philippine Nut
Industry, Inc. (hereinafter called Philippine Nut) for the trademark PHILIPPINE PLANTERS CORDIAL
PEANUTS, upon complaint of Standard Brands Inc. (hereinafter to be called Standard Brands).
The records of the case show the following incidents:

Philippine Nut a domestic corporation, obtained from the Patent Office on August 10, 1961, Certificate
of Registration No. SR-416 covering the trademark PHILIPPINE PLANTERS CORDIAL PEANUTS,
the label used on its product of salted peanuts.
On May 14, 1962, Standard Brands a foreign corporation, filed with the Director of Patente Inter Partes
Case No. 268 asking for the cancellation of Philippine Nuts certificate of registration on the ground that
the registrant was not entitled to register the mark at the time of its application for registration thereof
for the reason that it (Standard Brands) is the owner of the trademark PLANTERS COCKTAIL
PEANUTS covered by Certificate of Registration No. SR-172, issued by the Patent Office on July 28,
1958. Standard Brands alleged in its petition that Philippine Nuts trademark PHILIPPINE PLANTERS
CORDIAL PEANUTS closely resembles and is confusingly similar to its trademark PLANTERS
COCKTAIL PEANUTS used also on salted peanuts, and that the registration of the former is likely to
deceive the buying public and cause damage to it.

On June 1, 1962, Philippine Nut filed its answer invoking the special defense that its registered label is
not confusingly similar to that of Standard Brands as the latter alleges.

At the hearing of October 4, 1962, the parties submitted a partial stipulation of facts. On December 12,
1962, an amended partial stipulation of facts was submitted, the pertinent agreements contained in
which are: (1) that Standard Brands is the present owner of the trademark PLANTERS COCKTAIL
PEANUTS covered by Certificate of Registration No. SR-172 issued on July 28, 1958; (2) that Standard
Brands trademark was first used in commerce in the Philippines in December, 1938 and (3) that
Philippine Nuts trademark PHILIPPINE PLANTERS CORDIAL PEANUTS was first used in the
Philippines on December 20, 1958 and registered with the Patent Office on August 10, 1961.

On December 10, 1963, after the presentation of oral and documentary evidence and the filing by the
parties of their memoranda, respondent Director of Patents rendered Decision No. 281 giving due
course to Standard Brands petition and ordering the cancellation of Philippine Nuts Certificate of
Registration No. SR-416. The Director of Patents found and held that in the labels using the two
trademarks in question, the dominant part is the word Planters, displayed in a very similar manner
so much so that as to appearance and general impression there is a very confusing similarity, and
he concluded that Philippine Nut was not entitled to register the mark at the time of its filing the
application for registration as Standard Brands will be damaged by the registration of the same. Its
motion for reconsideration having been denied, Philippine Nut came up to this Court for a review of said
decision.

In seeking a reversal of the decision of respondent Director of Patents, petitioner brings forth eleven
assigned errors all of which revolve around one main issue: is the trademark PHILIPPINE PLANTERS
CORDIAL PEANUTS used by Philippine Nut on its label for salted peanuts confusingly similar to the
trademark PLANTERS COCKTAIL PEANUTS used by Standard Brands on its product so as to
constitute an infrigements of the latters trademark rights and justify its cancellation?

The applicable law to the case is found in Republic Act 166 otherwise known as the Trade-Mark Law
from which We quote the following pertinent provisions:

Chapter II-A.

Sec. 4. Registration of trade-marks, trade-names and service-marks on the principal register. There
is hereby established a register of trade-marks, trade-names and service-marks which shall be known
as the principal register. The owner of a 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:

(d) Consists of or comprises a mark or trade-name which so resembles a mark or trade-name


registered in the Philippines or a mark or trade-name previously used in the Philippines by another and
not abandoned, as to be likely, when applied to or used in connection with the goods, business or
services of the applicant, to cause confusion or mistake or to deceive purchasers; xx xx xx. (italics
Ours)

Sec. 17. Grounds for cancellationAny person, who believes that he is or will be damaged by the
registration of a mark or trade-name, may, upon the payment of the prescribed fee, apply to cancel said
registration upon any of the following grounds: (c) That the registration was obtained fraudulently or
contrary to the provisions of section four, Chapter II hereof; xx xx xx.
Sec. 22. Infringement, what constitutes.Any person who shall use, without the consent of the
registrant, any reproduction, counterfeit, copy or colorable imitation of any registered mark or trade-
name in connection with the sale, offering for sale, or advertising of any goods, business or services on
or in connection with which such use is likely to cause confusion or mistake or to deceive purchasers
or others as to the source or origin of such goods or services, or identity of such business; or reproduce,
counterfeit, copy or colorably imitate any such mark or trade-name and apply such reproduction,
counterfeit, copy, or colorable imitation to labels, signs, prints, packages, wrappers, receptacles or
advertisements intended to be used upon or in connection with such goods, business or services, shall
be liable to a civil action by the registrant for any or all of the remedies herein provided. (italics supplied)

In the cases involving infringement of trademark brought before the Court, it has been consistently held
that there is infringement of trademark when the use of the mark involved would be likely to cause
confusion or mistake in the mind of the public or to deceive purchasers as to the origin or source of the
commodity; that whether or not a trademark causes confusion and is likely to deceive the public is a
question of fact which is to be resolved by applying the test of dominancy, meaning, if the competing
trademark contains the main or essential or dominant features of another by reason of which confusion
and deception are likely to result, then infringement takes place; that duplication or imitation is not
necessary, a similarity in the dominant features of the trademarks would be sufficient.

1. The first argument advanced by petitioner which We believe goes to the core of the matter in litigation
is that the Director of Patents erred in holding that the dominant portion of the label of Standard Brands
in its cans of salted peanuts consists of the word PLANTERS which has been used in the label of
Philippine Nut for its own product. According to petitioner, PLANTERS cannot be considered as the
dominant feature of the trademarks in question because it is a mere descriptive term, an ordinary word
which is defined in Webster International Dictionary as one who or that which plants or sows, a farmer
or an agriculturist. (pp. 10-11, petitioners brief)

We find the argument without merit. While it is true that PLANTERS is an ordinary word, nevertheless
it is used in the labels not to describe the nature of the product, but to project the source or origin of the
salted peanuts contained in the cans. The word PLANTERS printed across the upper portion of the
label in bold letters easily attracts and catches the eye of the ordinary consumer and it is that word and
none other that sticks in his mind when he thinks of salted peanuts.

In cases of this nature there can be no better evidence as to what is the dominant feature of a label and
as to whether there is a confusing similarity in the contesting trademarks than the labels themselves. A
visual and graphic presentation of the labels will constitute the best argument for one or the other,
hence, we are reproducing hereunder a picture of the cans of salted peanuts of the parties to the case.

The picture below is part of the documentary evidence appearing in the original records, and it clearly
demonstrates the correctness of the finding of respondent Director that the word PLANTERS is the
dominant, striking mark of the labels in question.

Taken from page 15 of Record of Inter Partes Case No. 268 Bureau of Patents

It is true that there are other words used such as Cordial in petitioners can and Cocktail in Standard
Brands, which are also prominently displayed, but these words are mere adjectives describing the type
of peanuts in the labeled containers and are not sufficient to warn the unwary customer that the two
products come from distinct sources. As a whole it is the word PLANTERS which draws the attention
of the buyer and leads him to conclude that the salted peanuts contained in the two cans originate from
one and the same manufacturer. In fact, when a housewife sends her housemaid to the market to buy
canned salted peanuts, she will describe the brand she wants by using the word PLANTERS and not
Cordial nor Cocktail.

2. The next argument of petitioner is that respondent Director should not have based his decision simply
on the use of the term PLANTERS, and that what he should have resolved is whether there is a
confusing similarity in the trademarks of the parties.

It is quite obvious from the record, that respondent Directors decision is based not only on the fact that
petitioner herein adopted the same dominant mark of Standard Brands, that is, the word PLANTERS,
but that it also used in its label the same coloring scheme of gold, blue, and white, and basically the
same lay-out of words such as salted peanuts and vacuum packed with similar type and size of
lettering as appearing in Standard Brands own trademark, all of which result in a confusing similarity
between the two labels. Thus, the decision states: Furthermore, as to appearance and general
impression of the two trademarks, I find a very confusing similarity. (Italics supplied)

Referring again to the picture We have reproduced, the striking similarity between the two labels is quite
evident not only in the common use of PLANTERS but also in the other words employed. As a matter
of fact, the capital letter C of petitioners Cordial is alike to the capital C of Standards Cocktail,
with both words ending with an 1.

Admittedly, no producer or manufacturer may have a monopoly of any color scheme or form of words
in a label. But when a competitor adopts a distinctive or dominant mark or feature of anothers trademark
and with it makes use of the same color ensemble, employs similar words written in a style, type and
size of lettering almost identical with those found in the other trademark, the intent to pass to the public
his product as that of the other is quite obvious. Hence, there is good reason for Standard Brands to
ask why did petitioner herein use the word PLANTERS, the same coloring scheme, even almost
identical size and contour of the cans, the same lay-out of words on its label when there is a myriad of
other words, colors, phrases, symbols, and arrangements to choose from to distinguish its product from
Standard Brands, if petitioner was not motivated to simulate the label of the latter for its own can of
salted peanuts, and thereby deceive the public?

A similar question was asked by this Court in Clarke vs. Manila Candy Co., 36 Phil. 100, when it resolved
in favor of plaintiff a case of unfair competition based on an imitation of Clarkes packages and wrappers
of its candies the main feature of which was one rooster. The Court queried thus: . . .why, with all the
birds in the air, and all the fishes in the sea, and all the animals on the face of the earth to choose from,
the defendant company (Manila Candy Co.) selected two roosters as its trademark, although its
directors and managers must have been well aware of the long-continued use of a rooster by the plaintiff
with the sale and advertisement of its goods?. . . A cat, a dog, a carabao, a shark or an eagle stamped
upon the container in which candies are sold would serve as well as a rooster for purposes of
identification as the product of defendants factory. Why did defendant select two roosters as its
trademark? (p. 109, supra)

Petitioner contends, however, that there are differences between the two trademarks, such as, the
presence of the word Philippine above PLANTERS on its label, and other phrases, to wit: For Quality
and Price, Its Your Outstanding Buy, the address of the manufacturer in Quezon City, etc., plus a
pictorial representation of peanuts overflowing from a tin can, while in the label of Standard Brands it is
stated that the product is manufactured in San Francisco, California, and on top of the tin can is printed
Mr. Peanut and the representation of a humanized peanut. (pp. 30-33, petitioners brief)

We have taken note of those alleged differences but We find them insignificant in the sense that they
are not sufficient to call the attention of the ordinary buyer that the labeled cans come from distinct and
separate sources. The word Philippine printed in small type in petitioners label may simply give to the
purchaser the impression that that particular can of PLANTERS salted peanuts is locally produced or
canned but that what he is buying is still PLANTERS canned salted peanuts and nothing else. As
regards Mr. Peanut on Standard Brands label, the same appears on the top cover and is not visible
when the cans are displayed on the shelves, aside from the fact that the figure of Mr. Peanut is printed
on the tin cover which is thrown away after opening the can, leaving no lasting impression on the
consumer. It is also for this reason that We do not agree with petitioner that it is Mr. Peanut and the
Humanized Peanut which is the trademark of Standard Brands salted peanuts, it being a mere
descriptive pictorial representation of a peanut not prominently displayed on the very body of the label
covering the can, unlike the term PLANTERS which dominates the label.

It is correctly observed by respondent Director that the merchandize or goods being sold by the parties
herein are very ordinary commodities purchased by the average person and many times by the ignorant
and unlettered and these are the persons who will not as a rule examine the printed small tellerings on
the container but will simply be guided by the presence of the striking mark PLANTERS on the label.
Differences there will always be, but whatever differences exist, these pale into insignificance in the
face of an evident similarity in the dominant feature and overall appearance of the labels of the parties.
It is not necessary, to constitute trademark infringement, that every word of a trade-mark should be
appropriated, but it is sufficient that enough be taken to deceive the public in the purchase of a protected
article. (Bunte Bros. v. Standard Chocolates, D.C. Mass., 45 F. Supp. 478, 481)

A trade-name in order to be an infringement upon another need not be exactly like it in form and
sound, but it is enough if the one so resembles another as to deceive or mislead persons of ordinary
caution into the belief that they are dealing with the one concern when in fact they are dealing with the
other. (Foss v. Culbertson, 136 P. 2d 711, 718, 17 Wash. 2d 610)

Where a trade-mark contains a dominating or distinguishing word, and purchasing public has come to
know and designate the article by such dominating word, the use of such word by another in marking
similar goods may constitute Infringement though the marks aside from such dominating word may be
dissimilar. (Queen Mfg. Co. v. Isaac Ginsberg & Bros., CCA. Mon., 25 F. 2d 284, 287)

Infringement of trade-mark does not depend on the use of identical words, nor on the question
whether they are so similar that a person looking at one would be deceived into the belief that it was
the other; it being sufficient if one mark is so like another in form, spelling, or sound that one with not a
very definite or clear recollection as to the real mark is likely to be confused or misled. (Northam Warren
Corporation v. Universal Cosmetic Co., C. C. A. III., 18 F. 2d 774, 775)
3. What is next submitted by petitioner is that it was error for respondent Director to have enjoined it
from using PLANTERS in the absence of evidence showing that the term has acquired secondary
meaning. Petitioner, invoking American jurisprudence, asserts that the first user of a tradename
composed of common words is given no special preference unless it is shown that such words have
acquired secondary meaning, and this, respondent Standard Brands failed to do when no evidence was
presented to establish that fact. (pp. 14-16, petitioners brief)

The doctrine of secondary meaning is found in Sec. 4 (f), Chapter II-A of the Trade-Mark Law, viz:

Except as expressly excluded in paragraphs (a), (b), (c) and (d) of this section, nothing herein shall
prevent the registration of a mark or trade-name used by the applicant which has become distinctive of
the applicants goods, business or services. The Director may accept as prima facie evidence that the
mark or trade-name has become distinctive, as applied to or used in connection with the applicants
goods, business or services, proof of substantially exclusive and continuous use thereof as a mark or
trade-name by the applicant in connection with the sale of goods, business or services for the five years
next preceding the date of the filing of the application for its registration. (As amended by Sec. 3, Rep.
Act No. 638.)

This Court held that the doctrine is to the effect that a word or phrase originally incapable of exclusive
appropriation with reference to an article on the market, because geographically or otherwise
descriptive, might nevertheless have been used so long and so exclusively by one producer with
reference to his article that, in that trade and to that branch of the purchasing public, the word or phrase
has come to mean that the article was his product.

By way of illustration, is the word Selecta which according to this Court is a common ordinary term in
the sense that it may be used or employed by any one in promoting his business or enterprise, but
which once adopted or coined in connection with ones business as an emblem, sign or device to
characterize its products, or as a badge of authenticity, may acquire a secondary meaning as to be
exclusively associated with its products and business, so that its use by another may lead to confusion
in trade and cause damage to its business.

The applicability of the doctrine of secondary meaning to the situation now before Us is appropriate
because there is oral and documentary evidence showing that the word PLANTERS has been used by
and closely associated with Standard Brands for its canned salted peanuts since 1938 in this country.
Not only is that fact admitted by petitioner in the amended stipulation of facts (see p. 2 of this Decision),
but the matter has been established by testimonial (tsn October 4, 1962, pp. 2-8) and documentary
evidence consisting of invoices covering the sale of PLANTERS cocktail peanuts. (Exhibits C to C-4;
D to D-10; E to E-10; F to F-2) In other words, there is evidence to show that the term PLANTERS has
become a distinctive mark or symbol insofar as salted peanuts are concerned, and by priority of use
dating as far back as 1938, respondent Standard Brands has acquired a preferential right to its adoption
as its trademark warranting protection against its usurpation by another. Ubi jus ibi remedium. Where
there is a right there is a remedy. Standard Brands has shown the existence of a property right (Arce
Sons & Co. vs. Selecta Biscuit Co., Inc., supra, pp. 262-263) and respondent Director has afforded the
remedy.

Still on this point, petitioner contends that Standard Brands use of the trademark PLANTERS was
interrupted during the Japanese occupation and in fact was discontinued when the importation of
peanuts was prohibited by Central Bank regulations effective July 1, 1953, hence it cannot be presumed
that it has acquired a secondary meaning. We hold otherwise. Respondent Director correctly applied
the rule that non-use of a trademark on an article of merchandize due to legal restrictions or
circumstances beyond ones control is not to be considered as an abandonment.

In the case of Andres Romero vs. Maiden Form Brassiere Co., Inc., L-18289, March 31, 1964, 10 SCRA
556, the same question was raised by petitioner Romero when he filed with the Bureau of Patents a
petition to cancel the registration of the trademark Adagio for brassieres manufactured by Maiden
Form Brassiere Co., Inc. His petition having been dismissed by the Director of Patents, Romero
appealed to this Court and one of the issues posed by him was that when the Government imposed
restrictions on importations of brassieres bearing that particular trademark, there was abandonment of
the same by respondent company which entitled petitioner to adopt it for his own use and which in fact
he had been using for a number of years. That argument was met by the Court in the words of Justice
Jesus Barrera thus:

x x x The evidence on record shows, on the otherhand, that the trademark Adagio was first used
exlusively in the Philippines by appellee in the year 1932. There being no evidence of use of the mark
by others before 1932, or that appellee abandoned use thereof, the registration of the mark was made
in accordance with the Trademark Law. Granting that appellant used the mark when appellee stopped
using it during the period of time that the Government imposed restrictions on importation of
respondents brassiere being the trademark, such temporary non-use did not affect the rights of
appellee because it was occasioned by government restrictions and was not permanent, intentional,
and voluntary.

To work an abandonment, the disuse must be permanent and not ephemeral; it must be intentional
and voluntary, and not involuntary or even compulsory. There must be a thoroughgoing discontinuance
of any trade-mark use of the mark in question (Callman, Unfair Competition and Trademark, 2nd Ed.,
p. 1341).

The use of the trademark by other manufacturers did not indicate an intention on the part of appellee
to abandon it.

The instances of the use by others of the term Budweiser, cited by the defendant, fail, even when
liberally construed, to indicate an intention upon the part of the complainant to abandon its rights to that
name. To establish the defense of abandonment, it is necessary to show not only acts indicating a
practical abandonment, but an actual intention to abandon. Sanlehner v. Eisener & Mendelson Co.,
17& U.S. 19, 21 S. Ct. 7 (45 L. Ed. 60). (Anheuser-Busch, Inc. v. Budweiser Malt Products Corp., 287
F. 245.)

xxx xxx xxx xxx

Non-use because of legal restrictions is not evidence of an intent to abandon. Non-use of their ancient
trade-mark and the adoption of new marks by the Carthusian Monks after they had been compelled to
leave France was consistent with an intention to retain their right to use their old mark. Abandonment
will not be inferred from a disuse over a period of years occasioned by statutory restrictions on the name
of liquor. (Nims, Unfair Competition and Trade-Mark, p. 1269.) (pp. 562-564, supra) (italics Ours)

Applying the words of Justice Roman Ozaeta in the Ang Tibay case (Ang vs. Toribio Teodoro, p. 56,
supra) to the case now before Us, petitioner herein must not be allowed to get a free ride on the
reputation and selling power of Standard Brands PLANTERS salted peanuts, for a self-respecting
person, or a reputable business concern as is the case here, does not remain in the shelter of anothers
popularity and goodwill but builds one of his own.
4. Findings of fact by the Director of Patents are conclusive and binding on this Court provided they are
supported by substantial evidence. The testimonial and documentary evidence in addition to the
stipulation of facts submitted by the parties fully support the findings of respondent Director that (1)
there is a confusing similarity between the labels or trademarks of Philippine Nut and Standard Brands
used in their respective canned salted peanuts; (2) respondent Standard Brands has priority of adoption
and use of the label with PLANTERS as the dominant feature and the same has acquired secondary
meaning in relation to salted peanuts; and (3) there has been no abandonment or non-use of said
trademark by Standard Brands which would justify its adoption by petitioner or any other competitor for
the sale of salted peanuts in the market.

PREMISES CONSIDERED, We AFFIRM the decision of respondent Director of Patents with costs
against petitioner. So Ordered.

Castro (Chairman), Makasiar, Esguerra and Martin, JJ., concur.

Teehankee, J., is on leave.

Decision affirmed.

Notes. a) Difference between trademark and tradename.A trade-mark is generally described as a


sign, device or mark by which the articles produced or dealt in by a particular person or organization
are distinguished or distinguishable from those produced or dealt in by others, and must be affixed to
the goods or articles, while a trade-name is descriptive of the manufacturer or dealer himself as much
as his own name is, and frequently includes the name of the place where the business is located; it
involves the individuality of the maker or dealer for protection in trade, and to avoid confusion in
business, and to secure the advantages of a good reputation; it is more popularly applied to the goodwill
of a business, and need not be affixed to the goods sold. In other words, it is not regarded as a trade-
mark in the strict technical sense. (Arce Sons and Company vs. Selecta Biscuit Co., Inc., L-17981,
January 28, 1961).

b) Infringement of trademark and unfair competition. Though the law concerning infringement of
trade-marks and that concerning unfair competition have a common conception at their root, which is
that one person shall not be permitted to misrepresent that his goods or his business are the goods or
the business of another, the law concerning unfair competition is broader and more inclusive. On the
other hand, the law concerning the infringement of trade-mark is of more limited range, but within its
narrower range recognizes a more exclusive right derived from the adoption and registration of the
trade-mark by the person whose goods or business are first associated therewith. One who has
identified a peculiar symbol or mark with his goods thereby acquires a property right in such symbol or
mark, and if another infringes the trademark he thereby invades this property right. Unfair competition
cannot be placed on the plane of invasion of property right. The tort is strictly one of fraud. It results that
the law of trade-marks is specialized subject distinct from the law of unfair competition, though, as
stated above, the two subjects are entwined with each other and are dealt with together in Act No. 666.
(E. Spinner & Co. vs. Neuss Hesslein Corporation, L-31380, January 13, 1930, 54 Phil. 231).

o0o

AMERICAN WIRE & CABLE COMPANY, petitioner


vs.
DIRECTOR OP PATENTS and CENTRAL BANAHAW INDUSTRIES, respondents.

No. L-26557. February 18, 1970

Civil law; Trade-marks; Registrability of trade-marks; Test to determine registrability. The


determinative factor in a contest involving registration of trade mark is not whether the challenged mark
would actually cause confusion or deception of the purchasers but whether the use of such mark would
likely cause confusion or mistake on the part of the buying public. In short, to constitute an infringement
of an existing trademark patent and warrant a denial of an application for registration, the law does not
require that the competing trademarks must be so identical as to produce actual error or mistake; it
would be sufficient, for purposes of the law, that the similarity between the two labels is such that there
is a possibility or likelihood of the purchaser of the older brand mistaking the newer brand for it.
Same; Same; Same; Same; Dominancy testEarlier rulings of the Supreme Court indicate reliance on
the dominancy test or the assessment of the essential or dominant features in the competing labels to
determining whether they are confusingly similar or cause the public to mistake one for another. Even
their similarity in sound is taken into consideration, where the marks refer to merchandise of the same
descriptive properties, for the reason that trade idem sonans constitutes a violation of trademark
patents.

Same; Same; Same; Same; Buyers less concerned with etymology of words; Duraflex and Dynaflex,
confusingly similar. The similarity between the competing trademarks, Duraflex and Dynaflex, is clear
not only from their initial letters but also in the last half of the appellations. Buyers are less concerned
with the etymology of the words as with their sound and the dominant, features of the design. The
semantic difference and connotation of the prefixes Dura and Dyna of the competing trademark
cannot make the two marks different.

Same; Same; Same; Same; Minor and insignificant differences. Differences in the mark on the front
portion of the box are minor if there is close resemblance in the general appearance of the box and the
tradenames of the articles. For the dominant and essential feature of the article is the trademark itself.
Unlike the case of commodities ordinarily picked up by the purchaser himself from the grocery or market
counters, electric wires are purchased not by their appearance but by the size (voltage) and length and,
most importantly, by brand. Except for big constructions, the task of purchasing electrical materials is
delegated to one who is not a technical man, not necessarily the designing architect or engineer who
will undertake the work of building. Unlike the pharmacists or druggists, the dispensers of hardware or
electrical supplies are not likely to pay more concern to the brand of articles asked by the customer.

APPEAL from a decision of the Director of Patents.

The facts are stated in the opinion of the Court

Sotero H. Laurel & Florencio Z. Sioson for petitioner.

Celso P. Mariano for respondents.

REYES, J.B.L., J.:

Appeal filed by the American Wire & Cable Company, owner of the registered trademark DURAFLEX
for electric wires, questioning the correctness of the decision of the Director of Patents (in Inter Partes
Case No. 290) holding that the label DYNAFLEX and Device for electric wires, sought to be registered
by the Central Banahaw Industries, Inc., is not similar to herein appellants patented mark.

On 2 June 1962, Central Banahaw Industries, Inc., applied with the Director of Patents for registration
of the trademark DYNAFLEX and Device to be used in connection with electric wires, class 20, which
mark applicant allegedly had been using since 29 March 1962. The American Wire and Cable Co., Inc.,
another domestic corporation and authorized user since 10 April 1958 of the registered trade mark
DURAFLEX and Globe representation, for electric wires, apparatus, machines and supplies, class 20,
opposed the application on the ground that applicants use of the trade mark DYNAFLEX would cause
confusion or result in mistakes to purchasers intending to buy DURAFLEX electric wires and goods, the
mark being registered allegedly having practically the same spelling, pronunciation and sound, and
covering the same goods, as that of the opposer. Besides, opposer contended that there has been no
continuous use in commerce of the applicants mark.

After due hearing, the Director of Patents rendered decision holding the applicants mark DYNAFLEX
not to be similar to the previously registered trademark, DURAFLEX. Consequently, the application of
Central Banahaw Industries for registration of DYNAFLEX was given due course and the opposition
thereto by American Wire & Cable Company dismissed. The latter interposed the present appeal.

The issue to be resolved in this proceeding is simple: whether or not the mark DYNAFLEX and Device
is registrable as label for electric wires, class 20, considering that the trademark DURAFLEX and Globe
representation, also for electric wires, machines and supplies under class 20, has been registered more
than 4 years earlier. In ruling in favor of the herein application, the Director of Patents said:
x x x The applicants trademark is a composite mark consisting of the word DYNAFLEX printed in smaii
letters of the English alphabet except that letter D is capitalized, within a fanciful device, on top of
which is the encircled initials, in downward sequence, of the Respondents corporate name, and jutting
out on two sides of the circle are bolts of lightning, symbolic of electricity.

On the other hand, Opposers trademark is DURAFLEX in Capitalized print, except that one crosspiece
of the letter X is in the form of a bolt of lightning. The word slants slightly upward, traversing the center
of a figure of the earth or globe.

Resorting now to the semantics of the words, it is clear that both marks are suffixed by the word FLEX.
The word appears in any dictionary having as common meaning to bend. In Websters Internationa]
Dictionary, it is used by the British on electric cord. However, one mark (Respondents) is prefixed with
DYNA suggesting power. It is not in itself a root word but it has been commonly associated with any
source of power. At most, it could have been derived from the Greek word Dynamis* and, generally,
the root words commonly derived therefrom are dynam and dynamo*. The other (Opposers) is
prefixed with DURA, suggesting durability, strength and endurance.

Based on the foregoing comparisons, the trademarks of the parties are different in appearance,
meaning, sound and connotation and hence, are not confusingly similar.

The pertinent law, Republic Act 166, as amended, on registrabitity of trademarks, prescribes:

SEC. 4.The owner of a trademark, 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, unless it:

xxxx xxxx xxxx

(d) Consists of or comprises a mark or trade name which so resembles a mark or trade-name registered
in the Philippines by another and not abandoned, as to be likely, when applied to or used in connection
with the goods, business or services of the applicant, to cause confusion or mistake or to deceive
purchasers. (Italics supplied)

It is clear from the above-quoted provision that the determinative factor in a contest involving registration
of trade mark is not whether the challenged mark would actually cause confusion or deception of the
purchasers but whether the use of such mark would likely cause confusion or mistake on the part of the
buying public. In short, to constitute an infringement of an existing trademark patent and warrant a
denial of an application for registration, the law does not require that the competing trademarks must
be so identical as to produce actual error or mistake; it would be sufficient, for purposes of the law, that
the similarity between the two labels is such that there is a possibility or likelihood of the purchaser of
the older brand mistaking: the newer brand for it.

The question is, when is a trademark likely to confuse or cause the public to mistake one for another.
Earlier rulings of the Court seem to indicate its reliance on the dominancy test or the assessment of the
essential or dominant features in the competing labels to determine whether they are confusingly
similar. On this matter, the Court said:

It has been consistently held that the question of infringement of a trademark is to be determined by
the test of dominancy. Similarity in size, form, and color, while relevant, is not conclusive. If the
competing trademark contains the main or essential or dominant features of another, and confusion
and deception is likely to result, infringement takes place. Duplication or imitation is not necessary, nor
is it necessary that the infringing label should suggest an effort to imitate. (C. Neilman Brewing Co. vs.
Independent Brewing Co., 191 F. 489, 495, citing Eagle White Lead Co. vs. Pflugh [CC] 180 Fed. 679).
The question at issue in cases of infringement of trademarks is whether the use of the marks involved
would be likely to cause confusion or mistakes in the mind of the public or deceive purchasers. (Go
Tiong vs. Director of Patents, 95 Phil. 1, cited in Lam Hoa vs. Director of Patents, 100 Phil. 214).

In fact, even their similarity in sound is taken into consideration, where the marks refer to merchandise
of the same descriptive properties, for the reason that trade idem sonans constitutes a violation of trade
mark patents. Thus, in the case of Marvex Commercial Co. vs. Hatvpia & Co., the registration of the
trademark Lionpas for medicated plaster was denied for being confusingly similar in sound with
Salonpas, a registered mark also for medicated plaster, the Court saying:

Two letters of SALONPAS are missing in LIONFAS, the first letter a and the letter 0. Be that as it
may, when the two words are pronounced, the sound effects are confusingly similar. And where goods
are advertised over the radio, similarity in sound is of especial significance (Co Tiong Sa vs. Director of
Patents, 95 Phil 1, citing Nims, The Law of Unfair Competition and Trademarks, 4th ed., vol. 2, pp. 678-
679). The importance of this rule is emphasized by the increase of radio advertising in which we are
deprived of help of our eyes and must depend entirely on the ear (Operators, Inc. vs. Director of
Patents, supra.)

Along the same line are the rulings denying registration of a mark containing the picture of a fish
(Bangus), as label for soy sauce, for being similar to another registered brand of soy sauce that bears
the picture of the fish carp; or that of the mark bearing the picture of two roosters with the word Bantam,
as label for food seasoning (vetsin), which would confuse the purchasers of the same article bearing
the registered mark Hen Brand that features the picture of a hen.

The present case is governed by the principles laid down in the preceding cases. The similarity between
the competing trademarks, DURAFLEX and DYNAFLEX, is apparent. Not only are the initial letters and
the last half of the appellations identical, but the difference exists only in two out of the eight literal
elements of the designations. Coupled with the fact that both marks cover insulated flexible wires under
class 20; that both products are contained in boxes of the same material, color, shape and size; that
the dominant elements of the front designs are a red circle and a diagonal zigzag commonly related to
a spark or flash of electricity; that the back of both boxes show similar circles of broken lines with arrows
at the center pointing outward, with the identical legend Cut Out Ring Draw From Inside Circle, no
difficulty is experienced in reaching the conclusion that there is a deceptive similarity that would lead
the purchaser to confuse one product with the other.

The Director of Patents has predicated his decision mostly on the semantic difference and connotation
of the prefixes Dura and Dyna of the competing trademarks, unfortunately forgetting that the buyers
are less concerned with the etymology of the words as with their sound and the dominant features of
the design.

Of course, as pointed out in the decision now on appeal, there are some differences in the mark on the
front portion of the box. But they pale into insignificance in view of the close resemblance in the general
appearance of the box and the tradenames of the articles. Indeed, measured against the dominant-
feature standard, applicants mark must be disallowed. For, undeniably, the dominant and essential
feature of the article is the trademark itself. Unlike in the case of commodities that are ordinarily picked
up by the purchaser himself from the grocery or market counters, electric wires are purchased not by
their appearance but by the size (voltage) and length and, most importantly, by brand. It is even within
laymans knowledge that different brands of wire have different characteristics and properties; and for
an essential building item as electric wires and supplies, the owner of the building would not dare risk
his property, perhaps his life, on an unknown or untested brand. He would only demand for what is
recognized to be the best.

Relying on the doctrine enunciated in the Etepha case and the earlier ruling in Lim Hoa vs. Director of
Patents, applicant-appellee contends that the DYNAFLEX mark would not confuse or deceive the
buyers and subscribers of the DURAFLEX brand, because electrical wires are of great value and the
purchasers thereof are generally intelligentthe architects, engineers and building contractors. It must
be realized, however, that except perhaps in big constructions, the designing architect or engineer, or
the contractor who will undertake the work of building, does not himself purchase or place the order for
the purchase of the materials to be used therein. The task is oftentimes delegated to another. Nor are
said technical men die ones personally laying down the wiring system in the building that they could
possibly check on whether or not the correct wires are being used. So that even if the engineer or
contractor will specify in the bill of materials the particular brand of wires needed, there is no certainty
that the desired product will be acquired. For, unlike the pharmacists or druggists, the dispensers of
hardware or electrical supplies are not generally known to pay as much concern to the brand of articles
asked for by the customer and of a person who knows the name of the brand but is not acquainted with
its appearance, the likelihood of the DYNAFLEX product being mistaken for DURAFLEX is not remote.
Of course, as in all other cases of colorable imitations, the unanswered riddle is why, of the millions of
terms and combinations of letters and designs available, the appellee had to choose those so closely
similar to anothers trademark if there was no intent to take advantage of the goodwill generated by the
other mark.

FOR THE FOREGOING CONSIDERATIONS, the decision appealed from is hereby set aside, and the
application for registration of the trademark DYNAFLEX for electric wires, class 20, is ordered denied.
No costs.

Concepcion, CJ., Dizon, Makalintal, Zaldivar, Sanchez, Castro, Fernando, Barredo and Villamor, JJ.,
concur.

Teehankee, J., took no part.

Decision set aside.

Notes. (a) Trademarks; similarity of goods, products or business. The trademark LUX used by
plaintiff on soap, was infringed by adoption of the same word as a trademark by defendant for use on
pomades (Khe vs. Leper Brothers Co., L-46817, April 18, 1941).

The question of similarity or dissimilarity between trademarks, while one of opinion, is to be determined
by the court mainly on the basis of the facsimiles or labels or pictures submitted to the Director of
Patents (Go Tiong Sa vs. Director of Patents, L-5378, May 24, 1954).

(b) Infringement. To constitute infringement, it is enough if it has the one feature which the average
buyer is likely to remember from prior acquaintanceship with the earlier mark (Go Tiong Sa vs. Director
of Patents, supra).

o0o

ASIA BREWERY, INC., petitioner, vs. THE HON. COURT OF APPEALS and SAN MIGUEL
CORPORATION, respondents.

G.R. No. 103543. July 5, 1993

Remedial Law; Appeal; As a general rule, the findings of the Court of Appeals upon factual questions
are conclusive and ought not to be disturbed by the Court; Exceptions to the general rule. The lone
issue in this appeal is whether ABI infringes SMCs trademark: San Miguel Pale Pilsen with Rectangular
Hops and Malt Design, and thereby commits unfair competition against the latter. It is a factual issue
(Phil. Nut Industry Inc. v. Standard Brands Inc., 65 SCRA 575) and as a general rule, the findings of the
Court of Appeals upon factual questions are conclusive and ought not to be disturbed by us. However,
there are exceptions to this general rule, and they are: (1) When the conclusion is grounded entirely on
speculation, surmises and conjectures; (2) When the inference of the Court of Appeals from its findings
of fact is manifestly mistaken, absurd and impossible; (3) Where there is grave abuse of discretion; (4)
When the judgment is based on a misapprehension of facts; (5) When 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) When the findings of said court are contrary to those of the trial court;
(7) When the findings are without citation of specific evidence on which they are based; (8) When the
facts set forth in the petition as well as in the petitioners main and reply briefs are not disputed by the
respondents; and (9) When the findings of facts of the Court of Appeals are premised on the absence
of evidence and are contradicted on record.

Same; Same; Same; Where findings of the Court of Appeals and trial court are contrary to each other,
the Supreme Court may scrutinize the evidence on record. Under any of these exceptions, the Court
has to review the evidence in order to arrive at the correct findings based on the record (Roman Catholic
Bishop of Malolos, Inc. vs. IAC, 191 SCRA 411, 420.) Where findings of the Court of Appeals and trial
court are contrary to each other, the Supreme Court may scrutinize the evidence on record.
Unfair Competition; Trademarks; Infringement; Infringement of trademark is a form of unfair competition.
Infringement of trademark is a form of unfair competition (Clarke vs. Manila Candy Co., 36 Phil. 100,
106). Sec 22 of Republic Act No. 166, otherwise known as the Trademark Law, defines what constitutes
infringement.

Same; Same; Same; Definition of infringement implies that only registered trademarks, tradenames and
service marks are protected against infringement or unauthorized use by another or others. This
definition implies that only registered trademarks, trade names and service marks are protected against
infringement or unauthorized use by another or others. The use of someone elses registered
trademark, trade name or service mark is unauthorized, hence, actionable, if it is done without the
consent of the registrant.

Same; Same; Same; Infringement determined by the test of dominancy rather than by differences or
variations in the details of one trademark and of another. Infringement is determined by the test of
dominancy rather than by differences or variations in the details of one trademark and of another.

Same; Same; Same; Same; Fact that the words pale pilsen are part of ABIs trademark does not
constitute an infringement of SMCs trademark; Pilsen is a primarily geographically descriptive work,
hence non-registerable and not appropriable by any beer manufacturer.The fact that the words pale
pilsen are part of ABIs trademark does not constitute an infringement of SMCs 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. (Websters 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.

Same; Same; Same; The universal test question is whether the public is likely to be deceived. x x
x. The universal test question is whether the public is likely to be deceived. Nothing less than conduct
tending to pass off one mans goods or business as that of another will constitute unfair competition.
Actual or probable deception and confusion on the part of the customers by reason of defendants
practices must always appear.

Same; Same; Same; Same; Use by ABI of the steinie bottle similar but not identical to the San Miguel
Pale Pilsen bottle is not unlawful. The use by ABI of the steinie bottle, similar but not identical to the
SAN MIGUEL PALE PILSEN bottle, is not unlawful. As pointed out by ABIs counsel, SMC did not invent
but merely borrowed the steinie bottle from abroad and it claims neither patent nor trademark protection
for that bottle shape and design. (See rollo, page 55.) The Cerveza Especial and the Efes Pale Pilsen
use the steinie bottle.

Same; Same; Same; Same; Same; SMCs being the first to use the steinie bottle does not give SMC a
vested right to use it to the exclusion of everyone else. The petitioners contention that bottle size,
shape and color may not be the exclusive property of any one beer manufacturer is well taken. SMCs
being the first to use the steinie bottle does not give SMC a vested right to use it to the exclusion of
everyone else. Being of functional or common use, and not the exclusive invention of any one, it is
available to all who might need to use it within the industry. Nobody can acquire any exclusive right to
market articles supplying simple human needs in containers or wrappers of the general form, size and
character commonly and immediately used in marketing such articles.

Same; Same; Same; In resolving cases of infringement and unfair competition, courts should take into
consideration several factors which would affect its conclusion.The Court itself cautioned that in
resolving cases of infringement and unfair competition, the courts should take into consideration
several factors which would affect its conclusion, to wit: the age, training and education of the usual
purchaser, the nature and cost of the article, whether the article is bought for immediate consumption
and also the conditions under which it is usually purchased.

CRUZ, J., Dissenting Opinion:


Unfair Competition; Trademark; Infringement; Side-by-side comparison not final test of similarity
because average buyers do not make minute scrutiny of label details. It has been correctly held that
side-by-side comparison is not the final test of similarity. Such comparison requires a careful scrutiny
to determine in what points the labels of the products differ, as was done by the trial judge. The ordinary
buyer does not usually make such scrutiny nor does he usually have the time to do so. The average
shopper is usually in a hurry and does not inspect every product on the shelf as if he were browsing in
a library. Where the housewife has to return home as soon as possible to her baby or the working
woman has to make quick purchases during her off hours, she is apt to be confused by similar labels
even if they do have minute differences. The male shopper is worse as he usually does not bother about
such distinctions.

PETITION for review of the decision and resolution of the Court of Appeals.

The facts are stated in the opinion of the Court.

Abad Santos & Associates and Sycip, Salazar, Hernandez and Gatmaitan for petitioner.

Roco, Bunag, Kapunan Law Office for private respondent.

GRIO-AQUINO, J.:

On September 15, 1988, San Miguel Corporation (SMC) filed a complaint against Asia Brewery Inc.
(ABI) for infringement of trademark and unfair competition on account of the latters BEER PALE
PILSEN or BEER NA BEER product which has been competing with SMCs SAN MIGUEL PALE
PILSEN for a share of the local beer market. (San Miguel Corporation vs. Asia Brewery Inc., Civ. Case
No. 56390, RTC Branch 166, Pasig, Metro Manila.)

On August 27, 1990, a decision was rendered by the trial Court, presided over by Judge Jesus O.
Bersamira, dismissing SMCs complaint because ABI has not committed trademark infringement or
unfair competition against SMC (p. 189, Rollo).

SMC appealed to the Court of Appeals (C.A.-G.R. CV No. 28104). On September 30, 1991, the Court
of Appeals (Sixth Division composed of Justice Jose C. Campos, Jr., chairman and ponente, and
Justices Venancio D. Aldecoa Jr. and Filemon H. Mendoza, as members) reversed the trial court. The
dispositive part of the decision reads as follows:

In the light of the foregoing analysis and under the plain language of the applicable rule and principle
on the matter, We find the defendant Asia Brewery Incorporated GUILTY of infringement of trademark
and unfair competition. The decision of the trial court is hereby REVERSED, and a new judgment
entered in favor of the plaintiff and against the defendant as follows:

(1) The defendant Asia Brewery Inc. its officers, agents, servants and employees are hereby
permanently enjoined and restrained from manufacturing, putting up, selling, advertising, offering or
announcing for sale, or supplying Beer Pale Pilsen, or any similar preparation, manufacture or beer in
bottles and under labels substantially identical with or like the said bottles and labels of plaintiff San
Miguel Corporation employed for that purpose, or substantially identical with or like the bottles and
labels now employed by the defendant for that purpose, or in bottles or under labels which are calculated
to deceive purchasers and consumers into the belief that the beer is the product of the plaintiff or which
will enable others to substitute, sell or palm off the said beer of the defendant as and for the beer of the
plaintiff-complainant.

(2) The defendant Asia Brewery Inc. is hereby ordered to render an accounting and pay the San Miguel
Corporation double any and all the payments derived by defendant from operations of its business and
sale of goods bearing the mark Beer Pale Pilsen estimated at approximately Five Million Pesos
(P5,000,000.00); to recall all its products bearing the mark Beer Pale Pilsen from its retailers and
deliver these as well as all labels, signs, prints, packages, wrappers, receptacles and advertisements
bearing the infringing mark and all plates, molds, materials and other means of making the same to the
Court authorized to execute this judgment for destruction.
(3) The defendant is hereby ordered to pay plaintiff the sum of Two Million Pesos (P2,000,000.00) as
moral damages and Half a Million Pesos (P5,000,000.00) by way of exemplary damages.

(4) The defendant is further ordered to pay the plaintiff attorneys fees in the amount of P250,000.00
plus costs of this suit. (p. 90, Rollo.)

Upon a motion for reconsideration filed by ABI, the above dispositive part of the decision, was modified
by the separate opinions of the Special Sixth Division so that it should read thus:

In the light of the foregoing analysis and under the plain language of the applicable rule and principle
on the matter, We find the defendant Asia Brewery Incorporated GUILTY of infringement of trademark
and unfair competition. The decision of the trial court is hereby REVERSED, and a new judgment
entered in favor of the plaintiff and against the defendant as follows:

(1) The defendant Asia Brewery Inc., its officers, agents, servants and employees are hereby
permanently enjoined and restrained from manufacturing, putting up, selling, advertising, offering or
announcing for sale, of supplying Beer Pale Pilsen, or any similar preparation, manufacture or beer in
bottles and under labels substantially identical with or like the said bottles and labels of plaintiff San
Miguel Corporation employed for that purpose, or substantially identical with or like the bottles and
labels now employed by the defendant for that purpose, or in bottles or under labels which are calculated
to deceive purchasers and consumers into the belief that the beer is the product of the plaintiff or which
will enable others to substitute, sell or palm off the said beer of the defendant as and for the beer of the
plaintiff-complainant.

(2) The defendant Asia Brewery Inc. is hereby ordered to recall all its products bearing the mark Beer
Pale Pilsen from its retailers and deliver these as well as all labels, signs, prints, packages, wrappers,
receptacles and advertisements bearing the infringing mark and all plates, molds, materials and other
means of making the same to the Court authorized to execute this judgment for destruction.

(3) The defendant is hereby ordered to pay plaintiff the sum of Two Million Pesos (P2,000,000.00) as
moral damages and Half a Million Pesos (P500,000.00) by way of exemplary damages.

(4) The defendant is further ordered to pay the plaintiff attorneys fees in the amount of P250,000.00
plus costs of this suit.

In due time, ABI appealed to this Court by a petition for certiorari under Rule 45 of the Rules of Court.
The lone issue in this appeal is whether ABI infringes SMCs trademark: San Miguel Pale Pilsen with
Rectangular Hops and Malt Design, and thereby commits unfair competition against the latter. It is a
factual issue (Phil. Nut Industry Inc. v. Standard Brands Inc., 65 SCRA 575) and as a general rule, the
findings of the Court of Appeals upon factual questions are conclusive and ought not to be disturbed by
us. However, there are exceptions to this general rule, and they are:

(1) When the conclusion is grounded entirely on speculation, surmises and conjectures;

(2) When the inference of the Court of Appeals from its findings of fact is manifestly mistaken,
absurd and impossible;

(3) Where there is grave abuse of discretion;

(4) When the judgment is based on a misapprehension of facts;

(5) When 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) When the findings of said court are contrary to those of the trial court;

(7) When the findings are without citation of specific evidence on which they are based;

(8) When the facts set forth in the petition as well as in the petitioners main and reply briefs are
not disputed by the respondents; and
(9) When the findings of facts of the Court of Appeals are premised on the absence of evidence
and are contradicted on record. (Reynolds Philippine Corporation vs. Court of Appeals, 169
SCRA 220, 223 citing, Mendoza vs. Court of Appeals, 156 SCRA 597; Manlapaz vs. Court of
Appeals, 147 SCRA 238; Sacay vs. Sandiganbayan, 142 SCRA 593; 609; Guita vs. CA, 139
SCRA 576; Casanayan vs. Court of Appeals, 198 SCRA 333, 336; also Apex Investment and
Financing Corp. vs. IAC, 166 SCRA 458 [citing Tolentino vs. De Jesus, 56 SCRA 167; Carolina
Industries, Inc. vs. CMS Stock Brokerage, Inc., 97 SCRA 734; Manero vs. CA, 102 SCRA 817;
and Moran, Jr. vs. CA, 133 SCRA 88].)

Under any of these exceptions, the Court has to review the evidence in order to arrive at the correct
findings based on the record (Roman Catholic Bishop of Malolos, Inc. vs. IAC, 191 SCRA 411, 420.)
Where findings of the Court of Appeals and trial court are contrary to each other, the Supreme Court
may scrutinize the evidence on record. (Cruz vs. CA, 129 SCRA 222, 227.)

The present case is one of the exceptions because there is no concurrence between the trial court and
the Court of Appeals on the lone factual issue of whether ABI, by manufacturing and selling its BEER
PALE PILSEN in amber colored steinie bottles of 320 ml. capacity with a white painted rectangular label
has committed trademark infringement and unfair competition against SMC.

Infringement of trademark is a form of unfair competition (Clarke vs. Manila Candy Co., 36 Phil. 100,
106). Sec 22 of Republic Act No. 166, otherwise known as the Trademark Law, defines what constitutes
infringement:

Sec 22. Infringement, what constitutes.Any person who shall use, without the consent of the
registrant, any reproduction, counterfeit, copy or colorable imitation of any registered mark or trade-
name in connection with the sale, offering for sale, or advertising of any goods, business or services on
or in connection with which such use is likely to cause confusion or mistake or to deceive purchasers
or others as to the source or origin of such goods or services, or identity of such business; or reproduce,
counterfeit, copy or colorably imitate any such mark or trade-name and apply such reproduction,
counterfeit, copy, or colorable imitation to labels, signs, prints, packages, wrappers, receptacles or
advertisements intended to be used upon or in connection with such goods, business or services, shall
be liable to a civil action by the registrant for any or all of the remedies herein provided. (Italics supplied.)
This definition implies that only registered trade marks, trade names and service marks are protected
against infringement or unauthorized use by another or others. The use of someone elses registered
trademark, trade name or service mark is unauthorized, hence, actionable, if it is done without the
consent of the registrant. (Ibid.)

The registered trademark of SMC for its pale pilsen beer is:

San Miguel Pale Pilsen With Rectangular Hops and Malt Design. (Philippine Bureau of Patents,
Trademarks and Technology Transfer Trademark Certificate of Registration No. 36103, dated 23 Oct.
1986, (p. 174, Rollo.)

As described by the trial court in its decision (Page 177, Rollo):

x x x a rectangular design [is] bordered by what appears to be minute grains arranged in rows of three
in which there appear in each corner hop designs. At the top is a phrase written in small print Reg. Phil.
Pat. Off. and at the bottom Net Contents: 320 Ml The dominant feature is the phrase San Miguel
written horizontally at the upper portion. Below are the words Pale Pilsen written diagonally across the
middle of the rectangular design. In between is a coat of arms and the phrase Expertly Brewed. The
S in San and the M of Miguel, P of Pale and Pilsen are written in Gothic letters with fine strokes
of serifs, the kind that first appeared in the 1780s in England and used for printing German as
distinguished from Roman and Italic. Below Pale Pilsen is the statement And Bottled by (first line,
San Miguel Brewery (second line), and Philippines (third line). (p. 177, Rollo; Italics supplied.)

On the other hand, ABIs trademark, as described by the trial court, consists of:

x x x a rectangular design bordered by what appear to be buds of flowers with leaves. The dominant
feature is Beer written across the upper portion of the rectangular design. The phrase Pale Pilsen
appears immediately below is smaller block letters. To the left is a hop design and to the right, written
in small prints, is the phrase Net Contents 320 ml. Immediately below Pale Pilsen is the statement
written in three lines Especially brewed and bottled by (first line), Asia Brewery Incorporated (second
line), and Philippines (third line), (p. 177, Rollo; Italics supplied.)

Does ABIs BEER PALE PILSEN label or design infringe upon SMCs SAN MIGUEL PALE PILSEN
WITH RECTANGULAR MALT AND HOPS DESIGN? The answer is No.

Infringement is determined by the test of dominancy rather than by differences or variations in the
details of one trademark and of another. The rule was formulated in Co Tiong Sa vs. Director of Patents,
95 Phil. 1, 4 (1954); reiterated in Lim Hoa vs. Director of Patents, 100 Phil. 214, 216-217 (1956), thus:

It has been consistently held that the question of infringement of a trademark is to be determined by
the test of dominancy. Similarity in size, form and color, while relevant, is not conclusive. If the
competing trademark contains the main or essential or dominant features of another, and confusion
and deception is likely to result, infringement takes place. Duplication or imitation is not necessary; nor
it is necessary that the infringing label should suggest an effort to imitate. [C. Neilman Brewing Co. vs.
Independent Brewing Co., 191 F., 489, 495, citing Eagle White Lead Co., vs. Pflugh (CC) 180 Fed.
579]. The question at issue in cases of infringement of trademarks is whether the use of the marks
involved would be likely to cause confusion or mistakes in the mind of the public or deceive purchasers.
(Auburn Rubber Corporation vs. Honover Rubber Co., 107 F. 2d 588; x x x.) (Italics supplied.)

In Forbes, Munn & Co. (Ltd.) vs. Ang San To, 40 Phil. 272, 275), the test was similarity or resemblance
between the two (trademarks) such as would be likely to cause the one mark to be mistaken for the
other. x x x [But] this is not such similitude as amounts to identity.

In Phil. Nut Industry Inc. vs. Standard Brands Inc., 65 SCRA 575, the court was more specific: the test
is similarity in the dominant features of the trademarks.

What are the dominant features of the competing trademarks before us?

There is hardly any dispute that the dominant feature of SMCs trademark is the name of the product:
SAN MIGUEL PALE PILSEN, written in white Gothic letters with elaborate serifs at the beginning and
end of the letters S and M on an amber background across the upper portion of the rectangular
design.

On the other hand, the dominant feature of ABIs trademark is the name: BEER PALE PILSEN, with the
word Beer written in large amber letters, larger than any of the letters found in the SMC label.

The trial court perceptively observed that the word BEER does not appear in SMCs trademark, just
as the words SAN MIGUEL do not appear in ABIs trademark. Hence, there is absolutely no similarity
in the dominant features of both trademarks.

Neither in sound, spelling or appearance can BEER PALE PILSEN be said to be confusingly similar to
SAN MIGUEL PALE PILSEN. No one who purchases BEER PALE PILSEN can possibly be deceived
that it is SAN MIGUEL PALE PILSEN. No evidence whatsoever was presented by SMC proving
otherwise. Besides the dissimilarity in their names, the following other dissimilarities in the trade dress
or appearance of the competing products abound:

(1) The SAN MIGUEL PALE PILSEN bottle has a slender tapered neck. The BEER PALE PILSEN
bottle has a fat, bulging neck.

(2) The words pale Pilsen on SMCs label are printed in bold and laced letters along a diagonal
band, whereas the words pale pilsen on ABI's bottle are half the size and printed in slender
block letters on a straight horizontal band. (See Exhibit 8-a.)

(3) The names of the manufacturers are prominently printed on their respective bottles. SAN
MIGUEL PALE PILSEN is Bottled by the San Miguel Brewery, Philippines, whereas BEER
PALE PILSEN is Especially brewed and bottled by Asia Brewery Incorporated, Philippines.
(4) On the back of ABIs bottle is printed in big, bold letters, under a row of flower buds and leaves,
its copyrighted slogan: BEER NA BEER! Whereas SMCs bottle carries no slogan.

(5) The back of the SAN MIGUEL PALE PILSEN bottle carries the SMC logo, whereas the BEER
PALE PILSEN bottle has no logo.

(6) The SAN MIGUEL PALE PILSEN bottle cap is stamped with a coat of arms and the words San
Miguel Brewery Philippines encircling the same. The BEER PALE PILSEN bottle cap is
stamped with the name BEER in the center, surrounded by the words Asia Brewery
Incorporated Philippines.

(7) Finally, there is a substantial price difference between BEER PALE PILSEN (currently at P4.25
per bottle) and SAN MIGUEL PALE PILSEN (currently at P7.00 per bottle). One who pays only
P4.25 for a bottle of beer cannot expect to receive San Miguel Pale Pilsen from the storekeeper
or bartender.

The fact that the words pale pilsen are part of ABIs trademark does not constitute an infringement of
SMCs 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. (Websters
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. x x x. 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.
(Italics 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, corn 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. x x x 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 manufacturers, 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.)

x x x. 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.)

x x x. 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.)
(Italics supplied.)

The circumstance that the manufacturer of BEER PALE PILSEN, Asia Brewery Incorporated, has
printed its name all over the bottle of its beer product: on the label, on the back of the bottle, as well as
on the bottle cap, disproves SMCs charge that ABI dishonestly and fraudulently intends to palm off its
BEER PALE PILSEN as SMCs product. In view of the visible differences between the two products,
the Court believes it is quite unlikely that a customer of average intelligence would mistake a bottle of
BEER PILSEN for SAN MIGUEL PALE PILSEN.

The fact that BEER PALE PILSEN like SAN MIGUEL PALE PILSEN is bottled in amber-colored steinie
bottles of 320 ml. capacity and is also advertised in print, broadcast, and television media, does not
necessarily constitute unfair competition.

Unfair competition is the employment of deception or any other means contrary to good faith by which
a person shall pass off the goods manufactured by him or in which he deals, or his business, or services,
for those of another who has already established goodwill for his similar goods, business or services,
or any acts calculated to produce the same result. (Sec. 29, Republic Act No. 166, as amended.) The
law further enumerates the more common ways of committing unfair competition, thus:
Sec. 29. x x x.

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

(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; 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.
In this case, the question to be determined is whether ABI is using a name or mark for its beer that has
previously come to designate SMCs beer, or whether ABI is passing off its BEER PALE PILSEN as
SMCs SAN MIGUEL PALE PILSEN.

x x x. The universal test question is whether the public is likely to be deceived. Nothing less than
conduct tending to pass off one mans goods or business as that of another will constitute unfair
competition. Actual or probable deception and confusion on the part of the customers by reason of
defendants practices must always appear. (Shell Co. of the Philippines, Ltd. vs. Insular Petroleum
Refining Co. Ltd. et al., 120 Phil. 434, 439.)
The use by ABI of the steinie bottle, similar but not identical to the SAN MIGUEL PALE PILSEN bottle,
is not unlawful. As pointed out by ABIs counsel, SMC did not invent but merely borrowed the steinie
bottle from abroad and it claims neither patent nor trademark protection for that bottle shape and design.
(See rollo, page 55.) The Cerveza Especial and the Efes Pale Pilsen use the steinie bottle. (See
Exhibits 57-D, 57-E.) The trial court found no infringement of SMCs bottle

The court agrees with defendant that there is no infringement of plaintiffs bottle, firstly, because
according to plaintiffs witness Deogracias Villadolid, it is a standard type of bottle called steinie, and to
witness Jose Antonio Garcia, it is not a San Miguel Corporation design but a design originally developed
in the United States by the Glass Container Manufacturers Institute and therefore lacks exclusivity.
Secondly, the shape was never registered as a trademark. Exhibit C is not a registration of a beer
bottle design required under Rep. Act 165 but the registration of the name and other marks of ownership
stamped on containers as required by Rep. Act 623. Thirdly, the neck of defendants bottle is much
larger and has a distinct bulge in its uppermost part. (p. 186, Rollo.)

The petitioners contention that bottle size, shape and color may not be the exclusive property of any
one beer manufacturer is well taken. SMCs being the first to use the steinie bottle does not give SMC
a vested right to use it to the exclusion of everyone else. Being of functional or common use, and not
the exclusive invention of any one, it is available to all who might need to use it within the industry.
Nobody can acquire any exclusive right to market articles supplying a simple human needs in containers
or wrappers of the general form, size and character commonly and immediately used in marketing such
articles (Dy Buncio vs. Tan Tiao Bok, 42 Phil. 190, 194-195.)

x x x protection against imitation should be properly confined to nonfunctional features. Even if purely
functional elements are slavishly copied, the resemblance will not support an action for unfair
competition, and the first user cannot claim secondary meaning protection. Nor can the first user
predicate his claim to protection on the argument that his business was established in reliance on any
such unpatented nonfunctional feature, even at large expenditure of money. (Callman Unfair
Competition, Trademarks and Monopolies, Sec. 19.33 [4th Ed.].) (Petition for Review, p. 28.)

ABI does not use SMCs steinie bottle. Neither did ABI copy it. ABI makes its own steinie bottle which
has a fat bulging neck to differentiate it from SMCs bottle. The amber color is a functional feature of
the beer bottle. As pointed out by ABI, all bottled beer produced in the Philippines is contained and sold
in ambercolored bottles because amber is the most effective color in preventing transmission of light
and provides the maximum protection to beer. As was ruled in California Crushed Fruit Corporation vs.
Taylor B. and Candy Co., 38 F2d 885, a merchant cannot be enjoined from using a type or color of
bottle where the same has the useful purpose of protecting the contents from the deleterious effects of
light rays. Moreover, no one may have a monopoly of any color. Not only beer, but most medicines,
whether in liquid or tablet form, are sold in amber-colored bottles.

That the ABI bottle has a 320 ml. capacity is not due to a desire to imitate SMCs bottle but because
that bottle capacity is the standard prescribed under Metrication Circular No. 778, dated 4 December
1979, of the Department of Trade, Metric System Board.

With regard to the white label of both beer bottles, ABI explained that it used the color white for its label
because white presents the strongest contrast to the amber color of ABIs bottle; it is also the most
economical to use on labels, and the easiest to bake in the furnace (p. 16, TSN of September 20,
1988). No one can have a monopoly of the color amber for bottles, nor of white for labels, nor of the
rectangular shape which is the usual configuration of labels. Needless to say, the shape of the bottle
and of the label is unimportant. What is all important is the name of the product written on the label of
the bottle for that is how one beer may be distinguished from the others.

In Dy Buncio v. Tan Tiao Bok, 42 Phil. 190, 196-197, where two competing tea products were both
labelled as Formosan tea, both sold in 5-ounce packages made of ordinary wrapping paper of
conventional color, both with labels containing designs drawn in green ink and Chinese characters
written in red ink, one label showing a double-decked jar in the center, the other, a flower pot, this court
found that the resemblances between the designs were not sufficient to mislead the ordinary intelligent
buyer, hence, there was no unfair competition. The Court held:

x x x. In order that there may be deception of the buying public in the sense necessary to constitute
unfair competition, it is necessary to suppose a public 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 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 possibility of the deception, of the person who knows nothing about the design which has
been counterfeited, and who must be indifferent as between that and the other. The simulation, in order
to be objectionable, must be such as appears likely to mislead the ordinarily intelligent buyer who has
a need to supply and is familiar with the article that he seeks to purchase.

The main thrust of SMCs complaint is not infringement of its trademark, but unfair competition arising
from the allegedly confusing similarity in the general appearance or trade dress of ABIs BEER PALE
PILSEN beside SMCs SAN MIGUEL PALE PILSEN (p. 209, Rollo).

SMC claims that the trade dress of BEER PALE PILSEN is confusingly similar to its SAN MIGUEL
PALE PILSEN because both are bottled in 320 ml. steinie type, amber-colored bottles with white
rectangular labels.

However, when as in this case, the names of the competing products are clearly different and their
respective sources are prominently printed on the label and on other parts of the bottle, mere similarity
in the shape and size of the container and label, does not constitute unfair competition. The steinie
bottle is a standard bottle for beer and is universally used. SMC did not invent it nor patent it. The fact
that SMCs bottle is registered under R.A. No. 623 (as amended by RA 5700, An Act to Regulate the
Use of Duly Stamped or Marked Bottles, Boxes, Casks, Kegs, Barrels and Other Similar Containers)
simply prohibits manufacturers of other foodstuffs from the unauthorized use of SMCs bottles by refilling
these with their products. It was not uncommon then for products such as patis (fish sauce) and toyo
(soy sauce) to be sold in recycled SAN MIGUEL PALE PILSEN bottles. Registration of SMCs beer
bottles did not give SMC a patent on the steinie or on bottles of similar size, shape or color.

Most containers are standardized because they are usually made by the same manufacturer. Milk,
whether in powdered or liquid form, is sold in uniform tin cans. The same can be said of the standard
ketchup or vinegar bottle with its familiar elongated neck. Many other grocery items such as coffee,
mayonnaise, pickles and peanut butter are sold in standard glass jars. The manufacturers of these
foodstuffs have equal right to use these standard tins, bottles and jars for their products. Only their
respective labels distinguish them from each other. Just as no milk producer may sue the others for
unfair competition because they sell their milk in the same size and shape of milk can which he uses,
neither may SMC claim unfair competition arising from the fact that ABIs BEER PALE PILSEN is sold,
like SMCs SAN MIGUEL PALE PILSEN in amber steinie bottles.

The record does not bear out SMCs apprehension that BEER PALE PILSEN is being passed off as
SAN MIGUEL PALE PILSEN. This is unlikely to happen for consumers or buyers of beer generally order
their beer by brand. As pointed out by ABIs counsel, in supermarkets and tiendas, beer is ordered by
brand, and the customer surrenders his empty replacement bottles or pays a deposit to guarantee the
return of the empties. If his empties are SAN MIGUEL PALE PILSEN, he will get SAN MIGUEL PALE
PILSEN as replacement. In sari-sari stores, beer is also ordered from the tindera by brand. The same
is true in restaurants, pubs and beer gardensbeer is ordered from the waiters by brand. (Op. cit. page
50.)

Considering further that SAN MIGUEL PALE PILSEN has virtually monopolized the domestic beer
market for the past hundred years, those who have been drinking no other beer but SAN MIGUEL PALE
PILSEN these many years certainly know their beer too well to be deceived by a newcomer in the
market. If they gravitate to ABIs cheaper beer, it will not be because they are confused or deceived,
but because they find the competing product to their taste.

Our decision in this case will not diminish our ruling in Del Monte Corporation vs. Court of Appeals and
Sunshine Sauce Manufacturing Industries, 181 SCRA 410, 419, that:

x x x to determine whether a trademark has been infringed, we must consider the mark as a whole and
not as dissected. If the buyer is deceived, it is attributable to the marks as a totality, not usually to any
part of it.

That ruling may not apply to all kinds of products. The Court itself cautioned that in resolving cases of
infringement and unfair competition, the courts should take into consideration several factors which
would affect its conclusion, to wit: the age, training and education of the usual purchaser, the nature
and cost of the article, whether the article is bought for immediate consumption and also the conditions
under which it is usually purchased (181 SCRA 410, 418-419).

The Del Monte case involved catsup, a common household item which is bought off the store shelves
by housewives and house help who, if they are illiterate and cannot identify the product by name or
brand, would very likely identify it by mere recollection of its appearance. Since the competitor,
Sunshine Sauce Mfg. Industries, not only used recycled Del Monte bottles for its catsup (despite the
warning embossed on the bottles: Del Monte Corporation. Not to be refilled.) but also used labels
which were a colorable imitation of Del Montes label, we held that there was infringement of Del
Montes trademark and unfair competition by Sunshine.

Our ruling in Del Monte would not apply to beer which is not usually picked up from a store shelf but
ordered by brand by the beer drinker himself from the storekeeper or waiter in a pub or restaurant.

Moreover, SMCs brand or trademark: SAN MIGUEL PALE PILSEN is not infringed by ABIs mark:
BEER NA BEER or BEER PALE PILSEN. ABI makes its own bottle with a bulging neck to
differentiate it from SMCs bottle, and prints ABIs name in three (3) places on said bottle (front, back
and bottle cap) to prove that it has no intention to pass off its BEER as SAN MIGUEL.

There is no confusing similarity between the competing beers for the name of one is SAN MIGUEL
while the competitor is plain BEER and the points of dissimilarity between the two outnumber their
points of similarity.

Petitioner ABI has neither infringed SMCs trademark nor committed unfair competition with the latters
SAN MIGUEL PALE PILSEN product. While its BEER PALE PILSEN admittedly competes with the
latter in the open market, that competition is neither unfair nor fraudulent. Hence, we must deny SMCs
prayer to suppress it.

WHEREFORE, finding the petition for review meritorious, the same is hereby granted. The decision
and resolution of the Court of Appeals in CA-G.R. CV No. 28104 are hereby set aside and that of the
trial court is REINSTATED and AFFIRMED. Costs against the private respondent.

SO ORDERED.

Narvasa (C.J.), Bidin, Regalado, Romero, Nocon, Bellosillo, and Melo, JJ., concur.

Cruz, J., See dissent.

Feliciano, J., No part. One party represented by my former firm.

Padilla, J., No part, in view of substantial interest in SMC.

Davide, Jr., J., I join Justice Cruz in his dissent.

Quiason, J., No part.

CRUZ, J., dissenting:

The present ponencia stresses the specific similarities and differences of the two products to support
the conclusion that there is no infringement of trade marks or unfair competition. That test was rejected
in my own ponencia in Del Monte Corporation vs. Court of Appeals, 181 SCRA 410, concurred in by
Justices Narvasa, Gancayco, Grio-Aquino and Medialdea, where we declared:

While the Court does recognize these distinctions, it does not agree with the conclusion that there was
no infringement or unfair competition. It seems to us that the lower courts have been so preoccupied
with the details that they have not seen the total picture.

It has been correctly held that side-by-side comparison is not the final test of similarity. Such comparison
requires a careful scrutiny to determine in what points the labels of the products differ, as was done by
the trial judge. The ordinary buyer does not usually make such scrutiny nor does he usually have the
time to do so. The average shopper is usually in a hurry and does not inspect every product on the shelf
as if he were browsing in a library. Where the housewife has to return home as soon as possible to her
baby or the working woman has to make quick purchases during her off hours, she is apt to be confused
by similar labels even if they do have minute differences. The male shopper is worse as he usually does
not bother about such distinctions.

The question is not whether the two articles are distinguishable by their labels when set side by side
but whether the general confusion made by the article upon the eye of the casual purchaser who is
unsuspicious and off his guard, is such as to likely result in his confounding it with the original. As
observed in several cases, the general impression of the ordinary purchaser, buying under the normally
prevalent conditions in trade and giving the attention such purchasers usually give in buying that class
of goods, is the touchstone.

It has been held that in making purchases, the consumer must depend upon his recollection of the
appearance of the product which he intends to purchase. The buyer having in mind the mark/label of
the respondent must rely upon his memory of the petitioners mark. Unlike the judge who has ample
time to minutely examine the labels in question in the comfort of his sala, the ordinary shopper does not
enjoy the same opportunity.

A number of courts have held that to determine whether a trademark has been infringed, we must
consider the mark as a whole and not as dissected. If the buyer is deceived, it is attributable to the
marks as a totality, not usually to any part of it. The court therefore should be guided by its first
impression, for a buyer acts quickly and is governed by a casual glance, the value of which may be
dissipated as soon as the court assumes to analyze carefully the respective features of the mark.

It has also been held that it is not the function of the court in cases of infringement and unfair competition
to educate purchasers but rather to take their carelessness for granted, and to be ever conscious of the
fact that marks need not be identical. A confusing similarity will justify the intervention of equity. The
judge must also be aware of the fact that usually a defendant in cases of infringement does not normally
copy but makes only colorable changes. Well has it been said that the most successful form of copying
is to employ enough points of similarity to confuse the public with enough points of difference to confuse
the courts.

For the above reasons, and the other arguments stated in Del Monte, I dissent.

Petition granted.

Note. No exclusive right of use can be claimed if bottle design registered only in Supplemental
Register (Del Monte Corporation vs. Court of Appeals, 181 SCRA 410).

o0o

Ana L. Ang, petitioner


vs.
Toribio Teo-doro, respondent.

[No. 48226. December 14, 1942]

1.Trade-Marks and Trade-Names; Act No. 666.Respondent has continuously used "Ang Tibay,"
both as a trade-mark and as a trade-name, in the manufacture and sale of slippers, shoes, and indoor
baseballs since 1910. He formally registered it as a trade-mark on September 29, 1915, and as a trade-
name on January 3, 1933. Pe-titioner registered the same trade-mark "Ang Tibay" for pants and shirts
on April 11, 1932, and established a factory for the manufacture of said articles in the year 1937. Held:
That petitioner's registration of the trade-mark "Ang Tibay" should be cancelled, and that she should be
perpet-ually enjoined from using said trade-mark on goods manufactured and sold by her.

2.Id.; Id.; Term "Ang Tibay," not Being Geographic or Descriptive, is Capable of Exclusive Appropriation
as a Trade Mark.An inquiry into the etymology and meaning of the Tagalog words "Ang Tibay," made
in the decision, shows that the phrase is never used adjectively to define or describe an object. It is,
there-fore, not a descriptive term within the meaning of the Trade-mark Law but rather a fanciful or
coined phrase which may properly and legally be appropriated as a trade-mark or trade-name. Hence,
it was originally capable of exclusive appro-priation as a trade-mark by the respondent.

3.Id.; Id.; Id.; Function op a Trade-Mark; Doctrine of "Secondary Meaning."The function of a trade-
mark is to point dis-tinctively, either by its own meaning or by association, to the origin or ownership of
the wares to which it is applied. "Ang Tibay," as used by the respondent to des-ignate his wares, had
exactly performed that function for twenty-two years before the petitioner adopted it as a trade-mark in
her own business. "Ang Tibay" shoes and slippers are, by association, known throughout the Philippines
as products of the "Ang Tibay" factory owned and oper-ated by the respondent. Even if "Ang Tibay,"
therefore, were not capable of ex-clusive appropriation as a trade-mark, the application of the doctrine
of secondary meaning could nevertheless be fully sus-tained because, in any event, by respondent's
long and exclusive use of said phrase with reference to his products and his business, it has acquired
a proprietary connotation. This doctrine is to the effect that a word or phrase originally incapable of
exclusive appropriation with reference to an article on the market, because geo-graphically or otherwise
descriptive, might nevertheless have been used so long and so exclusively by one producer with
ref-erence to his article that, in that trade and to that branch of the purchasing- pub-lic, the word or
phrase has come to mean that the article was his product.

4.Id.; Id.; Id.; Id.; Test of whether Noncompeting Goods Are or Are not of the Same Class.In the
present stage of de-velopment of the law on trade-marks, unfair competition, and unfair trading, the test
employed by the courts to deter-mine whether noncompeting goods are or are not of the same class is
confusion as to the origin of the goods of the second user. Although two noncompeting arti-cles may
be classified under two different classes by the Patent Office because they are deemed not to possess
the same de-scriptive properties, they would neverthe-less be held by the courts to belong to the same
class if the simultaneous use on them of identical or closely similar trade-marks would be likely to cause
confusion as to the origin, or personal source, of the sec-ond user's goods. They would be consid-ered
as not falling under the same class only if they are so dissimilar or so foreign to each other as to make
it unlikely that the purchaser would think the first user made the second user's goods. Such con-struction
of the law is induced by cogent reasons of equity and fair dealing dis-cussed in the decision.

5.Id.; Id.; Id.; Id.; Id.Tested by the foregoing rule, and in the light of other considera-tions set out in
greater detail in the deci-sion, Held: That pants and shirts are goods similar to shoes and slippers within
the meaning of sections 3, 7, 11, 13, and 20 of the Trade-mark Law (Act No. 666).

PETITION for review on certiorari.

The facts are stated in the opinion of the court.

Cirilo Lim for petitioner.

Martial P. Lichauco and Manuel M. Mejia for respondent.

Ozaeta, J.:

Petitioner has appealed to this Court by certiorari to reverse the judgment of the Court of Appeals
reversing that of the Court of First Instance of Manila and directing the Director of Commerce to cancel
the registration of the trade-mark "Ang Tibay" in favor of said petitioner, and perpetually enjoining the
latter from using said trade-mark on goods manufac-tured and sold by her.

Respondent Toribio Teodoro, at first in partnership with Juan Katindig and later as sole proprietor, has
continuously used "Ang Tibay," both as a trade-mark and as a trade-name, in the manufacture and sale
of slippers, shoes, and indoor base-balls since 1910. He formally registered it as a trade-mark on
September 29, 1915, and as a trade-same on January 3, 1933. The growth of his business is a thrilling
epic of Filipino industry and business capacity. Starting in an ob-scure shop in 1910 with a modest
capital of P210 but with tireless industry and un-limited perseverance, Toribio Teodoro, then an
unknown young man making slippers with his own hands but now a prominent business magnate and
manu-facturer with a large factory operated with modern machinery by a great number of employees,
has steadily grown with his business to which he has de-dicated the best years of his life and which he
has expanded to such propor-tions that his gross sales from 1918 to 1938 aggregated P8,787,025.65.
His sales in 1937 amounted to Pl,299,343.10 and in 1938, Pl,133,165.77. His expenses for
advertisement from 1919 to 1938 ag-gregated P210,641.56.

Petitioner (defendant below) registered the same trade-mark "Ang Tibay" for pants and shirts on April
11, 1932, and established a factory for the manufac-ture of said articles in the year 1937.

In the following year (1938) her gross sales amounted to P422.682.09. Neither the decision of the trial
court nor that of the Court of Appeals shows how much petitioner has spent for advertisement.

But respondent in his brief says that petitioner "was unable to prove that she had spent a single centavo
advertising 'Ang Tibay' shirts and pants prior to 1938. In that year she advertised the factory which she
had just built and it was when this was brought to the atten-tion of the appellee that he consulted his
attorneys and eventually brought the present suit."

The trial court (Judge Quirico Abeto presiding) absolved the defendant from the complaint, with costs
against the plain-tiff, on the grounds that the two trade--marks are dissimilar * and are used on different
and non-competing goods; that there had been no exclusive use of the trade-mark by the plaintiff; and
that there had been no fraud in the use of the said trade-mark by the defendant be-cause the goods on
which it is used are essentially different from those of the plaintiff. The second division of the Court of
Appeals, composed of Justices Bengson, Padilla, Lopez Vito, Tuason, and Alex Reyes, with Justice
Padilla as ponente, reversed that judgment, holding that by uninterrupted and exclusive use since 1910
in the manufacture of slippers and shoes, respondent's trade-mark has acquired a secondary meaning;
that the goods or articles on which the two trade-marks are used are similar or belong to the same
class; and that the use bv pe-titioner of said trade-mark constitutes a violation of sections 3 and 7 of
Act No. 666. The defendant Director of Commerce did not appeal from the deci-sion of the Court of
Appeals.

First. Counsel for the petitioner, in a well-written brief, makes a frontal sledge-hammer attack on the
validity of respondent's trade-mark "Ang Tibay." He contends that the phrase "Ang Tibay" as employed
by the respondent on the articles manufactured by him is a de-scriptive term because, "freely translated
in English," it means "strong, durable, lasting." He invokes section 2 of Act No. 666, which provides that
words or devices which relate only to the name,quality, or description of the merchandise cannot be the
subject of a trade-mark. He cites among others the case of Baxter vs. Zuazua (5 Phil., 160), which
involved the trade-mark "Agua de Kananga" used on toilet water, and in which this Court held that the
word "Kananga," which is the name of a well-known Philippine tree or its flower, could not be
appropriated as a trade-mark any more than could the words "sugar," "tobacco," or "coffee." On the
other hand, counsel for the re-spondent, in an equally well-prepared and exhaustive brief, contend that
the words "Ang Tibay" are not descriptive but merely suggestive and may properly be regarded as
fanciful or arbitrary in the legal sense. They cite several cases in which similar words have been
sus-tained as valid trade-marks, such as "Holeproof" for hosiery, "Ideal" for tooth brushes, and
"Fashionknit" for neckties and sweaters.

We find it necessary to go into the ety-mology and meaning of the Tagalog words "Ang Tibay" to
determine whether they are a descriptive term, i. e., whether they relate to the quality or description of
the merchandise to which respondent has ap-plied them as a trade-mark. The word "ang" is a definite
article meaning "the" in English. It is also used as an adverb, a contraction of the word "anong" (what
or how). For instance, instead of say-ing, "Anong ganda!" ("How beautiful!"), we ordinarily say, "Ang
ganda!" Tibay is a root word from which are derived the verb magpatibay (to strengthen); the nouns
pagkamatibay (strength, durability), katibayan (proof, support, strength), katibaytibayan (superior
strength); and the adjectives matibay (strong, durable, lasting), napakatibay (very strong), kasintibay or
magkasinti-bay (as strong as, or of equal strength). The phrase "Ang Tibay" is an exclamation denoting
admiration of strength or durability. For instance, one who tries hard but fails to break an object
exclaims, "Ang tibay!" ("How strong!") It may also be used in a sentence thus, "Ang tibay ng sapatos
mo!" ("How durable your shoes are!") The phrase "ang tibay" is never used adjectively to define or
describe an object. One does not say, "ang tibay sa-patos" or "sapatos ang tibay" to mean "durable
shoes," but "matibay na sapatos" or "sapatos na matibay."

From all of this we deduce that "Ang Tibay" is not a descriptive term within the meaning of the Trade-
Mark Law but rather a fanciful or coined phrase which may properly and legally be appropriated as a
trade-mark or trade-name. In this connection we do not fail to note that when the petitioner herself took
the trouble and expense of securing the reg-istration of these same words as a trade-mark of her
products she or her attorney as well as the Director of Commerce was undoubtedly convinced that said
words (Ang Tibay) were not a descriptive term and hence could be legally used and va-lidly registered
as a trade-mark. It seems stultifying and puerile for her now to contend otherwise, suggestive of the
story of sour grapes. Counsel for the petitioner says that the function of a trade-mark is to point
distinctively, either by its own meaning or by association, to the origin or ownership of the wares to
which it is applied. That is correct, and we find that "Ang Tibay," as used by the respondent to designate
his wares, had exactly performed that function for twenty-two years before the petitioner adopted it as
a trade-mark in her own business. Ang Tibay shoes and slippers are, by association, known throughout
the Philippines as products of the Ang Tibay factory owned and operated by the respondent Toribio
Teodoro.

Second. In her second assignment of error petitioner contends that the Court of Appeals erred in holding
that the words "Ang Tibay" had acquired a sec-ondary meaning. In view of the conclusion we have
reached upon the first assignment of error, it is unnecessary to apply here the doctrine of "secondary
meaning" in trade-mark parlance. This doctrine is to the effect that a word or phrase originally incapable
of exclusive appropriation with reference to an article on the market, because geographically or
otherwise descriptive, might nevertheless have been used so long and so exclusively by one producer
with reference to his article that, in that trade and to that branch of the purchasing public, the word or
phrase has come to mean that the article was his product. (G. & C. Merriam Co. vs. Saalfield, 198 F.,
369, 373.) We have said that the phrase "Ang Tibay," being neither geographic nor de-scriptive, was
originally capable of ex-clusive appropriation as a trade-mark. But were it not so, the application of the
doctrine of secondary meaning made by the Court of Appeals could nevertheless be fully sustained
because, in any event, by respondent's long and exclusive use of said phrase with reference to his
prod-ucts and his business, it has acquired a proprietary connotation. (Landers, Frary, and Clark vs.
Universal Cooler Corporation, 85 F. [2d], 46.)

Third. Petitioner's third assignment of error is, that the Court of Appeals erred in holding that pants and
shirts are goods similar to shoes and slippers within the meaning of sections 3 and 7 of Act No. 666.
She also contends under her fourth assignment of error (which we deem convenient to pass upon
together with the third) that there can neither be infringement of trade-mark under section 3 nor unfair
competition under section 7 through her use of the words "Ang Tibay" in connection with pants and
shirts, be-cause those articles do not belong to the same class of merchandise as shoes and slippers.

The question raised by petitioner in-volve the scope and application of sec-tions 3, 7, 11, 13, and 20 of
the Trade-Mark Law (Act No. 666). Section 3 provides that "any person entitled to the exclusive use of
a trade-mark to designate the origin or ownership of goods he has made or deals in, may recover dam-
ages in a civil action from any person who has sold goods of a similar kind, bearing such trade-mark *
* * The complaining party * * * may have a preliminary injunction, * * * and such injunction upon
final hearing, if the complainant's property in the trade-mark and the defendant's violation thereof shall
be fully established, shall be made per-petual, and this injunction shall be part of the judgment for
damages to be ren-dered in the same cause." Section 7 provides that any person who, in selling his
goods, shall give them the general appearance of the goods of another either in the wrapping of the
packages, or in the devices or words thereon, or in any other feature of their appearance, which would
be likely to influence purchasers to believe that the goods offered are those of the complainant, shall
be guilty of unfair competition, and shall be liable to an action for damages and to an in-junction, as in
the cases of trade-mark infringement under section 3. Section 11 requires the applicant for registra-tion
of a trade-mark to state, among others, "the general class of merchandise to which the trade-mark
claimed has been appropriated." Section 13 provides that no alleged trade-mark or trade-name shall
be registered which is iden-tical with a registered or known trade-mark owned by another and
appropriate to the same class of merchandise, or which so nearly resembles another per-son's lawful
trade-mark or trade-name as to be likely to cause confusion or mis-take in the mind of the public, or to
deceive purchasers. And section 20 au-thorizes the Director of Commerce to establish classes of
merchandise for the purpose of the registration of trade-marks and to determine the particular
descrip-tion of articles included in each class; it also provides that "an application for registration of a
trade-mark shall be reg-istered only for one class of articles and only for the particular description of
ar-ticles mentioned in said application."

We have underlined the key words used in the statute: "goods of a similar kind," "general class of
merchandise," "same class of merchandise," "classes of merchandise," and "class of articles," because
it is upon their implications that the result of the case hinges. These phrases, which refer to the same
thing, have the same meaning as the phrase "merchandise of the same descriptive properties" used in
the statutes and juris-prudence of other jurisdictions.

The burden of petitioner's argument is that under sections 11 and 20 the regis-tration by respondent of
the trade-mark "Ang Tibay" for shoes and slippers is no safe-guard against its being used by pe-titioner
for pants and shirts because the latter do not belong to the same class of merchandise or articles as
the former; that she cannot be held guilty of infringe-ment of trade-mark under section 3 be-cause
respondent's mark is not a valid trade-mark, nor has it acquired a sec-ondary meaning; that pants and
shirts do not possess the same descriptive prop-erties as shoes and slippers; that neither can she be
held guilty of unfair competi-tion under section 7 because the use by her of the trade-mark "Ang Tibay"
upon pants and shirts is not likely to mislead the general public as to their origin or ownership; and that
there is no showing that she is unfairly or fraudulently using the mark "Ang Tibay" against the
re-spondent. If we were interpreting the statute for the first time and in the first decade of the twentieth
century, when it was enacted, ,and were to construe it strictly and literally, we might uphold petitioner's
contentions. But law and jurisprudence must keep abreast with the progress of mankind, and the courts
must breathe life into the statutes if they are to serve their purpose. Our Trade-mark Law, enacted
nearly forty years ago, has grown in its implications and practical application, like a constitution, in virtue
of the life continually breathed into it. It is not of merely local application; it has its counterpart in other
jurisdictions of the civilized world from whose juris-prudence it has also received vitalizing nourishment.
We have to apply this law as it has grown and not as it was born. Its growth or development abreast
with that of sister statutes and jurispru-dence in other jurisdictions is reflected in the following
observation of a well-known author:

"This fundamental change in attitude first manifested itself in the year 1915-1917. Until about then, the
courts had proceeded on the theory that the same trade-mark, used on unlike goods, could not cause
confusion in trade and that, therefore, there could be no objection to the use and registration of a well-
known mark by a third party for a different class of goods. Since 1916 however, a growing senti-ment
began to arise that in the selection of a famous mark by a third party, there was gen-erally the hidden
intention to 'have a free ride' on the trade-mark owner's reputation and good will." (Derenberg, Trade-
Mark Protection & Unfair Trading, 1936 edition, p. 409.)

In the present state of development of the law on Trade-Marks, Unfair Compe-tition, and Unfair Trading,
the test em-ployed by the courts to determine whether noncompeting goods are or are not of the same
class is confusion as to the origin of the goods of the second user. Although two noncompeting articles
may be classified under two different classes by the Patent Office because they are deemed not to
possess the same descriptive prop-erties, they would, nevertheless, be held by the courts to belong to
the same class if the simultaneous use on them of iden-tical or closely similar trade-marks would be
likely to cause confusion as to the origin, or personal source, of the second user's goods. They would
be considered as not falling under the same class only if they are so dissimilar or so foreign to each
other as to make it unlikely that the purchaser would think the first user made the second user's goods.

Such construction of the law is induced by cogent reasons of equity and fair deal-ing. The courts have
come to realize that there can be unfair competition or unfair trading even if the goods are non-
competing, and that such unfair trading can cause injury or damage to the first user of a given trade-
mark, first, by pre-vention of the natural expansion of his business and, second, by having his busi-ness
reputation confused with and put at the mercy of the second user. When noncompetitive products are
sold under the same mark, the gradual whittling away or dispersion of the identity and hold upon the
public mind of the mark created by its first user, inevitably re-sults. The original owner is entitled to the
preservation of the valuable link be-tween him and the public that has been created by his ingenuity
and the merit of his wares or services. Experience has demonstrated that when a well-known trade-
mark is adopted by another even for a totally different class of goods, it is done to get the benefit of the
reputation and advertisements of the originator of said mark, to convey to the public a false impression
of some supposed connection between the manufacturer of the article sold under the original mark and
the new articles being tendered to the public under the same or similar mark. As trade has developed
and commercial changes have come about, the law of un-fair competition has expanded to keep pace
with the times and the element of strict competition in itself has ceased to be the determining factor.
The owner of a trade-mark or trade-name has a prop-erty right in which he is entitled to pro-tection,
since there is damage to him from confusion of reputation or goodwill in the mind of the public as well
as from confusion of goods. The modern trend is to give emphasis to the unfairness of the acts and to
classify and treat the issue as a fraud.

A few of the numerous cases in which the foregoing doctrines have been laid down in one form or
another will now be cited: (1) In Teodoro Kalaw Ng Khevs. Lever Brothers Company (G. R. No.

46817), decided by this Court on April 18, 1941, the respondent company (plain-tiff below) was granted
injunctive relief against the use by the petitioner of the trade-mark "Lux" and "Lifebuoy" for hair pomade,
they having been origi-nally used by the respondent for soap; the Court held in effect that although said
articles are noncompetitive, they are sim-ilar or-belong to the same class. (2) In Lincoln Motor Co. vs.
Lincoln Automo-bile Co. (44 F. [2d"|, 812), the manufac-turer of the well-known Lincoln auto-mobile was
granted injunctive relief against the use of the word "Lincoln" by another company as part of its firm
name. (3) The case of Aunt Jemima Mills Co. vs. Rigney & Co. (247 F., 407), involved the trade-mark
"Aunt Jemima," originally used on flour, which the de-fendant attempted to use on syrup, and there the
court held that the goods, though different, are so related as to fall within the mischief which equity
should prevent. (4) In Tiffany & Co. vs. Tif-fany Productions, Inc. (264 N. Y. S., 459; 23 Trade-mark
Reporter, 183), the plain-tiff, a jewelry concern, was granted in-junctive relief against the defendant, a
manufacturer of motion pictures, from using the name "Tiffany." Other famous cases cited on the
margin, wherein the courts granted injunctive relief, involved the following trade-marks or trade-names
"Kodak," for cameras and photographic supplies, against its use for bicycles;1 "Penslar," for medicines
and toilet ar-ticles, against its use for cigars;2 "Rolls-Royce," for automobiles, against its use for radio
tubes;3 "Vogue," as the name of a magazine, against its use for hats;4 "Kotex," for sanitary napkins,
against the use of "Rotex" for vaginal syringes;'' "Sun-Maid," for raisins, against its use for flour;" "Yale,"
for locks and keys, against its use for electric flashlights;1 and "Waterman," for fountain pens, against
its use for razor blades.2

Against this array of famous cases, the industry of counsel for the petitioner has enabled him to cite on
this point only the following cases: (1) Mohawk Milk Products vs. General Distilleries Corpo-ration (95
F. [2d], 334), wherein the court held that gin and canned milk and cream do not belong to the same
class; (2) Fawcett Publications, Inc. vs. Pop-ular Mechanics Co. (80 F. [2d], 194), wherein the court
held that the words "Popular Mechanics" used as the title of a magazine and duly registered as a trade-
mark were not infringed by de-fendant's use of the words "Modern Me-chanics and Inventions" on a
competitive magazine, because the word "mechanics" is merely a descriptive name; and (3) Oxford
Book Co. us. College Entrance Book Co. (98 F. [2d], 688), wherein the plaintiff unsuccessfully attempted
to enjoin the defendant from using the word "Visualized" in connection with history books, the court
holding that said word is merely descriptive. These cases cited and relied upon by petitioner are
ob-viously of no decisive application to the case at bar.

We think reasonable men may not dis-agree that shoes and shirts are not as unrelated as fountain pens
and razor blades, for instance. The mere relation or association of the articles is not con-trolling. As
may readily be noted from what we have heretofore said, the pro-prietary connotation that a trade-mark
or trade-name has acquired is of more paramount consideration. The Court of Appeals found in this
case that by un-interrupted and exclusive use since 1910 of respondent's registered trade-mark on
slippers and shoes manufactured by him, it has come to indicate the origin and ownership of said goods.
It is cer-tainly not farfetched to surmise that the selection by petitioner of the same trade-mark for pants
and shirts was motivated by a desire to get a free ride on the repu-tation and selling power it has
acquired at the hands of the respondent. As ob-served in another case,3 the field from which a person
may select a trade-mark is practically unlimited, and hence there is no excuse for impinging upon or
even closely approaching the mark of a busi-ness rival. In the unlimited field of choice, what could have
been petitioner's purpose in selecting "Ang Tibay" if not for its fame?

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

Yulo, C.J., Moran, Paras, and Bocobo, J J., concur.

Judgment affirmed.

o0o

ARCE SONS AND COMPANY, petitioner


vs.
SELECTA BISCUIT COMPANY, INC., ET AL., respondents

No. L-14761. January 28, 1961

ARCE SONS AND COMPANY, plaintiff-appellee


vs.
SELECTA BISCUIT COMPANY, INC., defendant-appellant

No. L-17981. January 28, 1961

Trademark; Definition.A trademark is a distinctive mark of authenticity through which the merchandise
of a particular producer or manufacturer may be distinguished from that of others, and its sole function
is to designate distinctively the origin of the products to which it is attached.

Same; Trademark "Selecta".Where the petitioner and its predecessor have used since 1933 the
name "Selecta" as the name of its restaurant and as the mark for its dairy and bakery products, the
conclusion is that it has used that name as a trademark to distinguish its products from those sold by
other merchants or businessmen. The Director of Patents erred in holding that the petitioner used the
word merely as a tradename.

Same; Secondary meaning of "Selecta".The word "Selecta" may be an ordinary or common word in
the sense that it may be used or employed by anyone in promoting his business or enterprise, but once
adopted as an emblem, sign or device to characterize its products, or as a badge of authenticity, it may
acquire a secondary meaning as to be exclusively associated with the user's products and business.

Same; Rule as to secondary meaning.A word or phrase originally incapable of exclusive appropriation
with reference to an article on the market, because geographically or otherwise descriptive, might
nevertheless have been used so long and so exclusively by one producer with reference to his article
that, in that trade and to that branch of the purchasing public, the word or phrase has come to mean
that the article was his product.

PETITION for review of a decision of the Director of Patents and APPEAL from a decision of the Court
of First Instance of Manila.

The facts are stated in the opinion of the Court.

Manuel O. Chan and Ramon S. Ereeta for plaintiff. appellee.

E. Voltaire Garcia for defendant-appellant.

BAUTISTA ANGELO, J.:

On August 31, 1955, Selecta Biscuit Company, Inc., hereinafter referred to as respondent, filed with the
Philippine Patent Office a petition for the registration of the word "SELECTA" as trade-mark to be used
on its bakery products alleging that it is in actual use thereof for not less than two months before said
date and that "no other person, partnership, corporation, or association x x x has the right to use said
trade-mark in the Philippines, either in the identical form or in any such near resemblance thereto, as
might be calculated to deceive." Its petition was referred to an examiner for study who found that the
trade-mark sought to be registered resembles the word "SELECTA" used by Arce Sons and Company,
hereinafter referred to as petitioner, in its milk and ice cream products so that its use by respondent will
cause confusion as to the origin of their respective goods. Consequently, he recommended that the
application be refused. However, upon reconsideration, the Patent Office ordered the publication of the
application for purposes of opposition.

In due time, petitioner filed its opposition thereto on several grounds, among which are: (1) that the
mark "SELECTA" had been continuously used by petitioner in the manufacture and sale of its products,
including cakes, bakery products, milk and ice cream from the time of its organization and even prior
thereto by its predecessor-in-interest, Ramon Arce; (2) that the mark "SELECTA" has already become
identified with the name of petitioner and its business; (3) that petitioner had warned respondent not to
use said mark because it was already being used by the former, but that the latter ignored said warning;
(4) that respondent is using the word "SELECTA" as a trademark in bakery products in unfair
competition with the products of petitioner thus resulting in confusion in trade; (5) that the mark to which
the application of respondent refers has striking resemblance, both in appearance and

meaning, to petitioner's mark as to be mistaken therefor by the public and cause respondent's goods
to be sold as petitioner's; and (6) that actually a complaint has been filed by petitioner against
respondent for unfair competition in the Court of First Instance of Manila asking for damages and f or
the issuance of a writ of Injunction against respondent enjoining the latter from continuing with the use
of said mark.

On September 28, 1958, the Court of First Instance of Manila rendered decision in the unfair competition
case perpetually enjoining respondent from using the name "SELECTA" as a trade-mark on the goods
manufactured and/or sold by it and ordering it to pay petitioner by way of damages all the profits it may
have realized by the use of said name, plus the sum of P5,000.00 as attorney's fees and costs of suit.
From this decision, respondent brought the matter on appeal to the Court of Appeals wherein the case
was docketed as CA-G.R. No. 24017-R.

Inasmuch as the issues of facts in the case of unfair competition are substantially identical with those
raised before the Patent Office, the parties, at the hearing thereof, agreed to submit the evidence they
have introduced before the Court of First Instance of Manila to said office, and on the strength thereof,
the Director of Patents, on December 7, 1958, rendered decision dismissing petitioner's opposition and
stating that the registration of the trademark "SELECTA" in favor of applicant Selecta Biscuit Company,
Inc. will not cause confusion or mistake nor will deceive the purchasers as to cause damage to
petitioner. Hence, petitioner interposed the present petition f or review.

On September 7, 1960, this Court issued a resolution of the following tenor:

"In G.R. No. L-14761 (Arce Sons and Company vs. Selecta Biscuit Company, Inc., et al.), considering
that the issues raised and evidence presented in this appeal are the same as those involved and
presented in Civil Case No. 32907, entitled Arce Sons and Company vs. Selecta Biscuit Company, Inc.
of the Court of First Instance of Manila, presently pending appeal in the Court of Appeals, docketed as
CA-G.R. No. 24017-R, the Court resolved to require the parties, or their counsel, to inform this Court
why the appeal pending before the Court of Appeals should not be forwarded to this Court in order that
the two cases may be consolidated and jointly decided, to avoid any conflicting decision, pursuant to
the provisions of section 17, paragraph 5, of the Judiciary Act of 1948 (Republic Act No. 296)."

And having both petitioner and respondent manifested in writing that they do not register any objection
that the case they submitted on appeal to the Court of Appeals be certified to this Court so that it may
be consolidated with the present case, the two cases are now before us for consolidated decision.

The case for petitioner is narrated in the decision of the court a quo as follows:

"In 1933, Ramon Arce, predecessor in interest of the plaintiff, started a milk business in Novaliches,
Rizal, using the name 'SELECTA' as a trade-name as well as a trade-mark. He began selling and
distributing his products to different residences, restaurants and offices, in bottles on the caps of which
were inscribed the words 'SELECTA FRESH MILK.' As his business prospered, he thought of
expanding and, in fact, he expanded his business by establishing a store at Nos. 711-713 Lepanto
Street. While there, he began to cater, in addition to milk, ice cream, sandwiches and other food
products. As his catering and ice cream business prospered in a big way, he placed a sign signboard
in his establishment with the name 'SELECTA' inscribed thereon. This signboard was placed right in
front of the said store. For the sake of efficiency, the Novaliches place was made the pasteurizing plant
and its products were distributed through the Lepanto store. Special containers made of tin cans with
the word 'SELECTA' written on their covers and 'embossed or blown' on the bottles themselves were
used. Similarly, exclusive bottles for milk products were ordered from Getz Brothers with the word
'SELECTA' blown on them. The sandwiches which were sold and distributed were wrapped in carton
boxes with covers bearing the name 'SELECTA'. To the ordinary cars being used for the delivery of his
products to serve outside orders were added to. a fleet of five (5) delivery trucks with the word 'Selecta'
prominently painted on them. Sales were made directly at the Lepanto store or by means of deliveries
to specified addresses, restaurants and offices inside Manila and its suburbs and sometimes to
customers in the provinces. As time passed, new products were produced for sale, which as cheese
(cottage cheese) with special containers especially ordered from the Philippine Education Company
with the name 'Selecta' written on their covers.

"The war that broke out on December 8, 1941, did not stop Ramon Arce from continuing with his
business. After a brief interruption of about a month, that is, during the end of January, 1942, and early
February, 1942, he resumed his business using the same trade-name and trade-mark, but this time, on
a larger scale. He entered the restaurant business. Dairy products, ice cream, milk, sandwiches
continued to be sold and distributed by him. However, Ramon Arce was again forced to discontinue the
business on October, 1944, because time was beginning to be" precarious. American planes started to
bomb Manila and one of his sons, Eulalio Arce, who was managing the business, was seized and jailed
by the Japanese. Liberation came and immediately thereafter, Ramon Arce once more resumed his
business, even more actively, by adding another store located at the corner of Lepanto and Azcarraga
Streets. Continuing to use the name 'Selecta,' he added bakery products to his: line of business. With
a f irewood type of oven, about one-half the ' size of the courtroom, he made his own bread, cookies,
pastries and assorted bakery products. Incidentally, Arce's bakery was transferred to Balintawak,
Quezon Cityanother expansion of his businesswhere the bakery products are now being baked
thru the use of firewood, electric and gas oven. These bakery products, like his other products, are
being sold at the store itself and/or delivered to people ordering them in Manila and its suburbs, and
even Baguio. Like the other products, special carton boxes in different sizes, according to the sizes of
the bakery products, with the name 'Selecta' on top of the covers are provided for these bakery products.
For the cakes, special boxes and labels reading 'Selecta Cakes for all occasions' are made. For the
milk products, special bottle caps and bottles with the colored words 'Quality Always Selecta Fresh Milk,
One Pint' inscribed and blown on the sides of the bottlesan innovation from the old bottles and caps
used formerly. Similar, special boxes with the name 'Selecta' are provided for fried Chicken sold to
customers.

"Business being, already well established, Ramon Arce decided to retire, so that his children can go on
with the business. For this purpose, he transferred and leased to them all his rights, interests and
participations in the business, including the use of the name of 'Selecta', sometime in the year 1950, at
a monthly rental of P10,000.00, later reduced to P6,500.00. He further wrote the Bureau of Commerce
letter dated February 10, 1950, requesting cancellation of the business name 'Selecta Restaurant' to
give way to the registration of the name 'Selecta' and asked that the same be registered in the name of
Arce Sons & Company, a co-partnership entered into by and among his children on February 10, 1950.
Said co-partnership was organized, so its articles of co-partnership state, 'to conduct a first class
restaurant business; to engage in the manufacture and sale of ice cream, milk, cakes and other dairy
and bakery products; and to carry on such other legitimate business as may produce profit ; Arce Sons
& Company has thus continued the lucrative business of their predecessor in interest. It is now, and
has always been, engaged in the restaurant business, the sale of milk, and the production and sale of
cakes, dairy products and bakery products. Arce Sons & Company are now making bakery products
like bread rolls, pan de navaro, pan de sal, and other new types of cookies and biscuits of the round,
hard and other types, providing therefor special boxes with the name "Selecta'.

"Pursuing the policy of expansion ion adopted by their predecessor, Arce Sons & Company established
another storethe now famous 'Selecta Dewey Boulevard', with seven (7) delivery trucks with the name
'Selecta' conspicuously painted on them, to serve, deliver, and cater to customers in and outside of
Manila."

The case for respondent, on the other hand, is expressed as follows:


"Defendant was organized and registered as a corporation under the name and style of Selecta Biscuit
Company, Inc. on March 2, 1955 (Exhibit 2; Exhibit 2-A; t.s.n., p. 3, April 17, 1958) but which started
operation as a biscuit factory on June 20, 1955 (t.s.n., p. 3, id). The name 'Selecta' was chosen by the
organizers of defendant who are Chinese citizens as a translation of the Chinese word 'Ching Suan'
which means 'mapili' in Tagalog, and 'Selected' in English (t.s.n., p, 4, id.). Thereupon, the Articles of
Incorporation of Selecta Biscuit Company, Inc. were registered with the Securities and Exchange
Commission (t.s.n., p. 5. id.), and at the same time registered as a business name with the Bureau of
Commerce which issued certificate of registration No. 55594 (Exhibit 3; Exhibit 3-A). The same name
Selecta Biscuit Company, Inc. was also subsequently registered with the Bureau of Internal Revenue
which issued Registration Certificate No. 35764 (Exhibit 4, t.s.n., p. 6 id.). Inquiries were also made with
the Patent Office of the Philippines in connection with the registration of the name 'Selecta'; after an
official of the Patent referred to index cards information was furnished to the effect that defendant could
register the name 'Selecta' with the Bureau of Patents (t.s.n., p. 7, id.). Accordingly, the corresponding
petition for registration of trade-mark was filed (Exhs. 5, 5-A, Exhibit 5-B). Defendant actually operated
its business factory on June 20, 1955, while the petition for registration of trade-mark 'Selecta' was filed
with the Philippine Patent Office only on September 1, 1955, for the reason that the Patent Office
informed the defendant that the name should first be used before registration (t.s.n., p, 8, id.). The
factory of defendant is located at Tuason Avenue, Northern Hills, Malabon, Rizal. showing plainly on its
wall facing the streets the name 'SELECTA BISCUIT COMPANY, INC.' (Exhs. 6, 6-A 6-B, t.s.n., p. 9,
id.). It is significant to note that Eulalio Arce, Managing Partner of the plaintiff resided and resides near
the defendant's factory, only around 150 meters away; in fact, Eulalio Arce used to pass in front of the
factory of defendant while still under construction and up to the present time (t.s.n., pp. 9, 10, id.).
Neither Eulalio Arce nor any other person in representation of the plaintiff complained to the defendant
about the use of the name 'Selecta Biscuit' until the filing of the present complaint.

"There are other factories using 'Selecta' as trade-mark for biscuits (t.s.n., p. 12; Exhs. 7, 7-A, 7-B;
Exhibits 8, 8-A, 8-B; Exhibits 9, 9-A, 9-B); defendant in fact uses different kinds of trade-marks (Exhibits
10, 10-A, to 10-W, t.s.n., p. 17).

"The biscuits, cookies, and crackers manufactured and sold by defendant are-wrapped in cellophane
pouches and placed inside tin can (Exh. 11; t.s.n., p. 19); the products of defendant are sold through
the length and breadth of the Philippines through agents with more than 600 stores as customers buying
on credit (t.s.n.,) pp. 19, 20, Exh. 12; t.s.n., p. 10, June 20, 1958). Defendant employs more than one
hundred (100) laborers and employees presently although it started with around seventy (70)
employees and laborers (t.s.n., p. 24); its present capitalization fully paid for is Two Hundred Thirty Four
Thousand Pesos (P234,000.00) additional capitalizations were duly authorized by the Securities and
Exchange Commission (Exhs. 13, 13-A) there was no complaint whatsoever from plaintiff until plaintiff
saw defendant's business growing bigger and bigger and flourishing (t.s.n., p. 21) when plaintiff filed its
complaint.

"Defendant advertises its products through radio broadcasts and spot announcements (Exhs. 14, 14-A
to 14-L; inclusive Exhs. 15, 15-A, 15-B, 15-C; Exhs. 16, 16-A, 16-B to 16-E, inclusive; Exhs. 17, 17-A
to 17-L, inclusive); the broadcasts scripts announced therein through the radio clearly show, among
others, that Selecta Biscuits are manufactured by Selecta Company, Inc. at Tuason Avenue, Northern
Hills, Malabon, Rizal, with Telephone No. 2-13-27 (Exhs. 23-A, 23-B, 23-D, 23-E, 23-F). '

"Besides the signboard, Selecta Biscuit Company, Inc.' on the building itself, defendant has installed
signboard along the highways to indicate the location of the factory of defendant (Exhs. 18, 18-A) ;
delivery trucks of defendant are plainly carrying signboards Selecta Biscuit Company, Inc., Tuason
Avenue, Northern Hills, Malabon, Rizal, Telephone No. 2-13-27 (Exhs. 19, 19-A, 19-B, 19-C, 19-D, 19-
E, 19-F). Defendant is using modern machineries in its biscuit factory (Exhs. 20, 20-A, 20-B, 20-C, 20-
D, 20-E). The defendant sells its products throughout the Philippines, including Luzon, Visayas,
Mindanao; its customers count, among others, 600 stores buying on credit; its stores buying on cash
number around 50 (t.s.n., p. 10). Sales in Manila and suburbs are minimal, (Exh. 12). Defendant is a
wholesaler and not a retailer of biscuits, cookies, and crackers. This is the nature of the operation of
the business of the defendant."

At the outset one cannot but note that in the two cases appealed before us which involve the same
parties and the same issues of fact and law, the court a quo and the Director of Patents have rendered
contradictory decisions. While the former is of the opinion that the word "SELECTA" has been used by
petitioner, or its predecessor-in-interest, as a trade-mark in the sale and distribution of its dairy and
bakery products as early as 1933 to the extent that it has acquired a proprietary connotation 60 that to
allow respondent to use it now as a trade-mark in its business would be a usurpation of petitioner's
goodwill and an infringement of its property right, the Director of Patents entertained a contrary opinion.
He believes that the word as used by petitioner functions only to point to the -place of business or
location of its restaurant while the same word as used by respondent points to the origin of the products
it manufactures and sells and he predicates this distinction upon the fact that while the goods of
petitioner are only served within its restaurant or sold only on special orders in the City of Manila,
respondent's goods are ready-made and are for sale throughout the length and breadth of the country.
He is of the opinion that the use of said trade-mark by respondent has not resulted in confusion in trade
contrary to the finding of the court a quo. Which of these opinions is correct is the issue now for
determination.

It appears that Ramon Arce, predecessor-in-interest of petitioner, started his milk business as early as
1933. He sold his milk products in bottles covered by caps on which the words "SELECTA FRESH
MILK" were inscribed. Expanding his business, he established a store at Lepanto Street, City of Manila,
where he sold, in addition to his milk products, ice cream, sandwiches and other food products, placing
right in front of his establishment a signboard with the name "SELECTA" inscribed thereon. Special
containers made of tin cans with the word "SELECTA" written on their covers were used for his products.
Bottles with the same word embossed on their sides were used for his milk products. The sandwiches
he sold and distributed were wrapped in carton boxes with covers bearing the same name. He used
several cars and trucks for delivery purposes on the sides of which were written the same word. As new
products were produced for sale, the same were placed in containers with the same name written on
their covers. After the war, he added to his business such items as cakes, bread, cookies, pastries and
assorted bakery products. Then his business was acquired by petitioner, a co-partnership organized by
his sons, the purposes of which are "to conduct a first class restaurant business; to engage in the
manufacture and sale of ice cream, milk, cakes and other dairy and bakery products; and to carry on
such other legitimate business as may produce profit."

The foregoing unmistakably show that petitioner, through its predecessor-in-interest, had made use of
the word "SELECTA" not only as a trade-name indicative of the location of the restaurant where it
manufactures and sells Its products, but as trade-mark to indicate the goods it offers for sale to the
public. No other conclusion can be drawn. This is the very meaning or essence in which a trade-mark
is used. This is not only in accordance with its general acceptation but with our law on the matter.

" 'Trade-mark' or 'trade-name,' distinction being highly technical, is sign, device, or mark by which
articles produced are dealt in by particular person or organization are distinguished or distinguishable
from those produced or dealt in by others." (Church of God v. Tomlinson Church of God, 247 SW 2d,
63, 64)

"A 'trade-mark' is a distinctive mark of authenticity through which the merchandise of a particular
producer or manufacturer may be distinguished from that of others, and its sole function is to designate
distinctively the origin of the products to which it is attached." (Reynolds & Reynolds Co. v. Norick, et
al., 114 F 2d, 278)

"The term trade-mark' includes any word, name, symbol, emblem, sign or device or any combination
thereof adopted and used by a manufacturer or merchant to identify his goods and distinguish them
from those manufactured, sold or dealt in by others." (Section 38, Republic Act No. 166).

Verily, the word "SELECTA" has been chosen by petitioner and has been inscribed on all its products
to serve not only as a sign or symbol that may indicate that they are manufactured and sold by it but as
a mark of authenticity that may distinguish them from the products manufactured and sold by other
merchants or businessmen. The Director of Patents, therefore, erred in holding that petitioner made
use of that word merely as a trade-name and not as a trade-mark within the meaning of the law.1

The word "SELECTA", it is true, may be an ordinary or common word in the sense that it may be used
or employed by any one in promoting his business or enterprise, but once adopted or coined in
connection with one's business as an emblem, sign or device to characterize its products, or as a badge
of authenticity, it may acquire a secondary meaning as to be exclusively associated with its products
and business.2 In this sense, its use by another may lead to confusion in trade and cause damage to
its business. And this is the situation of petitioner when it used the word "SELECTA" as a trade-mark.
In this sense, the law gives it protection and guarantees its use to the exclusion of all others (G. & C.
Merriam Co. v. Saalfield, 198 F. 369, 373). And it is also in this sense that the law postulates that "The
ownership or possession of a trade-mark, x x x shall be recognized and protected in the same manner
and to the same extent, as are other property rights known to the law," thereby giving to any person
entitled to the exclusive use of such trade-mark the right to recover damages in a civil action from any
person who may have sold goods of similar kind bearing such trade-mark (Sections 2-A and 23,
Republic Act No. 166, as amended).

The term "SELECTA" may be placed at par with the words "Ang Tibay" which this Court has considered
not merely as a descriptive term within the meaning of the Trade-mark Law but as a fanciful or coined
phrase, or a trade-mark. In that case, this Court found that respondent has constantly used the term
"Ang Tibay", both as a trademark and a trade-name, in the manufacture and sale of slippers, shoes and
indoor baseballs for twenty-two years before petitioner registered it as a trade-name for pants and shirts
so that it has performed during that period the function of a trade-mark to point distinctively, or by its
own meaning or by association, to the origin or ownership of the wares to which it applies. And in holding
that respondent was entitled to protection in the use of that trademark, this Court made the following
comment:

"The function of a trade-mark is to point distinctively, either by its own meaning or by association, to the
origin or ownership of the wares to which it is applied. 'Ang Tibay,' as used by the respondent to
designate his wares, had exactly performed that function for twenty-two years before the petitioner
adopted it as a trade-mark in her own business. 'Ang Tibay' shoes and slippers are, by association,
known throughout the Philippines as products of the 'Ang Tibay' factory owned and operated by the
respondent. Even if 'Ang Tibay,' therefore, were not capable of exclusive appropriation as a trade-mark,
the application of the doctrine of secondary meaning could nevertheless be fully sustained because, in
any event, by respondent's long and exclusive use of said phrase with reference to his products and
his business, it has acquired a proprietary connotation. This doctrine is to the effect that a word or
phrase originally incapable of exclusive appropriation with reference to an article on the market,
because geographically or otherwise descriptive, might nevertheless have been used so long and so
exclusively by
one producer with reference to his article that, in that trade and to that branch of the purchasing public,
the word or phrase has -come to mean that the article was his product. (G. & C. Merriam Co. vs.
Saalfield, 198 F. 369, 373.)" (Ang v. Teodoro, 74 Phil. 50, 53).

The rationale in the Ang Tibay case applies on all fours to the case of petitioner.

But respondent claims that it adopted the trade-mark "SELECTA" in good faith and not precisely to
engage in unfair competition with petitioner. It tried to establish that respondent was organized as a
corporation under the name of Selecta Biscuit Company, Inc. on March 2, 1955 and started operations
as a biscuit factory on June 20, 1955; that the name "SELECTA" was chosen by the organizers of
respondent who are Chinese citizens as a translation of the Chinese word "Ching Suan" which means
"mapili" in Tagalog, and "Selected" in English; that, thereupon, it registered its articles of incorporation
with the Securities and Exchange Commission and the name "SELECTA" as a business name with the
Bureau of Commerce which issued to it Certificate of Registration No. 55594; and that it also registered
the same trade-name with the Bureau of Internal Revenue and took steps to obtain a patent from the
Patent Office by filing with it an application for the registration of said trade-name.

The suggestion that the name "SELECTA" was chosen by the organizers of respondent merely as a
translation from a Chinese word "Ching Suan" meaning "mapili" in the dialect is betrayed by the very
manner of its selection, for if the only purpose is to make an English translation of that word and not to
complete with the business of petitioner, why choose the word "SELECTA", a Spanish word, and not
"Selected", the English equivalent thereof, as was done by other well-known enterprises? In the words
of petitioner's counsel, "Why with all the words in the English dictionary and all the words in the Spanish
dictionary and all the phrases that could be coined, should defendant-appellant (respondent) choose
'SELECTA' if its purpose was not and is not to fool the people and to damage plaintiff-appellee?" In this
respect, we find appropriate the following comment of the trial court:

"Eventually, like the plaintiff, one is tempted to ask as to why with the richness in words of the English
language and with the affluence of the Spanish vocabulary or, for that matter, of our own dialects,
should the defendant choose the controverted word 'Selecta,' which has already acquired a secondary
meaning by virtue of plaintiff's prior and continued use of the same as a trade-mark or trade-name for
its products? The explanation given by Sy Hap, manager of the defendant, that the word 'Selecta' was
chosen for it3 bakery products by the organizers of said company from the Chinese Word 'Ching Suan'
meaning 'mapili,' which in English means 'Selected,' and that they chose 'selecta,' being the English
translation, is, to say the least, very weak and untenable. Sy Hap himself admitted that he had known
Eulalio Arce, the person managing plaintiff's business, since 1954; that since he began to reside at 10th
Avenue, Grace Park, he had known the Selecta Restaurant on Azcarraga street; that at the time he
established the defendant company, he knew that the word 'Selecta' was being employed in connection
with the business of Eulalio Arce; that he had seen signboards of 'Selecta' on Azcarraga Street and
Dewey Boulevard and that he even had occasion to eat in one of the restaurants of the plaintiff. All of
these circumstances tend to conspire in inducing one to doubt defendant's motive for using the same
word 'Selecta' for its bakery products. To allow the defendant here to use the word 'Selecta' in spite of
the fact that this word has already been adopted and exploited by Ramon Arce and by his family thru
the organization of Arce Sons and Company, for the maintenance of its goodwill, for which said plaintiff
and its predecessor have spent time, effort, and fortune, is to permit business pirates and buccaneers
to appropriate for themselves and to their profit and advantage the trade names and trademarks of well-
established merchants with all their attendant good will and commercial benefit. Certainly, this cannot
be allowed, and it becomes the duty of the court to protect the legitimate owners of said trade-names
and trade-marks, for under the law, the same constitute one kind of property right entitled to the
necessary legal protection."

Other points raised by respondent to show that the trial court erred in holding that the adoption by it of
the word "SELECTA" is tantamount to unfair competition are: (1) that its products are biscuits, crackers
and cookies, wrapped in cellophane packages, placed in tin containers, and that its products may last
a year without spoilage, while the ice cream, milk, cakes and other bakery products which. petitioner
matiufactUres last only for two or three days; (2) that the sale and distribution of petitioner's products
are on retail basis, limited to the City of Manila and suburbs, and its place of business is localized at
Azcarraga, corner of Lepanto Street and at Dewey Boulevard, Manila, while that of respondent is on a
wholesale basis, extending throughout the length and breadth of the Philippines; (3) that petitioner's
signboard on its place of business reads "SELECTA" and on its delivery trucks "Selecta, Quality Always,
Restaurant and Caterer, Azcarraga, Dewey Boulevard, Balintawak and Telephone number", in contrast
with respondent's signboard on 'its factory which reads "Selecta Biscuit Company, Inc.," and on its
delivery trucks "Selecta Biscuit Company, Inc., Tuason Avenue, Malabon, Rizal, Telephone No. 2-13-
27; (4) that the business name of petitioner is different from the business name of respondent; (5) that
petitioner has only a capital investment of P25,000.00 whereas respondent has a fully paid-up stock in
the amount of P234,000.00 out of the P500.000.00 authorized capital, and (6) that the use of the name
"SELECTA" by respondent cannot lead to confusion in the business operation of the parties.

We have read carefully the reasons advanced in support of the points raised by counsel in an effort to
make inroads into the findings of the court a quo on unfair competition, but we believe them to be
insubstantial and untenable. They appear to be well answered and refuted by counsel for petitioner in
his brief, which refutation we do not need to repeat here. Suffice it to state that we agree with the
authorities and reasons advanced therein which incidentally constitute the best support of the decision
of the court a quo.

With regard to the claim that petitioner failed to present sufficient evidence on the contract of lease of
the business from its predecessor-in-interest, we find that under the circumstances secondary evidence
is admissible.

In view of the foregoing, we hold that the Director of Patents committed an error in dismissing the
opposition of petitioner and in holding that the registration of the trade-mark "SELECTA" in favor of
respondent will not cause damage to petitioner, and, consequently, we hereby reverse his decision.

Consistently with this finding, we hereby affirm the decision of the court a quo rendered in G.R. No. L-
17981 No costs.

o0o

ONG Ai Gui alias TAN Ai GUI, applicant and petitioner


vs.
The Director of the Philippines Patent Office, respondent E. I. DU PONT DE NEMOURS AND
COMPANY, intervenor.

No. L-6235. March 28, 1955

1. TRADE-NAMES; DESCRIPTIVE OR GENERIC TERM CAN NOT BE APPROPRIATED BY


SINGLE INDIVIDUAL.Although a combination of words may be registered as a trade-name, it is no
justification for not applying the principle that the use of a descriptive or generic term in a trade-name
is always subject to the limitation that the registrant can not acquire the exclusive right to the descriptive
or generic term or word.

2. ID.; PROCEDURE FOR REGISTRATION.There are 'two steps in the proceedings for the
approval of an application for registration; the first is that conducted in the office of the Director and
taking place prior to publication, and the second, that conducted after publication, in which the public is
given the opportunity to contest the application. In the first, the application is referred to an examiner,
who, after study and investigation makes a report and recommendation to the Director who, upon finding
that applicant is entitled to registration, orders publication of the application. (Sec. 7, Rep. Act No. 166.)
If he finds that applicant is. not entitled to registration, he may then and there dismiss the application.
In the second, opportunity is offered the public or any interested party to come in and object to the
petition (Sec. 8, Id.), giving proofs and reasons for the objection, applicant being given the opportunity
also to submit proofs or arguments in support of the application. (Sec. 9, Id.) It is the decision of the
Director, given after this hearing, or opportunity to every interested party to be heard, that finally
terminates the proceedings and in which the registration is finally approved or disapproved. Thereafter,
notice of the issuance of the certificate of registration is published. (Sec. 10, Id.)

PETITION for review by certiorari of a decision of the Director of Patents.

The facts are stated in the opinion of the Court.

Jose P. Laurel for petitioner.

Solicitor General Juan R. Liwag and Solicitor Pacifico P. de Castro for respondent.

J. A. Wolfson for intervenor.

LABRADOR, J.:

On November 8, 1948, Ong Ai Gui alias Tan Ai Gui filed an application (No. 803) with the Director of
Patents for the registration of the following trade-name; "20th Century Nylon Shirts Factory." It is stated
in connection with the application that the trade-name was used for the first time by the applicant on
September 12, 1941 for his business described as follows: "General merchandise dealing principally in
textiles, haberdasheries; also operating as manufacturer of shirts, pants and other men's and women's
wears." Upon the filing of the application, the same was referred by the Director to an examiner. The
latter in a report dated August 18, 1950 held that the words "shirts factory" are not registrable; so the
applicant made a disclaimer of said words (shirts factory) inserting a statement to that effect in his
original application. On August 13, 1951 the Director ordered the publication of the trade-name in the
Official Gazette.

Publication was made but before the expiration of the period for filing opposition, Atty. J. A. Wolfson,
on behalf of E. I. Du Pont de Nemours and Company, presented on February 27, 1952, an opposition
on the ground that the word "nylon" was a name coined by E. I. Du Pont de Nemours and Company as
the generic name of a synthetic fabric material, invented, patented, manufactured and sold by it and
that this word is a generic term; that the use of the name "nylon" is descriptive or deceptively
misdescriptive of the goods, business of manufactures of the applicant; that the use of the name would
produce confusion in trade and would deceive the public; and that "nylon" is not distinctive of applicant's
goods; business and manufactures and applicant does not claim that it has so become. This opposition,
however, was dismissed by the Director on the ground that at the time it was submitted Atty. J. A.
Wolfson did not have, nor did he submit, authority to file it (opposition) in the corporate name, and that
the subsequent authorization from the corporation to that effect did not cure the general defect in the
opposition,

But while he dismissed the opposition, the Director ruled that the application must be disapproved
unless the word "nylon" is also disclaimed. The grounds for the disapproval of the application were as
follows:

"Nylon" is merely descriptive of the business of shirt-making if the shirts are made of nylon. It is
deceptively misdescriptive of said business, if the shirts are not made of nylon. In either case, its
registration in the Principal Register as a tradename, or as a part of a trade-name, is expressly forbidden
by subsection (e) of Section 4 of Republic Act No. 166, as amended by Section 2 of Republic Act No.
638.

* * * * * * *

"But even if the trade-name here in question were applied for under the said subsection (/), "Nylon"
would still have to be disclaimed. Used in connection with shirt-making, "Nylon" can never become
distinctive, can never acquire secondary, meaning, because it is a generic term, like cotton, silk, linen,
or ramie. Just as no length of use and no amount of advertising will make "cotton," "silk," "linen," or
"ramie," distinctive of shirts or of the business of making them, so no length of use and no amount of
advertising will make "nylon" distinctive of shirts or of the business of manufacturing them."

Against the above decision applicant has filed an appeal to this Court. During the pendency of this
appeal, E. I. Du Pont de Nemours and Co. filed a petition to intervene, which petition was granted. It
has also, through counsel, filed a brief answering the arguments of the applicant-appellant and
supporting the decision appealed from.

There are two main questions raised in the appeal, one legal and the other procedural. The legal
question is put up by the claim of the applicant-appellant that while he admits that the term "nylon" is
by itself alone descriptive and generic, what he desires to register is not the said word alone but the
whole combination of "20th Century Nylon Shirts Factory." It is to be noted in answer to this contention
that the Director of Patents has not completely denied the registration of the whole trade-name. He has
made a conditional denial only, permitting the registration of the name but with the disclaimer of the
terms "shirt factory" and "nylon." The import of the decision is that the trade-name may be registered,
but applicant-appellant may not be entitled to the exclusive use of the terms "shirts factory" and "nylon"
as against any other who may subsequently use the said terms, for the latter are merely descriptive or
general terms, juris publici, incapable of appropriation by any single individual to the exclusion of others.
This is supported by reason and authority.

"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. The reason for this is that 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.)

"* * * If the trade-name consists of a descriptive word, no monopoly of the right to use the same can be
acquired. This, is but a corollary of the proposition that a descriptive word cannot be the subject of a
trade mark. G. & C. Merriam Co. vs. Saalfield (C. C. A.) 198 F. 369. 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.)
"* * * The so-called descriptive terms, which may be used to describe the product adequately, can not
be monopolized by a single user and are available to all. It is only natural that the trade will prefer those
marks which bear some reference to the article itself. Therefore, even those descriptive marks which
are distinctive by themselves can be appropriated by others with impunity. 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 Trade Marks, pp. 869-870.)

The claim that a combination of words may be registered as a trade-name is no justification for not
applying the rules or principles hereinabove mentioned. . The use of a generic term in a trade-name is
always conditional, i. e., subject to the limitation that the registrant does not acquire the exclusive right
to the descriptive or generic term or word.

"* * * A combination of marks or words may constitute a valid trademark or (in the case of words) a
tradename even though some of the constituent portions thereof would not be subject, separately, to
exclusive appropriation as such. Thus, although a word may be descriptive and not subject to exclusive
use as a trademark, it may properly become the subject of a trademark by combination with another
word or term which is nondescriptive, although no exclusive right to the descriptive word or term is
created" * * *. (52 Am. Jur. 553.)

The citation of appellant himself supports the decision thus: "* * * although perhaps not entitled to
protection against infringement by the use of the descriptive matter by another." (Frost vs. Rindskopt,
42 Fed. 408.)

It must also be noted that no claim is made in the application that the trade-name sought to be registered
has acquired what is known as a secondary meaning within the provisions of paragraph (/) of section 4
of Republic Act No. 166. All that the applicant declares in his statement accompanying his application
is that the said trade-name has been continuously used by it in business in the Philippines for about
seven years, without allegation or proof that the trade-name has become distinctive of the applicant's
business or services. Furthermore, the use of the term "nylon" in the tradename is both "descriptive"
and "deceptively and misdescriptive" of the applicant-appellant's business, for apparently he does not
use nylon in the manufacture of the shirts, pants and wears that he produces and sells. How can a
secondary meaning be acquired if appellant's products are not made of nylon ? Certainly no exclusive
right can be acquired by deception or fraud.

The procedural question arises from the fact that after the Director had ordered publication and
notwithstanding dismissal of an opposition, the Director nevertheless conditionally denied the
application after its publication and failed to give applicant opportunity for a hearing, as specifically
required by section 7 of Republic Act No. 166.

It is argued that after approval of the findings of the commissioner to whom the application is referred
and giving of the order of publication, it becomes the ministerial duty of the Director to issue the
corresponding certificate of registration and that his power is confined to this issuance alone. The
answer to this argument is the fact that the law allows oppositions to be filed after publication, thus:

"Sec. 8. Opposition.Any person who believes that he would be damaged by the registration of a mark
or trade-name may, upon payment of the required fee and within thirty days after the publication under
the first paragraph of section seven hereof, file with the Director an opposition to the application. Such
opposition shall be in writing and verified by the oppositor, or by any person on his, behalf who knows
the facts, and shall specify the grounds on which it is based and include a statement of the facts relied
upon. Copies of certificates of registration of marks or trade-names registered in other countries or other
supporting documents mentioned in the opposition shall be filed therewith, together with the translation
thereof into English, if not in the English language. For good cause shown and upon payment of the
required surcharge, the time for filing an opposition may be extended for an additional thirty days by the
Director, who shall notify the applicant of such extension." (Republic Act No. 166.)

Of what use is the period given to oppositors to register their oppositions if such oppositions are not to
be given consideration at all, because the Director has only the ministerial duty after publication to issue
the certificate of registration? It will be noted that there are two steps in the proceedings for the approval
of an application for registration; the first is that conducted in the Office of the Director and taking place
prior to publication, and the second, that conducted after publication, in which the public is given the
opportunity to contest the application. In the first, the application is referred to an examiner, who, after
study and investigation makes a report and recommendation to the Director who, upon finding that
applicant is entitled to registration, orders publication of the application. (Sec. 7, Rep. Act No. 166.) If
he finds that applicant is not entitled to registration, he may then and there dismiss the application. In
the second, opportunity is offered the public or any interested party to come in and object to the petition
(Sec. 8, Id.), giving proofs and reasons for the objection, applicant being given opportunity also to submit
proofs or arguments in support of the application. (See. 9, Id.) It is the decision of the Director, given
after this hearing, or opportunity to every interested party to be heard, that finally terminates the
proceedings and in which the registration is finally approved or disapproved. Thereafter, notice of the
issuance of the certificate of registration is published. (Sec. 10, Id.)

It is evident that the decision of the Director af ter the first step, ordering publication, can not have any
finality. Of what use is the second step in the proceedings, if the Director is bound by his first decision,
giving course to the publication? His first decision is merely provisional, in the sense that the application
appears to be meritorious and is entitled to be given course leading to the more formal and important
second step of hearing and trial, where the public and interested parties are allowed to take part.

The argument that the Director failed to comply with paragraph 2 of section 7, Republic Act No. 166
cannot be raised in the case at bar, because the Director did not find that the applicant is not entitled to
registration. He actually found that he is entitled to registration and that is why an order for the
publication of the application was issued. How can the Director comply with the provisions of said
paragraph 2 if he did not disapprove the applicant's petition for registration?

We, therefore, find that the errors assigned in the appeal have not been committed by respondent
Director of Patents. His decision is hereby affirmed, with costs against the applicant-appellant.

Pars, C. J., Pablo, Bengzon, Padilla, Reyes, A., Jugo, Bautista Angelo, Concepcion and Reyes, J. B.
L., JJ., concur.

Decision of the Director of Patents affirmed.

o0o

COMPAA GENERAL DE TABACOS DE FILIPINAS, plaintiff and appellee


vs.
ALHAMBRA CIGAR & CIGARETTE MANUFACTURING Co., defendant and appellant.

No. 10251. February 10, 1916

1. TRADE-MARKS AND TRADE-NAMES; UNFAIR COMPETITION; RIGHT OF ACTION.A right


of action for the violation of a .trade-mark or trade-name or to restrain unfair competition is conferred
by statute, without which no such right of action would exist.

2. ID.; ACTION FOR INFRINGEMENT; BASIS OF RIGHT.A right of action for the violation of a
trade-mark or a trade-name is based on the property right which the statute (Act No. 666) confers on
the owner of such trade-mark or trade-name therein.

3. ID.; ID.; PROOF OF FRAUD NOT ESSENTIAL.In an action for the violation of a trade-mark or
trade-name, proof of fraud or of fraudulent intent is not one of the essential -requisites.

4. ID.; UNFAIR COMPETITION; PROOF OF FRAUD ESSENTIAL.One of the essential requisites


in an action to - restrain unfair competition is proof of fraud; the intent to deceive must be shown before
the right to recover can exist.

5. ID.; ID.; ACTIONS; DISTINCTIONS BETWEEN.If an action for a violation of a trade-name will
lie, then an action based on similarity to plaintiffs trade-name cannot be maintained; and if an action of
unfair competition is the proper action, then one for a violation of the trade-name based on the same
facts will not lie. The facts which will support an action for a violation of a trade-name will not support
an action of unfair competition.

6. ID.; ID.; ID.The same is true of an action for a violation of a trade-mark except where the trade-
mark could not have been legally selected as such because it consists of a word or words which in law
are not capable of appropriation as a trade-mark. In such case, by express provision of the statute (sec.
7), an action of unfair competition will lie.

7. ID.; DOCTRINE OF "SECONDARY MEANING."The doctrine of "secondary meaning" as applied


to trade-names is not applicable in this jurisdiction.

8. ID.; DEFINITION OF TRADE-NAME.A trade-name is a name, device or mark by which it is


intended to distinguish from that of others the business, profession, trade or occupation in which one
May be engaged and in which goods are manufactured or sold to the public, work is done for the public,
or professional services are rendered to the public.

9. ID.; ESSENTIAL REQUISITES.In order that a name may be considered as a trade-name with
the exclusive rights which attach to the use thereof, it is necessary that it be used with the intent of
appropriating it as a trade-name.

10, ID.; NAMES SUBJECT OF OWNERSHIP.Where plaintiff's registered trade-name is "La Flor
de la Isabela" which it uses by way of advertisements, signs over the place of business, upon letter
heads and in other ways to furnish to the public a method of distinguishing the plaintiff's business, and
sends its manufactured products into the market with such trade-name upon them, the plaintiff acquires
no trade-name rights in the single word "Isabela" where it is not claimed 'that the use of the word
"Isabela" is an infringement of the trade-name "La Flor de la Isabela."

11. ID.; ID.; GEOGRAPHICAL NAMES.This is particularly true where the word "Isabela" is a name,
quality or description of the merchandise in connection with which the word is used, or the geographical
place of its production and origin, and the statute provides that such a name cannot be appropriated as
a trademark or a trade-name.

APPEAL from a judgment of the Court of First Instance of Manila. Ostrand, J.

The facts are stated in the opinion of the court.

Rohde & Wright for appellant.

Gilbert, Haussermann, Cohn & Fisher for appellee.

MORELAND, J.:

The plaintiff claims to have appropriated and to own the exclusive right to use the word "Isabela" on
cigarettes.

Sometime before the commencement of this action defendant began the manufacture of cigarettes,
offering them to the public in packages on the front side of each of which appeared the words "Alhambra
Isabelas." This action was brought to enjoin the defendant from so using the word "Isabelas." Judgment
was for plaintiff and defendant appealed.

The complaint contains two counts, one for the violation or infringement of the trade-name "Isabela,"
and the other, claims the plaintiff, for unfair competition arising out of the use by the defendant of the
word "Isabelas" on its cigarettes in the manner already stated. The trial court dismissed the count based
on unfair competition, saying, "we doubt that the facts established, under the circumstances of the case,
justify the inference of actual intention on defendant's part to deceive the public and defraud a
competitor, and can, therefore, not find the defendant guilty of unfair competition," Although neither
count in the complaint was based on the infringement or violation of a trade-mark, and plaintiff, during
the trial, offered no evidence on that subject, and, accordingly, no issue was framed thereon either by
the pleadings or on the trial (Lizarraga Hermanos vs. Yap Tico, 24 Phil. Rep., 504), nevertheless the
court, in its decision for plaintiff, treated the action as one for the infringement of a trade-mark, saying,
"the case is rather one of the violation of a trade-mark under the first four sections of Act No. 666." The
court then cited those sections of the Act relative to trade-marks, discussed them at some length, and
finally founded its judgment thereon.

Plaintiff did not appeal from that portion of. the judgment finding the defendant not guilty of unfair
competition; while the defendant appealed from that part founded on the violation of a trade-mark and
decreeing a perpetual injunction. Therefore the question involving unfair competition is not really before
us, that count of the complaint founded thereon having been in effect dismissed by the trial court, and
no appeal having been taken from that dismissal. While the court founded its judgment solely on the
theory of a violation of a trade-mark and, although the defendant insisted from the very beginning that
the action as set out in the complaint in no possible way involved the question of a trade-mark,
nevertheless, the court, as we have already seen, proceeded to try and resolve the case on that theory
and based its judgment exclusively thereon. Defendant now contends that, if it appears that the action
was not for a violation of a trade-mark, the judgment should be reversed, as it was wholly misled in its
defense and would be seriously prejudiced by the change necessarily resulting, We regard the action,
however, as we necessarily must under the statute, as one f or the violation of a trade-name and not
one f or the violation of a trade-mark or for unfair competition. But, inasmuch as we find for the defendant
on the whole case and reverse the judgment against it, we do not stop to dispose of the question as to
whether the theory of the action was changed during or after trial or on appeal, so long as the parties
have agreed on certain questions which they have submitted and discussed, which questions include
all those which can arise whether the action be for the violation of a trade-name or for unfair competition.
We prefer to decide the case so as to end the litigation once for all.

Inasmuch as the plaintiff did not appeal from the judgment dismissing the complaint as to unfair
competition, we would be justified in holding that that question is not before us, and, accordingly, in
deciding the case from the single viewpoint of a violation of a' trade-name, But for the reasons just
expressed we take up both alleged causes of action and decide all the questions presented by both.

Plaintiffs claim is this: It has trade-name rights in the word "Isabela." The defendant has violated those
rights. Plaintiff is entitled to damages on the theory of violation of a trade name, or unfair competition,
or both. Can it recover? We hold that none of these claims have been sustained and that plaintiff is not
entitled to recover on any theory mentioned. We proceed to show why.

Rights of action for the violation of a trade-mark or trade-name or to restrain unfair competition are
conferred by statute. Without such a statute right of action would not exist in -those cases. In deciding
this appeal, therefore, we must be governed by the provisions of the statute.

The Act is No. 666 of the Philippine Commission and confers a right of action in three cases(1) for
the violation of a trade-mark, (2) a trade-name, and (3) to restrain unfair competition. The statute founds
the cause of action in the first two cases exclusively on the invasion of the right of property which the
statute gives in the trade-mark or trade-name. These actions are not based on fraud nor is the right
given on the theory of unfair competition. It is founded solely in the property which the statute creates
in the trade-mark or trade-name. These two cases are dealt with somewhat on the theory of patents,
giving the owner of the trade-mark or trade-name a right in the thing similar to the right created by a
patent. As a necessary consequence, an action for a violation or infringement of a trade-mark or trade-
name does not proceed primarily on the theory that either the plaintiff or the public has been or will be
defrauded, although that may be, in effect, the result; but on the hypothesis that plaintiff's right in the
mark or the name has been invaded and that he is entitled to the damages resulting from the invasion.
In either case an action may be maintained without proof of anything more than the right to the exclusive
use of the mark or name and that the defendant has violated it. No allegation or proof of fraud or intent
to defraud is necessary. On the other hand, the action to prevent unfair competition is based exclusively
on fraud; and it would seem from the wording of the statute that it refers to the fraud committed on the
public rather than to the fraud committed on the plaintiffthe fraud against the plaintiff being only an
incidentthe means by which the fraud is perpetrated on the public. No right of property in the
appearance which plaintiff gives to his goods is required, if the word "property" may be used in such a
connection, and none needs to be alleged or proved. In such an action plaintiff, to recover, must prove
that the defendant, in selling his goods, gave them the same general appearance of the goods of the
plaintiff either in the wrapping of the package in which they were contained or in the devices of words
thereon or in some other feature of their appearance which would be likely to influence purchasers to
believe that the goods offered for sale by defendant were those of the plaintiff; and that the defendant
clothed his goods with such appearance for the purpose of deceiving the public and of defrauding the
plaintiff of his legitimate trade. The statute expressly requires that the plaintiff prove the intent to deceive
the public and defraud a competitor before he can recover; and, while such intent may be inferred from
the similarity in the appearance of the goods as packed or offered for sale, such an inference is not a
necessary one, it being legally possible that such similarity exist and there still be no intent to deceive.
Fraud, then, is the essence of an action of unfair competition; right in property the essence of the other
two.

From these observations it is a necessary deduction that an action for the violation of a trade-name
cannot be carried on in conjunction with an action of unfair competition based on a similarity to the
plaintiff's trade-name. If an action on the trade-name will lie, then an action of unfair competition based
on similarity to the trade-name is impossible; whereas, on the other hand, if an action of unfair
competition is the proper action, then one for the violation of a trade-name based on the same facts will
not lie. The facts which will support an action for the violation of a trade-name will not support an action
of unfair competition. The same is true of an action for the violation of a trade-mark except where such
an action fails for the reason that the trade-mark is invalid because it consists of a word or words which,
in law, are not capable of appropriation as a trade-mark. In such case, by express provision of the
statute (section 7), an action of unfair competition will lie. No such exception is made in favor of a trade-
name; and if the plaintiff fails to establish his right of property therein, his failure is irremediable. He
cannot fall back on the action of unfair competition. We apprehend that the reason why this privilege
was not extended to a plaintiff in an action for the violation of a trade-name was that an action of unfair
competition is based exclusively on the appearance of the goods as they are exposed for sale; while,
under the statute, the trade-name, unlike the trade-mark, applies exclusively to the business,
profession, trade or occupation of the plaintiff "and, as a consequence, it is not essential that the trade-
name appear on plaintiff's goods or go into the market with them. (Section 5.) It is clear that, if the action
of unfair competition is based on the appearance of the goods as they are exposed for sale, the facts
necessary to support an action for the violation of a tradename will not sustain it, as neither the trade-
name of the plaintiff nor of the defendant need go into the market at all, and, as a consequence, the
similarity of appearance between the goods of plaintiff and defendant, a fact necessary to sustain an
action of unfair competition, may not exist.

Another principle of the law of trade-marks, tradenames and unfair competition of importance in this
case, and one which naturally follows from what has already been said, is that there can be no
secondary meaning, as that term is understood in the American law of trademarks and trade-names,
with respect to a trade-name. It must be borne in mind, as we stated at the outset, that the only rights
existing in this jurisdiction with respect to trade-marks and trade-names, as well as unfair competition,
are conferred by Act No. 666; and, accordingly, they are limited by the provisions of the Act. The statute
prohibits the registration of a trade-name when that trade name represents the geographical place of
production or origin of the products or goods to which the trade-name refers, or when it is merely the
name, quality, or description of the merchandise with respect to which the trade-name is to be used. In
such cases, therefore, no trade-name can exist. The statute prescribes what a trade-name may be and
then gives a right of action to protect the owner of that trade-name. If it is not a trade name defined by
statute, it does not carry with it the right of action granted by the statute. No trade-name can legally
exist except that prescribed by the Act. If it can exist, it can be enforced as, and only as, the rights in
trade-names are enforced under the statute. If it cannot exist as a trade-name, it cannot be enforced at
all, either as a trade-name, i. e., as a property right, or on the theory of unfair competition based on the
doctrine of secondary meaning. Of course, if the trade-name is not recognized in law, it can have no
secondary meaning. Moreover, the doctrine of secondary meaning as it is known in the United States,
is carried into effect on the theory of unfair competition and not on the theory of property in the trade-
name. Indeed, the necessity of basing the action on the theory of unfair competition negatives the
existence at that time of the trade-name in its primary meaning. In this jurisdiction that necessity is
emphasized by the fact that, as we have seen, the statute makes a sharp distinction between actions
for the violation of a trade-mark or trade-name and those based on unfair competition, the former being
founded in a property right and the latter on the fact that fraud has been or will be committed on the
public. Furthermore, if the action of unfair competition based on the similarity of plaintiff's and
defendant's trade-names cannot be maintained in this jurisdiction, as we have seen that it cannot, then
the fundamental basis of the doctrine of secondary meaning disappears. We might add that the statute
does not seem to have dealt with trade-names as it has with trade-marks; for, with respect to the latter,
it expressly confers, as we have seen (sec. 7), a right of action for unfair competition even though the
trade-mark, as such, is illegal and unregisterable by reason of being the name of the geographical place
of production or origin of the goods to which it is affixed, or the name, quality or description of the
merchandise on which it is placed. In other words, the statute seems to create with regard to a trade-
mark a right which is, in many aspects, the equivalent of that springing from the doctrine of secondary
meaning, and where the trade-mark, though illegal and unregisterable under the Act, has been used by
the plaintiff for such a length of time that it has ceased to be used and understood in its primary meaning,
the owner will be protected on the theory of unfair competition. The statute does not confer a right on
the owner of a tradename under similar circumstances.

The trial court was, therefore, correct in dismissing that count of the complaint based on unfair
competition. The statute, as we have already observed, does not permit these two actions to be
maintained on the same facts. We might say, however, that the ownership of a trade-name does not
necessarily prevent the owner from bringing an action of unfair competition founded on the appearance
of the goods of defendant as exposed for sale, which appearance is not based on similarity to the
owner's tradename. Such an action would have to be based on the general appearance of the package,
its form, color, style, adornment, and matters of that character; and would not lie on appearance arising
from the similarity of plaintiff's and defendant's trade-names.

The effect of these observations and conclusions would necessarily be to end the case at this point if
'we were disposed to leave the other questions presented for resolution unsettled; for, if there can attach
to a trade-name no secondary meaning, plaintiff's action must fail. It is based exclusively on the
secondary signification of the word "Isabela" which it has acquired by long association with plaintiff's
cigarettes, by virtue of which it no longer means to the trade and the public generally when used in
connection with tobacco products, a province of Luzon or the tobacco grown in that province, but simply
and solely the products of plaintiff's factory. In other words, the claim is that it has completely lost its
primary signification and come to have a secondary meaning exclusively when used in connection with
manufactured tobacco. The action being based entirely on the theory of secondary meaning, and the
statute giving no right of action in cases of that character, it is evident that the action cannot be
maintained.

In spite of the fact, however, that we might here reverse the judgment on the grounds already stated,
we prefer, in the interests of the parties, the bar and the public generally, to decide the other questions
presented, some of them being extremely important and of public interest and they having been fully
argued on the appeal. (Lichauco vs. Limjuco and Gonzalo, 19 Phil. Rep., 12.)

It is admitted all through this case, in fact it is alleged in plaintiff's complaint and is set out in all parts of
its brief filed on this appeal, that plaintiff's trade-name, as evidenced by the certificate issued under the
Spanish regime, consists solely of the words "La Flor de la Isabela." Plaintiff does not claim that the
word "Isabela" has been registered by it as a trade-name or that it has a title from any source conferring
on it the exclusive right to use that word. The certificate offered in evidence by plaintiff to show its right
to the exclusive use of the phrase "La Flor de la Isabela" grants two rights: One in a trade-mark
consisting of a rectangular shield, surmounted by a crown and divided into four equal parts, in the right
hand upper corner of which is a full rigged sailing ship at sea, in the left hand upper corner a growing
tobacco plant, in the lower right hand corner a field of sugar cane with a pool of water in the foreground,
and in the lower left hand corner a factory in operation; the other, a right in the trade-name "La Flor de
la Isabela." As we have already seen, there is no claim here based on the infringement or violation of
the trade-mark just described, nor is there contention or claim of any kind that the use of the word
"Isabela" is a violation or an infringement of the trade-name "La Flor de la Isabela." The action is not for
the violation of the trade-name "La Flor de la Isabela," but for the violation of an entirely different trade-
name, namely, "Isabela." The exclusive right to use this name, plaintiff claims arises from two causes:
First, the contraction of the phrase "La Flor de la Isabela" into the word "Isabela" by popular expression
and use; and, second, the use for more than twenty years of the word "Isabela." In view of the fact that
there is no claim of an infringement of the trade name "La Flor de la Isabela," these two claims are
identical; for, there could have been no contraction brought about by popular expression except after
long lapse of time. The contraction of the phrase into the word would create no rights, there being no
registration, unless it resulted from long use. Therefore, to establish a right in the word, the contraction
must be shown to have existed for a length of time equivalent to that which would be necessary to give
the word "Isabela" the dignity and legal status of a trade-name. If, therefore, it results from the evidence
in this action that the word "Isabela" has not been used by the plaintiff for a period of time sufficient to
give it the special value necessary to bring it within the law relating to trade-names (if it be admitted for
the moment that that could be done), then the plaintiff must fail, whether it base its action on contraction,
or use, or both.

There is another ground on which plaintiff would fail in his action. If it should appear in the case that the
word "Isabela" was a word which, at the time of its adoption by plaintiff and at all times since, was the
name of the geographical place of production or origin or was ordinarily and generally used as the
name, quality or description of the merchandise to which it related, plaintiff would fail, as such name
would not be capable of being registered as a trade-name (secs. 2 and 13) and could not, for that
reason, be appropriated by plaintiff as such. That being so, no action for a violation thereof could be
maintained, as none is granted by the statute in such case. (Secs. 3, 5, and 7.)

Before entering on the discussion of the facts of the case, it may be well to set down certain things that
appear to be uncontroverted:

1. There is a province in the Island of Luzon known as Isabela Province. In that province grows
tobacco of a class and quality not grown in any other province or place in the Philippine Islands.
2. That tobacco is known commercially and to the trade as Isabela tobacco and the expression
"Isabela tobacco" has in the Philippine Islands a meaning as definite, certain and clear as the expression
"Havana tobacco" or "Virginia tobacco" in the United States.
3. The defendant has used on its cigarettes the words "Alhambra Isabelas" with a statement that the
cigarettes inclosed in the package are composed exclusively of Isabela tobacco. Aside from "Isabela"
no other word or phrase or character is used on defendant's packages which it is claimed is in violation
of plaintiff's rights.
4. There is absolutely no resemblance between the packages of cigarettes manufactured and sold
by the plaintiff and those manufactured and sold by the defendant, except in the word "Isabela."
5. The phrase "La Flor de la Isabela" means in English, giving it a free translation, "The best tobacco
grown in Isabela Province," or "The finest tobacco grown in Isabela Province," or "The finest quality of
tobacco grown in Isabela Province." The phrase, in its primary sense, conveys the idea that the products
on which it is placed are composed of the best tobacco grown in the Province of Isabela.
6. Plaintiff's cigarettes marked with the design "La Flor de la Isabela," and referred to in this case,
are not manufactured or composed, either wholly or in part, of tobacco grown in Isabela Province.
7. The cigarettes manufactured and sold by defendant as "Alhambra Isabelas" are composed
exclusively of tobacco grown in Isabela Province.
8. The word "Isabela," when used in connection with tobacco, cigars or cigarettes, signifies in its
primary sense that the tobacco itself, or that composing the cigars or cigarettes, is Isabela tobacco.

We are of the opinion that the plaintiff must fail in this action for the reason that, in the first place, it has
not proved that the word "Isabela" has been used in the manner and form alleged in the complaint; and,
in the second place, for the reason that it is the name of the geographical place of production or origin
of the material composing the article to which it is affixed and that it is the name, quality and description
thereof. The burden is on plaintiff to prove the use of the word "Isabela" for such a length of time and
under such circumstances as to give it the right to its exclusive use. Reviewing the evidence of record,
we are of the opinion that the overwhelming weight thereof is contrary to plaintiff's contention, It shows
that in not a single instance in the history of the plaintiff corporation, so far as is disclosed by the record,
has a package of its cigarettes gone into the market, either at wholesale or retail, with the word "Isabela"
alone on the package as a separate or distinct word or name. In every instance, so far as the
documentary evidence goes, the packages have been marked by the phrase "La Flor de la Isabela."
There is not an exhibit of any probative value on the issues involved which does not tend affirmatively
to establish that the word was never used as a separate and distinct word and to negative any intention
on the part of the plaintiff to use it as such. As f ar back as the time when the plaintiff obtained the right
to use the trade-name "La Flor de la Isabela" the exhibits filed in its application for registration of that
trade-name demonstrate, as they naturally must, that the trade-name which plaintiff desired to secure
was "La Flor de la Isabela" and not "Isabela." These exhibits are the wrappers which inclose plaintiff's
cigarettes as they are found exposed for sale and have on them the words, designs and devices to the
exclusive use of which plaintiff claims to be entitled. Every one of them contains the phrase "La Flor de
la Isabela" and not one of them the word "Isabela." In all of them the word "Flor" is almost equally
conspicuous with the word "Isabela" and from them we can see no intent to emphasize the word
"Isabela" more than the word "Flor." So far as the record shows, plaintiff nowhere advertised or
advertises its cigarettes as "Isabela" cigarettes and we find nothing in the exhibits which shows that the
plaintiff has or ever had the slightest intention to use the word "Isabela" as a trade-name.
Much stress is laid by plaintiff on the fact that the wholesale packages of cigarettes, that is, the packages
containing a number of the small retail packages, have printed on the two edges in large letters "Isabela
Cortos," "Isabela Largos," and "Isabela Entrelargos," as the case may be. But it is to be noted that it
appears from the exhibits themselves that plaintiff's trade-name "La Flor de la Isabela," in conspicuous
letters, is also attached to both ends of each of such packages; and each of the small packages inclosed
in the larger carries the phrase "La Flor de la Isabela" and not the word "Isabela." It remains true,
therefore, as we said at the outset, that not a single package of plaintiff's cigarettes has ever gone into
the market in the Philippine Islands with the word "Isabela" alone thereon as a tradename.

Much importance is attached by plaintiff to a letter dated April 8,1914, received from one of its
employees in America. While this letter is of doubtful competency as evidence for plaintiff. it is in the
record, and inasmuch as so much stress is laid on a portion of it, and it appears to be competent
evidence as against plaintiff, we refer to it. The sentence in the letter to which reference is particularly
made is this: "Furthermore, the trade here knows the cigars as 'lsabela' pure and simple." As is seen,
this letter refers to cigars and not cigarettes; but, be that as it may, we believe that the plaintiff has quite
overlooked the real nature of the letter as evidence. In its attempt to demonstrate that its tobacco
products are known in America as "Isabela" products, it overlooked the first part of the letter which, to
us, is the most significant part of it. The writer says:

"Ehrman Bros. & Co. have asked us to have the paster 'La Flor de la Isabela,' which goes on the end
of the boxes, as per sample we inclose herewith, changed as follows: Make the strip about half as wide
again as the inclosed sample, and instead of the words 'La Flor de la Isabela,' put on just the one word
'lsabela' in large letters. Ehrman Bros. say their customers claim that the lettering on this strip is too
small for the customers to notice it readily behind the counter, whereas a large lettering of the word
'lsabela' will be much more attractive and more noticeable."

This portion of the letter demonstrates conclusively that the plaintiff has never advertised its cigars in
America as "Isabela" cigars. It has persisted always in advertising them as "La Flor de la Isabela;" and
the precise objection made by the dealers handling plaintiff's cigars in the United States is that plaintiff
insists on advertising its goods as "La Flor de la Isabela" instead of "Isabela;" and it is clear from the
letter that if, as the writer says, its cigars are known to the trade in America as "Isabela" cigars, it is not
by reason of plaintiff's efforts but in spite of them. Plaintiff itself has put forth no effort, as far as we can
see from the record, to create a right in the word "Isabela." All of its money has been spent and all its
energy used in the advertisement of the phrase "La Flor de la Isabela."

A price list of the products of the plaintiff company has been introduced in evidence, on the tenth and
eleventh pages of which appear the words "Isabela Cortos," "Isabela Largos" and "Isabela Entrelargos,"
together with the price. We do not regard this price list as indicating anything more than the fact that
the limited space (the price list is printed in very small letters) forbade the use of the phrase "La Flor de
la Isabela." But we note then, in extremely large letters, comparatively speaking. on the front page of
the price list, are found the words "La Flor de la Isabela," while on each package of cigarettes which, in
the price list, are called "Isabela Cortos," "Isabela Largos" and "Isabela Entrelargos," is found, in more
than one place, the phrase "La Flor de la Isabela." Moreover, under the word "remarks" found at the
close of the price list, are these words: "When the Spanish Government abolished the tobacco
monopoly in the Philippine Islands this company acquired the exclusive right to use the marks Cavite,
Malabon, Princesa, and Meisic which were formerly the property of the Government." Nothing is said
about the word "Isabela." No rights are claimed by that advertisement in that name.

The documentary evidence introduce by plaintiff is fully corroborated by the evidence of defendant. The
testimony of Mr. Olsen, one of the leading tobacco manufacturers of the Philippine Islands, is to the
effect that the products of plaintiff's factory are generally known in the Philippine Islands as Tabacalera
products, sometimes as "La Flor de la Isabela" products, but not as "Isabela" products. He states that
the cigarettes which plaintiff calls "Isabela Cortos" and "Isabela Largos" are generally known to the
trade as "Tabacalera Cortos" and "Tabacalera Largos." The clerk of the Court of First Instance in which
the action was tried, being called as a witness for the defendant. testified that he smoked cigarettes of
the Tabacalera and Insular factories and that he had never heard of "Isabela" cigarettes before the
defendant began the manufacture of its cigarettes; but that he had frequently heard of the factory "La
Flor de la Isabela." Mr. Blanco, the interpreter of the court, testified that he had smoked cigarettes for
forty or fifty years and that he had not heard of "Isabela" cigarettes.
While some of the witnesses for the plaintiff testified that the public knew the products of plaintiff's
factory as "Isabela" products, that testimony was in part contradicted by other witnesses for the plaintiff
and is entirely at variance with its documentary evidence.

It appearing from the record in the case that the plaintiff has always insisted on the ownership of the
trade-name "La Flor de la Isabela" and has invariably sent it into the market with its products both in
the Philippine Islands and in the United States, and that whatever effort and money plaintiff has
expended in securing a trade-name have been spent with respect to "La Flor de la Isabela" and not
"Isabela," we are driven to the conclusion that, as a matter of fact, the word "Isabela" has never been
used by the plaintiff as a trade-name in such a way as to give it any exclusive right therein. Moreover,
the persistent use of the trade-name "La Flor de la Isabela" denies the possibility of any single word in
that phrase being a trade-name. It being kept in mind that there is no contention on the part of the
plaintiff that the use of the word "Isabela" by the defendant is an infringement of the tradename "La Flor
de la Isabela," it is clear that the use of "La Flor de la Isabela" has given the plaintiff no right to the use
of the word "Isabela." Furthermore, plaintiff denies that it has abandoned the trade-name "La Flor de la
Isabela," but maintains that its rights therein are now in f ull force and effect. Admitting, even for the
sake of argument, that there can exist a trade-name without registration under the statute, it is well
known that the plaintiff is not entitled to the exclusive right to use such a trade-name unless it has used
it for a sufficient length of time to give it a special value. But plaintiff's effort has been directed exclusively
to the trade-name "La Flor de la Isabela," and this fact necessarily negatives any claim that the word
"Isabela," has, by plaintiff's effort, received any special value in connection with plaintiff's products.

We might say, in concluding this branch of the subject, that, even admitting that the word "Isabela" may
have been appropriable by plaintiff as a trade-name at the time it began to use it, the evidence showing
that it had been exclusively appropriated by the plaintiff would have to be very strong to establish the
fact of appropriation and the right to exclusive use. The law as it now stands and has stood since the
Royal Decree of 1888 prohibits the use of a geographical name as a trade-name. Act No. 666 prohibits
the use not only of a geographical name but also of a word which is either the name, quality, or the
description of the article to which the trade-name refers. Even if appropriation were possible, it would
require the clearest of proof to permit the appropriation of a word as a trade-name the use of which in
that connection the law expressly declines to sanction.

Furthermore, we are of the opinion that, even if plaintiff had proved a right to the exclusive use of the
word "Isabela," we would be f orced to conclude that its use by the defendant in connection with the
word "Alhambra," which is made equally conspicuous with the word "Isabela," would be a sufficient
effort on the part of defendant to distinguish its cigarettes from those of plaintiff; particularly in view of
the fact that the word "Isabela" is the name of a province and also the commercial name of the tobacco
grown in that province.

We do not believe, however, that the word "Isabela" can be appropriated or could be appropriated at
the time plaintiff claimed that it began to use that word as descriptive of its products. The Royal Decree
of 1888 prohibited the use of a geographical name as a trade-name or trade-mark and that decree was
in force before the use of the word "Isabela" began, even under plaintiff's claim. At least it had not been
used for a sufficient length of time to give it a property right therein, it never having been registered as
a trade-name either under that decree or Act No. 666. From the date of that decree to the present time
it has been unlawful to select the word "Isabela" as a trade-name, and it would have been impossible
during that time for plaintiff to have obtained a right therein, no matter how much the word might have
been used or to what extent it had been advertised. While Act No. 666, as we have seen, expressly
permits the appropriation of a trade-mark, although it may be a geographical or descriptive name, it
does not permit the appropriation of a trade-name under the same circumstances. We accordingly
repeat, f rom the Royal Decree of 1888 to the present time, the word "Isabela" has not been appropriable
by anybody as a trade-name.

For these reasons and for the further reason that we regard the case of Baxter vs. Zuazua (5 Phil. Rep.,
160), as decisive of the main questions involved in this case, we are of the opinion that the judgment
must be reversed,

The judgment appealed from is reversed and the perpetual injunction issued thereon is dissolved.
Without costs in this instance. So ordered.
Arellano C. J., and Torres, J., concur.

Carson, and Trent, JJ., concur in the result.

Johnson, J., dissents.

Judgment reversed, injunction dissolved.

o0o

COMPAA GENERAL DE TABACOS DE FILIPINAS, plaintiff and appellee


vs.
ALHAMBRA CIGAR & CIGARETTE MANUFACTURING Co., defendant and appellant

No. 10251. February 10, 1916

1. TRADE-MARKS AND TRADE-NAMES; UNFAIR COMPETITION; RIGHT OF ACTION. A right


of action for the violation of a trademark or tradename or to restrain unfair competition is conferred by
statute, without which no such right of action would exist.

2. ID.; ACTION FOR INFRINGEMENT; BASIS OF RIGHT. A right of action for the violation of a
trade-mark or a trade-name is based on the property right which the statute (Act No. 666) confers on
the owner of such trade-mark or trade-name therein.

3. ID.; ID.; PROOF OF FRAUD NOT ESSENTIAL. In an action for the violation of a trade-mark or
trade-name, proof of fraud or of f raudulent intent is not one of the essential -requisites.

4. ID.; UNFAIR COMPETITION; PROOF OF FRAUD ESSENTIAL. One of the essential requisites
in an action to - restrain unfair competition is proof of fraud; the intent to deceive must be shown before
the right to recover can exist.

5. ID.; ID.; ACTIONS; DISTINCTIONS BETWEEN. If an action for a violation of a trade-name will
lie, then an action based on similarity to plaintiffs tradename cannot be maintained; and if an action of
unfair competition is the proper action, then one for a violation of the trade-name based on the same
facts will not lie. The facts which will support an action for a violation of a trade-name will not support
an action of unfair competition.

6. ID.; ID.; ID.The same is true of an action for a violation of a trade-mark except where the trade-
mark could not have been legally selected as such because it consists of a word or words which in law
are not capable of appropriation as a trade-mark. In such case, by express provision of the statute (sec.
7), an action of unfair competition will lie.

7. ID.; DOCTRINE OF "SECONDARY MEANING."The doctrine of "secondary meaning" as applied


to trade-names is not applicable in this jurisdiction.

8. ID.; DEFINITION OF TRADENAME. A trade-name is a name, device or mark by which it is


intended to distinguish from that of others the business, profession, trade or occupation in which one
May be engaged and in which goods are manu-factured or sold to the public, work is done for the public,
or professional services are rendered to the public.

9. ID.; ESSENTIAL REQUISITES. In order that a name may be considered as a trade-name with
the exclusive rights which attach to the use thereof, it is necessary that it be used with the intent of
appropriating it as a trade-name.

10, ID.; NAMES SUBJECT OF OWNERSHIP.Where plaintiff's registered trade-name is "La Flor
de la Isabela" which it uses by way of advertisements, signs over the place of business, upon letter
heads and in other ways to furnish to the public a method of distinguishing the plaintiff's business, and
sends its manufactured products into the market with such trade-name upon them, the plaintiff acquires
no trade-name rights in the single word "Isabela" where it is not claimed 'that the use of the word
"Isabela" is an infringement of the trade-name "La Flor de la Isabela."

11. ID.; ID.; GEOGRAPHICAL NAMES. This is particularly true where the word "Isabela" is a
name, quality or description of the merchandise in connection with which the word is used, or the
geographical place of its production and origin, and the statute provides that such a name cannot be
appropriated as a trademark or a trade-name.

APPEAL from a judgment of the Court of First Instance of Manila. Ostrand, J.

The facts are stated in the opinion of the court.

Rohde & Wright for appellant.

Gilbert, Haussermann, Cohn & Fisher for appellee.

MORELAND, J.:

The plaintiff claims to have appropriated and to own the exclusive right to use the word "Isabela" on
cigarettes.

Sometime before the commencement of this action defendant began the manufacture of cigarettes,
offering them to the public in packages on the front side of each of which appeared the words "Alhambra
Isabelas." This action was brought to enjoin the defendant from so using the word "Isabelas." Judgment
was for plaintiff and defendant appealed.

The complaint contains two counts, one for the violation or infringement of the trade-name "Isabela,"
and the other, claims the plaintiff, for unfair competition arising out of the use by the defendant of the
word "Isabelas" on its cigarettes in the manner already stated. The trial court dismissed the count based
on unfair competition, saying, "we doubt that the facts established, under the circumstances of the case,
justify the inference of actual intention on defendant's part to deceive the public and defraud a
competitor, and can, therefore, not find the defendant guilty of unfair competition," Although neither
count in the complaint was based on the inf ringement or violation of a trade-mark, and plaintiff, during
the trial, off ered no evidence on that subject, and, accordingly, no issue was framed thereon either by
the pleadings or on the trial (Lizarraga Hermanos vs. Yap Tico, 24 Phil. Rep., 504), nevertheless the
court, in its decision for plaintiff, treated the action as one for the infringement of a trade-mark, saying,
"the case is rather one of the violation of a trade-mark under the first four sections of Act No. 666." The
court then cited those sections of the Act relative to trade-marks, discussed them at some length, and
finally founded its judgment thereon.

Plaintiff did not appeal from that portion of. the judgment finding the def endant not guilty of unf air
competition; while the defendant appealed from that part founded on the violation of a trade-mark and
decreeing a perpetual injunction. Therefore the question involving unfair competition is not really before
us, that count of the complaint founded thereon having been in effect dismissed by the trial court, and
no appeal having been taken from that dismissal. While the court founded its judgment solely on the
theory of a violation of a trade-mark and, although the def endant insisted f rom the very beginning that
the action as set out in the complaint in no possible way involved the question of a trade-mark,
nevertheless, the court, as we have already seen, proceeded to try and resolve the case on that theory
and based its judgment exclusively thereon. Defendant now contends that, if it appears that the action
was not for a violation of a trade-mark, the judgment should be reversed, as it was wholly misled in its
defense and would be seriously prejudiced by the change necessarily resulting, We regard the action,
however, as we necessarily must under the statute, as one f or the violation of a trade-name and not
one f or the violation of a trade-mark or for unfair competition. But, inasmuch as we find for the defendant
on the whole case and reverse the judgment against it, we do not stop to dispose of the question as to
whether the theory of the action was changed during or after trial or on appeal, so long as the parties
have agreed on certain questions which they have submitted and discussed, which questions include
all those which can arise whether the action be for the violation of a trade-name or for unfair competition.
We prefer to decide the case so as to end the litigation once for all.
Inasmuch as the plaintiff did not appeal from the judgment dismissing the complaint as to unfair
competition, we would be justified in holding that that question is not before us, and, accordingly, in
deciding the case from the single viewpoint of a violation of a' trade-name, But for the reasons just
expressed we take up both alleged causes of action and decide all the questions presented by both.

Plaintiffs claim is this: It has trade-name rights in the word "Isabela." The defendant has violated those
rights. Plaintiff is entitled to damages on the theory of violation of a trade name, or unfair competition,
or both. Can it recover? We hold that none of these claims have been sustained and that plaintiff is not
entitled to recover on any theory mentioned. We proceed to show why.

Rights of action for the violation of a trade-mark or trade-name or to restrain unfair competition are
conferred by statute. Without such a statute right of action would not exist in -those cases. In deciding
this appeal, therefore, we must be governed by the provisions of the statute.

The Act is No. 666 of the Philippine Commission and confers a right of action in three cases(1) for
the violation of a trade-mark, (2) a trade-name, and (3) to restrain unfair competition. The statute founds
the cause of action in the first two cases exclusively on the invasion of the right of property which the
statute gives in the trade-mark or trade-name. These actions are not based on fraud nor is the right
given on the theory of unfair competition. It is founded solely in the property which the statute creates
in the trade-mark or trade-name. These two cases are dealt with somewhat on the theory of patents,
giving the owner of the trade-mark or trade-name a right in the thing similar to the right created by a
patent. As a necessary consequence, an action for a violation or infringement of a trade-mark or trade-
name does not proceed primarily on the theory that either the plaintiff or the public has been or will be
defrauded, although that may be, in effect, the result; but on the hypothesis that plaintiff's right in the
mark or the name has been invaded and that he is entitled to the damages resulting from the invasion.
In either case an action may be maintained without proof of anything more than the right to the exclusive
use of the mark or name and that the defendant has violated it. No allegation or proof of fraud or intent
to defraud is necessary. On the other hand, the action to prevent unfair competition is based exclusively
on fraud; and it would seem from the wording of the statute that it refers to the fraud committed on the
public rather than to the fraud committed on the plaintiffthe fraud against the plaintiff being only an
incidentthe means by which the fraud is perpetrated on the public. No right of property in the
appearance which plaintiff gives to his goods is required, if the word "property" may be used in such a
connection, and none needs to be alleged or proved. In such an action plaintiff, to recover, must prove
that the defendant, in selling his goods, gave them the same general appearance of the goods of the
plaintiff either in the wrapping of the package in which they were contained or in the devices of words
thereon or in some other feature of their appearance which would be likely to influence purchasers to
believe that the goods offered for sale by defendant were those of the plaintiff; and that the defendant
clothed his goods with such appearance for the purpose of deceiving the public and of defrauding the
plaintiff of his legitimate trade. The statute expressly requires that the plaintiff prove the intent to deceive
the public and defraud a competitor before he can recover; and, while such intent may be inferred from
the similarity in the appearance of the goods as packed or offered for sale, such an inference is not a
necessary one, it being legally possible that such similarity exist and there still be no intent to deceive.
Fraud, then, is the essence of an action of unfair competition; right in property the essence of the other
two.

From these observations it is a necessary deduction that an action for the violation of a trade-name
cannot be carried on in conjunction with an action of unfair competition based on a similarity to the
plaintiff's trade-name. If an action on the trade-name will lie, then an action of unfair competition based
on similarity to the trade-name is impossible; whereas, on the other hand, if an action of unfair
competition is the proper action, then one for the violation of a trade-name based on the same facts will
not lie. The facts which will support an action for the violation of a trade-name will not support an action
of unfair competition. The same is true of an action for the violation of a trade-mark except where such
an action fails for the reason that the trade-mark is invalid because it consists of a word or words which,
in law, are not capable of appropriation as a trade-mark. In such case, by express provision of the
statute (section 7), an action of unfair competition will lie. No such exception is made in favor of a trade-
name; and if the plaintiff fails to establish his right of property therein, his failure is irremediable. He
cannot fall back on the action of unfair competition. We apprehend that the reason why this privilege
was not extended to a plaintiff in an action for the violation of a trade-name was that an action of unfair
competition is based exclusively on the appearance of the goods as they are exposed for sale; while,
under the statute, the trade-name, unlike the trade-mark, applies exclusively to the business,
profession, trade or occupation of the plaintiff "and, as a consequence, it is not essential that the trade-
name appear on plaintiff's goods or go into the market with them. (Section 5.) It is clear that, if the action
of unfair competition is based on the appearance of the goods as they are exposed for sale, the facts
necessary to support an action for the violation of a tradename will not sustain it, as neither the trade-
name of the plaintiff nor of the defendant need go into the market at all, and, as a consequence, the
similarity of appearance between the goods of plaintiff and defendant, a fact necessary to sustain an
action of unfair competition, may not exist.

Another principle of the law of trade-marks, tradenames and unfair competition of importance in this
case, and one which naturally follows from what has already been said, is that there can be no
secondary meaning, as that term is understood in the American law of trademarks and trade-names,
with respect to a trade-name. It must be borne in mind, as we stated at the outset, that the only rights
existing in this jurisdiction with respect to trade-marks and trade-names, as well as unfair competition,
are conferred by Act No. 666; and, accordingly, they are limited by the provisions of the Act. The statute
prohibits the registration of a trade-name when that trade name represents the geographical place of
production or origin of the products or goods to which the trade-name refers, or when it is merely the
name, quality, or description of the merchandise with respect to which the trade-name is to be used. In
such cases, therefore, no trade-name can exist. The statute prescribes what a trade-name may be and
then gives a right of action to protect the owner of that trade-name. If it is not a trade name defined by
statute, it does not carry with it the right of action granted by the statute. No trade-name can legally
exist except that prescribed by the Act. If it can exist, it can be enforced as, and only as, the rights in
trade-names are enforced under the statute. If it cannot exist as a trade-name, it cannot be enforced at
all, either as a trade-name, i. e., as a property right, or on the theory of unfair competition based on the
doctrine of secondary meaning. Of course, if the trade-name is not recognized in law, it can have no
secondary meaning. Moreover, the doctrine of secondary meaning as it is known in the United States,
is carried into effect on the theory of unfair competition and not on the theory of property in the trade-
name. Indeed, the necessity of basing the action on the theory of unfair competition negatives the
existence at that time of the trade-name in its primary meaning. In this jurisdiction that necessity is
emphasized by the fact that, as we have seen, the statute makes a sharp distinction between actions
for the violation of a trade-mark or trade-name and those based on unfair competition, the former being
founded in a property right and the latter on the fact that fraud has been or will be committed on the
public. Furthermore, if the action of unfair competition based on the similarity of plaintiff's and
defendant's trade-names cannot be maintained in this jurisdiction, as we have seen that it cannot, then
the fundamental basis of the doctrine of secondary meaning disappears. We might add that the statute
does not seem to have dealt with trade-names as it has with trade-marks; for, with respect to the latter,
it expressly confers, as we have seen (sec. 7), a right of action for unfair competition even though the
trade-mark, as such, is illegal and unregisterable by reason of being the name of the geographical place
of production or origin of the goods to which it is affixed, or the name, quality or description of the
merchandise on which it is placed. In other words, the statute seems to create with regard to a trade-
mark a right which is, in many aspects, the equivalent of that springing from the doctrine of secondary
meaning, and where the trade-mark, though illegal and unregisterable under the Act, has been used by
the plaintiff for such a length of time that it has ceased to be used and understood in its primary meaning,
the owner will be protected on the theory of unfair competition. The statute does not confer a right on
the owner of a tradename under similar circumstances.

The trial court was, therefore, correct in dismissing that count of the complaint based on unfair
competition. The statute, as we have already observed, does not permit these two actions to be
maintained on the same facts. We might say, however, that the ownership of a trade-name does not
necessarily prevent the owner from bringing an action of unfair competition founded on the appearance
of the goods of defendant as exposed for sale, which appearance is not based on similarity to the
owner's tradename. Such an action would have to be based on the general appearance of the package,
its form, color, style, adornment, and matters of that character; and would not lie on appearance arising
from the similarity of plaintiff's and defendant's trade-names.

The effect of these observations and conclusions would necessarily be to end the case at this point if
'we were disposed to leave the other questions presented for resolution unsettled; for, if there can attach
to a trade-name no secondary meaning, plaintiff's action must fail. It is based exclusively on the
secondary signification of the word "Isabela" which it has acquired by long association with plaintiff's
cigarettes, by virtue of which it no longer means to the trade and the public generally when used in
connection with tobacco products, a province of Luzon or the tobacco grown in that province, but simply
and solely the products of plaintiff's factory. In other words, the claim is that it has completely lost its
primary signification and come to have a secondary meaning exclusively when used in connection with
manufactured tobacco. The action being based entirely on the theory of secondary meaning, and the
statute giving no right of action in cases of that character, it is evident that the action cannot be
maintained.

In spite of the fact, however, that we might here reverse the judgment on the grounds already stated,
we prefer, in the interests of the parties, the bar and the public generally, to decide the other questions
presented, some of them being extremely important and of public interest and they having been fully
argued on the appeal. (Lichauco vs. Limjuco and Gonzalo, 19 Phil. Rep., 12.)

It is admitted all through this case, in fact it is alleged in plaintiff's complaint and is set out in all parts of
its brief filed on this appeal, that plaintiff's trade-name, as evidenced by the certificate issued under the
Spanish regime, consists solely of the words "La Flor de la Isabela." Plaintiff does not claim that the
word "Isabela" has been registered by it as a trade-name or that it has a title from any source conferring
on it the exclusive right to use that word. The certificate offered in evidence by plaintiff to show its right
to the exclusive use of the phrase "La Flor de la Isabela" grants two rights: One in a trade-mark
consisting of a rectangular shield, surmounted by a crown and divided into four equal parts, in the right
hand upper corner of which is a full rigged sailing ship at sea, in the left hand upper corner a growing
tobacco plant, in the lower right hand corner a field of sugar cane with a pool of water in the foreground,
and in the lower left hand corner a factory in operation; the other, a right in the trade-name "La Flor de
la Isabela." As we have already seen, there is no claim here based on the infringement or violation of
the trade-mark just described, nor is there contention or claim of any kind that the use of the word
"Isabela" is a violation or an infringement of the trade-name "La Flor de la Isabela." The action is not for
the violation of the trade-name "La Flor de la Isabela," but for the violation of an entirely different trade-
name, namely, "Isabela." The exclusive right to use this name, plaintiff claims arises from two causes:
First, the contraction of the phrase "La Flor de la Isabela" into the word "Isabela" by popular expression
and use; and, second, the use for more than twenty years of the word "Isabela." In view of the fact that
there is no claim of an inf ringement of the trade name "La Flor de la Isabela," these two claims are
identical; for, there could have been no contraction brought about by popular expression except after
long lapse of time. The contraction of the phrase into the word would create no rights, there being no
registration, unless it resulted from long use. Therefore, to establish a right in the word, the contraction
must be shown to have existed for a length of time equivalent to that which would be necessary to give
the word "Isabela" the dignity and legal status of a trade-name. If, therefore, it results from the evidence
in this action that the word "Isabela" has not been used by the plaintiff for a period of time sufficient to
give it the special value necessary to bring it within the law relating to trade-names (if it be admitted for
the moment that that could be done), then the plaintiff must fail, whether it base its action on contraction,
or use, or both.

There is another ground on which plaintiff would fail in his action. If it should appear in the case that the
word "Isabela" was a word which, at the time of its adoption by plaintiff and at all times since, was the
name of the geographical place of production or origin or was ordinarily and generally used as the
name, quality or description of the merchandise to which it related, plaintiff would fail, as such name
would not be capable of being registered as a trade-name (secs. 2 and 13) and could not, for that
reason, be appropriated by plaintiff as such. That being so, no action for a violation thereof could be
maintained, as none is granted by the statute in such case. (Secs. 3, 5, and 7.)

Before entering on the discussion of the facts of the case, it may be well to set down certain things that
appear to be uncontroverted:

1. There is a province in the Island of Luzon known as Isabela Province. In that province grows
tobacco of a class and quality not grown in any other province or place in the Philippine Islands.
2. That tobacco is known commercially and to the trade as Isabela tobacco and the expression
"Isabela tobacco" has in the Philippine Islands a meaning as definite, certain and clear as the
expression "Havana tobacco" or "Virginia tobacco" in the United States.
3. The defendant has used on its cigarettes the words "Alhambra Isabelas" with a statement that
the cigarettes inclosed in the package are composed exclusively of Isabela tobacco. Aside from
"Isabela" no other word or phrase or character is used on defendant's packages which it is
claimed is in violation of plaintiff's rights.
4. There is absolutely no resemblance between the packages of cigarettes manufactured and sold
by the plaintiff and those manufactured and sold by the defendant, except in the word "Isabela."
5. The phrase "La Flor de la Isabela" means in English, giving it a free translation, "The best tobacco
grown in Isabela Province," or "The finest tobacco grown in Isabela Province," or "The finest
quality of tobacco grown in Isabela Province." The phrase, in its primary sense, conveys the idea
that the products on which it is placed are composed of the best tobacco grown in the Province
of Isabela.
6. Plaintiff's cigarettes marked with the design "La Flor de la Isabela," and referred to in this case,
are not manufactured or composed, either wholly or in part, of tobacco grown in Isabela Province.
7. The cigarettes manufactured and sold by defendant as "Alhambra Isabelas" are composed
exclusively of tobacco grown in Isabela Province.
8. The word "Isabela," when used in connection with tobacco, cigars or cigarettes, signifies in its
primary sense that the tobacco itself, or that composing the cigars or cigarettes, is Isabela
tobacco.

We are of the opinion that the plaintiff must fail in this action for the reason that, in the first place, it has
not proved that the word "Isabela" has been used in the manner and form alleged in the complaint; and,
in the second place, for the reason that it is the name of the geographical place of production or origin
of the material composing the article to which it is affixed and that it is the name, quality and description
thereof. The burden is on plaintiff to prove the use of the word "Isabela" for such a length of time and
under such circumstances as to give it the right to its exclusive use. Reviewing the evidence of record,
we are of the opinion that the overwhelming weight thereof is contrary to plaintiff's contention, It shows
that in not a single instance in the history of the plaintiff corporation, so far as is disclosed by the record,
has a package of its cigarettes gone into the market, either at wholesale or retail, with the word "Isabela"
alone on the package as a separate or distinct word or name. In every instance, so far as the
documentary evidence goes, the packages have been marked by the phrase "La Flor de la Isabela."
There is not an exhibit of any probative value on the issues involved which does not tend affirmatively
to establish that the word was never used as a separate and distinct word and to negative any intention
on the part of the plaintiff to use it as such. As far back as the time when the plaintiff obtained the right
to use the trade-name "La Flor de la Isabela" the exhibits filed in its application for registration of that
trade-name demonstrate, as they naturally must, that the trade-name which plaintiff desired to secure
was "La Flor de la Isabela" and not "Isabela." These exhibits are the wrappers which inclose plaintiff's
cigarettes as they are found exposed for sale and have on them the words, designs and devices to the
exclusive use of which plaintiff claims to be entitled. Every one of them contains the phrase "La Flor de
la Isabela" and not one of them the word "Isabela." In all of them the word "Flor" is almost equally
conspicuous with the word "Isabela" and from them we can see no intent to emphasize the word
"Isabela" more than the word "Flor." So far as the record shows, plaintiff nowhere advertised or
advertises its cigarettes as "Isabela" cigarettes and we find nothing in the exhibits which shows that the
plaintiff has or ever had the slightest intention to use the word "Isabela" as a trade-name.

Much stress is laid by plaintiff on the fact that the wholesale packages of cigarettes, that is, the packages
containing a number of the small retail packages, have printed on the two edges in large letters "Isabela
Cortos," "Isabela Largos," and "Isabela Entrelargos," as the case may be. But it is to be noted that it
appears from the exhibits themselves that plaintiff's trade-name "La Flor de la Isabela," in conspicuous
letters, is also attached to both ends of each of such packages; and each of the small packages inclosed
in the larger carries the phrase "La Flor de la Isabela" and not the word "Isabela." It remains true,
therefore, as we said at the outset, that not a single package of plaintiff's cigarettes has ever gone into
the market in the Philippine Islands with the word "Isabela" alone thereon as a tradename.

Much importance is attached by plaintiff to a letter dated April 8,1914, received from one of its
employees in America. While this letter is of doubtful competency as evidence for plaintiff. it is in the
record, and inasmuch as so much stress is laid on a portion of it, and it appears to be competent
evidence as against plaintiff, we refer to it. The sentence in the letter to which reference is particularly
made is this: "Furthermore, the trade here knows the cigars as 'lsabela' pure and simple." As is seen,
this letter refers to cigars and not cigarettes; but, be that as it may, we believe that the plaintiff has quite
overlooked the real nature of the letter as evidence. In its attempt to demonstrate that its tobacco
products are known in America as "Isabela" products, it overlooked the first part of the letter which, to
us, is the most significant part of it. The writer says:

"Ehrman Bros. & Co. have asked us to have the paster 'La Flor de la Isabela,' which goes on the end
of the boxes, as per sample we inclose herewith, changed as follows: Make the strip about half as wide
again as the inclosed sample, and instead of the words 'La Flor de la Isabela,' put on just the one word
'lsabela' in large letters. Ehrman Bros. say their customers claim that the lettering on this strip is too
small for the customers to notice it readily behind the counter, whereas a large lettering of the word
'lsabela' will be much more attractive and more noticeable."

This portion of the letter demonstrates conclusively that the plaintiff has never advertised its cigars in
America as "Isabela" cigars. It has persisted always in advertising them as "La Flor de la Isabela;" and
the precise objection made by the dealers handling plaintiff's cigars in the United States is that plaintiff
insists on advertising its goods as "La Flor de la Isabela" instead of "Isabela;" and it is clear from the
letter that if, as the writer says, its cigars are known to the trade in America as "Isabela" cigars, it is not
by reason of plaintiff's efforts but in spite of them. Plaintiff itself has put forth no effort, as far as we can
see from the record, to create a right in the word "Isabela." All of its money has been spent and all its
energy used in the advertisement of the phrase "La Flor de la Isabela."

A price list of the products of the plaintiff company has been introduced in evidence, on the tenth and
eleventh pages of which appear the words "Isabela Cortos," "Isabela Largos" and "Isabela Entrelargos,"
together with the price. We do not regard this price list as indicating anything more than the fact that
the limited space (the price list is printed in very small letters) forbade the use of the phrase "La Flor de
la Isabela." But we note then, in extremely large letters, comparatively speaking. on the front page of
the price list, are found the words "La Flor de la Isabela," while on each package of cigarettes which, in
the price list, are called "Isabela Cortos," "Isabela Largos" and "Isabela Entrelargos," is found, in more
than one place, the phrase "La Flor de la Isabela." Moreover, under the word "remarks" found at the
close of the price list, are these words: "When the Spanish Government abolished the tobacco
monopoly in the Philippine Islands this company acquired the exclusive right to use the marks Cavite,
Malabon, Princesa, and Meisic which were formerly the property of the Government." Nothing is said
about the word "Isabela." No rights are claimed by that advertisement in that name.

The documentary evidence introduce by plaintiff is fully corroborated by the evidence of defendant. The
testimony of Mr. Olsen, one of the leading tobacco manufacturers of the Philippine Islands, is to the
effect that the products of plaintiff's factory are generally known in the Philippine Islands as Tabacalera
products, sometimes as "La Flor de la Isabela" products, but not as "Isabela" products. He states that
the cigarettes which plaintiff calls "Isabela Cortos" and "Isabela Largos" are generally known to the
trade as "Tabacalera Cortos" and "Tabacalera Largos." The clerk of the Court of First Instance in which
the action was tried, being called as a witness for the defendant. testified that he smoked cigarettes of
the Tabacalera and Insular factories and that he had never heard of "Isabela" cigarettes before the
defendant began the manufacture of its cigarettes; but that he had frequently heard of the factory "La
Flor de la Isabela." Mr. Blanco, the interpreter of the court, testified that he had smoked cigarettes for
forty or fifty years and that he had not heard of "Isabela" cigarettes.

While some of the witnesses for the plaintiff testified that the public knew the products of plaintiff's
factory as "Isabela" products, that testimony was in part contradicted by other witnesses for the plaintiff
and is entirely at variance with its documentary evidence.

It appearing from the record in the case that the plaintiff has always insisted on the ownership of the
trade-name "La Flor de la Isabela" and has invariably sent it into the market with its products both in
the Philippine Islands and in the United States, and that whatever effort and money plaintiff has
expended in securing a trade-name have been spent with respect to "La Flor de la Isabela" and not
"Isabela," we are driven to the conclusion that, as a matter of fact, the word "Isabela" has never been
used by the plaintiff as a trade-name in such a way as to give it any exclusive right therein. Moreover,
the persistent use of the trade-name "La Flor de la Isabela" denies the possibility of any single word in
that phrase being a trade-name. It being kept in mind that there is no contention on the part of the
plaintiff that the use of the word "Isabela" by the defendant is an infringement of the tradename "La Flor
de la Isabela," it is clear that the use of "La Flor de la Isabela" has given the plaintiff no right to the use
of the word "Isabela." Furthermore, plaintiff denies that it has abandoned the trade-name "La Flor de la
Isabela," but maintains that its rights therein are now in full force and effect. Admitting, even for the sake
of argument, that there can exist a trade-name without registration under the statute, it is well known
that the plaintiff is not entitled to the exclusive right to use such a trade-name unless it has used it for a
sufficient length of time to give it a special value. But plaintiff's effort has been directed exclusively to
the trade-name "La Flor de la Isabela," and this fact necessarily negatives any claim that the word
"Isabela," has, by plaintiff's effort, received any special value in connection with plaintiff's products.

We might say, in concluding this branch of the subject, that, even admitting that the word "Isabela" may
have been appropriable by plaintiff as a trade-name at the time it began to use it, the evidence showing
that it had been exclusively appropriated by the plaintiff would have to be very strong to establish the
fact of appropriation and the right to exclusive use. The law as it now stands and has stood since the
Royal Decree of 1888 prohibits the use of a geographical name as a trade-name. Act No. 666 prohibits
the use not only of a geographical name but also of a word which is either the name, quality, or the
description of the article to which the trade-name refers. Even if appropriation were possible, it would
require the clearest of proof to permit the appropriation of a word as a trade-name the use of which in
that connection the law expressly declines to sanction.

Furthermore, we are of the opinion that, even if plaintiff had proved a right to the exclusive use of the
word "Isabela," we would be forced to conclude that its use by the defendant in connection with the
word "Alhambra," which is made equally conspicuous with the word "Isabela," would be a sufficient
effort on the part of defendant to distinguish its cigarettes from those of plaintiff; particularly in view of
the fact that the word "Isabela" is the name of a province and also the commercial name of the tobacco
grown in that province.

We do not believe, however, that the word "Isabela" can be appropriated or could be appropriated at
the time plaintiff claimed that it began to use that word as descriptive of its products. The Royal Decree
of 1888 prohibited the use of a geographical name as a trade-name or trade-mark and that decree was
in force before the use of the word "Isabela" began, even under plaintiff's claim. At least it had not been
used for a sufficient length of time to give it a property right therein, it never having been registered as
a trade-name either under that decree or Act No. 666. From the date of that decree to the present time
it has been unlawful to select the word "Isabela" as a trade-name, and it would have been impossible
during that time for plaintiff to have obtained a right therein, no matter how much the word might have
been used or to what extent it had been advertised. While Act No. 666, as we have seen, expressly
permits the appropriation of a trade-mark, although it may be a geographical or descriptive name, it
does not permit the appropriation of a trade-name under the same circumstances. We accordingly
repeat, from the Royal Decree of 1888 to the present time, the word "Isabela" has not been appropriable
by anybody as a trade-name.

For these reasons and for the further reason that we regard the case of Baxter vs. Zuazua (5 Phil. Rep.,
160), as decisive of the main questions involved in this case, we are of the opinion that the judgment
must be reversed,

The judgment appealed from is reversed and the perpetual injunction issued thereon is dissolved.
Without costs in this instance. So ordered.

Arellano C. J., and Torres, J., concur.

Carson, and Trent, JJ., concur in the result.

Johnson, J., dissents.

Judgment reversed, injunction dissolved.

o0o

VICTORIAS MILLING COMPANY, INC., petitioner


vs.
ONG SU AND THE HONORABLE TIBURCIO S. EVALLE, IN HIS CAPACITY AS DIRECTOR OF
PATENTS, respondents

No. L-28499. September 30, 1977


Patents; Trademarks and Tradenames; Common geometrical shapes, such as diamonds, are ordinarily
not regarded as indicia of the origin of goods, unless they have acquired a secondary meaning. The
contention of petitioner that the diamond design in its trademark is an index of origin has no merit. The
petitioner has not shown that the design portion of the mark has been so used that purchasers recognize
the design, standing alone, as indicating goods coming from the registrant. As correctly stated by the
Director of Patents, common geometric shapes such as diamonds ordinarily are not regarded as indicia
of origin for goods to which the marks are applied unless they have acquired a secondary meaning.
And there is no evidence that the diamond design in the trade mark of the petitioner has acquired a
secondary meaning with respect to its sugar business. The work Victorias in what identifies the sugar
contained in the bag as the product of the petitioner. Indeed, the petitioner has advertised its sugar in
bags marked victorias with ova, hexagon and other designs.

Same; Same; There is no substantial similarity between the words Valentine and Victorias. It
seems clear that the words Valentine and Victorias and the names and places of business of
Victorias Milling Company, Inc. and Ong Su are the dominant features of the trademarks in question.
The petitioner has not established such a substantial similarity between the two trademarks in question
as to warrant the cancellation of the trademark valentine of the respondent Ong Su.

Same; Same; Unfair competition; Director of Patent has no jurisdiction over the issue of unfair
competition. The Director of Patents correctly ruled that he has no jurisdiction over the issue of unfair
competition. Under Section 27 of the Trade Mark Law, Republic Act No. 166, all actions for unfair
competition shall be brought before the proper Court of First Instance.

Same; Same; Evidence; Witnesses; Once a witness has been subjected to extensive cross-
examination, the motion to recall him as rebuttal witness may be denied. The only purpose of the
petitioner in proposing to call Ong Su as a witness on rebuttal is to ask the latter if he had judicial
authority to use the alias Mariano Ang. It appears, however, that the counsel of petitioner had already
extensively cross-examined Ong Su as to his citizenship, alien certificate of registration and the other
name Mariano Ang. It seems immaterial whether or not Ong Su has judicial authority to use Mariano
Ang as an alias. There is evidence that even before the last World War, the trademark Valentine and
design had been used under the name of either Ong Su or Mariano Ang.

Same; Same; Same; Same; Due process; When given the chance to make a formal offer of proof no
denial of due process can be complained of. Having made the foregoing formal offer of proof, the
petitioner cannot complain that it was denied procedural due process.

Same; Same; No similarity between trademark of petitioner and respondent exists; case at bar. The
words Victorias and Valentine are not similar in spelling and do not have a similar sound when
pronounced. Even the diamond designs are different. The diamond design of the trade mark Valentine
has protruding lines at the corners. Even an illiterate person can see the difference between the two
diamond designs.

Same; Same; There is no evidence that respondent obtained registration of Valentine trademark for
sugar by means of fraud be registered it ahead of petitioner. There is no evidence that the respondent
Ong Su had obtained the registration of his trademark Valentine and design by means of fraud. The
said trade mark was registered in the Philippines Patent Office before the petitioner registered its
trademark.

Same; Same; Evidence; Licenses and permits indicating two names may be admitted in evidence where
one and the same person was shown to be using them. The record and evidence show that Ong Su
had also used his business the name Mariano Ang. Hence the licenses and permits in the name of Ong
Su and/or Mariano Ang were correctly admitted as evidence.

PETITION for review of the decision of the Director of Patents.

The facts are stated in the opinion of the Court.

Gonzalo W. Gonzalez, Agpalo & Associates for petitioner.


Salonga, Ordoez, Yap & Associates and Armando G. Gungon for respondents.

FERNANDEZ, J.:

This is a petition to review the decision of the Director of Patents in Inter Partes Case No. 304 entitled
Victorias Milling Company, Inc., petitioner, versus, Ong Su dated August 15, 1967 denying the petition
to cancel the certificate of registration issued by the Philippines Patent Office on June 20, 1961 in favor
of Ong Su covering the trademark VALENTINE and design and used on refined sugar.

The petitioner, Victorias Milling Company, Inc., a domestic corporation and engaged in the manufacture
and sale of refined granulated sugar, is the owner of the trademark VICTORIAS and diamond design
registered in the Philippines Patent Office on November 9, 1961.

The respondent Ong Su is engaged in the repacking and sale of refined sugar and is the owner of the
trademark VALENTINE and design registered in the Philippines Patent Office on June 20, 1961.

On October 4, 1963, Victorias Milling Company, Inc. filed with the Philippines Patent Office a petition to
cancel the registration of the Ong Su trademark Valentine.

The petitioner alleged that its trademark Victorias and diamond design has become distinctive of its
sugar long before the respondent used its trademark; that the registration of Valentine and design has
caused and will cause great damage to petitioner by reason of mistake, confusion, or deception among
the purchasers because it is similar to its Victorias trademark; that registration was fradulently obtained
by respondent Ong Su; and that Valentine falsely suggests a connection with Saint Valentine or with
an institution or belief connected therewith.

In his answer to the petition the respondent averred that he is doing business under the name and style
Valentine Packaging and has registered the trademark Valentine with a design for sugar and was
issued Certificate of Registration No. 8891 dated June 20, 1961; that the trademark Victorias with
diamond design and the trademark Valentine with a design are two different marks; and that there is
absolutely no likelihood of confusion, mistake or deception to purchasers through the concurrent use of
the petitioners mark Victorias with a diamond design and the respondents mark Valentine with a
design in connection with sugar.

The petitioners only witness, Pacifico V. Vijandre, its vice-president and stockholder, testified that
Victorias Milling Company, Inc. has used since 1947 the trademark Victorias and diamond design with
colors of red and black on sacks of sugar having variable weight and size of 5 lbs., 10 lbs., 25 lbs., 50
lbs., and 100 lbs.; that the company had transactions on or sales of sugar with local dealers such as
Kim Kee, Chu Yu & Co., Limouan & Co., Luzon Merchandising Corp. and ARCA; that the average sale
from 1958 to 1962 was P30,000,000 and for the whole year of 1962 the sale was P46,000,000; that he
came to know that the trademark Valentine appeared in the market in 1962 through the report of his
companys field agents; and that except for the words Valentine and Victorias, the design and
wordings of the bags are practically the same.

The respondent, Ong Su, declared that he adopted and began using his trademark Valentine and
design before and continuously after World War II in the Philippines, particularly on paper bags used
as containers for starch, coffee and sugar; and that since January 1955 he continued using said
trademark on repacked sugar.

Arturo Chicano, a witness for the respondent, testified that he was a distribution agent of Ong Su; that
he travelled a lot but he never came across an instance when the respondent Ong Sus product was
mistaken for the petitioners product; that he found the diamond design to be quite common in
combination with other words used as trademarks as a background or to enhance their appearance,
such as DIAMOND and design (Exhibit 54-A), EAGLE and design (Exhibit 53), and SUNRISE
and design (Exhibit 55), not belonging to the petitioner, which are also used on repacked sugar by
various sugar dealers; and that said designs and the color of the lines on which drawn had not been
regarded as trademarks but mere ornamentation. The Director of Patents denied the petition to cancel
the certificate of registration of the respondent Ong Su covering the trademark Valentine and design
because:
From the facts of record, I find nothing to sustain the petition.

There is no question that as to their respective literal designation the trademarks are different. One is
VALENTINE while the other is VICTORIAS. Thus, as to sound and connotation there is no dispute as
to their dissimilarity.

However, from the evidence and pleadings, it appears that petitioner is relying heavily on its diamond
design, the color scheme, and the printing sequence or arrangement of such legends as weight,
contents and manufacturer or packer.

I am of the firm belief that the diamond portion of petitioners trademark has not bolstered its cause.
Common geometric shapes such as circles, ovals, squares, triangles, diamonds, and the like, when
used as vehicles for display of word marks, ordinarily are not regarded as indicia of origin for goods to
which the marks are applied, unless of course they have acquired secondary meaning. I have scoured
the records completely to ascertain if the petitioner has submitted satisfactory evidence in this regard,
but I find absolutely nothing to base a ruling that the triangle (sic) design has acquired a secondary
meaning with respect to its sugar business.

It is the common practice for trademark owners to register designs forming outline of their distinguishing
mark, but when the registrant of such design relies upon registration in proceeding based upon
likelihood of confusion of purchasers, he assumes the burden of showing that the design portion of the
mark has been so used that purchasers recognize the design, standing alone, as indicating goods
emanating from the registrant.Bausch & Lomb Optical Co., v. Overseas Finance & Trading Co., Inc.
(ComrPats) 112 USPQ 6.

Considering herein that the petitioner failed to establish that diamond design component of its mark has
acquired a secondary meaning and that the literal portion of the marks have no similarity, there is no
reasonable likelihood of purchaser confusion resulting from registrants use of VALENTINE within a
diamond and petitioners use of VICTORIAS within a diamond.

As regards the colors black and red used, it is fundamental in trademark jurisprudence that color alone,
unless displayed in a distinct or arbitrary design, does not function as a trademark, inasmuch as here,
or elsewhere, the colors black and red are not so displayed by the petitioner, and are primary colors
commonly and freely used in the printing business.

Finally, as regards the printing sequences or arrangement of such legends as weight, contents, and
manufacturer or packer, I regard it as merely a matter pertaining to the dress of the goodsa matter
involving unfair competition over which the Patent Office has no jurisdiction. (See: Menzi & Co., Inc. vs.
Andres Co, Dec. No. 59 dated Oct. 31, 1952, Dir. of Patents.) And in the case of A. E. Staley
Manufacturing Co., Inc. vs. Andres Co, v. Tan Tong, citing; Gillette Safety Razor Co. v. Triangle
Mechanical Laboratories, 31 USPQ 24; Aladdin Mfg. Co. v. Mantle Lamp Co., 21 USPQ 58; and J. C.
Eno (U.S.) Limited v. Deshayas, 29 USPQ 179), it was held that the tribunals of the Philippines Patent
Office have no jurisdiction over questions of unfair competition. At most, the petitioners recourse is for
it to seek relief in civil courts.

The allegations that the registration of VALENTINE was obtained fraudulently; that it falsely suggests a
connection with St. Valentine; and that it is merely descriptive or deceptively misdescriptive of sugar
have no basis in law and fact.

The petitioner submits that the Director of Patents committed the following errors:

I
THE RESPONDENT DIRECTOR OF PATENTS ERRED IN HOLDING THAT PETITIONERS
REGISTERED DIAMOND DESIGN IS NOT AN INDEX OF ORIGIN.

II
THE RESPONDENT DIRECTOR OF PATENTS ERRED IN HOLDING THAT PETITIONER IS
REQUIRED TO ESTABLISH THAT ITS DIAMOND DESIGN HAS ACQUIRED A SECONDARY
MEANING.
III
THE RESPONDENT DIRECTOR OF PATENTS ERRED IN HOLDING PETITIONERS DIAMOND
DESIGN HAS NOT ACQUIRED A SECONDARY MEANING.

IV
THE RESPONDENT DIRECTOR OF PATENTS ERRED IN HOLDING THAT THE DETAILS OF
PETITIONERS DESIGN THAT HAVE BEEN IMITATED BY RESPONDENT ONG SU MERELY
PERTAIN TO THE DRESS OF THE GOODS.

V
THE RESPONDENT DIRECTOR OF PATENTS ERRED IN CONFINING HIS COMPARISON OF
PETITIONERS AND RESPONDENTS RESPECTIVE TRADEMARKS TO ONE SOLE ITEM OF
THEIR DESIGN, IGNORING THE COMPLETE LABELS AS ACTUALLY USED IN TRADE AND SEEN
BY CONSUMERS.

VI
THE RESPONDENT DIRECTOR OF PATENTS ERRED IN TAKING THE POSITION THAT IN CASES
OF TRADEMARK CANCELLATION INVOLVING, AMONG OTHERS, OBVIOUS ACTS OF UNFAIR
COMPETITION, HE NEED NOT TAKE ANY ACTION WHATSOEVER, SINCE HE SUPPOSEDLY HAS
NO JURISDICTION IN THE PREMISES.

VII
THE RESPONDENT DIRECTOR OF PATENTS ERRED IN HOLDING THAT PETITIONERS
REGISTERED COLOR DESIGN DOES NOT FUNCTION AS A TRADEMARK.

VIII
THE RESPONDENT DIRECTOR OF PATENTS ERRED IN HOLDING THAT BECAUSE THE LITERAL
PORTIONS OF THE RESPECTIVE TRADEMARKS IN QUESTION, NAMELY, THE RESPECTIVE
NAMES VICTORIAS AND VALENTINE, HAVE NO SIMILARITY, THERE IS NO REASONABLE
LIKELIHOOD OF PURCHASER CONFUSION.

IX
THE RESPONDENT DIRECTOR OF PATENTS ERRED IN ASSUMING THAT PETITIONER, OR THE
OWNER OF ANY IMITATED OR INFRINGED TRADEMARK FOR THAT MATTER, MUST ESTABLISH
ACTUAL PURCHASER CONFUSION.

X
THE RESPONDENT DIRECTOR OF PATENTS ERRED IN PREVENTING THE TESTIMONIES OF
RESPONDENT ONG SU AND WITNESS ERNESTO DURAN AS REBUTTAL WITNESSES FOR
PETITIONER, SAID RULINGS OF RESPONDENT DIRECTOR CONSTITUTING REVERSIBLE
ERROR AND THE DENIAL OF PROCEDURAL DUE PROCESS.

XI
THE RESPONDENT DIRECTOR OF PATENTS ERRED IN HOLDING THAT THE REGISTRATION
OF THE VALENTINE TRADEMARK BY RESPONDENT ONG SU WAS NOT FRAUDULENTLY
OBTAINED.

XII
THE RESPONDENT DIRECTOR OF PATENTS, ACTING THROUGH HEARING OFFICER AMANDO
MARQUEZ, ERRED IN ADMITTING RESPONDENT ONG SUS EXHIBITS PERTAINING TO ONE
MARIANO ANG, SAID NAME NOT HAVING BEEN CLEARLY ESTABLISHED AS AN ALIAS,
ALTHOUGH ADMITTEDLY UNAUTHORIZED, OF RESPONDENT ONG SU.

The contention of petitioner that the diamond design in its trademark is an index of origin has no merit.
The petitioner has not shown that the design portion of the mark has been so used that purchasers
recognize the design, standing alone, as indicating goods coming from the registrant. As correctly stated
by the Director of Patents, common geometric shapes such as diamonds ordinarily are not regarded as
indicia of origin for goods to which the marks are applied unless they have acquired a secondary
meaning. And there is no evidence that the diamond design in the trademark of the petitioner has
acquired a secondary meaning with respect to its sugar business. The word Victorias is what identifies
the sugar contained in the bag as the product of the petitioner. Indeed, the petitioner has advertised its
sugar in bags marked Victorias with oval, hexagon and other designs.

The evidence is that Ong Su has been using his trademark since prior to the last World War and he
obtained the registration thereof on June 20, 1961. Vijandre declared that the petitioner started to use
its trademark only in 1947. Said trademark was registered on November 9, 1961. It cannot be said,
therefore, that the respondent Ong Su imitated the trademark of the petitioner.

The petitioner avers that purchasers of sugar are likely to confuse petitioners Victorias trademark and
respondent Ong Sus Valentine trademark because of the following similarities:

1. Both trademarks have the same diamond design with the slight modification that the lines of
the VALENTINE diamond design are a little protruding at the ends.

2. The lines forming the diamond design in both trademarks consist of two lines, namely, the outer
portion and the inner portion.

3. The outer portion of the diamond design of both trademarks has the color black as shown in
the specimens (Exhibits A and B). The inner line of the diamond design in both trademarks
has the color red.

4. In both trade marks, the word PURE in black print appears inside of the upper portion of the
diamond design.

5. In both trade marks, the word VICTORIAS and the word VALENTINE placed within the
diamond design are conspicuously colored red.

6. The letter V in Victorias and the letter V in Valentine are identically placed.

7. The word VICTORIAS and the word VALENTINE are identically arranged, the same
containing the same number of letters.

8. Immediately below the words VICTORIAS and VALENTINE appears the words REFINED
SUGAR.

9. Underneath the diamond design in both trademarks are the words FINE GRANULATED and
below said phrase are the words CANE SUGAR with a small diamond design.

10. Both trade marks are used on refines sugar.

11. The words PURE, VALENTINE, VICTORIAS, FINE GRANULATED and CANE SUGAR in
both trade marks are similarly arranged and printed.

The respondent Ong Su, maintains that the alleged similarities are minor for the following reason:

Appellant attempts to show the possibility or likelihood of purchaser confusion by pointing out alleged
similarities in the packages in question, e.g. Pure Refined Sugar appearing in both marks in question.
It should be noted, however, that these words are merely descriptive commonly applied to the goods,
namely, sugar, and cannot be exclusively appropriated by the petitioner. The other alleged similarities
pointed to by appellantthat the lines forming the diamond design in both trade-marks consist of two
lines, the outer portion and the inner portion; that the diamond design in both trademarks has the color
black and the inner line of both designs has the red color; that the diamond design as used by the
petitioner and by respondent are of the same size; that the letter V in Victorias and the letter V in
Valentine are the same size; and that the letter V in VICTORIAS and the letter V in the Valentine
package are identically placed in the diamond; and that the word Victorias and the word VALENTINE
are identically arranged within the diamondare, we submit with respect, minor and insignificant for
the purpose of this petition even if the observations of appellant are correct.
It seems clear that the words Valentine and Victorias and the names and places of business of
Victorias Milling Company, Inc. and Ong Su are the dominant features of the trademarks in question.
The petitioner has not established such a substantial similarity between the two trademarks in question
as to warrant the cancellation of the trademark Valentine of the respondent Ong Su.

The Director of Patents correctly ruled that he has no jurisdiction over the issue of unfair competition.
Under Section 27 of the Trade Mark Law, Republic Act No. 166, all actions for unfair competition shall
be brought before the proper Court of First Instance.

The refusal of the Director of Patents to allow respondent Ong Su and witness Ernesto Duran to testify
on rebuttal is not a reversible error.

The only purpose of the petitioner in proposing to call Ong Su as a witness on rebuttal is to ask the
latter if he had judicial authority to use the alias Mariano Ang. It appears, however, that the counsel of
petitioner had already extensively cross-examined Ong Su as to his citizenship, alien certificate of
registration and the other name Mariano Ang. It seems immaterial whether or not Ong Su has judicial
authority to use Mariano Ang as an alias. There is evidence that even before the last World War, the
trademark Valentine and design had been used under the name of either Ong Su or Mariano Ang.

The petitioner sought to present Ernesto T. Duran as rebuttal witness to prove that there was a
confusion among consumers or buyers of sugar caused by the alleged similarity of the Victorias and
Valentine trademarks. The presentation of Ernesto T. Duran as rebuttal witness was objected to by
counsel of the respondent on the ground that the evidence sought to be elicited from Duran did not
directly contradict the testimony of witness Chicano. The objection was sustained by the hearing officer
whose ruling was subsequently confirmed by the Director of Patents. Counsel for the petitioner made
the following formal offer of proof:

ATTY. GONZALEZ:

Your Honor please, in view of the ruling of the Honorable Director your Honor please on the admissibility
of certain items of evidence, which resolution dated February 21, 1966 was received by undersigned
counsel for the petitioner on February 22, 1966, said resolution was setting the hearing of this case for
this morning, I wish to state, I wish to register my exception, my respectful exception to said resolution.
In view of the resolution not permitting me to present Mr. Ernesto Duran, my proposed witness whom I
attempted to present at the last hearing, I wish to offer as proof the following items of the testimony of
witness Duran. Now as he would go shopping with his parents and that sometime in the month of
February 1963 he went to the Aranque market, and while he was buying groceries he saw a shelf with
five (5) lbs. bag of sugar with the bag and package he thought was VICTORIAS. Witness Duran will
further testify that he went to the shelf and pointed to the bag of sugar and he said Isang supot ng
Victorias nga. That the sugar was taken by the shopkeeper and when he went home he found out that
the sugar was marked VALENTINE. He went on again on another time later and saw that the shelf was
still filled with five (5) pounds (lbs.) bag VALENTINE sugar. The shelf also has bags of VICTORIAS
sugar side by side with VALENTINE sugar, that the package of VALENTINE looked so much alike with
VICTORIAS sugar that he was misled into pointing to VALENTINE and asked for VICTORIAS.

HEARING OFFICER:

What is that, is that supposed to be the testimony of witness Duran?

ATTY. GONZALEZ:

Yes, your Honor, I am offering as proof of what the witness Duran would have testified. Since this office
has ruled that I cannot present him an offer of proof is being made for purposes of putting on record
what he would have testified to on record in accordance with the Rules of Evidence.

Having made the foregoing formal offer of proof, the petitioner cannot complain that it was denied
procedural due process.
The proposed testimony of Ernesto T. Duran that in February 1963 he went to Arangue market and
bought one bag of sugar which he thought was Victorias and when he went home he found out that
the sugar was marked Valentine is not sufficient evidence that the two trademarks are so similar that
buyers of sugar are confused. The words Victorias and Valentine are not similar in spelling and do
not have a similar sound when pronounced. Even the diamond designs are different. The diamond
design of the trademark Valentine has protruding lines at the corners. Even an illiterate person can
see the difference between the two diamond designs.

There is no evidence that the respondent Ong Su had obtained the registration of his trademark
Valentine and design by means of fraud. The said trademark was registered in the Philippines Patent
Office before the petitioner registered its trademark.

The record and evidence show that Ong Su had also used in his business the name Mariano Ang.
Hence the licenses and permits in the name of Ong Su and/or Mariano Ang were correctly admitted as
evidence.
WHEREFORE, the decision of the Director of Patents sought to be reviewed is hereby affirmed, without
pronouncement as to costs.

SO ORDERED.

Teehankee (Chairman), Makasiar, Muoz Palma, Martin and Guerrero, JJ., concur.

Decision affirmed.

Notes. There is infringement of trademark when the use of the mark involved would be likely to
cause confusion or mistake in the mind of the public or to deceive purchasers as to the origin or source
of the commodity. (Philippine Nut Industry, Inc. vs. Standard Brands, Inc., 65 SCRA 575).
The abandonment of the use of a trademark to be effective must be permanent, intentional and
voluntary. The non-use of a trademark on an article of merchandise due to legal restrictions or
circumstances beyond ones control is not an abandonment in the legal sense. (Ibid.)

The Director of Patents is authorized to designate any ranking official of the Patent Office to hear inter
panes proceeding in the registration of trademarks and trade names under Republic Act No. 166.
(American Tobacco Co. vs. Director of Patents, 67 SCRA 287)

A practical approach to the problem of similarity or dissimilarity of trademarks is to go into the whole of
the two trademarks pictured in their manner of display. Inspection should be undertaken from the
viewpoint of a prospective buyer. The trademark complained of should be compared and contrasted
with the purchasers memory (not in juxtaposition) of the trademark said to be infringed. Some such
factors as sound, appearance, form, style, shape, size or format; color, ideas connoted my marks, the
meaning, spelling and pronunciation of words used and the setting in which the words appear may be
considered. For, in the last analysis, trademark infringement is a form of unfair competition. (Etepha vs.
Director of Patents, L-20905, April 30, 1966; Clarke vs. Manila Candy Co., 36 Phil. 100; Co Tiong Sa
vs. Director of Patents, 95 Phil. 1; 87 C.J.S. 288-291).

o0o

LYCEUM OF THE PHILIPPINES, INC., petitioner


vs.
COURT OF APPEALS, LYCEUM OF APARRI, LYCEUM OF CABAGAN, LYCEUM OF
CAMALANIUGAN, INC., LYCEUM OF LALLO, INC., LYCEUM OF TUAO, INC., BUHI LYCEUM,
CENTRAL LYCEUM OF CATANDUANES, LYCEUM OF SOUTHERN PHILIPPINES, LYCEUM OF
EASTERN MINDANAO, INC. and WESTERN PANGASINAN LYCEUM, INC., respondents

G.R. No. 101897. March 5, 1993

Corporation Law; Names; Fact that other schools use "Lyceum" as part of their school's name is not a
deceptive use thereof relative to Lyceum of the Philippines.We do not consider that the corporate
names of private respondent institutions are "identical with, or deceptively or confusingly similar" to that
of the petitioner institution. True enough, the corporate names of private respondent entities all carry
the word "Lyceum" but confusion and deception are effectively precluded by the appending of
geographic names to the word "Lyceum." Thus, we do not believe that the "Lyceum of Aparri" can be
mistaken by the general public for the Lyceum of the Philippines, or that the "Lyceum of Camalaniugan"
would be confused with the Lyceum of the Philippines.

Same; Same; Words and Phrases; "Lyceum" is a generic name.Etymologically, the word "Lyceum"
is the Latin word for the Greek lykeion which in turn referred to a locality on the river Ilissius in ancient
Athens "comprising an enclosure dedicated to Apollo and adorned with fountains and buildings erected
by Pisistratus, Pericles and Lycurgus frequented by the youth for exercise and by the philosopher
Aristotle and his followers for teaching." In time, the word "Lyceum" became associated with schools
and other institutions providing public lectures and concerts and public discussions. Thus today, the
word "Lyceum" generally refers to a school or an institution of learning. While the Latin word "lyceum"
has been incorporated into the English language, the word is also found in Spanish (liceo) and in French
(lycee). As the Court of Appeals noted in its Decision, Roman Catholic schools frequently use the term;
e.g., "Liceo de Manila," "Liceo de Baleno" (in Baleno Masbate), "Liceo de Masbate," "Liceo de Albay."
"Lyceum" is in fact as generic in character as the word "university." In the name of the petitioner,
"Lyceum" appears to be a substitute for "university;" in other places, however, "Lyceum," or "Liceo" or
"Lycee" frequently denotes a secondary school or a college. It may be (though this is a question of fact
which we need not resolve) that the use of the word "Lyceum" may not yet be as widespread as the
use of "university," but it is clear that a not inconsiderable number of educational institutions have
adopted "Lyceum" or "Liceo" as part of their corporate names. Since "Lyceum" or "Liceo" denotes a
school or institution of learning, it is not unnatural to use this word to designate an entity which is
organized and operating as an educational institution.

Same; Same; Same; Trademarks; "Secondary meaning," defined.In Philippine Nut Industry, Inc. v.
Standard Brands, Inc., the doctrine of secondary meaning was elaborated in the following terms: "x x x
a word or phrase originally incapable of exclusive appropriation with reference to an article on the
market, because geographically or otherwise descriptive, might nevertheless have been used so long
and so exclusively by one producer with reference to his article that, in that trade and to that branch of
the purchasing public, the word or phrase has come to mean that the article was his product."

Same; Same; Same; Same; Lyceum of the Philippines has not gained exclusive use of "Lyceum" by
long passage of time.We agree with the Court of Appeals. The number alone of the private
respondents in the case at bar suggests strongly that petitioner's use of the word "Lyceum" has not
been attended with the exclusivity essential for applicability of the doctrine of secondary meaning. It
may be noted also that at least one of the private respondents, i.e., the Western Pangasinan Lyceum,
Inc., used the term "Lyceum" seventeen (17) years before the petitioner registered its own corporate
name with the SEC and began using the word "Lyceum." It follows that if any institution had acquired
an exclusive right to the word "Lyceum," that institution would have been the Western Pangasinan
Lyceum, Inc. rather than the petitioner institution.

PETITION for review of the decision of the Court of Appeals.

The facts are stated in the opinion of the Court.

Quisumbing, Torres & Evangelista Law Offices and

Ambrosio Padilla for petitioner.

Antonio M. Nuyles and Purungan, Chato, Chato, Tarriela & Tan Law Offices for respondents.

Froilan Siobal for Western Pangasinan Lyceum.

FELICIANO, J,:

Petitioner is an educational institution duly registered with the Securities and Exchange Commission
("SEC"). When it first registered with the SEC on 21 September 1950, it used the corporate name
Lyceum of the Philippines, Inc. and has used that name ever since.
On 24 February 1984, petitioner instituted proceedings before the SEC to compel the private
respondents, which are also educational institutions, to delete the word "Lyceum" from their corporate
names and permanently to enjoin them from using "Lyceum" as part of their respective names.

Some of the private respondents actively participated in the proceedings before the SEC. These are
the following, the dates of their original SEC registration being set out below opposite their respective
names:

Western Pangasinan Lyceum27 October 1950


Lyceum of Cabagan31 October 1962
Lyceum of Lallo, Inc.26 March 1972
Lyceum of Aparri28 March 1972
Lyceum of Tuao, Inc.28 March 1972
Lyceum of Camalaniugan28 March 1972

The following private respondents were declared in default for failure to file an answer despite service
of summons:

Buhi Lyceum;
Central Lyceum of Catanduanes;
Lyceum of Eastern Mindanao, Inc.; and
Lyceum of Southern Philippines

Petitioner's original complaint before the SEC had included three (3) other entities:

1. The Lyceum of Malacanay;


2. The Lyceum of Marbel; and
3. The Lyceum of Araullo.

The complaint was later withdrawn insofar as concerned the Lyceum of Malacanay and the Lyceum of
Marbel, for failure to serve summons upon these two (2) entities. The case against the Lyceum of
Araullo was dismissed when that school motu proprio change its corporate name to "Pamantasan ng
Araullo."

The background of the case at bar needs some recounting. Petitioner had sometime before commenced
in the SEC a proceeding (SEC-Case No. 1241) against the Lyceum of Baguio, Inc. to require it to
change its corporate name and to adopt another name not "similar [to] or identical" with that of petitioner.
In an Order dated 20 April 1977, Associate Commissioner Julio Sulit held that the corporate name of
petitioner and that of the Lyceum of Baguio, Inc. were substantially identical because of the presence
of a "dominant" word, i.e., "Lyceum," the name of the geographical location of the campus being the
only word which distinguished one from the other corporate name. The SEC also noted that petitioner
had registered as a corporation ahead of the Lyceum of Baguio, Inc. in point of time, and ordered the
latter to change its name to another name "not similar or identical [with]" the names of previously
registered entities.

The Lyceum of Baguio, Inc. assailed the Order of the SEC before the Supreme Court in a case docketed
as G.R. No. L46595. In a Minute Resolution dated 14 September 1977, the Court denied the Petition
for Review for lack of merit. Entry of judgment in that case was made on 21 October 1977.

Armed with the Resolution of this Court in G.R. No. L46595, petitioner then wrote all the educational
institutions it could find using the word "Lyceum" as part of their corporate name, and advised them to
discontinue such use of "Lyceum." When, with the passage of time, it became clear that this recourse
had failed, petitioner instituted before the SEC SECCase No 2579 to enforce what petitioner claims as
its proprietary right to the word "Lyceum." The SEC hearing officer rendered a decision sustaining
petitioner's claim to an exclusive right to use the word "Lyceum." The hearing officer relied upon the
SEC ruling in the Lyceum of Baguio, Inc. case (SECCase No. 1241) and held that the word "Lyceum"
was capable of appropriation and that petitioner had acquired an enforceable exclusive right to the use
of that word.
On appeal, however, by private respondents to the SEC En Banc, the decision of the hearing officer
was reversed and set aside. The SEC En Banc did not consider the word "Lyceum" to have become so
identified with petitioner as to render use thereof by other institutions as productive of confusion about
the identity of the schools concerned in the mind of the general public. Unlike its hearing officer, the
SEC En Banc held that the attaching of geographical names to the word "Lyceum" served sufficiently
to distinguish the schools from one another, especially in view of the fact that the campuses of petitioner
and those of the private respondents were physically quite remote from each other.

Petitioner then went on appeal to the Court of Appeals. In its Decision dated 28 June 1991, however,
the Court of Appeals affirmed the questioned Orders of the SEC En Banc. Petitioner filed a motion for
reconsideration, without success.

Before this Court, petitioner asserts that the Court of Appeals committed the following errors:

1. The Court of Appeals erred in holding that the Resolution of the Supreme Court in G.R. No. L-
46595 did not constitute stare decisis as to apply to this case and in not holding that said
Resolution bound subsequent determinations on the right to exclusive use of the word Lyceum.

2. The Court of Appeals erred in holding that respondent Western Pangasinan Lyceum, Inc. was
incorporated earlier than petitioner.

3. The Court of Appeals erred in holding that the word Lyceum has not acquired a secondary
meaning in favor of petitioner.

4. The Court of Appeals erred in holding that Lyceum as a generic word cannot be appropriated
by the petitioner to the exclusion of others.

We will consider all the foregoing ascribed errors, though not necessarily seriatim. We begin by noting
that the Resolution of the Court in G.R. No. L-46595 does not, of course, constitute res adjudicata in
respect of the case at bar, since there is no identity of parties. Neither is stare decisis pertinent, if only
because the SEC En Banc itself has re-examined Associate Commissioner Sulit's ruling in the Lyceum
of Baguio case. The Minute Resolution of the Court in G.R. No. L-46595 was not a reasoned adoption
of the Sulit ruling.

The Articles of Incorporation of a corporation must, among other things, set out the name of the
corporation. Section 18 of the Corporation Code establishes a restrictive rule insofar as corporate
names are concerned:

"Section 18. Corporate name.No corporate name may be allowed by the Securities and Exchange
Commission if the proposed name is identical or deceptively or confusingly similar to that of any existing
corporation or to any other name already protected by law or is patently deceptive, confusing or contrary
to existing laws. When a change in the corporate name is approved, the Commission shall issue an
amended certificate of incorporation under the amended name." (Italics supplied)

The policy underlying the prohibition in Section 18 against the registration of a corporate name which
is "identical or deceptively or confusingly similar" to that of any existing corporation or which is "patently
deceptive" or "patently confusing" or "contrary to existing laws," is the avoidance of fraud upon the
public which would have occasion to deal with the entity concerned, the evasion of legal obligations and
duties, and the reduction of difficulties of administration and supervision over corporations.

We do not consider that the corporate names of private respondent institutions are "identical with, or
deceptively or confusingly similar" to that of the petitioner institution. True enough, the corporate names
of private respondent entities all carry the word "Lyceum" but confusion and deception are effectively
precluded by the appending of geographic names to the word "Lyceum." Thus, we do not believe that
the "Lyceum of Aparri" can be mistaken by the general public for the Lyceum of the Philippines, or that
the "Lyceum of Camalaniugan" would be confused with the Lyceum of the Philippines.

Etymologically, the word "Lyceum" is the Latin word for the Greek lykeion which in turn referred to a
locality on the river Ilissius in ancient Athens "comprising an enclosure dedicated to Apollo and adorned
with fountains and buildings erected by Pisistratus, Pericles and Lycurgus frequented by the youth for
exercise and by the philosopher Aristotle and his followers for teaching." In time, the word "Lyceum"
became associated with schools and other institutions providing public lectures and concerts and public
discussions. Thus today, the word "Lyceum" generally refers to a school or an institution of learning.
While the Latin word "lyceum" has been incorporated into the English language, the word is also found
in Spanish (liceo) and in French (lycee). As the Court of Appeals noted in its Decision, Roman Catholic
schools frequently use the term; e.g., "Liceo de Manila," "Liceo de Baleno" (in Baleno, Masbate), "Liceo
de Masbate," "Liceo de Albay." "Lyceum" is in fact as generic in character as the word "university." In
the name of the petitioner, "Lyceum" appears to be a substitute for "university;" in other places, however,
"Lyceum," or "Liceo" or "Lycee" frequently denotes a secondary school or a college. It may be (though
this is a question of fact which we need not resolve) that the use of the word "Lyceum" may not yet be
as widespread as the use of "university," but it is clear that a not inconsiderable number of educational
institutions have adopted "Lyceum" or "Liceo" as part of their corporate names. Since "Lyceum" or
"Liceo" denotes a school or institution of learning, it is not unnatural to use this word to designate an
entity which is organized and operating as an educational institution.

It is claimed, however, by petitioner that the word "Lyceum" has acquired a secondary meaning in
relation to petitioner with the result that that word, although originally a generic, has become
appropriable by petitioner to the exclusion of other institutions like private respondents herein.

The doctrine of secondary meaning originated in the field of trademark law. Its application has, however,
been extended to corporate names since the right to use a corporate name to the exclusion of others
is based upon the same principle which underlies the right to use a particular trademark or tradename.
In Philippine Nut Industry, Inc. v. Standard Brands, Inc., the doctrine of secondary meaning was
elaborated in the following terms:

"x x x a word or phrase originally incapable of exclusive appropriation with reference to an article on the
market, because geographically or otherwise descriptive, might nevertheless have been used so long
and so exclusively by one producer with reference to his article that, in that trade and to that branch of
the purchasing public, the word or phrase has come to mean that the article was his product."

The question which arises, therefore, is whether or not the use by petitioner of "Lyceum" in its corporate
name has been for such length of time and with such exclusivity as to have become associated or
identified with the petitioner institution in the mind of the general public (or at least that portion of the
general public which has to do with schools). The Court of Appeals recognized this issue and answered
it in the negative:

"Under the doctrine of secondary meaning, a word or phrase originally incapable of exclusive
appropriation with reference to an article in the market, because geographical or otherwise descriptive
might nevertheless have been used so long and so exclusively by one producer with reference to this
article that, in that trade and to that group of the purchasing public, the word or phrase has come to
mean that the article was his produce (Ana Ang vs. Toribio Teodoro, 74 Phil. 56). This circumstance
has been referred to as the distinctiveness into which the name or phrase has evolved through the
substantial and exclusive use of the same for a considerable period of time. Consequently, the same
doctrine or principle cannot be made to apply where the evidence did not prove that the business (of
the plaintiff) has continued for so long a time that it has become of consequence and acquired a good
will of considerable value such that its articles and produce have acquired a well-known reputation, and
confusion will result by the use of the disputed name (by the defendant) (Ang Si Heng vs. Wellington
Department Store, Inc., 92 Phil. 448).

With the foregoing as a yardstick, [we] believe the appellant failed to satisfy the aforementioned
requisites. No evidence was ever presented in the hearing before the Commission which sufficiently
proved that the word 'Lyceum' has indeed acquired secondary meaning in favor of the appellant. If there
was any of this kind, the same tend to prove only that the appellant had been using the disputed word
for a long period of time. Nevertheless, its (appellant) exclusive use of the word (Lyceum) was never
established or proven as in fact the evidence tends to convey that the cross-claimant was already using
the word 'Lyceum' seventeen (17) years prior to the date the appellant started using the same word in
its corporate name. Furthermore, educational institutions of the Roman Catholic Church had been using
the same or similar word like 'Liceo de Manila,' 'Liceo de Baleno' (in Baleno, Masbate), 'Liceo de
Masbate,' 'Liceo de Albay' long before appellant started using the word 'Lyceum'. The appellant also
failed to prove that the word 'Lyceum' has become so identified with its educational institution that
confusion will surely arise in the minds of the public if the same word were to be used by other
educational institutions.

In other words, while the appellant may have proved that it had been using the word 'Lyceum' for a long
period of time, this fact alone did not amount to mean that the said word had acquired secondary
meaning in its favor because the appellant failed to prove that it had been using the same word all by
itself to the exclusion of others. More so, there was no evidence presented to prove that confusion will
surely arise if the same word were to be used by other educational institutions. Consequently, the
allegations of the appellant in its first two assigned errors must necessarily fail." (Italics partly in the
original and partly supplied)

We agree with the Court of Appeals. The number alone of the private respondents in the case at bar
suggests strongly that petitioner's use of the word "Lyceum" has not been attended with the exclusivity
essential for applicability of the doctrine of secondary meaning. It may be noted also that at least one
of the private respondents, i.e., the Western Pangasinan Lyceum, Inc., used the term "Lyceum"
seventeen (17) years before the petitioner registered its own corporate name with the SEC and began
using the word "Lyceum." It follows that if any institution had acquired an exclusive right to the word
"Lyceum," that institution would have been the Western Pangasinan Lyceum, Inc. rather than the
petitioner institution.

In this connection, petitioner argues that because the Western Pangasinan Lyceum, Inc. failed to
reconstruct its records before the SEC in accordance with the provisions of R.A. No. 62, which records
had been destroyed during World War II, Western Pangasinan Lyceum should be deemed to have lost
all rights it may have acquired by virtue of its past registration. It might be noted that the Western
Pangasinan Lyceum, Inc. registered with the SEC soon after petitioner had filed its own registration on
21 September 1950. Whether or not Western Pangasinan Lyceum, Inc. must be deemed to have lost
its rights under its original 1933 registration, appears to us to be quite secondary in importance; we
refer to this earlier registration simply to underscore the fact that petitioner's use of the word "Lyceum"
was neither the first use of that term in the Philippines nor an exclusive use thereof. Petitioner's use of
the word "Lyceum" was not exclusive but was in truth shared with the Western Pangasinan Lyceum
and a little later with other private respondent institutions which registered with the SEC using "Lyceum"
as part of their corporation names. There may well be other schools using Lyceum or Liceo in their
names, but not registered with the SEC because they have not adopted the corporate form of
organization.

We conclude and so hold that petitioner institution is not entitled to a legally enforceable exclusive right
to use the word "Lyceum" in its corporate name and that other institutions may use "Lyceum" as part of
their own corporate names. To determine whether a given corporate name is "identical" or "confusingly
or deceptively similar" with another entity's corporate name, it is not enough to ascertain the presence
of "Lyceum" or "Liceo" in both names. One must evaluate corporate names in their entirety and when
the name of petitioner is juxtaposed with the names of private respondents, they are not reasonably
regarded as "identical" or "confusingly or deceptively similar" with each other.

WHEREFORE, the petitioner having failed to show any reversible error on the part of the public
respondent Court of Appeals, the Petition for Review is DENIED for lack of merit, and the Decision of
the Court of Appeals dated 28 June 1991 is hereby AFFIRMED. No pronouncement as to costs.
SO ORDERED.

Bidin, Davide, Jr., Romero and Melo, JJ., concur.

Gutierrez, Jr., J., On terminal leave.

Petition denied.

Notes. In determining whether two trademarks are confusingly similar, the entirety of both and not
just a comparison of words used must be considered (Fruit of the Loom Inc vs Court of Appeals, 133
SCRA 405).

Where two trademarks present striking or glaring dissimilarities, no infringement case obtains (Fruit of
the Loom, Inc vs. Court of Appeals, 133 SCRA 405).
o0o

Qualitex v. Jacobson
514 U.S. 159

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT

No. 93-1577. Argued January 9, 1995; Decided March 28,1995

Petitioner Qualitex Company has for years colored the dry cleaning press pads it manufactures with a
special shade of green gold. After respondent Jacobson Products (a Qualitex rival) began to use a
similar shade on its own press pads, Qualitex registered its color as a trademark and added a trademark
infringement count to the suit it had previously filed challenging Jacobson's use of the green-gold color.
Qualitex won in the District Court, but the Ninth Circuit set aside the judgment on the infringement claim
because, in its view, the Trademark Act of 1946 (Lanham Act) does not permit registration of color alone
as a trademark.

Held: The Lanham Act permits the registration of a trademark that consists, purely and simply, of a
color.

(a) That color alone can meet the basic legal requirements for use as a trademark is demonstrated
both by the language of the Act, which describes the universe of things that can qualify as a
trademark in the broadest of terms, 15 U. S. C. 1127, and by the underlying principles of
trademark law, including the requirements that the mark "identify and distinguish [the seller's]
goods ... from those manufactured or sold by others and to indicate [their] source," ibid., and
that it not be "ftmctional," see, e. g., Inwood Laboratories, Inc. v. Ives Laboratories, Inc., 456 U.
S. 844, 850, n. 10. The District Court's findings (accepted by the Ninth Circuit and here
undisputed) show Qualitex's green-gold color has met these requirements. It acts as a symbol.
Because customers identify the color as Qualitex's, it has developed secondary meaning,
see, e. g., id., at 851, n. 11, and thereby identifies the press pads' source. And, the color serves
no other function. (Although it is important to use some color on press pads to avoid noticeable
stains, the court found no competitive need in the industry for the green-gold color, since other
colors are equally usable.) Accordingly, unless there is some special reason that convincingly
militates against the use of color alone as a trademark, trademark law protects Qualitex's use
of its green-gold color.

(b) Jacobson's various special reasons why the law should forbid the use of color alone as a
trademark-that a contrary holding (1) will produce uncertainty and unresolvable court disputes
about what shades of a color a competitor may lawfully use; (2) is unworkable in light of the
limited supply of colors that will soon be depleted by competitors; (3) is contradicted by many
older cases, including decisions of this Court interpreting pre-Lanham Act trademark law; and
(4) is unnecessary because firms already may use color as part of a trademark and may rely
on "trade dress" protection-are unpersuasive.

BREYER, J., delivered the opinion for a unanimous Court.

Donald G. Mulack argued the cause for petitioner. With him on the briefs were Christopher A. Bloom,
Edward J. Chalfie, Heather C. Steinmeyer, and Ava B. Campagna.

Deputy Solicitor General Wallace argued the cause for the United States as amicus curiae urging
reversal. With him on the brief were Solicitor General Days, Assistant Attorneys General Hunger and
Bingaman, Diane P. Wood, James A. Feldman, William Kanter, Marc Richman, Nancy J. Linck, Albin
F. Drost, Nancy C. Slutter, and Linda Moneys Isacson.

Laurence D. Strick argued the cause and filed a brief for respondent.

JUSTICE BREYER delivered the opinion of the Court.


The question in this case is whether the Trademark Act of 1946 (Lanham Act), 15 U. S. C. 1051-
1127 (1988 ed. and Supp. V), permits the registration of a trademark that consists, purely and simply,
of a color. We conclude that, sometimes, a color will meet ordinary legal trademark requirements. And,
when it does so, no special legal rule prevents color alone from serving as a trademark.

The case before us grows out of petitioner Qualitex Company's use (since the 1950's) of a special
shade of green-gold color on the pads that it makes and sells to dry cleaning firms for use on dry
cleaning presses. In 1989, respondent J acobson Products (a Qualitex rival) began to sell its own press
pads to dry cleaning firms; and it colored those pads a similar green gold. In 1991, Qualitex registered
the special greengold color on press pads with the Patent and Trademark Office as a trademark.
Registration No. 1,633,711 (Feb. 5, 1991). Qualitex subsequently added a trademark infringement
count, 15 U. s. C. 1114(1), to an unfair competition claim, 1125(a), in a lawsuit it had already filed
challenging Jacobson's use of the green-gold color.

Qualitex won the lawsuit in the District Court. 21 U. S. P. Q. 2d 1457 (CD Cal. 1991). But, the Court of
Appeals for the Ninth Circuit set aside the judgment in Qualitex's favor on the trademark infringement
claim because, in that Circuit's view, the Lanham Act does not permit Qualitex, or anyone else, to
register "color alone" as a trademark. 13 F.3d 1297, 1300, 1302 (1994).

The Courts of Appeals have differed as to whether or not the law recognizes the use of color alone as
a trademark. Compare NutraSweet Co. v. Stadt Corp., 917 F.2d 1024, 1028 (CA7 1990) (absolute
prohibition against protection of color alone), with In re Owens-Corning Fiberglas Corp., 774 F.2d 1116,
1128 (CA Fed. 1985) (allowing registration of color pink for fiberglass insulation), and Master
Distributors, Inc. v. Pako Corp., 986 F.2d 219, 224 (CA8 1993) (declining to establish per se prohibition
against protecting color alone as a trademark). Therefore, this Court granted certiorari. 512 U. S. 1287
(1994). We now hold that there is no rule absolutely barring the use of color alone, and we reverse the
judgment of the Ninth Circuit.

II

The Lanham Act gives a seller or producer the exclusive right to "register" a trademark, 15 U. S. C.
1052 (1988 ed. and Supp. V), and to prevent his or her competitors from using that trademark,
1114(1). Both the language of the Act and the basic underlying principles of trademark law would seem
to include color within the universe of things that can qualify as a trademark. The language of the
Lanham Act describes that universe in the broadest of terms. It says that trademarks "includ[e] any
word, name, symbol, or device, or any combination thereof." 1127. Since human beings might use as
a "symbol" or "device" almost anything at all that is capable of carrying meaning, this language, read
literally, is not restrictive. The courts and the Patent and Trademark Office have authorized for use as
a mark a particular shape (of a Coca-Cola bottle), a particular sound (of NBC's three chimes), and even
a particular scent (of plumeria blossoms on sewing thread). See, e. g., Registration No. 696,147 (Apr.
12, 1960); Registration Nos. 523,616 (Apr. 4, 1950) and 916,522 (July 13, 1971); In re Clarke, 17 U. S.
P. Q. 2d 1238, 1240 (TTAB 1990). If a shape, a sound, and a fragrance can act as symbols why, one
might ask, can a color not do the same?

A color is also capable of satisfying the more important part of the statutory definition of a trademark,
which requires that a person "us[e]" or "inten[d] to use" the mark "to identify and distinguish his or her
goods, including a unique product, from those manufactured or sold by others and to indicate the source
of the goods, even if that source is unknown." 15 U. S. C. 1127.

True, a product's color is unlike "fanciful," "arbitrary," or "suggestive" words or designs, which
almost automatically tell a customer that they refer to a brand. Abercrombie & Fitch Co. v. Hunting
World, Inc., 537 F.2d 4, 9-10 (CA2 1976) (Friendly, J.); see Two Pesos, Inc. v. Taco Cabana, Inc., 505
U. S. 763, 768 (1992). The imaginary word "Suntost," or the words "Suntost Marmalade," on a jar of
orange jam immediately would signal a brand or a product "source"; the jam's orange color does not do
so. But, over time, customers may come to treat a particular color on a product or its packaging (say, a
color that in context seems unusual, such as pink on a firm's insulating material or red on the head of a
large industrial bolt) as signifying a brand. And, if so, that color would have come to identify and
distinguish the goods-i. e., "to indicate" their "source"-much in the way that descriptive words on a
product (say, "Trim" on nail clippers or "Car- Freshner" on deodorizer) can come to indicate a product's
origin. See, e. g., J. Wiss & Sons Co. v. W E. Bassett Co., 59 C. C. P. A. 1269, 1271 (Pat.), 462 F.2d
567, 569 (1972); Car-Freshner Corp. v. Turtle Wax, Inc., 268 F. Supp. 162, 164 (SDNY 1967). In this
circumstance, trademark law says that the word (e. g., "Trim"), although not inherently distinctive, has
developed "secondary meaning." See Inwood Laboratories, Inc. v. Ives Laboratories, Inc., 456 U. S.
844, 851, n. 11 (1982) ("[S]econdary meaning" is acquired when "in the minds of the public, the primary
significance of a product feature ... is to identify the source of the product rather than the product itself").
Again, one might ask, if trademark law permits a descriptive word with secondary meaning to act as a
mark, why would it not permit a color, under similar circumstances, to do the same?

We cannot find in the basic objectives of trademark law any obvious theoretical objection to the use of
color alone as a trademark, where that color has attained "secondary meaning" and therefore identifies
and distinguishes a particular brand (and thus indicates its "source"). In principle, trademark law, by
preventing others from copying a source identifying mark, "reduce[s] the customer's costs of shopping
and making purchasing decisions," 1 J. McCarthy, McCarthy on Trademarks and Unfair Competition
2.01[2], p. 2-3 (3d ed. 1994) (hereinafter McCarthy), for it quickly and easily assures a potential
customer that this item-the item with this mark-is made by the same producer as other similarly marked
items that he or she liked (or disliked) in the past. At the same time, the law helps assure a producer
that it (and not an imitating competitor) will reap the financial, reputation-related rewards associated
with a desirable product. The law thereby "encourage[s] the production of quality products," ibid., and
simultaneously discourages those who hope to sell inferior products by capitalizing on a consumer's
inability quickly to evaluate the quality of an item offered for sale. See, e. g., 3 L. Altman, Callmann on
Unfair Competition, Trademarks and Monopolies 17.03 (4th ed. 1983); Landes & Posner, The
Economics of Trademark Law, 78 T. M. Rep. 267, 271-272 (1988); Park 'N Fly, Inc. v. Dollar Park & Fly,
Inc., 469 U. S. 189, 198 (1985); S. Rep. No. 100515, p. 4 (1988). It is the source-distinguishing ability
of a mark-not its ontological status as color, shape, fragrance, word, or sign-that permits it to serve
these basic purposes. See Landes & Posner, Trademark Law: An Economic Perspective, 30 J. Law &
Econ. 265, 290 (1987). And, for that reason, it is difficult to find, in basic trademark objectives, a reason
to disqualify absolutely the use of a color as a mark.

Neither can we find a principled objection to the use of color as a mark in the important "functionality"
doctrine of trademark law. The functionality doctrine prevents trademark law, which seeks to promote
competition by protecting a firm's reputation, from instead inhibiting legitimate competition by allowing
a producer to control a useful product feature. It is the province of patent law, not trademark law, to
encourage invention by granting inventors a monopoly over new product designs or functions for a
limited time, 35 U. S. C. 154, 173, after which competitors are free to use the innovation. If a product's
functional features could be used as trademarks, however, a monopoly over such features could be
obtained without regard to whether they qualify as patents and could be extended forever (because
trademarks may be renewed in perpetuity). See Kellogg Co. v. National Biscuit Co., 305 U. S. 111, 119-
120 (1938) (Brandeis, J.); Inwood Laboratories, Inc., supra, at 863 (White, J., concurring in result) ("A
functional characteristic is 'an important ingredient in the commercial success of the product,' and, after
expiration of a patent, it is no more the property of the originator than the product itself") (citation
omitted). Functionality doctrine therefore would require, to take an imaginary example, that even if
customers have come to identify the special illumination-enhancing shape of a new patented light bulb
with a particular manufacturer, the manufacturer may not use that shape as a trademark, for doing so,
after the patent had expired, would impede competition-not by protecting the reputation of the original
bulb maker, but by frustrating competitors' legitimate efforts to produce an equivalent illumination-
enhancing bulb. See, e. g., Kellogg Co., supra, at 119-120 (trademark law cannot be used to extend
monopoly over "pillow" shape of shredded wheat biscuit after the patent for that shape had expired).
This Court consequently has explained that, "[i]n general terms, a product feature is functional," and
cannot serve as a trademark, "if it is essential to the use or purpose of the article or if it affects the cost
or quality of the article," that is, if exclusive use of the feature would put competitors at a significant non-
reputation-related disadvantage. Inwood Laboratories, Inc., supra, at 850, n. 10. Although sometimes
color plays an important role (unrelated to source identification) in making a product more desirable,
sometimes it does not. And, this latter fact-the fact that sometimes color is not essential to a product's
use or purpose and does not affect cost or quality-indicates that the doctrine of "functionality" does not
create an absolute bar to the use of color alone as a mark. See Owens-Corning, 774 F. 2d, at 1123
(pink color of insulation in wall "performs no non-trademark function").
It would seem, then, that color alone, at least sometimes, can meet the basic legal requirements for use
as a trademark. It can act as a symbol that distinguishes a firm's goods and identifies their source,
without serving any other significant function. See U. S. Dept. of Commerce, Patent and Trademark
Office, Trademark Manual of Examining Procedure 1202.04(e), p. 1202-13 (2d ed. May, 1993)
(hereinafter PTO Manual) (approving trademark registration of color alone where it "has become
distinctive of the applicant's goods in commerce," provided that "there is [no] competitive need for colors
to remain available in the industry" and the color is not "functional"); see also 1 McCarthy 3.01[1],
7.26, pp. 3-2, 7-113 ("requirements for qualification of a word or symbol as a trademark" are that it be
(1) a "symbol," (2) "use[d] ... as a mark," (3) "to identify and distinguish the seller's goods from goods
made or sold by others," but that it not be "functional"). Indeed, the District Court, in this case, entered
findings (accepted by the Ninth Circuit) that show Qualitex's green-gold press pad color has met these
requirements. The green-gold color acts as a symbol. Having developed secondary meaning (for
customers identified the green-gold color as Qualitex's), it identifies the press pads' source. And, the
green-gold color serves no other function. (Although it is important to use some color on press pads to
avoid noticeable stains, the court found "no competitive need in the press pad industry for the green-
gold color, since other colors are equally usable." 21 U. S. P. Q. 2d, at 1460.) Accordingly, unless there
is some special reason that convincingly militates against the use of color alone as a trademark,
trademark law would protect Qualitex's use of the green-gold color on its press pads.

III

Respondent Jacobson Products says that there are four special reasons why the law should forbid the
use of color alone as a trademark. We shall explain, in turn, why we, ultimately, find them unpersuasive.
First, Jacobson says that, if the law permits the use of color as a trademark, it will produce uncertainty
and unresolvable court disputes about what shades of a color a competitor may lawfully use. Because
lighting (morning sun, twilight mist) will affect perceptions of protected color, competitors and courts will
suffer from "shade confusion" as they try to decide whether use of a similar color on a similar product
does, or does not, confuse customers and thereby infringe a trademark. Jacobson adds that the "shade
confusion" problem is "more difficult" and "far different from" the "determination of the similarity of words
or symbols." Brief for Respondent 22.

We do not believe, however, that color, in this respect, is special. Courts traditionally decide quite
difficult questions about whether two words or phrases or symbols are sufficiently similar, in context, to
confuse buyers. They have had to compare, for example, such words as "Bonamine" and "Dramamine"
(motion-sickness remedies); "Huggies" and "Dougies" (diapers); "Cheracol" and "Syrocol" (cough
syrup); "Cyclone" and "Tornado" (wire fences); and "Mattres" and "1-800-Mattres" (mattress franchisor
telephone numbers). See, e. g., G. D. Searle & Co. v. Chas. Pfizer & Co., 265 F.2d 385, 389 (CA7
1959); Kimberly-Clark Corp. v. H. Douglas Enterprises, Ltd., 774 F.2d 1144, 1146-1147 (CA Fed.
1985); Upjohn Co. v. Schwartz, 246 F.2d 254, 262 (CA2 1957); Hancock v. American Steel & Wire Co.
of N. J., 40 C. C. P. A. (Pat.) 931, 935, 203 F.2d 737, 740-741 (1953); Dial-AMattress Franchise
Corp. v. Page, 880 F.2d 675, 678 (CA2 1989). Legal standards exist to guide courts in making such
comparisons. See, e. g., 2 McCarthy 15.08; 1 McCarthy 11.24-11.25 ("[S]trong" marks, with
greater secondary meaning, receive broader protection than "weak" marks). We do not see why courts
could not apply those standards to a color, replicating, if necessary, lighting conditions under which a
colored product is normally sold. See Ebert, Trademark Protection in Color: Do It By the Numbers!, 84
T. M. Rep. 379, 405 (1994). Indeed, courts already have done so in cases where a trademark consists
of a color plus a design, i. e., a colored symbol such as a gold stripe (around a sewer pipe), a yellow
strand of wire rope, or a "brilliant yellow" band (on ampules). See, e. g., Youngstown Sheet & Tube
Co. v. Tallman Conduit Co., 149 U. S. P. Q. 656, 657 (TTAB 1966); Amstead Industries, Inc. v. West
Coast Wire Rope & Rigging Inc., 2 U. S. P. Q. 2d 1755, 1760 (TTAB 1987); In re Hodes-Lange
Corp., 167 U. S. P. Q. 255, 256 (TTAB 1970).

Second, Jacobson argues, as have others, that colors are in limited supply. See, e. g., NutraSweet
Co., 917 F. 2d, at 1028; Campbell Soup Co. v. Armour & Co., 175 F.2d 795, 798 (CA3 1949). Jacobson
claims that, if one of many competitors can appropriate a particular color for use as a trademark, and
each competitor then tries to do the same, the supply of colors will soon be depleted. Put in its strongest
form, this argument would concede that "[h]undreds of color pigments are manufactured and thousands
of colors can be obtained by mixing." L. Cheskin, Colors: What They Can Do For You 47 (1947). But, it
would add that, in the context of a particular product, only some colors are usable. By the time one
discards colors that, say, for reasons of customer appeal, are not usable, and adds the shades that
competitors cannot use lest they risk infringing a similar, registered shade, then one is left with only a
handful of possible colors. And, under these circumstances, to permit one, or a few, producers to use
colors as trademarks will "deplete" the supply of usable colors to the point where a competitor's inability
to find a suitable color will put that competitor at a significant disadvantage.

This argument is unpersuasive, however, largely because it relies on an occasional problem to justify a
blanket prohibition. When a color serves as a mark, normally alternative colors will likely be available
for similar use by others. See, e. g., Owens-Corning, 774 F. 2d, at 1121 (pink insulation).

Moreover, if that is not so-if a "color depletion" or "color scarcity" problem does arise-the trademark
doctrine of "functionality" normally would seem available to prevent the anticompetitive consequences
that Jacobson's argument posits, thereby minimizing that argument's practical force.

The functionality doctrine, as we have said, forbids the use of a product's feature as a trademark where
doing so will put a competitor at a significant disadvantage because the feature is "essential to the use
or purpose of the article" or "affects [its] cost or quality." Inwood Laboratories, Inc., 456 U. S., at 850, n.
10. The functionality doctrine thus protects competitors against a disadvantage (unrelated to recognition
or reputation) that trademark protection might otherwise impose, namely, their inability reasonably to
replicate important non-reputation-related product features. For example, this Court has written that
competitors might be free to copy the color of a medical pill where that color serves to identify the kind
of medication (e. g., a type of blood medicine) in addition to its source. See id., at 853, 858, n. 20
("[S]ome patients commingle medications in a container and rely on color to differentiate one from
another"); see also J. Ginsburg, D. Goldberg, & A. Greenbaum, Trademark and Unfair Competition Law
194-195 (1991) (noting that drug color cases "have more to do with public health policy" regarding
generic drug substitution "than with trademark law"). And, the federal courts have demonstrated that
they can apply this doctrine in a careful and reasoned manner, with sensitivity to the effect on
competition. Although we need not comment on the merits of specific cases, we note that lower courts
have permitted competitors to copy the green color of farm machinery (because customers wanted their
farm equipment to match) and have barred the use of black as a trademark on outboard boat motors
(because black has the special functional attributes of decreasing the apparent size of the motor and
ensuring compatibility with many different boat colors). See Deere & Co. v. Farmhand, Inc., 560 F.
Supp. 85, 98 (SD Iowa 1982), aff'd, 721 F.2d 253 (CA8 1983); Brunswick Corp. v. British Seagull
Ltd., 35 F.3d 1527, 1532 (CA Fed. 1994), cert. pending, No. 94-1075; see also Nor-Am Chemical v.
O. M. Scott & Sons Co., 4 U. S. P. Q. 2d 1316, 1320 (ED Pa. 1987) (blue color of fertilizer held functional
because it indicated the presence of nitrogen). The Restatement (Third) of Unfair Competition adds
that, if a design's "aesthetic value" lies in its ability to "confe[r] a significant benefit that cannot practically
be duplicated by the use of alternative designs," then the design is "functional." Restatement (Third) of
Unfair Competition 17, Comment c, pp. 175-176 (1993). The "ultimate test of aesthetic functionality,"
it explains, "is whether the recognition of trademark rights would significantly hinder competition." Id., at
176.

The upshot is that, where a color serves a significant nontrademark function-whether to distinguish a
heart pill from a digestive medicine or to satisfy the "noble instinct for giving the right touch of beauty to
common and necessary things," G. Chesterton, Simplicity and Tolstoy 61 (1912)courts will examine
whether its use as a mark would permit one competitor (or a group) to interfere with legitimate
(nontrademark-related) competition through actual or potential exclusive use of an important product
ingredient. That examination should not discourage firms from creating esthetically pleasing mark
designs, for it is open to their competitors to do the same. See, e. g., W T. Rogers Co. v. Keene, 778
F.2d 334, 343 (CA7 1985) (Posner, J.). But, ordinarily, it should prevent the anticompetitive
consequences of Jacobson's hypothetical "color depletion" argument, when, and if, the circumstances
of a particular case threaten "color depletion."

Third, Jacobson points to many older cases-including Supreme Court cases-in support of its position.
In 1878, this Court described the common-law definition of trademark rather broadly to "consist of a
name, symbol, figure, letter, form, or device, if adopted and used by a manufacturer or merchant in
order to designate the goods he manufactures or sells to distinguish the same from those manufactured
or sold by another." McLean v. Fleming, 96 U. S. 245, 254. Yet, in interpreting the Trademark Acts of
1881 and 1905, 21 Stat. 502, 33 Stat. 724, which retained that common-law definition, the Court
questioned "[w]hether mere color can constitute a valid trade-mark," A. Leschen & Sons Rope
Co. v. Broderick & Bascom Rope Co., 201 U. S. 166, 171 (1906), and suggested that the "product
including the coloring matter is free to all who make it," Coca-Cola Co. v. Koke Co. of America, 254 U.
S. 143, 147 (1920). Even though these statements amounted to dicta, lower courts interpreted them as
forbidding protection for color alone. See, e. g., Campbell Soup Co., 175 F. 2d, at 798, and n. 9; Life
Savers Corp. v. Curtiss Candy Co., 182 F.2d 4,9 (CA7 1950) (quoting Campbell Soup, supra, at 798).
These Supreme Court cases, however, interpreted trademark law as it existed before 1946, when
Congress enacted the Lanham Act. The Lanham Act significantly changed and liberalized the common
law to "dispense with mere technical prohibitions," S. Rep. No. 1333, 79th Cong., 2d Sess., 3 (1946),
most notably, by permitting trademark registration of descriptive words (say, "V-Build-It" model
airplanes) where they had acquired "secondary meaning." See Abercrombie & Fitch Co., 537 F. 2d, at
9 (Friendly, J.). The Lanham Act extended protection to descriptive marks by making clear that (with
certain explicit exceptions not relevant here)

"nothing ... shall prevent the registration of a mark used by the applicant which has become distinctive
of the applicant's goods in commerce." 15 U. S. C. 1052(f) (1988 ed., Supp. V).

This language permits an ordinary word, normally used for a nontrademark purpose (e. g., description),
to act as a trademark where it has gained "secondary meaning." Its logic would appear to apply to color
as well. Indeed, in 1985, the Federal Circuit considered the significance of the Lanham Act's changes
as they related to color and held that trademark protection for color was consistent with the
"jurisprudence under the Lanham Act developed in accordance with the statutory principle that if a mark
is capable of being or becoming distinctive of [the] applicant's goods in commerce, then it is capable of
serving as a trademark." Owens-Corning, 774 F. 2d, at 1120.

In 1988, Congress amended the Lanham Act, revising portions of the definitional language, but left
unchanged the language here relevant. 134, 102 Stat. 3946, 15 U. S. C. 1127. It enacted these
amendments against the following background: (1) the Federal Circuit had decided Owens-Corning; (2)
the Patent and Trademark Office had adopted a clear policy (which it still maintains) permitting
registration of color as a trademark, see PTO Manual 1202.04(e) (at p. 1200-12 of the January 1986
edition and p. 1202-13 of the May 1993 edition); and (3) the Trademark Commission had written a
report, which recommended that "the terms 'symbol, or device' ... not be deleted or narrowed to preclude
registration of such things as a color, shape, smell, sound, or configuration which functions as a mark,"
The United States Trademark Association Trademark Review Commission Report and
Recommendations to USTA President and Board of Directors, 77 T. M. Rep. 375, 421 (1987); see also
133 Congo Rec. 32812 (1987) (statement of Sen. DeConcini) ("The bill I am introducing today is based
on the Commission's report and recommendations"). This background strongly suggests that the
language "any word, name, symbol, or device," 15 U. S. C. 1127, had come to include color. And,
when it amended the statute, Congress retained these terms. Indeed, the Senate Report accompanying
the Lanham Act revision explicitly referred to this background understanding, in saying that the "revised
definition intentionally retains ...the words 'symbol or device' so as not to preclude the registration of
colors, shapes, sounds or configurations where they function as trademarks." S. Rep. No. 100-515, at
44. (In addition, the statute retained language providing that "[n]o trademark by which the goods of the
applicant may be distinguished from the goods of others shall be refused registration ... on account of
its nature" (except for certain specified reasons not relevant here). 15 U. S. C. 1052 (1988 ed., Supp.
V).)

This history undercuts the authority of the precedent on which Jacobson relies. Much of the pre-1985
case law rested on statements in Supreme Court opinions that interpreted pre- Lanham Act trademark
law and were not directly related to the holdings in those cases. Moreover, we believe the Federal
Circuit was right in 1985 when it found that the 1946 Lanham Act embodied crucial legal changes that
liberalized the law to permit the use of color alone as a trademark (under appropriate circumstances).
At a minimum, the Lanham Act's changes left the courts free to reevaluate the preexisting legal
precedent which had absolutely forbidden the use of color alone as a trademark. Finally, when
Congress reenacted the terms "word, name, symbol, or device" in 1988, it did so against a legal
background in which those terms had come to include color, and its statutory revision embraced that
understanding.

Fourth, Jacobson argues that there is no need to permit color alone to function as a trademark because
a firm already may use color as part of a trademark, say, as a colored circle or colored letter or colored
word, and may rely upon "trade dress" protection, under 43(a) of the Lanham Act, if a competitor
copies its color and thereby causes consumer confusion regarding the overall appearance of the
competing products or their packaging, see 15 U. S. C. 1125(a) (1988 ed., Supp. V). The first part of
this argument begs the question. One can understand why a firm might find it difficult to place a usable
symbol or word on a product (say, a large industrial bolt that customers normally see from a distance);
and, in such instances, a firm might want to use color, pure and simple, instead of color as part of a
design. Neither is the second portion of the argument convincing. Trademark law helps the holder of a
mark in many ways that "trade dress" protection does not. See 15 U. S. C. 1124 (ability to prevent
importation of confusingly similar goods); 1072 (constructive notice of ownership); 1065
(incontestible status); 1057(b) (prima facie evidence of validity and ownership). Thus, one can easily
find reasons why the law might provide trademark protection in addition to trade dress protection.

IV

Having determined that a color may sometimes meet the basic legal requirements for use as a
trademark and that respondent Jacobson's arguments do not justify a special legal rule preventing color
alone from serving as a trademark (and, in light of the District Court's here undisputed findings that
Qualitex's use of the green-gold color on its press pads meets the basic trademark requirements), we
conclude that the Ninth Circuit erred in barring Qualitex's use of color as a trademark. For these
reasons, the judgment of the Ninth Circuit is Reversed.

o0o

FREDCO MANUFACTURING CORPORATION, petitioner


vs.
PRESIDENT AND FELLOWS OF HARVARD COLLEGE (HARVARD UNIVERSITY), respondents.

June 1, 2011. G.R. No. 185917.

Trademarks; Before a trademark can be registered, it must have been actually used in commerce for
not less than two months in the Philippines prior to the filing of an application for its registration; Harvard
Universitys Registration of the name Harvard is based on home registration which is allowed under
Section 37 of R.A. No. 166.Under Section 2 of Republic Act No. 166, as amended (R.A. No. 166),
before a trademark can be registered, it must have been actually used in commerce for not less than
two months in the Philippines prior to the filing of an application for its registration. While Harvard
University had actual prior use of its marks abroad for a long time, it did not have actual prior use in the
Philippines of the mark Harvard Veritas Shield Symbol before its application for registration of the
mark Harvard with the then Philippine Patents Office. However, Harvard Universitys registration of
the name Harvard is based on home registration which is allowed under Section 37 of R.A. No. 166.

Same; What Fredco has done in using the mark Harvard and the words Cambridge, Massachusetts,
USA to evoke a desirable aura to its products is precisely to exploit commercially the goodwill of
Harvard University without the latters consent. Section 4(a) of R.A. No. 166 is identical to Section
2(a) of the Lanham Act, the trademark law of the United States. These provisions are intended to protect
the right of publicity of famous individuals and institutions from commercial exploitation of their goodwill
by others. What Fredco has done in using the mark Harvard and the words Cambridge,
Massachusetts, USA to evoke a desirable aura to its products is precisely to exploit commercially
the goodwill of Harvard University without the latters consent. This is a clear violation of Section 4(a)
of R.A. No. 166. Under Section 17(c) of R.A. No. 166, such violation is a ground for cancellation of
Fredcos registration of the mark Harvard because the registration was obtained in violation of Section
4 of R.A. No. 166.

Same; Paris Convention; The Philippines is obligated to assure nationals of countries of the Paris
Convention that they are afforded an effective protection against violation of their intellectual property
rights in the Philippines in the same way that their own countries are obligated to accord similar
protection to Philippine Nationals.This Court has ruled that the Philippines is obligated to assure
nationals of countries of the Paris Convention that they are afforded an effective protection against
violation of their intellectual property rights in the Philippines in the same way that their own countries
are obligated to accord similar protection to Philippine nationals.

Same; Same; Under Article 8 of the Paris Convention, as well as Section 37 of R.A. No. 166, Harvard
University is entitled to protection in the Philippines of its trade name Harvard even without registration
of such trade name in the Philippines. Harvard is the trade name of the world famous Harvard
University, and it is also a trademark of Harvard University. Under Article 8 of the Paris Convention, as
well as Section 37 of R.A. No. 166, Harvard University is entitled to protection in the Philippines of its
trade name Harvard even without registration of such trade name in the Philippines. This means that
no educational entity in the Philippines can use the trade name Harvard without the consent of Harvard
University. Likewise, no entity in the Philippines can claim, expressly or impliedly through the use of the
name and mark Harvard, that its products or services are authorized, approved, or licensed by, or
sourced from, Harvard University without the latters consent.

Same; Same; The essential requirement under article 6bis of the Paris Convention is that the trademark
to be protected must be well-known in the country where protection is sought; The power to determine
whether a trademark is well-known lies in the competent authority of the country of registration or use.
In Mirpuri, 318 SCRA 516 (1999), the Court ruled that the essential requirement under Article 6bis of
the Paris Convention is that the trademark to be protected must be well-known in the country where
protection is sought. The Court declared that the power to determine whether a trademark is well-known
lies in the competent authority of the country of registration or use. The Court then stated that the
competent authority would either be the registering authority if it has the power to decide this, or the
courts of the country in question if the issue comes before the courts.

Same; Same; Section 123.1(e) does not require that the well-known mark be used in commerce in the
Philippines but only that it be well-known in the Philippines. Section 123.1(e) of R.A. No. 8293 now
categorically states that a mark which is considered by the competent authority of the Philippines to be
well-known internationally and in the Philippines, whether or not it is registered here, cannot be
registered by another in the Philippines. Section 123.1(e) does not require that the well-known mark be
used in commerce in the Philippines but only that it be well-known in the Philippines.

Same; Same; While under the territoriality principle a mark must be used in commerce in the Philippines
to be entitled to protection, internationally well-known marks are the exceptions to this rule. Since
any combination of the foregoing criteria is sufficient to determine that a mark is well-known, it is
clearly not necessary that the mark be used in commerce in the Philippines. Thus, while under the
territoriality principle a mark must be used in commerce in the Philippines to be entitled to protection,
internationally well-known marks are the exceptions to this rule.

PETITION for review on certiorari of the decision and resolution of the Court of Appeals.

The facts are stated in the opinion of the Court.

Cordova & Associates for petitioner.

Ortega, Del Castillo, Bacorro, Odulio, Calma & Carbonell for respondent.

CARPIO, J.:

The Case

Before the Court is a petition for review assailing the 24 October 2008 Decision and 8 January 2009
Resolution of the Court of Appeals in CA-G.R. SP No. 103394.

The Antecedent Facts

On 10 August 2005, petitioner Fredco Manufacturing Corporation (Fredco), a corporation organized


and existing under the laws of the Philippines, filed a Petition for Cancellation of Registration No. 56561
before the Bureau of Legal Affairs of the Intellectual Property Office (IPO) against respondents
President and Fellows of Harvard College (Harvard University), a corporation organized and existing
under the laws of Massachusetts, United States of America. The case was docketed as Inter Partes
Case No. 14-2005-00094.

Fredco alleged that Registration No. 56561 was issued to Harvard University on 25 November 1993 for
the mark Harvard Veritas Shield Symbol for decals, tote bags, serving trays, sweatshirts, t-shirts, hats
and flying discs under Classes 16, 18, 21, 25 and 28 of the Nice International Classification of Goods
and Services. Fredco alleged that the mark Harvard for t-shirts, polo shirts, sandos, briefs, jackets and
slacks was first used in the Philippines on 2 January 1982 by New York Garments Manufacturing &
Export Co., Inc. (New York Garments), a domestic corporation and Fredcos predecessor-in-interest.
On 24 January 1985, New York Garments filed for trademark registration of the mark Harvard for
goods under Class 25. The application matured into a registration and a Certificate of Registration was
issued on 12 December 1988, with a 20-year term subject to renewal at the end of the term. The
registration was later assigned to Romeo Chuateco, a member of the family that owned New York
Garments.

Fredco alleged that it was formed and registered with the Securities and Exchange Commission on 9
November 1995 and had since then handled the manufacture, promotion and marketing of Harvard
clothing articles. Fredco alleged that at the time of issuance of Registration No. 56561 to Harvard
University, New York Garments had already registered the mark Harvard for goods under Class 25.
Fredco alleged that the registration was cancelled on 30 July 1998 when New York Garments
inadvertently failed to file an affidavit of use/non-use on the fifth anniversary of the registration but the
right to the mark Harvard remained with its predecessor New York Garments and now with Fredco.
Harvard University, on the other hand, alleged that it is the lawful owner of the name and mark Harvard
in numerous countries worldwide, including the Philippines. Among the countries where Harvard
University has registered its name and mark Harvard are:

1. Argentina 5. Chile
2. Benelux 6. China P.R.
3. Brazil 7. Colombia
4. Canada 8. Costa Rica

9. Cyprus 30. Norway


10. Czech Republic 31. Peru
11. Denmark 32. Philippines
12. Ecuador 33. Poland
13. Egypt 34. Portugal
14. Finland 35. Russia
15. France 36. South Africa
16. Great Britain 37. Switzerland
17. Germany 38. Singapore
18. Greece 39. Slovak Republic
19. Hong Kong 40. Spain
20. India 41. Sweden
21. Indonesia 42. Taiwan
22. Ireland 43. Thailand
23. Israel 44. Turkey
24. Italy 45. United Arab Emirates
25. Japan 46. Uruguay
26. South Korea 47. United States of America
27. Malaysia 48. Venezuela
28. Mexico 49. Zimbabwe
29. New Zealand 50. European Community

The name and mark Harvard was adopted in 1639 as the name of Harvard College of Cambridge,
Massachusetts, U.S.A. The name and mark Harvard was allegedly used in commerce as early as
1872. Harvard University is over 350 years old and is a highly regarded institution of higher learning in
the United States and throughout the world. Harvard University promotes, uses, and advertises its name
Harvard through various publications, services, and products in foreign countries, including the
Philippines. Harvard University further alleged that the name and the mark have been rated as one of
the most famous brands in the world, valued between US $750,000,000 and US $1,000,000,000.

Harvard University alleged that in March 2002, it discovered, through its international trademark watch
program, Fredcos website www.harvard-usa.com. The website advertises and promotes the brand
name Harvard Jeans USA without Harvard Universitys consent. The websites main page shows an
oblong logo bearing the mark Harvard Jeans USA, Established 1936, and Cambridge,
Massachusetts. On 20 April 2004, Harvard University filed an administrative complaint against Fredco
before the IPO for trademark infringement and/or unfair competition with damages.

Harvard University alleged that its valid and existing certificates of trademark registration in the
Philippines are:

Trademark 1. Registration No. 56561 issued on 25 November 1993 for Harvard Veritas Shield
Design for goods and services in Classes 16, 18, 21, 25 and 28 (decals, tote bags, serving trays,
sweatshirts, t-shirts, hats and flying discs) of the Nice International Classification of Goods and
Services;

Trademark 2. Registration No. 57526 issued on 24 March 1994 for Harvard Veritas Shield Symbol
for services in Class 41; Trademark Registration No. 56539 issued on 25 November 1998 for Harvard
for services in Class 41; and

Trademark 3. Registration No. 66677 issued on 8 December 1998 for Harvard Graphics for goods
in Class 9. Harvard University further alleged that it filed the requisite affidavits of use for the mark
Harvard Veritas Shield Symbol with the IPO.

Further, on 7 May 2003 Harvard University filed Trademark Application No. 4-2003-04090 for Harvard
Medical International & Shield Design for services in Classes 41 and 44. In 1989, Harvard University
established the Harvard Trademark Licensing Program, operated by the Office for Technology and
Trademark Licensing, to oversee and manage the worldwide licensing of the Harvard name and
trademarks for various goods and services. Harvard University stated that it never authorized or
licensed any person to use its name and mark Harvard in connection with any goods or services in
the Philippines.

In a Decision dated 22 December 2006, Director Estrellita Beltran-Abelardo of the Bureau of Legal
Affairs, IPO cancelled Harvard Universitys registration of the mark Harvard under Class 25, as follows:

WHEREFORE, premises considered, the Petition for Cancellation is hereby GRANTED.


Consequently, Trademark Registration Number 56561 for the trademark HARVARD VE RI TAS
SHIELD SYMBOL issued on November 25, 1993 to PRESIDENT AND FELLOWS OF HARVARD
COLLEGE (HARVARD UNIVERSITY) should be CANCELLED only with respect to goods falling under
Class 25. On the other hand, considering that the goods of Respondent-Registrant falling under Classes
16, 18, 21 and 28 are not confusingly similar with the Petitioners goods, the Respondent-Registrant
has acquired vested right over the same and therefore, should not be cancelled.

Let the filewrapper of the Trademark Registration No. 56561 issued on November 25, 1993 for the
trademark HARVARD VE RI TAS SHIELD SYMBOL, subject matter of this case together with a copy
of this Decision be forwarded to the Bureau of Trademarks (BOT) for appropriate action.

SO ORDERED.

Harvard University filed an appeal before the Office of the Director General of the IPO. In a Decision
dated 21 April 2008, the Office of the Director General, IPO reversed the decision of the Bureau of
Legal Affairs, IPO.

The Director General ruled that more than the use of the trademark in the Philippines, the applicant
must be the owner of the mark sought to be registered. The Director General ruled that the right to
register a trademark is based on ownership and when the applicant is not the owner, he has no right to
register the mark. The Director General noted that the mark covered by Harvard Universitys
Registration No. 56561 is not only the word Harvard but also the logo, emblem or symbol of Harvard
University. The Director General ruled that Fredco failed to explain how its predecessor New York
Garments came up with the mark Harvard. In addition, there was no evidence that Fredco or New
York Garments was licensed or authorized by Harvard University to use its name in commerce or for
any other use.

The dispositive portion of the decision of the Office of the Director General, IPO reads:

WHEREFORE, premises considered, the instant appeal is GRANTED. The appealed decision is
hereby REVERSED and SET ASIDE. Let a copy of this Decision as well as the trademark application
and records be furnished and returned to the Director of Bureau of Legal Affairs for appropriate action.
Further, let also the Directors of the Bureau of Trademarks and the Administrative, Financial and Human
Resources Development Services Bureau, 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.

Fredco filed a petition for review before the Court of Appeals assailing the decision of the Director
General.

The Decision of the Court of Appeals

In its assailed decision, the Court of Appeals affirmed the decision of the Office of the Director General
of the IPO.

The Court of Appeals adopted the findings of the Office of the Director General and ruled that the latter
correctly set aside the cancellation by the Director of the Bureau of Legal Affairs of Harvard Universitys
trademark registration under Class 25. The Court of Appeals ruled that Harvard University was able to
substantiate that it appropriated and used the marks Harvard and Harvard Veritas Shield Symbol in
Class 25 way ahead of Fredco and its predecessor New York Garments. The Court of Appeals also
ruled that the records failed to disclose any explanation for Fredcos use of the name and mark
Harvard and the words USA, Established 1936, and Cambridge, Massachusetts within an oblong
device, US Legend and Europes No. 1 Brand. Citing Shangri-La International Hotel Management,
Ltd. v. Developers Group of Companies, Inc., the Court of Appeals ruled:

One who has imitated the trademark of another cannot bring an action for infringement, particularly
against the true owner of the mark, because he would be coming to court with unclean hands. Priority
is of no avail to the bad faith plaintiff. Good faith is required in order to ensure that a second user may
not merely take advantage of the goodwill established by the true owner.

The dispositive portion of the decision of the Court of Appeals reads:

WHEREFORE, premises considered, the petition for review is DENIED. The Decision dated April 21,
2008 of the Director General of the IPO in Appeal No. 14-07-09 Inter Partes Case No. 14-2005-00094
is hereby AFFIRMED.

SO ORDERED.

Fredco filed a motion for reconsideration.

In its Resolution promulgated on 8 January 2009, the Court of Appeals denied the motion for lack of
merit.

Hence, this petition before the Court.

The Issue

The issue in this case is whether the Court of Appeals committed a reversible error in affirming the
decision of the Office of the Director General of the IPO.
The Ruling of this Court

The petition has no merit.

There is no dispute that the mark Harvard used by Fredco is the same as the mark Harvard in the
Harvard Veritas Shield Symbol of Harvard University. It is also not disputed that Harvard University
was named Harvard College in 1639 and that then, as now, Harvard University is located in Cambridge,
Massachusetts, U.S.A. It is also unrefuted that Harvard University has been using the mark Harvard
in commerce since 1872. It is also established that Harvard University has been using the marks
Harvard and Harvard Veritas Shield Symbol for Class 25 goods in the United States since 1953.
Further, there is no dispute that Harvard University has registered the name and mark Harvard in at
least 50 countries.

On the other hand, Fredcos predecessor-in-interest, New York Garments, started using the mark
Harvard in the Philippines only in 1982. New York Garments filed an application with the Philippine
Patent Office in 1985 to register the mark Harvard, which application was approved in 1988. Fredco
insists that the date of actual use in the Philippines should prevail on the issue of who has the better
right to register the marks.

Under Section 2 of Republic Act No. 166, as amended (R.A. No. 166), before a trademark can be
registered, it must have been actually used in commerce for not less than two months in the Philippines
prior to the filing of an application for its registration. While Harvard University had actual prior use of
its marks abroad for a long time, it did not have actual prior use in the Philippines of the mark Harvard
Veritas Shield Symbol before its application for registration of the mark Harvard with the then
Philippine Patents Office. However, Harvard Universitys registration of the name Harvard is based on
home registration which is allowed under Section 37 of R.A. No. 166. As pointed out by Harvard
University in its Comment:

Although Section 2 of the Trademark law (R.A. 166) requires for the registration of trademark that the
applicant thereof must prove that the same has been actually in use in commerce or services for not
less than two (2) months in the Philippines before the application for registration is filed, where the
trademark sought to be registered has already been registered in a foreign country that is a member of
the Paris Convention, the requirement of proof of use in the commerce in the Philippines for the said
period is not necessary. An applicant for registration based on home certificate of registration need not
even have used the mark or trade name in this country.

Indeed, in its Petition for Cancellation of Registration No. 56561, Fredco alleged that Harvard
Universitys registration is based on home registration for the mark Harvard Veritas Shield for Class
25.

In any event, under Section 239.2 of Republic Act No. 8293 (R.A. No. 8293), [m]arks registered under
Republic Act No. 166 shall remain in force but shall be deemed to have been granted under this Act
x x x, which does not require actual prior use of the mark in the Philippines. Since the mark Harvard
Veritas Shield Symbol is now deemed granted under R.A. No. 8293, any alleged defect arising from
the absence of actual prior use in the Philippines has been cured by Section 239.2. In addition, Fredcos
registration was already cancelled on 30 July 1998 when it failed to file the required affidavit of use/non-
use for the fifth anniversary of the marks registration. Hence, at the time of Fredcos filing of the Petition
for Cancellation before the Bureau of Legal Affairs of the IPO, Fredco was no longer the registrant or
presumptive owner of the mark Harvard.

There are two compelling reasons why Fredcos petition must fail.

First, Fredcos registration of the mark Harvard and its identification of origin as Cambridge,
Massachusetts falsely suggest that Fredco or its goods are connected with Harvard University, which
uses the same mark Harvard and is also located in Cambridge, Massachusetts. This can easily be
gleaned from the following oblong logo of Fredco that it attaches to its clothing line:
Fredcos registration of the mark Harvard should not have been allowed because Section 4(a) of R.A.
No. 166 prohibits the registration of a mark which may disparage or falsely suggest a connection with
persons, living or dead, institutions, beliefs x x x. Section 4(a) of R.A. No. 166 provides:

Section 4. Registration of trade-marks, trade-names and service- marks on the principal register.
There is hereby established a register of trade-mark, trade-names and service-marks which shall be
known as the principal register. The owner of a trade-mark, a 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:

Consists of or comprises immoral, deceptive or scandalous manner, or matter which may disparage or
(a) falsely suggest a connection with persons, living or dead, institutions, beliefs, or national symbols,
or bring them into contempt or disrepute;

x x x (b) (emphasis supplied)

Fredcos use of the mark Harvard, coupled with its claimed origin in Cambridge, Massachusetts,
obviously suggests a false connection with Harvard University. On this ground alone, Fredcos
registration of the mark Harvard should have been disallowed.

Indisputably, Fredco does not have any affiliation or connection with Harvard University, or even with
Cambridge, Massachusetts. Fredco or its predecessor New York Garments was not established in
1936, or in the U.S.A. as indicated by Fredco in its oblong logo. Fredco offered no explanation to the
Court of Appeals or to the IPO why it used the mark Harvard on its oblong logo with the words
Cambridge, Massachusetts, Established in 1936, and USA. Fredco now claims before this Court
that it used these words to evoke a lifestyle or suggest a desirable aura of petitioners clothing lines.
Fredcos belated justification merely confirms that it sought to connect or associate its products with
Harvard University, riding on the prestige and popularity of Harvard University, and thus appropriating
part of Harvard Universitys goodwill without the latters consent.

Section 4(a) of R.A. No. 166 is identical to Section 2(a) of the Lanham Act, the trademark law of the
United States. These provisions are intended to protect the right of publicity of famous individuals and
institutions from commercial exploitation of their goodwill by others. What Fredco has done in using the
mark Harvard and the words Cambridge, Massachusetts, USA to evoke a desirable aura to its
products is precisely to exploit commercially the goodwill of Harvard University without the latters
consent. This is a clear violation of Section 4(a) of R.A. No. 166. Under Section 17(c) of R.A. No. 166,
such violation is a ground for cancellation of Fredcos registration of the mark Harvard because the
registration was obtained in violation of Section 4 of R.A. No. 166.

Second, the Philippines and the United States of America are both signatories to the Paris Convention
for the Protection of Industrial Property (Paris Convention). The Philippines became a signatory to the
Paris Convention on 27 September 1965. Articles 6bis and 8 of the Paris Convention state:
ARTICLE 6bis

The (i) countries of the Union undertake either administratively if their legislation so permits, or at the
request of an interested party, to refuse or to cancel the registration and to prohibit the use of a
trademark which constitutes a reproduction, imitation or translation, liable to create confusion or a mark
considered by the competent authority of the country as being already the mark of a person entitled to
the benefits of the present Convention and used for identical or similar goods. These provisions shall
also apply when the essential part of the mark constitutes a reproduction of any such well-known mark
or an imitation liable to create confusion therewith.

ARTICLE 8

A trade name shall be protected in all the countries of the Union without the obligation of filing or
registration, whether or not it forms part of a trademark. (Emphasis supplied)

Thus, this Court has ruled that the Philippines is obligated to assure nationals of countries of the Paris
Convention that they are afforded an effective protection against violation of their intellectual property
rights in the Philippines in the same way that their own countries are obligated to accord similar
protection to Philippine nationals.

Article 8 of the Paris Convention has been incorporated in Section 37 of R.A. No. 166, as follows:

Section 37. Rights of foreign registrants.Persons who are nationals of, domiciled in, or have a bona
fide or effective business or commercial establishment in any foreign country, which is a party to any
international convention or treaty relating to marks or trade-names, or the repression of unfair
competition to which the Philippines may be a party, shall be entitled to the benefits and subject to the
provisions of this Act to the extent and under the conditions essential to give effect to any such
convention and treaties so long as the Philippines shall continue to be a party thereto, except as
provided in the following paragraphs of this section.

xxxx

Trade-names of persons described in the first paragraph of this section shall be protected without the
obligation of filing or registration whether or not they form parts of marks.

x x x x (Emphasis supplied)

Thus, under Philippine law, a trade name of a national of a State that is a party to the Paris Convention,
whether or not the trade name forms part of a trademark, is protected without the obligation of filing or
registration.

Harvard is the trade name of the world famous Harvard University, and it is also a trademark of
Harvard University. Under Article 8 of the Paris Convention, as well as Section 37 of R.A. No. 166,
Harvard University is entitled to protection in the Philippines of its trade name Harvard even without
registration of such trade name in the Philippines. This means that no educational entity in the
Philippines can use the trade name Harvard without the consent of Harvard University. Likewise, no
entity in the Philippines can claim, expressly or impliedly through the use of the name and mark
Harvard, that its products or services are authorized, approved, or licensed by, or sourced from,
Harvard University without the latters consent.

Article 6bis of the Paris Convention has been administratively implemented in the Philippines through
two directives of the then Ministry (now Department) of Trade, which directives were upheld by this
Court in several cases. On 20 November 1980, then Minister of Trade Secretary Luis Villafuerte issued
a Memorandum directing the Director of Patents to reject, pursuant to the Paris Convention, all pending
applications for Philippine registration of signature and other world-famous trademarks by applicants
other than their original owners. The Memorandum states:
Pursuant to the Paris Convention for the Protection of Industrial Property to which the Philippines is a
signatory, you are hereby directed to reject all pending applications for Philippine registration of
signature and other world-famous trademarks by applicants other than its original owners or users.

The conflicting claims over internationally known trademarks involve such name brands as Lacoste,
Jordache, Vanderbilt, Sasson, Fila, Pierre Cardin, Gucci, Christian Dior, Oscar de la Renta, Calvin
Klein, Givenchy, Ralph Lauren, Geoffrey Beene, Lanvin and Ted Lapidus.
It is further directed that, in cases where warranted, Philippine registrants of such trademarks should
be asked to surrender their certificates of registration, if any, to avoid suits for damages and other legal
action by the trademarks foreign or local owners or original users.

You are also required to submit to the undersigned a progress report on the matter.

For immediate compliance.

In a Memorandum dated 25 October 1983, then Minister of Trade and Industry Roberto Ongpin affirmed
the earlier Memorandum of Minister Villafuerte. Minister Ongpin directed the Director of Patents to
implement measures necessary to comply with the Philippines obligations under the Paris Convention,
thus:

1. Whether the trademark under consideration is well-known in the Philippines or is a mark already
belonging to a person entitled to the benefits of the CONVENTION, this should be established, pursuant
to Philippine Patent Office procedures in inter partes and ex parte cases, according to any of the
following criteria or any combination thereof:

a. a declaration by the Minister of Trade and Industry that the trademark being considered is
already well-known in the Philippines such that permission for its use by other than its original
owner will constitute a reproduction, imitation, translation or other infringement;

b. That the trademark is used in commerce internationally, supported by proof that goods bearing
the trademark are sold on an international scale, advertisements, the establishment of factories,
sales offices, distributorships, and the like, in different countries, including volume or other
measure of international trade and commerce;

c. that the trademark is duly registered in the industrial property office(s) of another country or
countries, taking into consideration the dates of such registration;

d. that the trademark has been long established and obtained goodwill and general international
consumer recognition as belonging to one owner or source;

e. that the trademark actually belongs to a party claiming ownership and has the right to
registration under the provisions of the aforestated PARIS CONVENTION.

2. The word trademark, as used in this MEMORANDUM, shall include tradenames, service marks,
logos, signs, emblems, insignia or other similar devices used for identification and recognition by
consumers.

3. The Philippine Patent Office shall refuse all applications for, or cancel the registration of, trademarks
which constitute a reproduction, translation or imitation of a trademark owned by a person, natural or
corporate, who is a citizen of a country signatory to the PARIS CONVENTION FOR THE PROTECTION
OF INDUSTRIAL PROPERTY.

x x x x (Emphasis supplied)

In Mirpuri, the Court ruled that the essential requirement under Article 6bis of the Paris Convention is
that the trademark to be protected must be well-known in the country where protection is sought. The
Court declared that the power to determine whether a trademark is well-known lies in the competent
authority of the country of registration or use. The Court then stated that the competent authority would
either be the registering authority if it has the power to decide this, or the courts of the country in question
if the issue comes before the courts.

To be protected under the two directives of the Ministry of Trade, an internationally well-known mark
need not be registered or used in the Philippines. All that is required is that the mark is well-known
internationally and in the Philippines for identical or similar goods, whether or not the mark is registered
or used in the Philippines. The Court ruled in Sehwani, Incorporated v. In-N-Out Burger, Inc.:
The fact that respondents marks are neither registered nor used in the Philippines is of no moment.
The scope of protection initially afforded by Article 6bis of the Paris Convention has been expanded in
the 1999 Joint Recommendation Concerning Provisions on the Protection of Well-Known Marks,
wherein the World Intellectual Property Organization (WIPO) General Assembly and the Paris Union
agreed to a nonbinding recommendation that a well-known mark should be protected in a country even
if the mark is neither registered nor used in that country. Part I, Article 2(3) thereof provides:

[ (3) Factors Which Shall Not Be Required] (a) A Member State shall not require, as a condition for
determining whether a mark is a well-known mark:

(i) that the mark has been used in, or that the mark has been registered or that an application
for registration of the mark has been filed in or in respect of, the Member State:

(ii) that the mark is well known in, or that the mark has been registered or that an application
for registration of the mark has been filed in or in respect of, any jurisdiction other than the
Member State; or

(iii) that the mark is well known by the public at large in the Member State. (Italics in the original
decision; boldface supplied)

Indeed, Section 123.1(e) of R.A. No. 8293 now categorically states that a mark which is considered by
the competent authority of the Philippines to be well-known internationally and in the Philippines,
whether or not it is registered here, cannot be registered by another in the Philippines. Section 123.1(e)
does not require that the well-known mark be used in commerce in the Philippines but only that it be
well-known in the Philippines. Moreover, Rule 102 of the Rules and Regulations on Trademarks,
Service Marks, Trade Names and Marked or Stamped Containers, which implement R.A. No. 8293,
provides:

Rule 102.Criteria for determining whether a mark is well-known.In determining whether a mark is
well-known, the following criteria or any combination thereof may be taken into account:

The duration, extent and geographical area of any use of the mark, in particular, the duration, extent
and geographical area of any promotion of the mark, including advertising or publicity and the
presentation, at fairs or exhibitions, of the goods and/or services to which the mark applies;

a. the market share, in the Philippines and in other countries, of the goods and/or services to
which the mark applies;
b. the degree of the inherent or acquired distinction of the mark;
c. the quality-image or reputation acquired by the mark;
d. the extent to which the mark has been registered in the world;
e. the exclusivity of registration attained by the mark in the world;
f. the extent to which the mark has been used in the world;
g. the exclusivity of use attained by the mark in the world;
h. the commercial value attributed to the mark in the world;
i. the record of successful protection of the rights in the mark;
j. the outcome of litigations dealing with the issue of whether the mark is a well-known mark; and
k. the presence or absence of identical or similar marks validly registered for or used on
identical or similar goods or services and owned by persons other than the person claiming that
his mark is a well-known mark. (Emphasis supplied)

Since any combination of the foregoing criteria is sufficient to determine that a mark is well-known, it
is clearly not necessary that the mark be used in commerce in the Philippines. Thus, while under the
territoriality principle a mark must be used in commerce in the Philippines to be entitled to protection,
internationally well-known marks are the exceptions to this rule.

In the assailed Decision of the Office of the Director General dated 21 April 2008, the Director General
found that:

Traced to its roots or origin, HARVARD is not an ordinary word. It refers to no other than Harvard
University, a recognized and respected institution of higher learning located in Cambridge,
Massachusetts, U.S.A. Initially referred to simply as the new college, the institution was named
Harvard College on 13 March 1639, after its first principal donor, a young clergyman named John
Harvard. A graduate of Emmanuel College, Cambridge in England, John Harvard bequeathed about
four hundred books in his will to form the basis of the college library collection, along with half his
personal wealth worth several hundred pounds. The earliest known official reference to Harvard as a
university rather than college occurred in the new Massachusetts Constitution of 1780.

Records also show that the first use of the name HARVARD was in 1638 for educational services, policy
courses of instructions and training at the university level. It has a Charter. Its first commercial use of
the name or mark HARVARD for Class 25 was on 31 December 1953 covered by UPTON Reg. No.
2,119,339 and 2,101,295. Assuming in arguendo, that the Appellate may have used the mark
HARVARD in the Philippines ahead of the Appellant, it still cannot be denied that the Appellants use
thereof was decades, even centuries, ahead of the Appellees. More importantly, the name HARVARD
was the name of a person whose deeds were considered to be a cornerstone of the university. The
Appellants logos, emblems or symbols are owned by Harvard University. The name HARVARD and
the logos, emblems or symbols are endemic and cannot be separated from the institution.

Finally, in its assailed Decision, the Court of Appeals ruled:

Records show that Harvard University is the oldest and one of the foremost educational institutions in
the United States, it being established in 1636. It is located primarily in Cambridge, Massachusetts and
was named after John Harvard, a puritan minister who left to the college his books and half of his estate.

The mark Harvard College was first used in commerce in the United States in 1638 for educational
services, specifically, providing courses of instruction and training at the university level (Class 41). Its
application for registration with the United States Patent and Trademark Office was filed on September
20, 2000 and it was registered on October 16, 2001. The marks Harvard and Harvard Ve ri tas Shield
Symbol were first used in commerce in the United States on December 31, 1953 for athletic uniforms,
boxer shorts, briefs, caps, coats, leather coats, sports coats, gym shorts, infant jackets, leather jackets,
night shirts, shirts, socks, sweat pants, sweatshirts, sweaters and underwear (Class 25). The
applications for registration with the USPTO were filed on September 9, 1996, the mark Harvard was
registered on December 9, 1997 and the mark Harvard Ve ri tas Shield Symbol was registered on
September 30, 1997.

We also note that in a Decision dated 18 December 2008 involving a separate case between Harvard
University and Streetward International, Inc., the Bureau of Legal Affairs of the IPO ruled that the mark
Harvard is a well-known mark. This Decision, which cites among others the numerous trademark
registrations of Harvard University in various countries, has become final and executory.

There is no question then, and this Court so declares, that Harvard is a well-known name and mark
not only in the United States but also internationally, including the Philippines. The mark Harvard is
rated as one of the most famous marks in the world. It has been registered in at least 50 countries. It
has been used and promoted extensively in numerous publications worldwide. It has established a
considerable goodwill worldwide since the founding of Harvard University more than 350 years ago. It
is easily recognizable as the trade name and mark of Harvard University of Cambridge, Massachusetts,
U.S.A., internationally known as one of the leading educational institutions in the world. As such, even
before Harvard University applied for registration of the mark Harvard in the Philippines, the mark was
already protected under Article 6bis and Article 8 of the Paris Convention. Again, even without applying
the Paris Convention, Harvard University can invoke Section 4(a) of R.A. No. 166 which prohibits the
registration of a mark which may disparage or falsely suggest a connection with persons, living or dead,
institutions, beliefs x x x.

WHEREFORE, we DENY the petition. We AFFIRM the 24 October 2008 Decision and 8 January 2009
Resolution of the Court of Appeals in CA-G.R. SP No. 103394.

SO ORDERED.

Nachura, Peralta, Abad and Mendoza, JJ., concur.

Petition denied, judgment and resolution affirmed.


Note. An applicants declaration in his Comment and Memorandum before the Supreme Court that
he has not filed the Declaration of Actual Use (DAU) as mandated by pertinent provisions of R.A. No.
8293 is a judicial admission that he has effectively abandoned or withdrawn any right or interest in his
trademark. (Mattel, Inc. vs. Francisco, 560 SCRA 504 [2008])

o0o

In Re Petition for Registration of Trademark "FREEDOM" under section 4 of Republic Act No.
166 filed in the Philippine Patent Office bearing Serial No. 38. Co TIONG SA, applicant
petitioner
vs.
DIRECTOR OF PATENTS, respondent, SAW Woo CHIONG & Co., oppositor

No. L-5378. May 24, 1954

1. TRADEMARKS: TESTS OF SIMILARITY; WHEN INFRINGEMENT TAKES PLACE. Differences


or variations in the details of one trademark and of another are not the legally accepted tests of
similarity in trademarks. The question of infringement of trademark is to be determined by the test
of dominancy. Similarity in size, form, and color, while relevant, is not conclusive. Duplication or
imitation is not necessary; nor is it necessary that the infringing label should suggest an effort to
imitate. There is infringement of trademark when the use of the marks involved would be likely to
cause confusion or mistake in the mind of the public or to deceive purchasers.

2. ID.; ID.; ID.; WHEN TRADEMARK CAUSES CONFUSION. Infringement of trademark is a form
of unfair competition and unfair competition is always a question of fact. The universal test has been
said to be whether the public is likely to be deceived.

3. ID.; SlMILARITY OR DlSSIMILARITY CAN BE DETERMINED BY COMPARISON OF FACSIMILES


SUBMITTED; FAILURE TO SUBMIT TESTIMONIES OF WlTNESSES ON THE ALLEGED
SlMILARITY OR DlSSIMILARITY NOT GROUND FOR DISMISSAL OF OPPOSITION. The
question of similarity or dissimilarity of trademarks can be determined by a mere examination and
comparison of the competing trademarks. Failure on the part of the oppositor to submit the testimony
of witnesses, who are to give opinions on the alleged similarity or dissimilarity, can not be a ground
for a dismissal of an opposition.

APPEAL from a decision of the Director of Patents.

The facts are stated in the opinion of the Court.

Antonio Fa., Quesada, Floro Crisologo. Manuel A. Par and Rizalino L. Favila, for petitioner.

Eufemio E. de Mesa and E. L. Gonzales for oppositor.

First Assistant Solicitor General Ruperto Kapunan, Jr. and Solicitor Pacifico P. de Castro for
respondent.

LABRADOR, J.:

This is an appeal filed by Co Tiong Sa, applicant for registration of the trademark "FREEDOM" and its
corresponding design, against a decision of the Director of Patents sustaining the opposition thereto of
Saw Woo Chiong & Co., and denying the application. The applicant in said registration proceeding, now
petitioner in this Court, has used the trademark on undershirts and T-shirts since March, 1947. The
trademark sought to be registered is "FREEDOM". The word "FREEDOM" is in hand print, with a slight
slant to the right. In the facsimiles attached to the original application, there are no letters, lines, or
figures around the word, but in the label, Exhibit D-1, the said word is preceded by a triangle, with the
letter "F" inside and small letters "H.L." under. A capital letter "L" is on the lower right-hand corner; and
all of these are enclosed in a rectangle of double lines. In Exhibit D-2, the label is the same word
"FREEDOM" with a capital letter "M" above it, a flourish under the word "FREEDOM" and the words
"HIGH QUALITY" thereunder. The label used for boxes is similar to label Exhibit D-1, except that the
rectangle is in a heavy line and is longer.

The label presented by Saw Woo Chiong & Co., oppositor-respondent herein (Exhibit D-3), consist of
the word "FREEMAN" in hand print, with a right slant, above the middle of which is a vignette of a man
wearing a tophat, which vignette is preceded by the small word "The" in print and followed by two
parallel lines close to each other, and the words "PERFECT WEAR" in smaller letters under the word
"FREEMAN". This trademark was registered in 1947 in the Bureau of Commerce and re-registered in
the Patent Office on September 22, 1948. This trademark is used not only on shirts, but also on polo
shirts, undershirts, pajamas, skippers, and T-shirts, although in the year 1947 Saw Woo Chiong & Co.
discontinued manufacturing skippers and T-shirts on the ground of scarcity of materials. This trademark
has been used since 1938, and it had been advertised extensively in newspapers, magazines, etc.

The applicant-petitioner claims that in sustaining the objection of the oppositor-respondent, the Director
of Patents erred: (1) in holding that in determining an opposition in the registration of trademarks,
attention should be centered upon the central idea of each trademark, disregarding their differences in
details; (2) in holding that if the central idea of each trademark gives the same general impression, the
two trademarks should be adjudged as confusingly similar; (3) in holding that the word "FREEDOM"
and "FREEMAN" convey the same general impression, hence must be adjudged to be confusingly
similar; (4) in holding that if the word "FREEDOM" is allowed to be registered as trademark, although
no confusion and deception will actually take place, the oppositor will nevertheless be damaged; and
(5) in holding that the oppositor is not required to introduce testimony to substantiate the claim made in
its opposition.

The first four assignments of error are related to each other and may be considered together. There is
no question that if the details of the two trademarks are to be considered, many differences would be
noted that would enable a careful and scrutinizing eye to distinguish one trademark from the other.
Thus, we have the vignette of a man wearing a tophat, which would distinguish the oppositor's label
from the triangle with the letter "F" on the right hand corner of applicant's label. Then we also have the
rectangle enclosing the applicant's mark, which rectangle is absent in that of the oppositor's. But
differences of variations in the details of one trademark and of another are not the legally accepted tests
of similarity in trademarks. It has been consistently held that the question of infringement of a trademark
is to be determined by the test of dominancy. Similarity in size, form, and color, while relevant, is not
conclusive. If the competing trademark contains the main or essential or dominant features of another,
and confusion and deception is likely to result, infringement takes place. Duplication or imitation is not
necessary; nor is it necessary that the infringing label should suggest an effort to imitate. (G. Heilman
Brewing Co. vs. Independent Brewing Co., 191 F., 489, 495, citing Eagle White Lead Co. vs. Pflugh
(CC) 180 Fed. 579.) The question at issue in cases of infringement of trademarks is whether the use of
the marks involved would be likely to cause confusion or mistake in the mind of the public or to deceive
purchasers. (Auburn Rubber Corporation vs. Honover Rubber Co., 107 F. 2d, 588, citing Procter and
Gamble Co. vs. J. L. Prescott Co., 49 F. 2d, 959, 18 CCPA, Patert, 1433; Pepsodent Co. vs. Comfort
Manufacturing Co., 83 F. 2d, 906, 23 CCPA, Patents, 1224.)

When would a trademark cause confusion in the mind of the public or in those unwary customers or
purchasers? It must be remembered that infringement of a trademark is a form of unfair competition
(Clarke vs. Manila Candy Co., 36 Phil., 100), and unfair competition is always a question of fact. The
universal test has been said to be whether the public is likely to be deceived. (Alhambra Cigar &
Cigarette Co. vs. Mojica, 27 Phil., 266.)

When a person sees an object, a central or dominan tidea or picture thereof is formed in his mind. This
dominant picture or idea is retained in the mind. and the decorations or details are forgotten. When one
sees the city hall of Baguio, the dominant characteristics which are likely to be retained in the mind are
the portico in the middle of the building, the tower thereon, the four columns supporting it, and the wings
on both sides. The features that are retained are the peculiar, dominant features. When one sees the
Legislative Building in Manila, the picture that is retained is that of a majestic low building with concrete
columns all around. In this mind-picture the slight or minor decorations are lost sight of, and the central
figure only is retained. So is it with a customer or purchaser who sees a label. He retains in his mind
the dominant characteristics or features or central idea in the label, and does not retain or forgets the
attendant decorations, flourishes, or variations. The ordinary customer does not scrutinize the details
of the label; he forgets or overlooks these, but retains a general impression, or a central figure, or a
dominant characteristic. The reason for the above has been explained in the following manner:

* * * This rule has a basis in experience. The average person usually will not, and often can not, take in
at a casual glance all, or even a large part of the details of what he looks at. What part or parts of two
trademarks which are alleged to be similar does the average ordinary buyer see when he looks at them?
What features of them are remembered by the average buyer? We do not really hear all that is spoken
in our hearing. Far from all we see or hear casually is retained sufficiently clearly or insufficient detail
for us to get a lasting impression of it which we can remember when we encounter the mark again. The
importance of this rule is emphasized by the increase of radio advertising in which we are deprived of
the help of our eyes and must depend entirely on the ear.

The average buyer usually seeks a sign, some special, easily remembered earmarks of the brand he
has in mind. It may be the color, sound, design, or a peculiar shape or name. Once his eyes see that
or his ear hears it, he is satisfied. An unfair competitor need not copy the entire mark to accomplish his
fraudulent purpose. It is enough if he takes the one feature which the average buyer is likely to
remember. (Nims, The Law of Unfair Competition and Trademarks, 4th ed., Vol. 2, pp. 678-679). The
question of infringement is to be determined by the test of dominancy. The dissimilarity in size, form
and color of the label and the place where applied are not conclusive. If the competing label contains
the trademark of another, and confusion or deception is likely to result, infringement takes place,
regardless of the fact that the accessories are dissimilar. Duplication or exact imitation is not necessary;
nor is it necessary that the infringing label should suggest an effort to imitate. (G. Heilman Brewing Co.
vs. Independent Brewing Co., 191 F., 489, citing Eagle Co. vs. Pflugh (C.C.) 180 F., 579.)

In order to constitute infringement, it is not necessary that the trademark be literally copied. * * *. Neither
is it necessary that every word be appropriated. There may be infringement where the substantial and
distinctive part of the trademark is copied or imitated * * *. Dissimilarity in size, form and color of the
label and place where it is applied are not conclusive against infringement. * * *. The resemblances may
so far dominate the differences as to be likely to deceive ordinary purchasers. (Queen Mfg. Co. vs.
Isaac Ginsberg Bros. Co., 25 F 2d, 284, 287. See also Rinchley, Inc. vs. George Hess Co., Inc., et al,
24 F., Supp. 94.)

Upon examination of the trademark of the oppositor-respondent, one will readily see that the dominant
feature is the word "FREEMAN" written in a peculiar print, slightly slanting to the right, with a peculiarly
written capital letters "FF". These dominant features or characteristics of oppositor's trademarks are
reproduced or imitated in applicant's trademark. In the first place, the word "FREEDOM" conveys a
similar idea as the word "FREEMAN". In the second place, the style in which both capital "F" are written
are similar. The print and slant of the letters are also similar. An ordinary purchaser or an unsuspecting
customer who has seen the oppositor's label sometime before will not recognize the difference between
that label and applicant's label. He may notice some variations, but he will ignore these, believing that
they are variations of the same trademark to distinguish one kind or quality of goods from another.

For purposes of illustration, the following words have been held to have the same significance or to
have the same appearance and meaning.

"CELDURA" and "CORDURA".That both marks considered as a whole are similar in meaning and
appearance can not be doubted. When spoken as written they sound very much alike. Similarity of
sound alone, under such circumstances, is sufficient to cause the marks to be regarded as confusingly
similar when applied to merchandise of the same descriptive properties. (Celanes Corporation of
America vs. E. I. Du Pont de Nemours & Co. (1946), 154 F. 2d 146 148.)

"SKOAL" and "SKOL", "SKOAL" was held identical in sound and meaning to "SKOL". (Skol Co., Inc.,
vs. Olson, 151 F. 2d, 200.)

In this jurisdiction we have held that the name "Lusolin" is an infringement of the trademark "Sapolin,"
as the sound of the two names is almost the same, and the labels of containers being almost the same
in respect to color, size, and other characteristics. (Sapolin Co. vs. Balmeceda and Germann & Co., 67
Phil., 705.)
In the case of La Insular vs. Jao Oge, 47 Phil., 75, plaintiff's label represented a European female, while
defendant's was a Filipino, but both labels exhibited a matron seated on a platform with a view of Manila
Bay looking towards Mariveles at sunset. In spite of the fact that the posture and coloring were slightly
different, defendant's labels were declared to constitute an infringement of plaintiff's labels.

After a careful study, we find that the dominant characteristic of oppositor's trademark "FREEMAN" has
been imitated in applicants's trademark "FREEDOM," such as to confuse the public and unwary
customers and purchasers, and to deceive them into believing that the articles bearing one label are
similar or produced by the same manuf acturer as those carrying the other label. The decision of the
Director of Patents sustaining the opposition and denying the application must, therefore, be affirmed.

With respect to the fifth assignment of error (first in petitioner's brief), it must be remembered that the
question of similarity or dissimilarity, while it is a question of opinion, is to be determined by the court
mainly on the basis of the facsimiles or labels or pictures submitted to the Director of Patents. In the
case at bar, innumerable exhibits were presented to show the similarity. Similarity or dissimilarity can
be determined by the Director of Patents, or by this Court on appeal, by a mere examination and
comparison of the competing trademarks. Failure on the part of the oppositor to submit the testimony
of witnesses, who are to give opinions on the alleged similarity or dissimilarity, can not, therefore, be a
ground for a dismissal of an opposition. We hold that the Director of Patents did not err in denying the
motion for dismissal presented by the applicant upon the failure of the oppositor to submit witnesses to
sustain his opposition.

Finding no error in the decision appealed from, the same is hereby affirmed, with costs against the
applicant-petitioner Co Tiong Sa.

Pars, C. J., Pablo, Bengzon, Montemayor, Reyes, A., Jugo, Bautista Angelo, and Concepcion, JJ.,
concur,

Judgment affirmed.

o0o

LIM HOA, petitioner, vs. DIRECTOR OF PATENTS, respondent.


No. L-8072. October 31, 1956

1. TRADEMARK; INFRINGEMENT OF, HOW DETERMINEDIt has been consistently held that the
question of infringement of a trademark is to be determined by the test of dominancy. Similarity in size,
form, and color, while relevant, is not conclusive. If the competing trademark contains the main or
essential or dominant features of another, and confusion and deception is likely to result, infringement
takes place. Duplication or imitation is not necessary; nor it is necessary that the infringing label should
suggest an effort to imitate. (Co. Tiong Sa vs. Director of Patents, L-5372, May 24, 1954.

2. ID.; ID.; MARKS WHICH WOULD LIKLY CAUSE CONFUSION OR EVEN DECEPTION; CASE AT
BARThe two roosters appearing on the trademark of the applicant and the hen appearing on the
trademark of the oppositor, although of different sexes, belong to the same family of the chicken, known
as manok in all the principal dialects of the Philippines, and when a cook or a household help or even
a housewife buys a food seasoning product for the kitchen, the brand of Manok or Marca Manok
would most likely be upper most in her mind and would influence her in selecting the product, regardless
of whether the brand pictures a hen or a rooster or two rooster. To her, they are all manok. Therein lies
the confusion, even deception.

PETITION for review by certiorari of an order of the Director of Patents.

The facts are stated in the opinion of the Court.

Perfecta E. de Vera for petitioner.

Solicitor General Ambrosio Padilla, First Assistant Solicitor General Guillermo E. Torres and Solicitor
Meliton G. Soliman for respondent.
MONTEMAYOR, J.:

On April 26, 1949, the petitioner, Lim Hoa, filed with the Patent Office an application for the registration
of a trademark, consisting of a representation of two midget roosters in an attitude of combat with the
word Bantam printed above them, he claiming that he had used said trademark on a food seasoning
product since April 25 of that year. The application was published in the Official Gazette in its issue of
February, 1953, released for circulation on April 18, of the same year. On April 30, 1953, the Agricom
Development Co., Inc., a domestic corporation, opposed the application on several grounds, among
others, that the trademark sought to be registered was confusingly similar to its register mark, consisting
of a pictorial representation of a hen with the words Hen Brand and Marca Manok, which mark or
brand was also used on a food seasoning product, before the use of the trademark by the applicant.

It is a fact that the family of C. Javier Advincula, since the year 1946, had adopted and used as a
trademark of said food seasoning product manufactured by it, the pictorial representation of a hen. In
1947, the members of the Advincula family organized the Agricom Development Co., Inc., the oppositor
in this case, and said corporation took over the manufacture of the same food product of the Advincula
family, including the use of the brand of the pictorial representation of a hen but adding to it the word
Hen. In. the year 1948, an addition was made to the brand with the words Ve-Tsin, Hen Brand and
Marca Manok, and since then, on its food seasoning product at different times, labels were used, in
different colors but bearing the representation of a hen and the words just mentioned. So that the
application to register applicants brand, consisting of two roosters is an attitude of combat, with the
word Bantam printed above them, came along after the use and registration of the mark or brand of
the oppositor corporation and its predecessor, the Advincula family.

After considering the application and the opposition thereto, and after comparing the two brands, the
Director of Patents issued his order dated June 26, 1954, wherein he found and held that to allow the
registration of the applicants trademark would likely cause confusion or mistake or deceive purchasers,
and he refused registration of said trademark, under Rule 178 of the Revised Rules of Practice in
Trademark Cases, 1953. The petitioner is now appealling said order.

After a careful examination of the facts above mentioned, and after comparing the two brands, we do
not hesitate to say and to hold that there is such similarity between the two brands as to cause confusion
in the mind of the public that buys the food seasoning product on the strenght and on the indication of
the trademark or brand identifying or distinguishing the same. In the case of Go Tiong Sa vs. Director
of Patents, (95 Phil., 1), we had occasion to say the following:

"* * * It has been consistently held that the question of infringement of a trademark is to be determined
by the test of dominancy. Similarity in size, form, and color, -while relevant, is not conclusive. If the
competing trademark contains the main or essential or dominant features of another, and confusion
and deception is likely to result, infringement takes place. Duplication or imitation is not necessary; nor
it is necessary that the infringing label should suggest an effort to imitate. (C. Neilman Brewing Co. vs.
Independent Brewing Co., 191 F. 489, 495, citing Eagle White Lead Co. v. Pflugh (CC) 180 Fed. 579).
The question at issue in cases of infringement of trademarks is whether the use of the marks involved
would be likely to cause confusion or mistakes in the mind of the public or deceive purchasers. (Auburn
Rubber Corporation vs. Honover Rubber Co., 107 F 2d 588, 590, citing Procter and Gamble Co. vs.
J.L. Prescot Co., 49 F 2d 959, 18 CCPA, Patents, 1433; Pepsodent Co. vs. Comfort Manufacturing Co.,
83 F 2d 906; 23 CCPA, Patents, 124)"

The danger of confusion in trademarks and brands which are similar may not be so great in the case of
commodities or articles of relatively great value, such as, radio and television sets, air conditioning units,
machinery, etc., for the prospective buyer, generally the head of the family or a businessman, before
making the purchase, reads the pamphlets and all literature available, describing the article he is
planning to buy, and perhaps even makes comparisons with similar articles in the market. He is not
likely to be deceived by similarity in the trademarks because he makes a more or less thorough study
of the same and may even consult his friends about the relative merit and performance of the article or
machinery, as compared to others also for sale. But in the sale of a food seasoning product, a kitchen
article of everyday consumption, the circumstances are far different. Said product is generally
purchased by cooks and household help, sometimes illiterate who are guided by pictorial
representations and the sound of the word descriptive of said representation. The two roosters
appearing in the trademark of the applicant and the hen appearing on the trademark of the oppositor,
although of different sexes, belong to the same family of chicken, known as manok in all the principal
dialects of the Philippines, and when a cook or a household help or even a housewife buys a food
seasoning product for the kitchen the brand of Manok or Marca Manok would most likely be upper
most in her mind and would influence her in selecting the product, regardless of whether the brand
pictures a hen or a rooster or two roosters. To her, they are all manok. Therein lies the confusion, even
deception.

We do not see why applicant could not have streched his imagination even a little and extended his
choice to other members of the animal kingdom, as a brand to differentiate his product from similar
products in the market. In a similar case decided by this Tribunal wherein, although one brand consisting
of the representation of a rooster was already being used by one party, another party wanted to register
a similar brand, consisting of two roosters on a similar product, namely, candy, this Court said:

Counsel for defendant insists that there is no real resemblance between a picture of one rooster and
a picture of two roosters; that no person could or would be deceived by the use by the defendant of a
trade-mark wholly distinct from that of the plaintiff; that the fact that the defendant used two roosters as
its trademark clearly discloses its innocence of any intent to deceive, since a comparison of the trade-
mark of the plaintiff with that of the defendant makes apparent at once that was not intended to be an
imitation of the other.

We ask, however, why, with all the birds in the air, and all the fishes in the sea, and all the animals on
the face of the earth to choose from, the defendant company selected two roosters as its trade-mark,
although its directors, and managers must have been well aware of the long-continued use of a rooster
by the plaintiff in connection with the sale and advertisement of his goods?
There is nothing in the picture of one or more roosters which in itself is descriptive of the goods sold
by the plaintiff or by the defendant corporation, or suggestive of the quality of these goods. A cat, or
dog, a carabao, a shark, or an eagle stamped upon the container in which candies are sold would serve
as well as a rooster for purposes of identification as the product of defendants factory. Why did
defendant select two roosters as its trade-mark? We can not doubt that it was because the plaintiffs
candies had acquired a certain reputation under the trade-mark of a rooster, and the defendant
corporation hoped to profit unjustly by that reputation. Defendant knew that the use of a single rooster
would be prohibited as a technical infringement of plaintiffs trade-mark, but it hoped that it could avoid
that danger by the use of two roosters; and at the Same time get such advantage as it must have
believed it could secure from the use of a design on the containers of its goods, not absolutely identical
with that used by the plaintiff, but so similar in the dominant idea as to confuse or mislead the
purchasers. * * *." (Clarke vs. Manila Candy Co., 100 Phil. 36).

In view of the foregoing, the order appealed from is hereby affirmed, with costs. We do not deem it
necessary to discuss and rule upon the other questions raised in the appeal.

Pars, C.J., Padilla, Bautista Angelo, Labrador, Concepcion, Reyes, J.B. L., and Felix, JJ., concur.
Order affirmed.

o0o

MARVEX COMMERCIAL Co., INC., petitioner, vs. PETRA HAWPIA :& Co., and THE DIRECTOR
OF PATENTS, respondents.

No. L-19297. December 22, 1966.

Trademarks; Applicant should prove ownership of trademark sought to be registered. The right to
register trademarks is based on ownership. The applicant has the burden of proving ownership. Where
the applicant's alleged ownership is not shown in any notarial document and the applicant appears to
be merely an importer or distributor of the merchandise covered by said trademark, its application
cannot be granted.

Same; Director of Patents; Supreme Court; Findings of Director of Patents on similarity of trademarks
is reviewable by Supreme Court. Although the Director of Patents is the official vested by law with
the power to administer the registration of trademarks and trade names, his opinion on the matter of
similarity or dissimilarity of trademarks and tradenames is not conclusive upon the Supreme Court which
may review his conclusions on the matter.

Same; Trademarks "'Lionpas" and "Salonpas" plaster are confusingly similar. The trademark
"Lionpas" for medicated plaster cannot be registered because it is confusingly similar to "Salonpas," a
registered trademark also for medicated plaster. Both words have the same suffix, "pas" which denotes
a plaster, with curative powers, that adheres to the body. However, as "pas" is merely descriptive and
furnishes no indication of the origin of the article, it is open for appropriation by. anyone and may
properly become the subject of a trademark by combination with another word or phrase. Although two
letters of "Salonpas" are missing in "Lionpas," nevertheless, when the two words are pronounced, the
sound effects are confusingly similar. Where goods are advertised over the radio, similarity in sound is
of special significance. Similarity of sound is a sufficient ground for holding that the two marks are
confusingly similar when applied to merchandise of the same descriptive properties.

PETITION for review by certiorari of a decision of the Director of Patents.

The facts are stated in the opinion of the Court.

Sta. Ana & Lasam for petitioner.

A.S. Donato for respondent Petra Hawpia :& Co.

Solicitor General for respondent Director of Patents.

CASTRO, J.:

Petra Hawpia :& Co., a partnership duly organized under the laws of the Philippines and doing business
at 543 M. de Santos (Botica Divisoria), Manila (hereinafter referred to as the applicant), on October 14,
1958 filed a petition for the registration of the trademark "LIONPAS" used on medicated plaster, with
the Philippine Patent Office, asserting its continuous use in the Philippines since June 9, 1958. 1 The
Marvex Commercial Co., Inc., a corporation also duly organized under the laws of the Philippines
(hereinafter referred to as the oppositor), on July 24, 1959 filed an opposition thereto, alleging that the
registration of such trademark would violate its right to and interest in the trademark "SALONPAS" used
on another medicated plaster, which is registered in its name under Certificate of Registration 5486,
issued by the Director of Patents on September 29, 1956, and that both trademarks when used on
medicated plaster would mislead the public as they are confusingly similar.

After due hearing, the Director of Patents in his decision of August 18, 1961 dismissed the opposition
and gave due course to the petition, stating in part that "confusion, mistake, or deception among the
purchasers will not likely and reasonably occur'" when both trademarks are applied to medicated
plaster. The oppositor moved to have the decision reconsidered. This motion was denied in a resolution
of November 27, 1961. The oppositor then interposed the present appeal.

The issues stated by the Director of Patents in his decision are the same ones now tendered by the
oppositor for resolution, namely, (1) Is the applicant the owner of the trademark "LIONPAS"?; (2) Should
the application be rejected on the ground that the applicant made false representations in placing the
phrase "Reg. Phil. Pat. Off." below the trademark "LIONPAS" on its cartons?, and (3) Is the trademark
"LIONPAS" confusingly similar to the trademark "SALONPAS"?

We do not consider the second issue of any importance; we will thus proceed to resolve the first and
third issues. Is the applicant the owner of the trademark "LIONPAS?"

Under sections 1) and 2-A of the Trade Mark Law, as amended, the right to register trademarks,
tradenames and service marks by any person, corporation, partnership or association domiciled in the
Philippines or in any foreign country, is based on ownership, and the burden is upon the applicant to
prove such ownership (Operators, Inc. vs. The Director of Patents, et al., L-17901, Oct. 29, 1965).

The Director of Patents found, on the strength of exhibits 5. and 5, for the applicant, that the latter has
"satisfactorily shown" its ownership of the trademark sought to be registered. Exhibit 5. is a letter dated
June 20, 1958, sent by "OSAKA BOEKI KAISHA, LTD. to the applicant which tends to show that the
former, for a $1 consideration, has assigned, ceded, and conveyed all its "rights, interests and goodwill
in the tradename LIONPAS Medicated Plaster x x x" in favor of the latter. Exhibit 5, is a joint "SWORN
STATEMENT which appears to have been executed by the presidents of "OSAKA BOEKI KAISHA,
LTD." and "ASUNARO PHARMACEUTICAL INDUSTRY CO., and tends to confirm the contents of
exhibit 5.

A careful scrutiny of exh. 5 will reveal, however, that the sender of the letter, "OSAKA BOEKI KAISHA,
LTD.", and which appears to be the seller, is merely a representative of the manufacturer "ASUNARO
PHARMACEUTICAL INDUSTRY CO." There is no proof that as such representative, the former has
been authorized by the latter to sell the trademark in question. Moreover, exh. 5 on its face appears to
have been signed only by someone whose position in the company's "Sundries Dept." is not described;
the signature is not legible. It is even contradicted by exh. 6. While exh. 5 shows that "OSAKA BOEKI
KAISHA, LTD." is a representative of "ASUNARO PHARMACEUTICAL INDUSTRY CO."; exh. 6
asserts that the former is not a respresentative of the latter, but that it is the owner of the trademark
"LIONPAS" (par. 2, exh. 6). At all events, neither averment can be accorded the weight of an assignment
of ownership of the trademark in question under the Trade Mark Law. Exh. 5 is not acknowledged. Exh.
6 does not bear the acknowledgment contemplated by the aforesaid law, particularly by the last
paragraph of section 37 and paragraph 2 of section 31 of R.A. 166, as amended, which provide as
follows:

"The registration of a mark under the provisions of this section shall be independent of the registration
in the country of origin and the duration, validity or transfer in the Philippines of such registration shall
be governed by the provisions of this Act." (Sec. 37, last par.) (Italics ours)

"The assignment must be in writing, acknowledged before a notary public or other officer authorized to
administer oaths or perform other notarial acts and certified under the hand and official seal of the
notary or other officer." (Sec. 31, par. 2)

In this case, although a sheet of paper is attached to exh. 6, on which is typewritten a certification that
the signatures of the presidents of the two named companies (referring to the signatures in exh. 6)
"have been duly written by themselves", this sheet is unmarked, unpaged, unsigned, undated and
unsealed. We have thumbed the record in quest of any definitive evidence that it is a correct translation
of the Japanese characters found on another unmarked and unpaged sheet, and have found none.

It follows from the above disquisition that exhs. 5 and 6 are legally insufficient to prove that the applicant
is the owner of the trademark in question.

As a matter of fact, the other evidence on record conclusively belies the import of exh. 6. Thus exh. A
states that the applicant is merely the "exclusive distributor" in the Philippines of the "LIONPAS"
penetrative plaster; exh. A-1 describes the applicant as the "Philippine sole distributor" of "LlONPAS";
exh. B simply states that "LIONPAS" is "manufactured exclusively for Petra Hawpio & Co. for distribution
in the Philippines."

Not being the owner of the trademark "LIONPAS" but being merely an importer and/or distributor of the
said penetrative plaster, the applicant is not entitled under the law to register it in its name (Operators,
Inc. vs. Director of Patents, supra).

Upon the third issue, the applicant preliminarily asserts that there is no justification for this Court to
disturb any finding made by the Director of Patents on appeal. This assertion is not tenable. Although
the Director of Patents is the official vested by law with the power to administer the registration of
trademarks and tradenames, his opinion on the matter of similarity or dissimilarity of trademarks and
tradenames is not conclusive upon this Court which may pass upon such determination.

The "SALONPAS" mark is not before this Court. Our meticulous examination of the entire record has
failed to yield a sample of such mark. We have therefore proceeded to analyze the two marks, vis-a-vis
each other, on the basis of what we can derive from the record for a comparative study. And our
conclusion, in disagreement with that of the Director of Patents, is not based on a comparison of the
appearance, form, style, shape, size or format of the trademarks, which we can not make because, as
we have already observed, the "SALONPAS" mark is not before us, but on a comparison of the spelling,
sound and pronunciation of the two words.
It is our considered view that the trademarks "SALONPAS" and "LIONPAS" are confusingly similar in
sound.

Both these words have the same suffix, "PAS", which is used to denote a plaster that adheres to the
body with curative powers. "Pas, being merely descriptive, furnishes no indication of the origin of the
article and therefore is open for appropriation by anyone (Ethepa vs. Director of Patents, L-20635,
March 31, 1966) and may properly become the subject of a trademark by combination with another
word or phrase.

Two letters of "SALONPAS" are missing in "LIONPAS"; the first letter a and the letter s. Be that as it
may, when the two words are pronounced, the sound effects are confusingly similar. And where goods
are advertised over the radio, similarity in sound is of especial significance (Co Tiong Sa vs. Director of
Patents, 95 Phil. -3 citing Nims, The Law of Unfair Competition and Trademarks, 4th ed., vol. 2, pp.
678-679). 'The importance of this rule is emphasized by the increase of radio advertising in which we
are deprived of help of our eyes and must depend entirely on the ear" (Operators, Inc. vs. Director of
Patents, supra).

The following random list of conf usingly similar sounds in the matter of trademarks, culled from Nims,
Unfair Competition and Trade Marks, 1947, vol. I, will reinforce our view that "SALONPAS" and
"LIONPAS" are confusingly similar in sound: "Gold Dust" and "Gold Drop"; "Jantzen" and "Jazz-Sea";
"Silver Flash" and "SupperFlash"; "Cascarete" and "Celborite"; "Celluloid" and "Cellonite"; "Chartreuse"
and "Charseurs; "Cutex" and "Cuticlean"; "Hebe" and "Meje"; "Kotex" and "Femetex"; "Zuso" and "Hoo
Hoo". Leon Amdur, in his book "TradeMark Law and Practice", pp. 419-421, cites, as coming within the
purview of the idem sonans rule, "Yusea" and "U-C-A", "Steinway Pianos" and "Steinberg Pianos", and
"Seven-Up" and "Lemon-Up". In Co Tiong vs. Director of Patents, this Court unequivocally said that
"Celdura and "Cordura" are confusingly similar in sound; this Court held in Sapolin Co. vs. Balmaceda,
67 Phil. 795 that the name "Lusolin" is an infringement of the trademark "Sapolin", as the sound of the
two names is almost the same. In the case at bar, "SALONPAS" and "LIONPAS", when spoken. sound
very much alike. Similarity of sound is sufficient ground for this Court to rule that the-two marks are
confusingly similar when applied to merchandise of the same descriptive properties (see Celanese
Corporation of America vs, E. I. Du Pont, 154 F. 2d. 146, 148).

The registration of "LIONPAS" cannot therefore be given due course.

ACCORDINGLY, the decision of the respondent Director of Patents is set aside, and the petition below
of the respondent Petra Hawpia :& Co. is hereby dismissed, at the cost of the latter respondent.
Concepcion, C.J., Reyes, J.B.L., Dizon, Regala, Makalintal, Bengzon, J.P., Zaldivar and Sanchez, JJ.,
concur.

Decision reversed; petition for registration of trademark dismissed.

Notes. See annotation under Etepha, A. G. vs. Director of Patents, L-20635, March 31, .1966, 16
Supreme Court Reports Annotated 495, 502. The Etepha case holds that the trademarks "Atussin" and
"Pertussin" are not confusingly similar.

In Bristol Myers Company vs. Director of Patents, L21587, May 19, 1966, 17 Supreme Court Reports
Annotated 128, it was held that the trademark "Bioferin" can be registered over the oposition of the
owner of the registered trademark "Bufferin

o0o

AMERICAN WIRE & CABLE COMPANY, petitioner


vs.
DIRECTOR OP PATENTS and CENTRAL BANAHAW INDUSTRIES, respondents.

No. L-26557. February 18, 1970

Civil law; Trade-marks; Registrability of trade-marks; Test to determine registrability. The


determinative factor in a contest involving registration of trade mark is not whether the challenged mark
would actually cause confusion or deception of the purchasers but whether the use of such mark would
likely cause confusion or mistake on the part of the buying public. In short, to constitute an infringement
of an existing trademark patent and warrant a denial of an application for registration, the law does not
require that the competing trademarks must be so identical as to produce actual error or mistake; it
would be sufficient, for purposes of the law, that the similarity between the two labels is such that there
is a possibility or likelihood of the purchaser of the older brand mistaking the newer brand for it.

Same; Same; Same; Same; Dominancy testEarlier rulings of the Supreme Court indicate reliance on
the dominancy test or the assessment of the essential or dominant features in the competing labels to
determining whether they are confusingly similar or cause the public to mistake one for another. Even
their similarity in sound is taken into consideration, where the marks refer to merchandise of the same
descriptive properties, for the reason that trade idem sonans constitutes a violation of trademark
patents.

Same; Same; Same; Same; Buyers less concerned with etymology of words; Duraflex and Dynaflex,
confusingly similar. The similarity between the competing trademarks, Duraflex and Dynaflex, is clear
not only from their initial letters but also in the last half of the appellations. Buyers are less concerned
with the etymology of the words as with their sound and the dominant, features of the design. The
semantic difference and connotation of the prefixes Dura and Dyna of the competing trademark
cannot make the two marks different.

Same; Same; Same; Same; Minor and insignificant differences. Differences in the mark on the front
portion of the box are minor if there is close resemblance in the general appearance of the box and the
tradenames of the articles. For the dominant and essential feature of the article is the trademark itself.
Unlike the case of commodities ordinarily picked up by the purchaser himself from the grocery or market
counters, electric wires are purchased not by their appearance but by the size (voltage) and length and,
most importantly, by brand. Except for big constructions, the task of purchasing electrical materials is
delegated to one who is not a technical man, not necessarily the designing architect or engineer who
will undertake the work of building. Unlike the pharmacists or druggists, the dispensers of hardware or
electrical supplies are not likely to pay more concern to the brand of articles asked by the customer.

APPEAL from a decision of the Director of Patents.

The facts are stated in the opinion of the Court

Sotero H. Laurel & Florencio Z. Sioson for petitioner.

Celso P. Mariano for respondents.

REYES, J.B.L., J.:

Appeal filed by the American Wire & Cable Company, owner of the registered trademark DURAFLEX
for electric wires, questioning the correctness of the decision of the Director of Patents (in Inter Partes
Case No. 290) holding that the label DYNAFLEX and Device for electric wires, sought to be registered
by the Central Banahaw Industries, Inc., is not similar to herein appellants patented mark.

On 2 June 1962, Central Banahaw Industries, Inc., applied with the Director of Patents for registration
of the trademark DYNAFLEX and Device to be used in connection with electric wires, class 20, which
mark applicant allegedly had been using since 29 March 1962. The American Wire and Cable Co., Inc.,
another domestic corporation and authorized user since 10 April 1958 of the registered trade mark
DURAFLEX and Globe representation, for electric wires, apparatus, machines and supplies, class 20,
opposed the application on the ground that applicants use of the trade mark DYNAFLEX would cause
confusion or result in mistakes to purchasers intending to buy DURAFLEX electric wires and goods, the
mark being registered allegedly having practically the same spelling, pronunciation and sound, and
covering the same goods, as that of the opposer. Besides, opposer contended that there has been no
continuous use in commerce of the applicants mark.

After due hearing, the Director of Patents rendered decision holding the applicants mark DYNAFLEX
not to be similar to the previously registered trademark, DURAFLEX. Consequently, the application of
Central Banahaw Industries for registration of DYNAFLEX was given due course and the opposition
thereto by American Wire & Cable Company dismissed. The latter interposed the present appeal.

The issue to be resolved in this proceeding is simple: whether or not the mark DYNAFLEX and Device
is registrable as label for electric wires, class 20, considering that the trademark DURAFLEX and Globe
representation, also for electric wires, machines and supplies under class 20, has been registered more
than 4 years earlier. In ruling in favor of the herein application, the Director of Patents said:

x x x The applicants trademark is a composite mark consisting of the word DYNAFLEX printed in smaii
letters of the English alphabet except that letter D is capitalized, within a fanciful device, on top of
which is the encircled initials, in downward sequence, of the Respondents corporate name, and jutting
out on two sides of the circle are bolts of lightning, symbolic of electricity.

On the other hand, Opposers trademark is DURAFLEX in Capitalized print, except that one crosspiece
of the letter X is in the form of a bolt of lightning. The word slants slightly upward, traversing the center
of a figure of the earth or globe.

Resorting now to the semantics of the words, it is clear that both marks are suffixed by the word FLEX.
The word appears in any dictionary having as common meaning to bend. In Websters Internationa]
Dictionary, it is used by the British on electric cord. However, one mark (Respondents) is prefixed with
DYNA suggesting power. It is not in itself a root word but it has been commonly associated with any
source of power. At most, it could have been derived from the Greek word Dynamis* and, generally,
the root words commonly derived therefrom are dynam and dynamo*. The other (Opposers) is
prefixed with DURA, suggesting durability, strength and endurance.

Based on the foregoing comparisons, the trademarks of the parties are different in appearance,
meaning, sound and connotation and hence, are not confusingly similar.

The pertinent law, Republic Act 166, as amended, on registrabitity of trademarks, prescribes:

SEC. 4.The owner of a trademark, 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, unless it:

xxxx xxxx xxxx

(d) Consists of or comprises a mark or trade name which so resembles a mark or trade-name registered
in the Philippines by another and not abandoned, as to be likely, when applied to or used in connection
with the goods, business or services of the applicant, to cause confusion or mistake or to deceive
purchasers. (Italics supplied)

It is clear from the above-quoted provision that the determinative factor in a contest involving registration
of trade mark is not whether the challenged mark would actually cause confusion or deception of the
purchasers but whether the use of such mark would likely cause confusion or mistake on the part of the
buying public. In short, to constitute an infringement of an existing trademark patent and warrant a
denial of an application for registration, the law does not require that the competing trademarks must
be so identical as to produce actual error or mistake; it would be sufficient, for purposes of the law, that
the similarity between the two labels is such that there is a possibility or likelihood of the purchaser of
the older brand mistaking: the newer brand for it.

The question is, when is a trademark likely to confuse or cause the public to mistake one for another.
Earlier rulings of the Court seem to indicate its reliance on the dominancy test or the assessment of the
essential or dominant features in the competing labels to determine whether they are confusingly
similar. On this matter, the Court said:

It has been consistently held that the question of infringement of a trademark is to be determined by
the test of dominancy. Similarity in size, form, and color, while relevant, is not conclusive. If the
competing trademark contains the main or essential or dominant features of another, and confusion
and deception is likely to result, infringement takes place. Duplication or imitation is not necessary, nor
is it necessary that the infringing label should suggest an effort to imitate. (C. Neilman Brewing Co. vs.
Independent Brewing Co., 191 F. 489, 495, citing Eagle White Lead Co. vs. Pflugh [CC] 180 Fed. 679).
The question at issue in cases of infringement of trademarks is whether the use of the marks involved
would be likely to cause confusion or mistakes in the mind of the public or deceive purchasers. (Go
Tiong vs. Director of Patents, 95 Phil. 1, cited in Lam Hoa vs. Director of Patents, 100 Phil. 214).

In fact, even their similarity in sound is taken into consideration, where the marks refer to merchandise
of the same descriptive properties, for the reason that trade idem sonans constitutes a violation of trade
mark patents. Thus, in the case of Marvex Commercial Co. vs. Hatvpia & Co., the registration of the
trademark Lionpas for medicated plaster was denied for being confusingly similar in sound with
Salonpas, a registered mark also for medicated plaster, the Court saying:

Two letters of SALONPAS are missing in LIONFAS, the first letter a and the letter 0. Be that as it
may, when the two words are pronounced, the sound effects are confusingly similar. And where goods
are advertised over the radio, similarity in sound is of especial significance (Co Tiong Sa vs. Director of
Patents, 95 Phil 1, citing Nims, The Law of Unfair Competition and Trademarks, 4th ed., vol. 2, pp. 678-
679). The importance of this rule is emphasized by the increase of radio advertising in which we are
deprived of help of our eyes and must depend entirely on the ear (Operators, Inc. vs. Director of
Patents, supra.)

Along the same line are the rulings denying registration of a mark containing the picture of a fish
(Bangus), as label for soy sauce, for being similar to another registered brand of soy sauce that bears
the picture of the fish carp; or that of the mark bearing the picture of two roosters with the word Bantam,
as label for food seasoning (vetsin), which would confuse the purchasers of the same article bearing
the registered mark Hen Brand that features the picture of a hen.

The present case is governed by the principles laid down in the preceding cases. The similarity between
the competing trademarks, DURAFLEX and DYNAFLEX, is apparent. Not only are the initial letters and
the last half of the appellations identical, but the difference exists only in two out of the eight literal
elements of the designations. Coupled with the fact that both marks cover insulated flexible wires under
class 20; that both products are contained in boxes of the same material, color, shape and size; that
the dominant elements of the front designs are a red circle and a diagonal zigzag commonly related to
a spark or flash of electricity; that the back of both boxes show similar circles of broken lines with arrows
at the center pointing outward, with the identical legend Cut Out Ring Draw From Inside Circle, no
difficulty is experienced in reaching the conclusion that there is a deceptive similarity that would lead
the purchaser to confuse one product with the other.

The Director of Patents has predicated his decision mostly on the semantic difference and connotation
of the prefixes Dura and Dyna of the competing trademarks, unfortunately forgetting that the buyers
are less concerned with the etymology of the words as with their sound and the dominant features of
the design.

Of course, as pointed out in the decision now on appeal, there are some differences in the mark on the
front portion of the box. But they pale into insignificance in view of the close resemblance in the general
appearance of the box and the tradenames of the articles. Indeed, measured against the dominant-
feature standard, applicants mark must be disallowed. For, undeniably, the dominant and essential
feature of the article is the trademark itself. Unlike in the case of commodities that are ordinarily picked
up by the purchaser himself from the grocery or market counters, electric wires are purchased not by
their appearance but by the size (voltage) and length and, most importantly, by brand. It is even within
laymans knowledge that different brands of wire have different characteristics and properties; and for
an essential building item as electric wires and supplies, the owner of the building would not dare risk
his property, perhaps his life, on an unknown or untested brand. He would only demand for what is
recognized to be the best.

Relying on the doctrine enunciated in the Etepha case and the earlier ruling in Lim Hoa vs. Director of
Patents, applicant-appellee contends that the DYNAFLEX mark would not confuse or deceive the
buyers and subscribers of the DURAFLEX brand, because electrical wires are of great value and the
purchasers thereof are generally intelligentthe architects, engineers and building contractors. It must
be realized, however, that except perhaps in big constructions, the designing architect or engineer, or
the contractor who will undertake the work of building, does not himself purchase or place the order for
the purchase of the materials to be used therein. The task is oftentimes delegated to another. Nor are
said technical men die ones personally laying down the wiring system in the building that they could
possibly check on whether or not the correct wires are being used. So that even if the engineer or
contractor will specify in the bill of materials the particular brand of wires needed, there is no certainty
that the desired product will be acquired. For, unlike the pharmacists or druggists, the dispensers of
hardware or electrical supplies are not generally known to pay as much concern to the brand of articles
asked for by the customer and of a person who knows the name of the brand but is not acquainted with
its appearance, the likelihood of the DYNAFLEX product being mistaken for DURAFLEX is not remote.

Of course, as in all other cases of colorable imitations, the unanswered riddle is why, of the millions of
terms and combinations of letters and designs available, the appellee had to choose those so closely
similar to anothers trademark if there was no intent to take advantage of the goodwill generated by the
other mark.

FOR THE FOREGOING CONSIDERATIONS, the decision appealed from is hereby set aside, and the
application for registration of the trademark DYNAFLEX for electric wires, class 20, is ordered denied.
No costs.

Concepcion, CJ., Dizon, Makalintal, Zaldivar, Sanchez, Castro, Fernando, Barredo and Villamor, JJ.,
concur.

Teehankee, J., took no part.

Decision set aside.

Notes. (a) Trademarks; similarity of goods, products or business. The trademark LUX used by
plaintiff on soap, was infringed by adoption of the same word as a trademark by defendant for use on
pomades (Khe vs. Leper Brothers Co., L-46817, April 18, 1941).

The question of similarity or dissimilarity between trademarks, while one of opinion, is to be determined
by the court mainly on the basis of the facsimiles or labels or pictures submitted to the Director of
Patents (Go Tiong Sa vs. Director of Patents, L-5378, May 24, 1954).

(b) Infringement. To constitute infringement, it is enough if it has the one feature which the average
buyer is likely to remember from prior acquaintanceship with the earlier mark (Go Tiong Sa vs. Director
of Patents, supra).

o0o

PHILIPPINE NUT INDUSTRY, INC., petitioner, vs. STANDARD BRANDS INCORPORATED and
TIBURCIO S. EVALLE, as Director of Patents, respondents.

No. L-23035. July 31, 1975

Trademarks; Infringement of; Marks likely to cause confusion, mistake or even deception. There is
infringement of trademark when the use of the mark involved would be likely to cause confusion or
mistake in the mind of the public or to deceive purchasers as to the origin or source of the commodity.

Same; Same; Determination of infringement a question of fact; Test of dominancy.Whether or not a


trademark causes confusion and is likely to deceive the public is a question of fact which is to be
resolved by applying the test of dominancy, meaning, if the competing trademark contains the main,
or essential or dominant features of another by reason of which confusion and deception are likely to
result, then infringement takes place; that duplication or imitation is not necessary a similarity in the
dominant features of the trademarks would be sufficient.

Same; Same; Same; Same; Word PLANTERS considered the dominant feature of trademark; Case at
bar.While it is true that PLANTERS is an ordinary word, nevertheless it is used in the labels not to
describe the nature of the product, but to project the source or origin of the salted peanuts contained in
the cans, the word PLANTERS printed across the upper portion of the label in bold letters easily attracts
and catches the eye of the ordinary consumer and it is that word and none other that sticks in his mind
when he thinks of salted peanuts.
Same; Same; Intent to pass to public ones product as that of another; Similarity of coloring scheme,
layout of words, and type and size of lettering. No producer or manufacturer may have a monopoly
of any color scheme or form of words in a label. But when a competitor adopts a distinctive or dominant
mark or feature of anothers trademark and with it makes use of the same color ensemble, employs
similar words written in a style, type and size of lettering almost identical with those found in the other
trademark, the intent to pass to the public his product as that of the other is quite obvious.

Same: Same; Same Insignificant differences in trademarks; Effect of; Case at bar. The merchandize
or goods being sold by the parties herein are very ordinary commodities purchased by the average
person and many times by the ignorant and unlettered and these are the persons who will not as a rule
examine the printed small letterings on the container but will simply be guided by the presence of the
striking mark PLANTERS on the label. Differences there will always be, but whatever differences exist,
these pale into insignificance in the face of an evident similarity in the dominant feature and overall
appearance of the labels of the parties.

Same; Same; Doctrine of secondary meaning. The doctrine is to the effect that a word or phrase
originally incapable of exclusive appropriation with reference to an article on the market, because
geographically or otherwise descriptive, might nevertheless have been used so long and so exclusively
by one producer with reference to his article that, in that trade and to that branch of the purchasing
public, the word or phrase has come to mean that the article was his product.

Same; Same; Same; Preferential right to adoption of trademark by priority of use; Case at bar. There
is evidence to show that the term PLANTERS has become a distinctive mark or symbol insofar as salted
peanuts are concerned, and by priority of use dating as far back as 1938, respondent Standard Brands
has acquired a preferential right to its adoption as its trademark warranting protection against its
usurpation by another. Ubi jus ibi remedium. Where there is a right there is a remedy.

Same; Same; Same; Temporary non-use of trademark; Effect of. Non-use of a trademark on an
article of merchandize due to legal restrictions or circumstances beyond ones control is not to be
considered as an abandonment.

Same; Same; Same; Abandonment of use of trademark; Abandonment must be permanent, intentional
and voluntary. To work an abandonment, the disuse must be permanent and not ephemeral; it must
be intentional and voluntary, and not involuntary or even compulsory. There must be a thorough-going
discontinuance of any trade-mark use of the mark in question.

Same; Findings of facts of Director of Patents conlusive on Supreme Court. Findings of fact by the
Director of Patents are conclusive and binding on the Supreme Court provided they are supported by
substantial evidence.

PETITION for review of the decision of the Director of Patents.

The facts are stated in the opinion of the Court.

Perfecta E. De Vera for petitioner.

Paredes, Poblador, Cruz & Nazareno for private respondent.

Solicitor General Arturo A. Alafriz, Acting Assistant Solicitor General Isidro C. Borromeo and Solicitor
Francisco J. Bautista for respondent Director.

MUOZ PALMA, J.:

Challenged in this petition for review is the decision of respondent Director of Patents which orders the
cancellation of Certificate of Registration No. SR-416 issued in favor of herein petitioner Philippine Nut
Industry, Inc. (hereinafter called Philippine Nut) for the trademark PHILIPPINE PLANTERS CORDIAL
PEANUTS, upon complaint of Standard Brands Inc. (hereinafter to be called Standard Brands).
The records of the case show the following incidents:
Philippine Nut a domestic corporation, obtained from the Patent Office on August 10, 1961, Certificate
of Registration No. SR-416 covering the trademark PHILIPPINE PLANTERS CORDIAL PEANUTS,
the label used on its product of salted peanuts.

On May 14, 1962, Standard Brands a foreign corporation, filed with the Director of Patente Inter Partes
Case No. 268 asking for the cancellation of Philippine Nuts certificate of registration on the ground that
the registrant was not entitled to register the mark at the time of its application for registration thereof
for the reason that it (Standard Brands) is the owner of the trademark PLANTERS COCKTAIL
PEANUTS covered by Certificate of Registration No. SR-172, issued by the Patent Office on July 28,
1958. Standard Brands alleged in its petition that Philippine Nuts trademark PHILIPPINE PLANTERS
CORDIAL PEANUTS closely resembles and is confusingly similar to its trademark PLANTERS
COCKTAIL PEANUTS used also on salted peanuts, and that the registration of the former is likely to
deceive the buying public and cause damage to it.

On June 1, 1962, Philippine Nut filed its answer invoking the special defense that its registered label is
not confusingly similar to that of Standard Brands as the latter alleges.

At the hearing of October 4, 1962, the parties submitted a partial stipulation of facts. On December 12,
1962, an amended partial stipulation of facts was submitted, the pertinent agreements contained in
which are: (1) that Standard Brands is the present owner of the trademark PLANTERS COCKTAIL
PEANUTS covered by Certificate of Registration No. SR-172 issued on July 28, 1958; (2) that Standard
Brands trademark was first used in commerce in the Philippines in December, 1938 and (3) that
Philippine Nuts trademark PHILIPPINE PLANTERS CORDIAL PEANUTS was first used in the
Philippines on December 20, 1958 and registered with the Patent Office on August 10, 1961.

On December 10, 1963, after the presentation of oral and documentary evidence and the filing by the
parties of their memoranda, respondent Director of Patents rendered Decision No. 281 giving due
course to Standard Brands petition and ordering the cancellation of Philippine Nuts Certificate of
Registration No. SR-416. The Director of Patents found and held that in the labels using the two
trademarks in question, the dominant part is the word Planters, displayed in a very similar manner
so much so that as to appearance and general impression there is a very confusing similarity, and
he concluded that Philippine Nut was not entitled to register the mark at the time of its filing the
application for registration as Standard Brands will be damaged by the registration of the same. Its
motion for reconsideration having been denied, Philippine Nut came up to this Court for a review of said
decision.

In seeking a reversal of the decision of respondent Director of Patents, petitioner brings forth eleven
assigned errors all of which revolve around one main issue: is the trademark PHILIPPINE PLANTERS
CORDIAL PEANUTS used by Philippine Nut on its label for salted peanuts confusingly similar to the
trademark PLANTERS COCKTAIL PEANUTS used by Standard Brands on its product so as to
constitute an infrigements of the latters trademark rights and justify its cancellation?

The applicable law to the case is found in Republic Act 166 otherwise known as the Trade-Mark Law
from which We quote the following pertinent provisions:

Chapter II-A.

Sec. 4. Registration of trade-marks, trade-names and service-marks on the principal register. There
is hereby established a register of trade-marks, trade-names and service-marks which shall be known
as the principal register. The owner of a 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:

(d) Consists of or comprises a mark or trade-name which so resembles a mark or trade-name


registered in the Philippines or a mark or trade-name previously used in the Philippines by another and
not abandoned, as to be likely, when applied to or used in connection with the goods, business or
services of the applicant, to cause confusion or mistake or to deceive purchasers; xx xx xx. (italics
Ours)
Sec. 17. Grounds for cancellationAny person, who believes that he is or will be damaged by the
registration of a mark or trade-name, may, upon the payment of the prescribed fee, apply to cancel said
registration upon any of the following grounds: (c) That the registration was obtained fraudulently or
contrary to the provisions of section four, Chapter II hereof; xx xx xx.

Sec. 22. Infringement, what constitutes.Any person who shall use, without the consent of the
registrant, any reproduction, counterfeit, copy or colorable imitation of any registered mark or trade-
name in connection with the sale, offering for sale, or advertising of any goods, business or services on
or in connection with which such use is likely to cause confusion or mistake or to deceive purchasers
or others as to the source or origin of such goods or services, or identity of such business; or reproduce,
counterfeit, copy or colorably imitate any such mark or trade-name and apply such reproduction,
counterfeit, copy, or colorable imitation to labels, signs, prints, packages, wrappers, receptacles or
advertisements intended to be used upon or in connection with such goods, business or services, shall
be liable to a civil action by the registrant for any or all of the remedies herein provided. (italics supplied)

In the cases involving infringement of trademark brought before the Court, it has been consistently held
that there is infringement of trademark when the use of the mark involved would be likely to cause
confusion or mistake in the mind of the public or to deceive purchasers as to the origin or source of the
commodity; that whether or not a trademark causes confusion and is likely to deceive the public is a
question of fact which is to be resolved by applying the test of dominancy, meaning, if the competing
trademark contains the main or essential or dominant features of another by reason of which confusion
and deception are likely to result, then infringement takes place; that duplication or imitation is not
necessary, a similarity in the dominant features of the trademarks would be sufficient.

1. The first argument advanced by petitioner which We believe goes to the core of the matter in litigation
is that the Director of Patents erred in holding that the dominant portion of the label of Standard Brands
in its cans of salted peanuts consists of the word PLANTERS which has been used in the label of
Philippine Nut for its own product. According to petitioner, PLANTERS cannot be considered as the
dominant feature of the trademarks in question because it is a mere descriptive term, an ordinary word
which is defined in Webster International Dictionary as one who or that which plants or sows, a farmer
or an agriculturist. (pp. 10-11, petitioners brief)

We find the argument without merit. While it is true that PLANTERS is an ordinary word, nevertheless
it is used in the labels not to describe the nature of the product, but to project the source or origin of the
salted peanuts contained in the cans. The word PLANTERS printed across the upper portion of the
label in bold letters easily attracts and catches the eye of the ordinary consumer and it is that word and
none other that sticks in his mind when he thinks of salted peanuts.

In cases of this nature there can be no better evidence as to what is the dominant feature of a label and
as to whether there is a confusing similarity in the contesting trademarks than the labels themselves. A
visual and graphic presentation of the labels will constitute the best argument for one or the other,
hence, we are reproducing hereunder a picture of the cans of salted peanuts of the parties to the case.

The picture below is part of the documentary evidence appearing in the original records, and it clearly
demonstrates the correctness of the finding of respondent Director that the word PLANTERS is the
dominant, striking mark of the labels in question.

Taken from page 15 of Record of Inter Partes Case No. 268 Bureau of Patents

It is true that there are other words used such as Cordial in petitioners can and Cocktail in Standard
Brands, which are also prominently displayed, but these words are mere adjectives describing the type
of peanuts in the labeled containers and are not sufficient to warn the unwary customer that the two
products come from distinct sources. As a whole it is the word PLANTERS which draws the attention
of the buyer and leads him to conclude that the salted peanuts contained in the two cans originate from
one and the same manufacturer. In fact, when a housewife sends her housemaid to the market to buy
canned salted peanuts, she will describe the brand she wants by using the word PLANTERS and not
Cordial nor Cocktail.
2. The next argument of petitioner is that respondent Director should not have based his decision simply
on the use of the term PLANTERS, and that what he should have resolved is whether there is a
confusing similarity in the trademarks of the parties.

It is quite obvious from the record, that respondent Directors decision is based not only on the fact that
petitioner herein adopted the same dominant mark of Standard Brands, that is, the word PLANTERS,
but that it also used in its label the same coloring scheme of gold, blue, and white, and basically the
same lay-out of words such as salted peanuts and vacuum packed with similar type and size of
lettering as appearing in Standard Brands own trademark, all of which result in a confusing similarity
between the two labels. Thus, the decision states: Furthermore, as to appearance and general
impression of the two trademarks, I find a very confusing similarity. (Italics supplied)

Referring again to the picture We have reproduced, the striking similarity between the two labels is quite
evident not only in the common use of PLANTERS but also in the other words employed. As a matter
of fact, the capital letter C of petitioners Cordial is alike to the capital C of Standards Cocktail,
with both words ending with an 1.

Admittedly, no producer or manufacturer may have a monopoly of any color scheme or form of words
in a label. But when a competitor adopts a distinctive or dominant mark or feature of anothers trademark
and with it makes use of the same color ensemble, employs similar words written in a style, type and
size of lettering almost identical with those found in the other trademark, the intent to pass to the public
his product as that of the other is quite obvious. Hence, there is good reason for Standard Brands to
ask why did petitioner herein use the word PLANTERS, the same coloring scheme, even almost
identical size and contour of the cans, the same lay-out of words on its label when there is a myriad of
other words, colors, phrases, symbols, and arrangements to choose from to distinguish its product from
Standard Brands, if petitioner was not motivated to simulate the label of the latter for its own can of
salted peanuts, and thereby deceive the public?

A similar question was asked by this Court in Clarke vs. Manila Candy Co., 36 Phil. 100, when it resolved
in favor of plaintiff a case of unfair competition based on an imitation of Clarkes packages and wrappers
of its candies the main feature of which was one rooster. The Court queried thus: . . .why, with all the
birds in the air, and all the fishes in the sea, and all the animals on the face of the earth to choose from,
the defendant company (Manila Candy Co.) selected two roosters as its trademark, although its
directors and managers must have been well aware of the long-continued use of a rooster by the plaintiff
with the sale and advertisement of its goods?. . . A cat, a dog, a carabao, a shark or an eagle stamped
upon the container in which candies are sold would serve as well as a rooster for purposes of
identification as the product of defendants factory. Why did defendant select two roosters as its
trademark? (p. 109, supra)

Petitioner contends, however, that there are differences between the two trademarks, such as, the
presence of the word Philippine above PLANTERS on its label, and other phrases, to wit: For Quality
and Price, Its Your Outstanding Buy, the address of the manufacturer in Quezon City, etc., plus a
pictorial representation of peanuts overflowing from a tin can, while in the label of Standard Brands it is
stated that the product is manufactured in San Francisco, California, and on top of the tin can is printed
Mr. Peanut and the representation of a humanized peanut. (pp. 30-33, petitioners brief)

We have taken note of those alleged differences but We find them insignificant in the sense that they
are not sufficient to call the attention of the ordinary buyer that the labeled cans come from distinct and
separate sources. The word Philippine printed in small type in petitioners label may simply give to the
purchaser the impression that that particular can of PLANTERS salted peanuts is locally produced or
canned but that what he is buying is still PLANTERS canned salted peanuts and nothing else. As
regards Mr. Peanut on Standard Brands label, the same appears on the top cover and is not visible
when the cans are displayed on the shelves, aside from the fact that the figure of Mr. Peanut is printed
on the tin cover which is thrown away after opening the can, leaving no lasting impression on the
consumer. It is also for this reason that We do not agree with petitioner that it is Mr. Peanut and the
Humanized Peanut which is the trademark of Standard Brands salted peanuts, it being a mere
descriptive pictorial representation of a peanut not prominently displayed on the very body of the label
covering the can, unlike the term PLANTERS which dominates the label.
It is correctly observed by respondent Director that the merchandize or goods being sold by the parties
herein are very ordinary commodities purchased by the average person and many times by the ignorant
and unlettered and these are the persons who will not as a rule examine the printed small tellerings on
the container but will simply be guided by the presence of the striking mark PLANTERS on the label.
Differences there will always be, but whatever differences exist, these pale into insignificance in the
face of an evident similarity in the dominant feature and overall appearance of the labels of the parties.

It is not necessary, to constitute trademark infringement, that every word of a trade-mark should be
appropriated, but it is sufficient that enough be taken to deceive the public in the purchase of a protected
article. (Bunte Bros. v. Standard Chocolates, D.C. Mass., 45 F. Supp. 478, 481)

A trade-name in order to be an infringement upon another need not be exactly like it in form and
sound, but it is enough if the one so resembles another as to deceive or mislead persons of ordinary
caution into the belief that they are dealing with the one concern when in fact they are dealing with the
other. (Foss v. Culbertson, 136 P. 2d 711, 718, 17 Wash. 2d 610)

Where a trade-mark contains a dominating or distinguishing word, and purchasing public has come to
know and designate the article by such dominating word, the use of such word by another in marking
similar goods may constitute Infringement though the marks aside from such dominating word may be
dissimilar. (Queen Mfg. Co. v. Isaac Ginsberg & Bros., CCA. Mon., 25 F. 2d 284, 287)

Infringement of trade-mark does not depend on the use of identical words, nor on the question
whether they are so similar that a person looking at one would be deceived into the belief that it was
the other; it being sufficient if one mark is so like another in form, spelling, or sound that one with not a
very definite or clear recollection as to the real mark is likely to be confused or misled. (Northam Warren
Corporation v. Universal Cosmetic Co., C. C. A. III., 18 F. 2d 774, 775)
3. What is next submitted by petitioner is that it was error for respondent Director to have enjoined it
from using PLANTERS in the absence of evidence showing that the term has acquired secondary
meaning. Petitioner, invoking American jurisprudence, asserts that the first user of a tradename
composed of common words is given no special preference unless it is shown that such words have
acquired secondary meaning, and this, respondent Standard Brands failed to do when no evidence was
presented to establish that fact. (pp. 14-16, petitioners brief)

The doctrine of secondary meaning is found in Sec. 4 (f), Chapter II-A of the Trade-Mark Law, viz:

Except as expressly excluded in paragraphs (a), (b), (c) and (d) of this section, nothing herein shall
prevent the registration of a mark or trade-name used by the applicant which has become distinctive of
the applicants goods, business or services. The Director may accept as prima facie evidence that the
mark or trade-name has become distinctive, as applied to or used in connection with the applicants
goods, business or services, proof of substantially exclusive and continuous use thereof as a mark or
trade-name by the applicant in connection with the sale of goods, business or services for the five years
next preceding the date of the filing of the application for its registration. (As amended by Sec. 3, Rep.
Act No. 638.)

This Court held that the doctrine is to the effect that a word or phrase originally incapable of exclusive
appropriation with reference to an article on the market, because geographically or otherwise
descriptive, might nevertheless have been used so long and so exclusively by one producer with
reference to his article that, in that trade and to that branch of the purchasing public, the word or phrase
has come to mean that the article was his product.

By way of illustration, is the word Selecta which according to this Court is a common ordinary term in
the sense that it may be used or employed by any one in promoting his business or enterprise, but
which once adopted or coined in connection with ones business as an emblem, sign or device to
characterize its products, or as a badge of authenticity, may acquire a secondary meaning as to be
exclusively associated with its products and business, so that its use by another may lead to confusion
in trade and cause damage to its business.

The applicability of the doctrine of secondary meaning to the situation now before Us is appropriate
because there is oral and documentary evidence showing that the word PLANTERS has been used by
and closely associated with Standard Brands for its canned salted peanuts since 1938 in this country.
Not only is that fact admitted by petitioner in the amended stipulation of facts (see p. 2 of this Decision),
but the matter has been established by testimonial (tsn October 4, 1962, pp. 2-8) and documentary
evidence consisting of invoices covering the sale of PLANTERS cocktail peanuts. (Exhibits C to C-4;
D to D-10; E to E-10; F to F-2) In other words, there is evidence to show that the term PLANTERS has
become a distinctive mark or symbol insofar as salted peanuts are concerned, and by priority of use
dating as far back as 1938, respondent Standard Brands has acquired a preferential right to its adoption
as its trademark warranting protection against its usurpation by another. Ubi jus ibi remedium. Where
there is a right there is a remedy. Standard Brands has shown the existence of a property right (Arce
Sons & Co. vs. Selecta Biscuit Co., Inc., supra, pp. 262-263) and respondent Director has afforded the
remedy.

Still on this point, petitioner contends that Standard Brands use of the trademark PLANTERS was
interrupted during the Japanese occupation and in fact was discontinued when the importation of
peanuts was prohibited by Central Bank regulations effective July 1, 1953, hence it cannot be presumed
that it has acquired a secondary meaning. We hold otherwise. Respondent Director correctly applied
the rule that non-use of a trademark on an article of merchandize due to legal restrictions or
circumstances beyond ones control is not to be considered as an abandonment.

In the case of Andres Romero vs. Maiden Form Brassiere Co., Inc., L-18289, March 31, 1964, 10 SCRA
556, the same question was raised by petitioner Romero when he filed with the Bureau of Patents a
petition to cancel the registration of the trademark Adagio for brassieres manufactured by Maiden
Form Brassiere Co., Inc. His petition having been dismissed by the Director of Patents, Romero
appealed to this Court and one of the issues posed by him was that when the Government imposed
restrictions on importations of brassieres bearing that particular trademark, there was abandonment of
the same by respondent company which entitled petitioner to adopt it for his own use and which in fact
he had been using for a number of years. That argument was met by the Court in the words of Justice
Jesus Barrera thus:

x x x The evidence on record shows, on the otherhand, that the trademark Adagio was first used
exlusively in the Philippines by appellee in the year 1932. There being no evidence of use of the mark
by others before 1932, or that appellee abandoned use thereof, the registration of the mark was made
in accordance with the Trademark Law. Granting that appellant used the mark when appellee stopped
using it during the period of time that the Government imposed restrictions on importation of
respondents brassiere being the trademark, such temporary non-use did not affect the rights of
appellee because it was occasioned by government restrictions and was not permanent, intentional,
and voluntary.

To work an abandonment, the disuse must be permanent and not ephemeral; it must be intentional
and voluntary, and not involuntary or even compulsory. There must be a thoroughgoing discontinuance
of any trade-mark use of the mark in question (Callman, Unfair Competition and Trademark, 2nd Ed.,
p. 1341).

The use of the trademark by other manufacturers did not indicate an intention on the part of appellee
to abandon it.

The instances of the use by others of the term Budweiser, cited by the defendant, fail, even when
liberally construed, to indicate an intention upon the part of the complainant to abandon its rights to that
name. To establish the defense of abandonment, it is necessary to show not only acts indicating a
practical abandonment, but an actual intention to abandon. Sanlehner v. Eisener & Mendelson Co.,
17& U.S. 19, 21 S. Ct. 7 (45 L. Ed. 60). (Anheuser-Busch, Inc. v. Budweiser Malt Products Corp., 287
F. 245.)

xxx xxx xxx xxx

Non-use because of legal restrictions is not evidence of an intent to abandon. Non-use of their ancient
trade-mark and the adoption of new marks by the Carthusian Monks after they had been compelled to
leave France was consistent with an intention to retain their right to use their old mark. Abandonment
will not be inferred from a disuse over a period of years occasioned by statutory restrictions on the name
of liquor. (Nims, Unfair Competition and Trade-Mark, p. 1269.) (pp. 562-564, supra) (italics Ours)
Applying the words of Justice Roman Ozaeta in the Ang Tibay case (Ang vs. Toribio Teodoro, p. 56,
supra) to the case now before Us, petitioner herein must not be allowed to get a free ride on the
reputation and selling power of Standard Brands PLANTERS salted peanuts, for a self-respecting
person, or a reputable business concern as is the case here, does not remain in the shelter of anothers
popularity and goodwill but builds one of his own.

4. Findings of fact by the Director of Patents are conclusive and binding on this Court provided they are
supported by substantial evidence. The testimonial and documentary evidence in addition to the
stipulation of facts submitted by the parties fully support the findings of respondent Director that (1)
there is a confusing similarity between the labels or trademarks of Philippine Nut and Standard Brands
used in their respective canned salted peanuts; (2) respondent Standard Brands has priority of adoption
and use of the label with PLANTERS as the dominant feature and the same has acquired secondary
meaning in relation to salted peanuts; and (3) there has been no abandonment or non-use of said
trademark by Standard Brands which would justify its adoption by petitioner or any other competitor for
the sale of salted peanuts in the market.

PREMISES CONSIDERED, We AFFIRM the decision of respondent Director of Patents with costs
against petitioner. So Ordered.

Castro (Chairman), Makasiar, Esguerra and Martin, JJ., concur.

Teehankee, J., is on leave.

Decision affirmed.

Notes. a) Difference between trademark and tradename.A trade-mark is generally described as a


sign, device or mark by which the articles produced or dealt in by a particular person or organization
are distinguished or distinguishable from those produced or dealt in by others, and must be affixed to
the goods or articles, while a trade-name is descriptive of the manufacturer or dealer himself as much
as his own name is, and frequently includes the name of the place where the business is located; it
involves the individuality of the maker or dealer for protection in trade, and to avoid confusion in
business, and to secure the advantages of a good reputation; it is more popularly applied to the goodwill
of a business, and need not be affixed to the goods sold. In other words, it is not regarded as a trade-
mark in the strict technical sense. (Arce Sons and Company vs. Selecta Biscuit Co., Inc., L-17981,
January 28, 1961).

b) Infringement of trademark and unfair competition. Though the law concerning infringement of
trade-marks and that concerning unfair competition have a common conception at their root, which is
that one person shall not be permitted to misrepresent that his goods or his business are the goods or
the business of another, the law concerning unfair competition is broader and more inclusive. On the
other hand, the law concerning the infringement of trade-mark is of more limited range, but within its
narrower range recognizes a more exclusive right derived from the adoption and registration of the
trade-mark by the person whose goods or business are first associated therewith. One who has
identified a peculiar symbol or mark with his goods thereby acquires a property right in such symbol or
mark, and if another infringes the trademark he thereby invades this property right. Unfair competition
cannot be placed on the plane of invasion of property right. The tort is strictly one of fraud. It results that
the law of trade-marks is specialized subject distinct from the law of unfair competition, though, as
stated above, the two subjects are entwined with each other and are dealt with together in Act No. 666.
(E. Spinner & Co. vs. Neuss Hesslein Corporation, L-31380, January 13, 1930, 54 Phil. 231).

o0o

ESSO STANDARD EASTERN, INC., petitioner, vs. THE HONORABLE COURT OF APPEALS and
UNITED CIGARETTE CORPORATION, respondents.

No. L-29971. August 31, 1982

Tradenames and Trademarks; Words and Phrases; Infringement of trademark, defined.The law
defines infringement as the use without consent of the trademark owner of 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 on or in connection with which such
use is likely to cause confusion or mistake or to deceive purchasers or others as to the source or origin
of such goods or services, or identity of such business; or reproduce, counterfeit, copy or colorably
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. Implicit in this definition is the
concept that the goods must be so related that there is a likelihood either of confusion of goods or
business. But likelihood of confusion is a relative concept; to be determined only according to the
particular, and sometimes peculiar, circumstances of each case. It is unquestionably true that, as stated
in Coburn vs. Puritan Mills, Inc.: In trademark cases, even more than in other litigation, precedent must
be studied in the light of the facts of the particular case.

Same; Same, Infringement of trademark depends on whether the goods of the two contending parties
using the same trademark, such as ESSO, are so related as to lead the public to be deceived. It is
undisputed that the goods on which petitioner uses the trademark ESSO, petroleum products, and the
product of respondent, cigarettes, are non-competing. But as to whether trademark infringement exists
depends for the most part upon whether or not the goods are so related that the public may be, or is
actually, deceived and misled that they came from the same maker or manufacturer. For non-competing
goods may be those which, though they are not in actual competition, are so related to each other that
it might reasonably be assumed that they originate from one manufacturer. Non-competing goods may
also be those which, being entirely unrelated, could not reasonably be assumed to have a common
source. In the former case of related goods, confusion of business could arise out of the use of similar
marks; in the latter case of non-related goods, it could not. The vast majority of courts today follow the
modern theory or concept of related goods which the Court has likewise adopted and uniformly
recognized and applied.

Same; Same; Related goods defined. Goods are related when they belong to the same class or
have the same descriptive properties; when they possess the same physical attributes or essential
characteristics with reference to their form composition, texture or quality. They may also be related
because they serve the same purpose or are sold in grocery stores. Thus, biscuits were held related to
milk because they are both food products. Soap and perfume, lipstick and nail polish are similarly
related because they are common household items nowadays. 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. Soap and pomade, although non-competitive, were held to be similar or to belong to
the same class, since both are toilet articles. But no confusion or deception can possibly result or arise
when the name Wellington which is the trademark for shirts, pants, drawers and other articles of wear
for men. women and children is used as a name of a department store.

Same; The trademark ESSO which the petitioner uses for its various petroleum products may also be
used as a trademark by a manufacturer of cigarettes, the two products not being related and the public
cannot be deceived as to which product they are buying.Petitioner uses the trademark ESSO and
holds certificate of registration of the trademark for petroleum products, including aviation gasoline,
grease, cigarette lighter fluid and other various products such as plastics, chemicals, synthetics,
gasoline solvents, kerosene, automotive and industrial fuel, bunker fuel, lubricating oil, fertilizers, gas,
alcohol, insecticides and the ESSO Gasul burner, while respondents business is solely for the
manufacture and sale of the unrelated product of cigarettes. The public knows too well that petitioner
deals solely with petroleum products that there is no possibility that cigarettes with ESSO brand will be
associated with whatever good name petitioners ESSO trademark may have generated. Although
petitioners products are numerous, they are of the same class or line of merchandise which are non-
competing with respondents product of cigarettes, which as pointed out in the appealed judgment is
beyond petitioners zone of potential or natural and logical expansion. When a trademark is used by
a party for a product in which the other party does not deal, the use of the same trademark on the
latters product cannot be validly objected to.

Same; The trademark ESSO which petitioner uses for its various petroleum products can be used by
another as trademark for cigarettes as the two classes of products flow through different trade channels.
Another factor that shows that the goods involved are non-competitive and non-related is the
appellate courts finding that they flow through different channels of trade, thus: The products of each
party move along and are disposed through different channels of distribution. The (petitioners) products
are distributed principally through gasoline service and lubrication stations, automotive shops and
hardware stores. On the other hand, the (respondents) cigarettes are sold in sari-sari stores, grocery
stores, and other small distributor outlets. (Respondents) cigarettes are even peddled in the streets
while (petitioners) gasul burners are not. Finally, there is a marked distinction between oil and tobacco,
as well as between petroleum and cigarettes. Evidently, in kind and nature the products of (respondent)
and of (petitioner) are poles apart.

Same; Same. 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 conies 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,

PETITION to review the decision of the Court of Appeals.

The facts are stated in the opinion of the Court.

TEEHANKEE, J.:

The Court affirms on the basis of controlling doctrine the appealed decision of the Court of Appeals
reversing that of the Court of First Instance of Manila and dismissing the complaint filed by herein
petitioner against private respondent for trade infringement for using petitioners trademark ESSO, since
it clearly appears that the goods on which the trademark ESSO is used by respondent is non-competing
and entirely unrelated to the products of petitioner so that there is no likelihood of confusion or deception
on the part of the purchasing public as to the origin or source of the goods.

Petitioner Esso Standard Eastern, Inc., then a foreign corporation duly licensed to do business in the
Philippines, is engaged in the sale of petroleum products which are identified with its trademark ESSO
(which as successor of the defunct Standard Vacuum Oil Co. it registered as a business name with the
Bureaus of Commerce and Internal Revenue in April and May, 1962). Private respondent in turn is a
domestic corporation then engaged in the manufacture and sale of cigarettes, after it acquired in
November, 1963 the business, factory and patent rights of its predecessor La Oriental Tobacco
Corporation, one of the rights thus acquired having been the use of the trademark ESSO on its
cigarettes, for which a permit had been duly granted by the Bureau of Internal Revenue.

Barely had respondent as such successor started manufacturing cigarettes with the trademark ESSO,
when petitioner commenced a case for trademark infringement in the Court of First Instance of Manila.
The complaint alleged that the petitioner had been for many years engaged in the sale of petroleum
products and its trademark ESSO had acquired a considerable goodwill to such an extent that the
buying public had always taken the trademark ESSO as equivalent to high quality petroleum products.
Petitioner asserted that the continued use by private respondent of the same trademark ESSO on its
cigarettes was being carried out for the purpose of deceiving the public as to its quality and origin to the
detriment and disadvantage of its own products.

In its answer, respondent admitted that it used the trademark ESSO on its own product of cigarettes,
which was not identical to those produced and sold by petitioner and therefore did not in any way
infringe on or imitate petitioners trademark. Respondent contended that in order that there may be
trademark infringement, it is indispensable that the mark must be used by one person in connection or
competition with goods of the same kind as the complainants.

The trial court, relying on the old cases of Ang vs. Teodoro and Arce & Sons, Inc. vs. Selecta Biscuit
Company, referring to related products, decided in favor of petitioner and ruled that respondent was
guilty of infringement of trademark.
On appeal, respondent Court of Appeals found that there was no trademark infringement and dismissed
the complaint. Reconsideration of the decision having been denied, petitioner appealed to this Court by
way of certiorari to reverse the decision of the Court of Appeals and to reinstate the decision of the
Court of First Instance of Manila. The Court finds no ground for granting the petition.

The law defines infringement as the use without consent of the trademark owner of 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 on or in connection with which such
use is likely to cause confusion or mistake or to deceive purchasers or others as to the source or origin
of such goods or services, or identity of such business; or reproduce, counterfeit, copy or colorably
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, Implicit in this definition is the
concept that the goods must be so related that there is a likelihood either of confusion of goods or
business. But likelihood of confusion is a relative concept; to be determined only according to the
particular, and sometimes peculiar, circumstances of each case. It is unquestionably true that, as stated
in Coburn vs. Puritan Mills, Inc.: In trademark cases, even more than in other litigation, precedent must
be studied in the light of the facts of the particular case.

It is undisputed that the goods on which petitioner uses; the trademark ESSO, petroleum products, and
the product of respondent, cigarettes, are non-competing. But as to whether trademark infringement
exists depends for the most part upon whether or not the goods are so related that the public may be,
or is actually, deceived and misled that they came from the same maker or manufacturer. For non-
competing goods may be those which, though they are not in actual competition, are so related to each
other that it might reasonably be assumed that they originate from one manufacturer. Non-competing
goods may also be those which, being entirely unrelated, could not reasonably be assumed to have a
common source. In the former case of related goods, confusion of business could arise out of the use
of similar marks; in the latter case of non-related goods, it could not. The vast majority of courts today
follow the modern theory or concept of related goods which the Court has likewise adopted and
uniformly recognized and applied.

Goods are related when they belong to the same class or have the same descriptive properties; when
they possess the same physical attributes or essential characteristics with reference to their form,
composition, texture or quality. They may also be related because they serve the same purpose or are
sold in grocery stores. Thus, biscuits were held related to milk because they are both food products.
Soap and perfume, lipstick and nail polish are similarly related because they are common household
items nowadays. 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. Soap and pomade, although non-
competitive, were held to be similar or to belong to the same class, since both are toilet articles. But no
confusion or deception can possibly result or arise when the name Wellington which is the trademark
for shirts, pants, drawers and other articles of wear for men, women and children is used as a name of
a department store.

Thus, in Acoje Mining Co., Inc. vs. Director of Patents, the Court, through now Chief Justice Fernando,
reversed the patent directors decision on the question of May petitioner Acoje Mining Company
register for the purpose of advertising its product, soy sauce, the trademark LOTUS, there being already
in existence one such registered in favor of the Philippine Refining Company for its product, edible oil,
it being further shown that the trademark applied for is in smaller type, colored differently, set on a
background which is dissimilar as to yield a distinct appearance? and ordered the granting of
petitioners application for registration ruling that there is quite a difference between soy sauce and
edible oil. If one is in the market for the former, he is not likely to purchase the latter just because of the
trademark LOTUS and when regard is had for the principle that the two trademarks in their entirety as
they appear in their respective labels should be considered in relation to the goods advertised before
registration could be denied, the conclusion is inescapable that respondent Director ought to have
reached a different conclusion.

By the same token, in the recent case of Philippine Refining Co., Inc. vs. Ng Sam and Director of
Patents, the Court upheld the patent directors registration of the same trademark CAMIA for therein
respondents product of ham notwithstanding its already being used by therein petitioner for a wide
range of products: lard, butter, cooking oil, abrasive detergents, polishing materials and soap of all
kinds. The Court, after noting that the same CAMIA trademark had been registered by two other
companies, Everbright Development Company and F. E. Zuellig, Inc. for their respective products of
thread and yarn (for the former) and textiles, embroideries and laces (for the latter) ruled that while
ham and some of the products of petitioner are classified under Class 47 (Foods and Ingredients of
Food), this alone cannot serve as the decisive factor in the resolution of whether or not they 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. The Court, therefore,
concluded that In fine, We hold that the businesses of the parties are noncompetitive and their products
so unrelated that the use of identical trademarks is not likely to give rise to confusion, much less cause
damage to petitioner.

In the situation before us, the goods are obviously different from each otherwith absolutely no iota
of similitude as stressed in respondent courts judgment. They are so foreign to each other as to make
it unlikely that purchasers would think that petitioner is the manufacturer of respondents goods. The
mere fact that one person has adopted and used a trademark on his goods does not prevent the
adoption and use of the same trademark by others on unrelated articles of a different kind.

Petitioner uses the trademark ESSO and holds certificate of registration of the trademark for petroleum
products, including aviation gasoline, grease, cigarette lighter fluid and other various products such as
plastics, chemicals, synthetics, gasoline solvents, kerosene, automotive and industrial fuel, bunker fuel,
lubricating oil, fertilizers, gas, alcohol, insecticides and the ESSO Gasul burner, while respondents
business is solely for the manufacture and sale of the unrelated product of cigarettes. The public knows
too well that petitioner deals solely with petroleum products that there is no possibility that cigarettes
with ESSO brand will be associated with whatever good name petitioners ESSO trademark may have
generated. Although petitioners products are numerous, they are of the same class or line of
merchandise which are non-competing with respondents product of cigarettes, which as pointed out in
the appealed judgment is beyond petitioners zone of potential or natural and logical expansion. When
a trademark is used by a party for a product in which the other party does not deal, the use of the same
trademark on the latters product cannot be validly objected to.

Another factor that shows that the goods involved are noncompetitive and non-related is the appellate
courts finding that they flow through different channels of trade, thus: The products of each party move
along and are disposed through different channels of distribution. The (petitioners) products are
distributed principally through gasoline service and lubrication stations, automotive shops and hardware
stores. On the other hand, the (respondents) cigarettes are sold in sari-sari stores, grocery stores, and
other small distributor outlets. (Respondents) cigarettes are even peddled in the streets while
(petitioners) gasul burners are not. Finally, there is a marked distinction between oil and tobacco, as
well as between petroleum and cigarettes. Evidently, in kind and nature the products of (respondent)
and of (petitioner) are poles apart.

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.

In point of fact and time, the Courts dismissal of the petition at bar was presaged by its Resolution of
May 21, 1979 dismissing by minute resolution the petition for review for lack of merit in the identical
case of Shell Company of the Philippines, Ltd. vs. Court of Appeals, wherein the Court thereby affirmed
the patent offices registration of the trademark SHELL as used in the cigarettes manufactured by
therein respondent Fortune Tobacco Corporation notwithstanding the therein petitioner Shell
Companys opposition thereto as the prior registrant of the same trademark for its gasoline and other
petroleum trademarks, on the strength of the controlling authority of Acoje Mining Co. vs. Director of
Patents, supra, and the same rationale that (I)n the Philippines, where buyers of appellees (Fortune
Corp.s) cigarettes, which are low cost articles, can be more numerous compared to buyers of the higher
priced petroleum and chemical products of appellant (Shell Co.) and where appellant (Shell) is known
to be in the business of selling petroleum and petroleum-based chemical products, and no others, it is
difficult to conceive of confusion in the minds of the buying public in the sense it can be thought that
appellant (Shell) is the manufacturer of appellees (Fortunes) cigarettes, or that appellee (Fortune) is
the manufacturer or processor of appellants (Shells) petroleum and chemical products.

ACCORDINGLY, the petition is dismissed and the decision of respondent Court of Appeals is hereby
affirmed.

Melencio-Herrera, Plana, Relova and Gutierrez, Jr., JJ., concur.

Makasiar, J., is on official leave.

Vasquez, J., took no part.

Petition dismissed.

Notes. Agreement giving distributor ownership of packages does not necessarily grant her exclusive
use of trademark. (Gabriel vs. Perez, 55 SCRA 406.)

The determinative factor in a contest involving registration of trademark is not whether the challenged
mark would actually cause confusion or deception of the purchaser but whether the use of such mark
would likely to cause confusion or mistake on the part of the buying public. (Acoje Mining Co., Inc. vs.
Director of Patents, 38 SCRA 480.)

Factors considered in determining the existence of substantial difference between two labels are: in
size, background, colors, contents, and pictorial arrangement. (American Company vs. Director of
Patents, 76 SCRA 568.)

o0o

CONVERSE RUBBER CORPORATION, petitioner


vs
UNIVERSAL RUBBER PRODUCTS, INC. and TIBURCIO S. EVALLE, DIRECTOR OF PATENTS,
respondents

G.R. No. L-27906. January 8, 1987

Trademarks; Tradenames; Tradename definedA trade name is any individual name or surname, firm
name, device or word used by manufacturers, industrialists, merchants and others to identify their
businesses, vocations or occupations. As the trade name refers to the business and its goodwill x x x
the trademark refers to the goods.

Same; Same; There is a basic similarity between the tradenames Universal Converse and Device and
Converse Rubber Corporation as in both names Converse is the dominant ward. From a cursory
appreciation of the petitioners corporate name CONVERSE RUBBER CORPORATION," it is evident
that the word CONVERSE" is the dominant word which identifies petitioner from where corporations
engaged in similar business. The respondents. having known that the word CONVERSE" belongs to
and is being used by petitioner, has no right to appropriate the same for use on its products which are
similar to those being produced by petitioner.

Same; Same; Corporations; Tradename may not be similar to a corporate name. A corporation is
entitled to the cancellation of a mark that is confusingly similar to its corporate name. Appropriation by
another of the dominant part of a corporate name is an infringement.
Same; Same; Converse Rubber Corp. has already earned a business reputation in this country which
should be protected. The testimony of petitioners witness, who is a legitimate trader as well as the
invoices evidencing sales of petitioners products in the Philippines, give credence to petitioners claim
that it has earned a business reputation and goodwill in the country. Thus, contrary to the dissemination
of the Director of Patents, the word CONVERSE" has grown to be identified with petitioners products
and has acquired a second meaning within the context of trademark and tradename laws.

Same; Same; Same. The sales invoices provide the best proof that there were actual sales of
petitioners products in the country and that there was actual use for a protracted period of petitioners
trademark or part thereof through these sales.

Same; Same; Same. The sales of 12 to 20 pairs a month of petitioners rubber shoes cannot be
considered insignificant, considering that they appear to be of very expensive quality, which not too
many basketball players can afford to buy. Any sale made by a legitimate trader from his store is a
commercial act establishing trademark rights since such sales are made in due course of business to
the general public.

Same; Same; Same. It is a corollary logical deduction that while Converse Rubber Corporation is
not licensed to do business in the country and is not actually doing business here, it does not mean that
its goods are not being sold here or that it has not earned a reputation or goodwill as regards its
products.

Same; Same; Same; Predominant factor in determining similarity of tradename. The determinative
factor in ascertaining whether or not marks are confusingly similar to each other is not whether the
challenged mark would actually cause confusion or deception of the purchasers but whether use of
such mark would likely cause confusion or mistake on the part of the buying public. The risk of damage
is not limited to a possible confusion of goods but also includes confusion of reputation if the public
could reasonably assume that the goods of the parties originated from the same source.''

Same; Same; Same; Actions; Foreign corporation not doing business in the Phil may sue here even if
not licensed. That a foreign corporation has a right to maintain an action in the forum even if it is not
licensed to do business and is not actually doing business on its own therein has been enunciated many
times by this court.

Same; Same; Same; Actions. An unlicensed, unregistered foreign corporation which has never done
any business in the Philippines, but is widely and favorably known in the Philippines through the use of
its products bearing its corporate and tradename, has a legal right to maintain an action in the
Philippines to restrain the organization of a corporation whose sole purpose is to deal and trade in the
same goods as those of the foreign corporation.

Same; Same; Same; International Law; Actions; The Philippines is a party to the treaty for the Protection
of Industrial Property. Articles of the Convention of the Union of Paris for the Protection of Industrial
Property to which the Philippines is a party to provides that a trade name [corporate name] shall be
protected in all the countries of the Union without the obligation of filing or registration, whether or not
it forms part of the trademark. This law is reiterated in Sec. 37 of RA No. 166.

PETITION to review the decision of the Director of Patents.

The facts are stated in the opinion of the Court.

Paredes, Poblador, Nazareno, Azada & Tomacruz for petitioner.

RESOLUTION

FERNAN, J.:

The undisputed facts of the case are as follows:


Respondent Universal Rubber Products, Inc. filed an application with the Philippine Patent office for
registration of the trademark UNIVERSAL CONVERSE AND DEVICE" used on rubber shoes and
rubber slippers.

Petitioner Converse Rubber Corporation filed its opposition to the application for registration on grounds
that:

a] The trademark sought to be registered is confusingly similar to the word CONVERSE" which is part
of petitioners corporate name CONVERSE RUBBER CORPORATION" as to likely deceive purchasers
of products on which it is to be used to an extent that said products may be mistaken by the unwary
public to be manufactured by the petitioner; and,

b] The registration of respondents trademark will cause great and irreparable injury to the business
reputation and goodwill of petitioner in the Philippines and would cause damage to said petitioner within
the meaning of Section 8, R.A. No. 166, as amended.

Thereafter, respondent filed its answer and at the pre-trial, the parties submitted the following partial
stipulation of facts:

1] The petitioners corporate name is CONVERSE RUBBER CORPORATION' and has been in
existence since July 31, 1946; it is duly organized under the laws of Massachusetts, USA and doing
business at 392 Pearl St., Malden, County of Middlesex, Massachusetts;

2] Petitioner is not licensed to do business in the Philippines and it is not doing business on its own in
the Philippines; and,

3] Petitioner manufacturers rubber shoes and uses thereon the trademarks CHUCK TAYLOR' and ALL
STAR AND DEVICE'.
At the trial, petitioners lone witness, Mrs. Carmen B. Pacquing, a duly licensed private merchant with
stores at the Sta. Mesa Market and in Davao City, testified that she had been selling CONVERSE
rubber shoes in the local market since 1956 and that sales of petitioners rubber shoes in her stores
averaged twelve to twenty pairs a month purchased mostly by basketball players of local private
educational institutions like Ateneo, La Salle and San Beda.

Mrs. Pacquing, further stated that she knew petitioners rubber shoes came from the United States
because it says there in the trademark Converse Chuck Taylor with star red or blue and is a round
figure and made in U.S.A. In the invoices issued by her store, the rubber shoes were described as
Converse Chuck Taylor", Converse All Star," All Star Converse Chuck Taylor," or Converse Shoes
Chuck Taylor." She also affirmed that she had no business connection with the petitioner.

Respondent, on the other hand, presented as its lone witness the secretary of said corporation who
testified that respondent has been selling on wholesale basis Universal Converse sandals since 1962
and Universal Converse rubber shoes since 1963. Invoices were submitted as evidence of such sales.
The witness also testified that she had no idea why respondent chose Universal Converse as a
trademark and that she was unaware of the name Converse prior to her corporations sale of
Universal Converse rubber shoes and rubber sandals.

Eventually, the Director of Patents dismissed the opposition of the petitioner and gave due course to
respondents application. His decision reads in part:

x x x . . . the only question for determination is whether or not the applicants partial appropriation of
the Opposers [petitioner] corporate name is of such character that in this particular case, it is calculated
to deceive or confuse the public to the injury of the corporation to which the name belongs.

... I cannot find anything that will prevent registration of the word UNIVERSAL CONVERSE' in favor of
the respondent. In arriving at this conclusion, I am guided by the fact that the opposer failed to present
proof that the single word CONVERSE' in its corporate name has become so identified with the
corporation that whenever used, it designates to the mind of the public that particular corporation.
The proofs herein are sales made by a single witness who had never dealt with the petitioner . . . the
entry of Opposers [petitioners] goods in the Philippines were not only effected in a very insignificant
quantity but without the opposer [petitioner] having a direct or indirect hand in the transaction so as to
be made the basis f or trademark pre-emption.

Opposers proof of its corporate personality cannot establish the use of the word CONVERSE' in any
sense, as it is already stipulated that it is not licensed to do business in the Philippines, and is not doing
business of its own in the Philippines. If so, it will be futile for it to establish that CONVERSE' as part of
its corporate name identifies its rubber shoes. Besides, it was also stipulated that opposer [petitioner],
in manufacturing rubber shoes uses thereon the trademark CHUCK TAYLOR' and ALL STAR and
DEVICE' and none other.

Furthermore, inasmuch as the Opposer never presented any label herein, or specimen of its shoes,
whereon the label may be seen, notwithstanding its witness testimony touching upon her identification
of the rubber shoes sold in her stores, no determination can be made as to whether the word
CONVERSE' appears thereon. ......the record is wanting in proof to establish likelihood of confusion so
as to cause probable damage to the Opposer.

Its motion for reconsideration having been denied by the respondent Director of Patents, petitioner
instituted the instant petition f or review.

As correctly phrased by public respondent Director of Patents, the basic issue presented for our
consideration is whether or not the respondents partial appropriation of petitioners corporate name is
of such character that it is calculated to deceive or confuse the public to the injury of the petitioner to
which the name belongs.
A trade name is any individual name or surname, firm name, device or word used by manufacturers,
industrialists, merchants and others to identify their businesses, vocations or occupations." As the trade
name refers to the business and its goodwill xxx the trademark refers to the goods." The ownership of
a trademark or tradename is a property right which the owner is entitled to protect since there is
damage to him from confusion or reputation or goodwill in the mind of the public as well as from
confusion of goods. The modern trend is to give emphasis to the unfairness of the acts and to classify
and treat the issue as fraud."

From a cursory appreciation of the petitioners corporate name CONVERSE RUBBER


CORPORATION,' it is evident that the word CONVERSE" is the dominant word which identifies
petitioner from other corporations engaged in similar business. Respondent, in the stipulation of facts,
admitted petitioners existence since 1946 as a duly organized foreign corporation engaged in the
manufacture of rubber shoes. This admission necessarily betrays its knowledge of the reputation and
business of petitioner even bef ore it applied f or registration of the trademark in question. Knowing,
therefore, that the word CONVERSE" belongs to and is being used by petitioner, and is in fact the
dominant word in petitioners corporate name, respondent has no right to appropriate the same for use
on its products which are similar to those being produced by petitioner.

A corporation is entitled to the cancellation of a mark that is confusingly similar to its corporate name."
Appropriation by another of the dominant part of a corporate name is an infringement."

Respondents witness had no idea why respondent chose UNIVERSAL CONVERSE" as trademark
and the record discloses no reasonable explanation for respondents use of the word CONVERSE" in
its trademark. Such unexplained use by respondent of the dominant word of petitioners corporate name
lends itself open to the suspicion of fraudulent motive to trade upon petitioners reputation, thus:

A boundless choice of words, phrases and symbols is available to one who wishes a trademark
sufficient unto itself to distinguish his product from those of others. When, however, there is no
reasonable explanation for the defendants choice of such a mark though the field for his selection was
so broad, the inference is inevitable that it was chosen deliberately to deceive."

The testimony of petitioners witness, who is a legitimate trader as well as the invoices evidencing sales
of petitioners products in the Philippines, give credence to petitioners claim that it has earned a
business reputation and goodwill in this country. The sales invoices submitted by petitioners lone
witness show that it is the word CONVERSE" that mainly identifies petitioners products, i.e.
CONVERSE CHUCK TAYLOR," CONVERSE ALL STAR," ALL STAR CONVERSE CHUCK
TAYLOR," or CONVERSE SHOES CHUCK and TAYLOR." Thus, contrary to the determination of the
respondent Director of Patents, the word CONVERSE" has grown to be identified with petitioners
products, and in this sense, has acquired a second meaning within the context of trademark and
tradename laws.

Furthermore, said sales invoices provide the best proof that there were actual sales of petitioners
products in the country and that there was actual use for a protracted period of petitioners trademark
or part thereof through these sales. The most convincing proof of use of a mark in commerce is
testimony of such witnesses as customers, or the orders of buyers during a certain period." Petitioners
witness, having affirmed her lack of business connections with petitioner, has testified as such
customer, supporting strongly petitioners move for trademark pre-emption.

The sales of 12 to 20 pairs a month of petitioners rubber shoes cannot be considered insignificant,
considering that they appear to be of high expensive quality, which not too many basketball players can
afford to buy. Any sale made by a legitimate trader from his store is a commercial act establishing
trademark rights since such sales are made in due course of business to the general public, not only to
limited individuals. It is a matter of public knowledge that all brands of goods filter into the market,
indiscriminately sold by jobbers, dealers and merchants not necessarily with the knowledge or consent
of the manufacturer. Such actual sale of goods in the local market establishes trademark use which
serves as the basis for any action aimed at trademark pre-emption. It is a corollary logical deduction
that while Converse Rubber Corporation is not licensed to do business in the country and is not actually
doing business here, it does not mean that its goods are not being sold here or that it has not earned a
reputation or goodwill as regards its products. The Director of Patents was, therefore, remiss in ruling
that the proofs of sales presented was made by a single witness who had never dealt with nor had
never known opposer [petitioner] x x x without Opposer having a direct or indirect hand in the transaction
to be the basis of trademark pre-emption.

Another factor why respondents application should be denied is the confusing similarity between its
trademark UNIVERSAL CONVERSE AND DEVICE" and petitioners corporate name and/or its
trademarks CHUCK TAYLOR" and ALL STAR DEVICE" which could confuse the purchasing public
to the prejudice of petitioner.

The trademark of respondent UNIVERSAL CONVERSE and DEVICE" is imprinted in a circular manner
on the side of its rubber shoes. In the same manner, the trademark of petitioner which reads
CONVERSE CHUCK TAYLOR" is imprinted on a circular base attached to the side of its rubber shoes.

The determinative factor in ascertaining whether or not marks are confusingly similar to each other is
not whether the challenged mark would actually cause confusion or deception of the purchasers but
whether the use of such mark would likely cause confusion or mistake on the part of the buying public.
It would be sufficient, for purposes of the law, that the similarity between the two labels is such that
there is a possibility or likelihood of the purchaser of the older brand mistaking the new brand for it."
Even if not all the details just mentioned were identical, with the general appearance alone of the two
products, any ordinary, or even perhaps even [sic] a not too perceptive and discriminating customer
could be deceived x x x."

When the law speaks of purchaser, the reference is to ordinary average purchasers. It is not
necessary in either case that the resemblance be sufficient to deceive experts, dealers, or other persons
specially familiar with the trademark or goods involved."

The similarity in the general appearance of respondents trademark and that of petitioner would
evidently create a likelihood of confusion among the purchasing public. But even assuming, arguendo,
that the trademark sought to be registered by respondent is distinctively dissimilar from those of the
petitioner, the likelihood of confusion would still subsists, not on the purchasers perception of the goods
but on the origins thereof By appropriating the word CONVERSE," respondents products are likely to
be mistaken as having been produced by petitioner. The risk of damage is not limited to a possible
confusion of goods but also includes confusion of reputation if the public could reasonably assume that
the goods of the parties originated from the same source.
It is unfortunate that respondent Director of Patents has concluded that since the petitioner is not
licensed to do business in the country and is actually not doing business on its own in the Philippines,
it has no name to protect in the forum and thus, it is futile for it to establish that CONVERSE" as part
of its corporate name identifies its rubber shoes. That a foreign corporation has a right to maintain an
action in the forum even if it is not licensed to do business and is not actually doing business on its own
therein has been enunciated many times by this Court. In La Chemise Lacoste, S.A. vs. Fernandez,
129 SCRA 373, this Court, reiterating Western Equipment and Supply Co. vs. Reyes, 51 Phil. 115,
stated that:

x x x a foreign corporation which has never done any business in the Philippines and which is
unlicensed and unregistered to do business here, but is widely and favorably known in the Philippines
through the use therein of its products bearing its corporate and tradename, has a legal right to maintain
an action in the Philippines to restrain the residents and inhabitants thereof from organizing a
corporation therein bearing the same name as the foreign corporation, when it appears that they have
personal knowledge of the existence of such a foreign corporation, and it is apparent that the purpose
of the proposed domestic corporation is to deal and trade in the same goods as those of the foreign
corporation.

We further held:

xxx xxx xxx


That company is not here seeking to enforce any legal or control rights arising from, or growing out of,
any business which it has transacted in the Philippine Islands. The sole purpose of the action:

Is to protect its reputation, its corporate name, its goodwill, whenever that reputation, corporate name
or goodwill have, through the natural development of its trade, established themselves. And it contends
that its rights to the use of its corporate and trade name:

Is a property right, a right in rem, which it may assert and protect against all the world, in any of the
courts of the worldeven in jurisdictions where it does not transact businessjust the same as it may
protect its tangible property, real or personal, against trespass, or conversion. Citing sec. 10, Nims on
Unfair Competition and Trademarks and cases cited; secs. 2122, Hopkins on Trademarks, Trade
Names and Unfair Competition and cases cited. That point is sustained by the authorities, and is well
stated in Hanover Star Mining Co. vs. Allen and Wheeler Co. [208 Fed., 513], in which the syllabus
says:

Since it is the trade and not the mark that is to be protected, a trademark acknowledges no territorial
boundaries of municipalities or states or nations, but extends to every market where the traders goods
have become known and identified by the use of the mark. "

The ruling in the aforecited case is in consonance with the Convention of the Union of Paris for the
Protection of Industrial Property to which the Philippines became a party on September 27, 1965. Article
8 thereof provides that a trade name [corporate name] shall be protected in all the countries of the
Union without the obligation of filing or registration, whether or not it forms part of the trademark. [italics
supplied]

The object of the Convention is to accord a national of a member nation extensive protection against
infringement and other types of unfair competition [Vanitary Fair Mills, Inc. vs. T. Eaton Co., 234 F. 2d
633].

The mandate of the aforementioned Convention finds implementation in Sec. 37 of RA No. 166,
otherwise known as the Trademark Law:

Sec. 37. Rights of Foreign Registrants-Persons who are nationals of, domiciled in, or have a bona fide
or effective business or commercial establishment in any foreign country, which is a party to an
international convention or treaty relating to marks or tradenames on the repression of unfair
competition to which the Philippines may be a party, shall be entitled to the benefits and subject to the
provisions of this Act. . x x x
Tradenames of persons described in the first paragraph of this section shall be protected without the
obKgation of filing or registration whether or not they form parts of marks. [italics supplied.]

WHEREFORE, the decision of the Director of Patents is hereby set aside and a new one entered
denying Respondent Universal Rubber Products, Inc.'s application for registration of the trademark
UNIVERSAL CONVERSE AND DEVICE on its rubber shoes and slippers.

SO ORDERED.

Feria (Chairman), Alampay, Gutierrez, Jr., and Paras, JJ., concur.

Decision set aside.

Notes. The first user of a trademark in the Philippines may oppose its registration by another person
for such registration will damage the first user of the trademark. (Asari Yoko Co., Ltd. vs. KeeBoc, 1
SCRA 1.)

In determining whether two trademarks are confusingly similar, the two marks in their entirely as they
appear in the respective labels must be considered in relation to the goods to which they are attached;
the discerning eye of the observer must focus not only on the predominant words but also on the
features appearing on both labels. (Mead Johnson & Co. vs. N.V.J. Van Dorp, Ltd, 7 SCRA 768; Bristol
Myers Co. vs. Director of Patents, 17 SCRA 128.)

o0o

ASIA BREWERY, INC., petitioner, vs. THE HON. COURT OF APPEALS and SAN MIGUEL
CORPORATION, respondents.

G.R. No. 103543. July 5, 1993

Remedial Law; Appeal; As a general rule, the findings of the Court of Appeals upon factual questions
are conclusive and ought not to be disturbed by the Court; Exceptions to the general rule. The lone
issue in this appeal is whether ABI infringes SMCs trademark: San Miguel Pale Pilsen with Rectangular
Hops and Malt Design, and thereby commits unfair competition against the latter. It is a factual issue
(Phil. Nut Industry Inc. v. Standard Brands Inc., 65 SCRA 575) and as a general rule, the findings of the
Court of Appeals upon factual questions are conclusive and ought not to be disturbed by us. However,
there are exceptions to this general rule, and they are: (1) When the conclusion is grounded entirely on
speculation, surmises and conjectures; (2) When the inference of the Court of Appeals from its findings
of fact is manifestly mistaken, absurd and impossible; (3) Where there is grave abuse of discretion; (4)
When the judgment is based on a misapprehension of facts; (5) When 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) When the findings of said court are contrary to those of the trial court;
(7) When the findings are without citation of specific evidence on which they are based; (8) When the
facts set forth in the petition as well as in the petitioners main and reply briefs are not disputed by the
respondents; and (9) When the findings of facts of the Court of Appeals are premised on the absence
of evidence and are contradicted on record.

Same; Same; Same; Where findings of the Court of Appeals and trial court are contrary to each other,
the Supreme Court may scrutinize the evidence on record. Under any of these exceptions, the Court
has to review the evidence in order to arrive at the correct findings based on the record (Roman Catholic
Bishop of Malolos, Inc. vs. IAC, 191 SCRA 411, 420.) Where findings of the Court of Appeals and trial
court are contrary to each other, the Supreme Court may scrutinize the evidence on record.

Unfair Competition; Trademarks; Infringement; Infringement of trademark is a form of unfair competition.


Infringement of trademark is a form of unfair competition (Clarke vs. Manila Candy Co., 36 Phil. 100,
106). Sec 22 of Republic Act No. 166, otherwise known as the Trademark Law, defines what constitutes
infringement.

Same; Same; Same; Definition of infringement implies that only registered trademarks, tradenames and
service marks are protected against infringement or unauthorized use by another or others. This
definition implies that only registered trademarks, trade names and service marks are protected against
infringement or unauthorized use by another or others. The use of someone elses registered
trademark, trade name or service mark is unauthorized, hence, actionable, if it is done without the
consent of the registrant.

Same; Same; Same; Infringement determined by the test of dominancy rather than by differences or
variations in the details of one trademark and of another. Infringement is determined by the test of
dominancy rather than by differences or variations in the details of one trademark and of another.

Same; Same; Same; Same; Fact that the words pale pilsen are part of ABIs trademark does not
constitute an infringement of SMCs trademark; Pilsen is a primarily geographically descriptive work,
hence non-registerable and not appropriable by any beer manufacturer.The fact that the words pale
pilsen are part of ABIs trademark does not constitute an infringement of SMCs 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. (Websters 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.

Same; Same; Same; The universal test question is whether the public is likely to be deceived. x x
x. The universal test question is whether the public is likely to be deceived. Nothing less than conduct
tending to pass off one mans goods or business as that of another will constitute unfair competition.
Actual or probable deception and confusion on the part of the customers by reason of defendants
practices must always appear.

Same; Same; Same; Same; Use by ABI of the steinie bottle similar but not identical to the San Miguel
Pale Pilsen bottle is not unlawful. The use by ABI of the steinie bottle, similar but not identical to the
SAN MIGUEL PALE PILSEN bottle, is not unlawful. As pointed out by ABIs counsel, SMC did not invent
but merely borrowed the steinie bottle from abroad and it claims neither patent nor trademark protection
for that bottle shape and design. (See rollo, page 55.) The Cerveza Especial and the Efes Pale Pilsen
use the steinie bottle.

Same; Same; Same; Same; Same; SMCs being the first to use the steinie bottle does not give SMC a
vested right to use it to the exclusion of everyone else. The petitioners contention that bottle size,
shape and color may not be the exclusive property of any one beer manufacturer is well taken. SMCs
being the first to use the steinie bottle does not give SMC a vested right to use it to the exclusion of
everyone else. Being of functional or common use, and not the exclusive invention of any one, it is
available to all who might need to use it within the industry. Nobody can acquire any exclusive right to
market articles supplying simple human needs in containers or wrappers of the general form, size and
character commonly and immediately used in marketing such articles.

Same; Same; Same; In resolving cases of infringement and unfair competition, courts should take into
consideration several factors which would affect its conclusion.The Court itself cautioned that in
resolving cases of infringement and unfair competition, the courts should take into consideration
several factors which would affect its conclusion, to wit: the age, training and education of the usual
purchaser, the nature and cost of the article, whether the article is bought for immediate consumption
and also the conditions under which it is usually purchased.

CRUZ, J., Dissenting Opinion:

Unfair Competition; Trademark; Infringement; Side-by-side comparison not final test of similarity
because average buyers do not make minute scrutiny of label details. It has been correctly held that
side-by-side comparison is not the final test of similarity. Such comparison requires a careful scrutiny
to determine in what points the labels of the products differ, as was done by the trial judge. The ordinary
buyer does not usually make such scrutiny nor does he usually have the time to do so. The average
shopper is usually in a hurry and does not inspect every product on the shelf as if he were browsing in
a library. Where the housewife has to return home as soon as possible to her baby or the working
woman has to make quick purchases during her off hours, she is apt to be confused by similar labels
even if they do have minute differences. The male shopper is worse as he usually does not bother about
such distinctions.

PETITION for review of the decision and resolution of the Court of Appeals.

The facts are stated in the opinion of the Court.

Abad Santos & Associates and Sycip, Salazar, Hernandez and Gatmaitan for petitioner.

Roco, Bunag, Kapunan Law Office for private respondent.

GRIO-AQUINO, J.:

On September 15, 1988, San Miguel Corporation (SMC) filed a complaint against Asia Brewery Inc.
(ABI) for infringement of trademark and unfair competition on account of the latters BEER PALE
PILSEN or BEER NA BEER product which has been competing with SMCs SAN MIGUEL PALE
PILSEN for a share of the local beer market. (San Miguel Corporation vs. Asia Brewery Inc., Civ. Case
No. 56390, RTC Branch 166, Pasig, Metro Manila.)

On August 27, 1990, a decision was rendered by the trial Court, presided over by Judge Jesus O.
Bersamira, dismissing SMCs complaint because ABI has not committed trademark infringement or
unfair competition against SMC (p. 189, Rollo).

SMC appealed to the Court of Appeals (C.A.-G.R. CV No. 28104). On September 30, 1991, the Court
of Appeals (Sixth Division composed of Justice Jose C. Campos, Jr., chairman and ponente, and
Justices Venancio D. Aldecoa Jr. and Filemon H. Mendoza, as members) reversed the trial court. The
dispositive part of the decision reads as follows:

In the light of the foregoing analysis and under the plain language of the applicable rule and principle
on the matter, We find the defendant Asia Brewery Incorporated GUILTY of infringement of trademark
and unfair competition. The decision of the trial court is hereby REVERSED, and a new judgment
entered in favor of the plaintiff and against the defendant as follows:

(1) The defendant Asia Brewery Inc. its officers, agents, servants and employees are hereby
permanently enjoined and restrained from manufacturing, putting up, selling, advertising, offering or
announcing for sale, or supplying Beer Pale Pilsen, or any similar preparation, manufacture or beer in
bottles and under labels substantially identical with or like the said bottles and labels of plaintiff San
Miguel Corporation employed for that purpose, or substantially identical with or like the bottles and
labels now employed by the defendant for that purpose, or in bottles or under labels which are calculated
to deceive purchasers and consumers into the belief that the beer is the product of the plaintiff or which
will enable others to substitute, sell or palm off the said beer of the defendant as and for the beer of the
plaintiff-complainant.

(2) The defendant Asia Brewery Inc. is hereby ordered to render an accounting and pay the San Miguel
Corporation double any and all the payments derived by defendant from operations of its business and
sale of goods bearing the mark Beer Pale Pilsen estimated at approximately Five Million Pesos
(P5,000,000.00); to recall all its products bearing the mark Beer Pale Pilsen from its retailers and
deliver these as well as all labels, signs, prints, packages, wrappers, receptacles and advertisements
bearing the infringing mark and all plates, molds, materials and other means of making the same to the
Court authorized to execute this judgment for destruction.

(3) The defendant is hereby ordered to pay plaintiff the sum of Two Million Pesos (P2,000,000.00) as
moral damages and Half a Million Pesos (P5,000,000.00) by way of exemplary damages.

(4) The defendant is further ordered to pay the plaintiff attorneys fees in the amount of P250,000.00
plus costs of this suit. (p. 90, Rollo.)

Upon a motion for reconsideration filed by ABI, the above dispositive part of the decision, was modified
by the separate opinions of the Special Sixth Division so that it should read thus:
In the light of the foregoing analysis and under the plain language of the applicable rule and principle
on the matter, We find the defendant Asia Brewery Incorporated GUILTY of infringement of trademark
and unfair competition. The decision of the trial court is hereby REVERSED, and a new judgment
entered in favor of the plaintiff and against the defendant as follows:

(1) The defendant Asia Brewery Inc., its officers, agents, servants and employees are hereby
permanently enjoined and restrained from manufacturing, putting up, selling, advertising, offering or
announcing for sale, of supplying Beer Pale Pilsen, or any similar preparation, manufacture or beer in
bottles and under labels substantially identical with or like the said bottles and labels of plaintiff San
Miguel Corporation employed for that purpose, or substantially identical with or like the bottles and
labels now employed by the defendant for that purpose, or in bottles or under labels which are calculated
to deceive purchasers and consumers into the belief that the beer is the product of the plaintiff or which
will enable others to substitute, sell or palm off the said beer of the defendant as and for the beer of the
plaintiff-complainant.

(2) The defendant Asia Brewery Inc. is hereby ordered to recall all its products bearing the mark Beer
Pale Pilsen from its retailers and deliver these as well as all labels, signs, prints, packages, wrappers,
receptacles and advertisements bearing the infringing mark and all plates, molds, materials and other
means of making the same to the Court authorized to execute this judgment for destruction.

(3) The defendant is hereby ordered to pay plaintiff the sum of Two Million Pesos (P2,000,000.00) as
moral damages and Half a Million Pesos (P500,000.00) by way of exemplary damages.

(4) The defendant is further ordered to pay the plaintiff attorneys fees in the amount of P250,000.00
plus costs of this suit.

In due time, ABI appealed to this Court by a petition for certiorari under Rule 45 of the Rules of Court.
The lone issue in this appeal is whether ABI infringes SMCs trademark: San Miguel Pale Pilsen with
Rectangular Hops and Malt Design, and thereby commits unfair competition against the latter. It is a
factual issue (Phil. Nut Industry Inc. v. Standard Brands Inc., 65 SCRA 575) and as a general rule, the
findings of the Court of Appeals upon factual questions are conclusive and ought not to be disturbed by
us. However, there are exceptions to this general rule, and they are:

(10)When the conclusion is grounded entirely on speculation, surmises and conjectures;

(11)When the inference of the Court of Appeals from its findings of fact is manifestly mistaken,
absurd and impossible;

(12)Where there is grave abuse of discretion;

(13)When the judgment is based on a misapprehension of facts;

(14)When 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;

(15)When the findings of said court are contrary to those of the trial court;

(16)When the findings are without citation of specific evidence on which they are based;

(17)When the facts set forth in the petition as well as in the petitioners main and reply briefs are
not disputed by the respondents; and

(18)When the findings of facts of the Court of Appeals are premised on the absence of evidence
and are contradicted on record. (Reynolds Philippine Corporation vs. Court of Appeals, 169
SCRA 220, 223 citing, Mendoza vs. Court of Appeals, 156 SCRA 597; Manlapaz vs. Court of
Appeals, 147 SCRA 238; Sacay vs. Sandiganbayan, 142 SCRA 593; 609; Guita vs. CA, 139
SCRA 576; Casanayan vs. Court of Appeals, 198 SCRA 333, 336; also Apex Investment and
Financing Corp. vs. IAC, 166 SCRA 458 [citing Tolentino vs. De Jesus, 56 SCRA 167; Carolina
Industries, Inc. vs. CMS Stock Brokerage, Inc., 97 SCRA 734; Manero vs. CA, 102 SCRA 817;
and Moran, Jr. vs. CA, 133 SCRA 88].)
Under any of these exceptions, the Court has to review the evidence in order to arrive at the correct
findings based on the record (Roman Catholic Bishop of Malolos, Inc. vs. IAC, 191 SCRA 411, 420.)
Where findings of the Court of Appeals and trial court are contrary to each other, the Supreme Court
may scrutinize the evidence on record. (Cruz vs. CA, 129 SCRA 222, 227.)

The present case is one of the exceptions because there is no concurrence between the trial court and
the Court of Appeals on the lone factual issue of whether ABI, by manufacturing and selling its BEER
PALE PILSEN in amber colored steinie bottles of 320 ml. capacity with a white painted rectangular label
has committed trademark infringement and unfair competition against SMC.

Infringement of trademark is a form of unfair competition (Clarke vs. Manila Candy Co., 36 Phil. 100,
106). Sec 22 of Republic Act No. 166, otherwise known as the Trademark Law, defines what constitutes
infringement:

Sec 22. Infringement, what constitutes.Any person who shall use, without the consent of the
registrant, any reproduction, counterfeit, copy or colorable imitation of any registered mark or trade-
name in connection with the sale, offering for sale, or advertising of any goods, business or services on
or in connection with which such use is likely to cause confusion or mistake or to deceive purchasers
or others as to the source or origin of such goods or services, or identity of such business; or reproduce,
counterfeit, copy or colorably imitate any such mark or trade-name and apply such reproduction,
counterfeit, copy, or colorable imitation to labels, signs, prints, packages, wrappers, receptacles or
advertisements intended to be used upon or in connection with such goods, business or services, shall
be liable to a civil action by the registrant for any or all of the remedies herein provided. (Italics supplied.)
This definition implies that only registered trade marks, trade names and service marks are protected
against infringement or unauthorized use by another or others. The use of someone elses registered
trademark, trade name or service mark is unauthorized, hence, actionable, if it is done without the
consent of the registrant. (Ibid.)

The registered trademark of SMC for its pale pilsen beer is:

San Miguel Pale Pilsen With Rectangular Hops and Malt Design. (Philippine Bureau of Patents,
Trademarks and Technology Transfer Trademark Certificate of Registration No. 36103, dated 23 Oct.
1986, (p. 174, Rollo.)

As described by the trial court in its decision (Page 177, Rollo):

x x x a rectangular design [is] bordered by what appears to be minute grains arranged in rows of three
in which there appear in each corner hop designs. At the top is a phrase written in small print Reg. Phil.
Pat. Off. and at the bottom Net Contents: 320 Ml The dominant feature is the phrase San Miguel
written horizontally at the upper portion. Below are the words Pale Pilsen written diagonally across the
middle of the rectangular design. In between is a coat of arms and the phrase Expertly Brewed. The
S in San and the M of Miguel, P of Pale and Pilsen are written in Gothic letters with fine strokes
of serifs, the kind that first appeared in the 1780s in England and used for printing German as
distinguished from Roman and Italic. Below Pale Pilsen is the statement And Bottled by (first line,
San Miguel Brewery (second line), and Philippines (third line). (p. 177, Rollo; Italics supplied.)

On the other hand, ABIs trademark, as described by the trial court, consists of:

x x x a rectangular design bordered by what appear to be buds of flowers with leaves. The dominant
feature is Beer written across the upper portion of the rectangular design. The phrase Pale Pilsen
appears immediately below is smaller block letters. To the left is a hop design and to the right, written
in small prints, is the phrase Net Contents 320 ml. Immediately below Pale Pilsen is the statement
written in three lines Especially brewed and bottled by (first line), Asia Brewery Incorporated (second
line), and Philippines (third line), (p. 177, Rollo; Italics supplied.)

Does ABIs BEER PALE PILSEN label or design infringe upon SMCs SAN MIGUEL PALE PILSEN
WITH RECTANGULAR MALT AND HOPS DESIGN? The answer is No.
Infringement is determined by the test of dominancy rather than by differences or variations in the
details of one trademark and of another. The rule was formulated in Co Tiong Sa vs. Director of Patents,
95 Phil. 1, 4 (1954); reiterated in Lim Hoa vs. Director of Patents, 100 Phil. 214, 216-217 (1956), thus:

It has been consistently held that the question of infringement of a trademark is to be determined by
the test of dominancy. Similarity in size, form and color, while relevant, is not conclusive. If the
competing trademark contains the main or essential or dominant features of another, and confusion
and deception is likely to result, infringement takes place. Duplication or imitation is not necessary; nor
it is necessary that the infringing label should suggest an effort to imitate. [C. Neilman Brewing Co. vs.
Independent Brewing Co., 191 F., 489, 495, citing Eagle White Lead Co., vs. Pflugh (CC) 180 Fed.
579]. The question at issue in cases of infringement of trademarks is whether the use of the marks
involved would be likely to cause confusion or mistakes in the mind of the public or deceive purchasers.
(Auburn Rubber Corporation vs. Honover Rubber Co., 107 F. 2d 588; x x x.) (Italics supplied.)

In Forbes, Munn & Co. (Ltd.) vs. Ang San To, 40 Phil. 272, 275), the test was similarity or resemblance
between the two (trademarks) such as would be likely to cause the one mark to be mistaken for the
other. x x x [But] this is not such similitude as amounts to identity.

In Phil. Nut Industry Inc. vs. Standard Brands Inc., 65 SCRA 575, the court was more specific: the test
is similarity in the dominant features of the trademarks.

What are the dominant features of the competing trademarks before us?

There is hardly any dispute that the dominant feature of SMCs trademark is the name of the product:
SAN MIGUEL PALE PILSEN, written in white Gothic letters with elaborate serifs at the beginning and
end of the letters S and M on an amber background across the upper portion of the rectangular
design.

On the other hand, the dominant feature of ABIs trademark is the name: BEER PALE PILSEN, with the
word Beer written in large amber letters, larger than any of the letters found in the SMC label.

The trial court perceptively observed that the word BEER does not appear in SMCs trademark, just
as the words SAN MIGUEL do not appear in ABIs trademark. Hence, there is absolutely no similarity
in the dominant features of both trademarks.

Neither in sound, spelling or appearance can BEER PALE PILSEN be said to be confusingly similar to
SAN MIGUEL PALE PILSEN. No one who purchases BEER PALE PILSEN can possibly be deceived
that it is SAN MIGUEL PALE PILSEN. No evidence whatsoever was presented by SMC proving
otherwise. Besides the dissimilarity in their names, the following other dissimilarities in the trade dress
or appearance of the competing products abound:

(8) The SAN MIGUEL PALE PILSEN bottle has a slender tapered neck. The BEER PALE PILSEN
bottle has a fat, bulging neck.

(9) The words pale Pilsen on SMCs label are printed in bold and laced letters along a diagonal
band, whereas the words pale pilsen on ABI's bottle are half the size and printed in slender
block letters on a straight horizontal band. (See Exhibit 8-a.)

(10)The names of the manufacturers are prominently printed on their respective bottles. SAN
MIGUEL PALE PILSEN is Bottled by the San Miguel Brewery, Philippines, whereas BEER
PALE PILSEN is Especially brewed and bottled by Asia Brewery Incorporated, Philippines.

(11)On the back of ABIs bottle is printed in big, bold letters, under a row of flower buds and leaves,
its copyrighted slogan: BEER NA BEER! Whereas SMCs bottle carries no slogan.

(12)The back of the SAN MIGUEL PALE PILSEN bottle carries the SMC logo, whereas the BEER
PALE PILSEN bottle has no logo.

(13)The SAN MIGUEL PALE PILSEN bottle cap is stamped with a coat of arms and the words San
Miguel Brewery Philippines encircling the same. The BEER PALE PILSEN bottle cap is
stamped with the name BEER in the center, surrounded by the words Asia Brewery
Incorporated Philippines.

(14)Finally, there is a substantial price difference between BEER PALE PILSEN (currently at P4.25
per bottle) and SAN MIGUEL PALE PILSEN (currently at P7.00 per bottle). One who pays only
P4.25 for a bottle of beer cannot expect to receive San Miguel Pale Pilsen from the storekeeper
or bartender.

The fact that the words pale pilsen are part of ABIs trademark does not constitute an infringement of
SMCs 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. (Websters
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. x x x. 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.
(Italics 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, corn 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. x x x 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 manufacturers, 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.)

x x x. 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.)
x x x. 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.)
(Italics supplied.)

The circumstance that the manufacturer of BEER PALE PILSEN, Asia Brewery Incorporated, has
printed its name all over the bottle of its beer product: on the label, on the back of the bottle, as well as
on the bottle cap, disproves SMCs charge that ABI dishonestly and fraudulently intends to palm off its
BEER PALE PILSEN as SMCs product. In view of the visible differences between the two products,
the Court believes it is quite unlikely that a customer of average intelligence would mistake a bottle of
BEER PILSEN for SAN MIGUEL PALE PILSEN.

The fact that BEER PALE PILSEN like SAN MIGUEL PALE PILSEN is bottled in amber-colored steinie
bottles of 320 ml. capacity and is also advertised in print, broadcast, and television media, does not
necessarily constitute unfair competition.

Unfair competition is the employment of deception or any other means contrary to good faith by which
a person shall pass off the goods manufactured by him or in which he deals, or his business, or services,
for those of another who has already established goodwill for his similar goods, business or services,
or any acts calculated to produce the same result. (Sec. 29, Republic Act No. 166, as amended.) The
law further enumerates the more common ways of committing unfair competition, thus:
Sec. 29. x x x.

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

(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; 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.
In this case, the question to be determined is whether ABI is using a name or mark for its beer that has
previously come to designate SMCs beer, or whether ABI is passing off its BEER PALE PILSEN as
SMCs SAN MIGUEL PALE PILSEN.

x x x. The universal test question is whether the public is likely to be deceived. Nothing less than
conduct tending to pass off one mans goods or business as that of another will constitute unfair
competition. Actual or probable deception and confusion on the part of the customers by reason of
defendants practices must always appear. (Shell Co. of the Philippines, Ltd. vs. Insular Petroleum
Refining Co. Ltd. et al., 120 Phil. 434, 439.)
The use by ABI of the steinie bottle, similar but not identical to the SAN MIGUEL PALE PILSEN bottle,
is not unlawful. As pointed out by ABIs counsel, SMC did not invent but merely borrowed the steinie
bottle from abroad and it claims neither patent nor trademark protection for that bottle shape and design.
(See rollo, page 55.) The Cerveza Especial and the Efes Pale Pilsen use the steinie bottle. (See
Exhibits 57-D, 57-E.) The trial court found no infringement of SMCs bottle

The court agrees with defendant that there is no infringement of plaintiffs bottle, firstly, because
according to plaintiffs witness Deogracias Villadolid, it is a standard type of bottle called steinie, and to
witness Jose Antonio Garcia, it is not a San Miguel Corporation design but a design originally developed
in the United States by the Glass Container Manufacturers Institute and therefore lacks exclusivity.
Secondly, the shape was never registered as a trademark. Exhibit C is not a registration of a beer
bottle design required under Rep. Act 165 but the registration of the name and other marks of ownership
stamped on containers as required by Rep. Act 623. Thirdly, the neck of defendants bottle is much
larger and has a distinct bulge in its uppermost part. (p. 186, Rollo.)

The petitioners contention that bottle size, shape and color may not be the exclusive property of any
one beer manufacturer is well taken. SMCs being the first to use the steinie bottle does not give SMC
a vested right to use it to the exclusion of everyone else. Being of functional or common use, and not
the exclusive invention of any one, it is available to all who might need to use it within the industry.
Nobody can acquire any exclusive right to market articles supplying a simple human needs in containers
or wrappers of the general form, size and character commonly and immediately used in marketing such
articles (Dy Buncio vs. Tan Tiao Bok, 42 Phil. 190, 194-195.)

x x x protection against imitation should be properly confined to nonfunctional features. Even if purely
functional elements are slavishly copied, the resemblance will not support an action for unfair
competition, and the first user cannot claim secondary meaning protection. Nor can the first user
predicate his claim to protection on the argument that his business was established in reliance on any
such unpatented nonfunctional feature, even at large expenditure of money. (Callman Unfair
Competition, Trademarks and Monopolies, Sec. 19.33 [4th Ed.].) (Petition for Review, p. 28.)

ABI does not use SMCs steinie bottle. Neither did ABI copy it. ABI makes its own steinie bottle which
has a fat bulging neck to differentiate it from SMCs bottle. The amber color is a functional feature of
the beer bottle. As pointed out by ABI, all bottled beer produced in the Philippines is contained and sold
in ambercolored bottles because amber is the most effective color in preventing transmission of light
and provides the maximum protection to beer. As was ruled in California Crushed Fruit Corporation vs.
Taylor B. and Candy Co., 38 F2d 885, a merchant cannot be enjoined from using a type or color of
bottle where the same has the useful purpose of protecting the contents from the deleterious effects of
light rays. Moreover, no one may have a monopoly of any color. Not only beer, but most medicines,
whether in liquid or tablet form, are sold in amber-colored bottles.

That the ABI bottle has a 320 ml. capacity is not due to a desire to imitate SMCs bottle but because
that bottle capacity is the standard prescribed under Metrication Circular No. 778, dated 4 December
1979, of the Department of Trade, Metric System Board.

With regard to the white label of both beer bottles, ABI explained that it used the color white for its label
because white presents the strongest contrast to the amber color of ABIs bottle; it is also the most
economical to use on labels, and the easiest to bake in the furnace (p. 16, TSN of September 20,
1988). No one can have a monopoly of the color amber for bottles, nor of white for labels, nor of the
rectangular shape which is the usual configuration of labels. Needless to say, the shape of the bottle
and of the label is unimportant. What is all important is the name of the product written on the label of
the bottle for that is how one beer may be distinguished from the others.

In Dy Buncio v. Tan Tiao Bok, 42 Phil. 190, 196-197, where two competing tea products were both
labelled as Formosan tea, both sold in 5-ounce packages made of ordinary wrapping paper of
conventional color, both with labels containing designs drawn in green ink and Chinese characters
written in red ink, one label showing a double-decked jar in the center, the other, a flower pot, this court
found that the resemblances between the designs were not sufficient to mislead the ordinary intelligent
buyer, hence, there was no unfair competition. The Court held:

x x x. In order that there may be deception of the buying public in the sense necessary to constitute
unfair competition, it is necessary to suppose a public 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 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 possibility of the deception, of the person who knows nothing about the design which has
been counterfeited, and who must be indifferent as between that and the other. The simulation, in order
to be objectionable, must be such as appears likely to mislead the ordinarily intelligent buyer who has
a need to supply and is familiar with the article that he seeks to purchase.
The main thrust of SMCs complaint is not infringement of its trademark, but unfair competition arising
from the allegedly confusing similarity in the general appearance or trade dress of ABIs BEER PALE
PILSEN beside SMCs SAN MIGUEL PALE PILSEN (p. 209, Rollo).

SMC claims that the trade dress of BEER PALE PILSEN is confusingly similar to its SAN MIGUEL
PALE PILSEN because both are bottled in 320 ml. steinie type, amber-colored bottles with white
rectangular labels.

However, when as in this case, the names of the competing products are clearly different and their
respective sources are prominently printed on the label and on other parts of the bottle, mere similarity
in the shape and size of the container and label, does not constitute unfair competition. The steinie
bottle is a standard bottle for beer and is universally used. SMC did not invent it nor patent it. The fact
that SMCs bottle is registered under R.A. No. 623 (as amended by RA 5700, An Act to Regulate the
Use of Duly Stamped or Marked Bottles, Boxes, Casks, Kegs, Barrels and Other Similar Containers)
simply prohibits manufacturers of other foodstuffs from the unauthorized use of SMCs bottles by refilling
these with their products. It was not uncommon then for products such as patis (fish sauce) and toyo
(soy sauce) to be sold in recycled SAN MIGUEL PALE PILSEN bottles. Registration of SMCs beer
bottles did not give SMC a patent on the steinie or on bottles of similar size, shape or color.

Most containers are standardized because they are usually made by the same manufacturer. Milk,
whether in powdered or liquid form, is sold in uniform tin cans. The same can be said of the standard
ketchup or vinegar bottle with its familiar elongated neck. Many other grocery items such as coffee,
mayonnaise, pickles and peanut butter are sold in standard glass jars. The manufacturers of these
foodstuffs have equal right to use these standard tins, bottles and jars for their products. Only their
respective labels distinguish them from each other. Just as no milk producer may sue the others for
unfair competition because they sell their milk in the same size and shape of milk can which he uses,
neither may SMC claim unfair competition arising from the fact that ABIs BEER PALE PILSEN is sold,
like SMCs SAN MIGUEL PALE PILSEN in amber steinie bottles.

The record does not bear out SMCs apprehension that BEER PALE PILSEN is being passed off as
SAN MIGUEL PALE PILSEN. This is unlikely to happen for consumers or buyers of beer generally order
their beer by brand. As pointed out by ABIs counsel, in supermarkets and tiendas, beer is ordered by
brand, and the customer surrenders his empty replacement bottles or pays a deposit to guarantee the
return of the empties. If his empties are SAN MIGUEL PALE PILSEN, he will get SAN MIGUEL PALE
PILSEN as replacement. In sari-sari stores, beer is also ordered from the tindera by brand. The same
is true in restaurants, pubs and beer gardensbeer is ordered from the waiters by brand. (Op. cit. page
50.)

Considering further that SAN MIGUEL PALE PILSEN has virtually monopolized the domestic beer
market for the past hundred years, those who have been drinking no other beer but SAN MIGUEL PALE
PILSEN these many years certainly know their beer too well to be deceived by a newcomer in the
market. If they gravitate to ABIs cheaper beer, it will not be because they are confused or deceived,
but because they find the competing product to their taste.

Our decision in this case will not diminish our ruling in Del Monte Corporation vs. Court of Appeals and
Sunshine Sauce Manufacturing Industries, 181 SCRA 410, 419, that:

x x x to determine whether a trademark has been infringed, we must consider the mark as a whole and
not as dissected. If the buyer is deceived, it is attributable to the marks as a totality, not usually to any
part of it.

That ruling may not apply to all kinds of products. The Court itself cautioned that in resolving cases of
infringement and unfair competition, the courts should take into consideration several factors which
would affect its conclusion, to wit: the age, training and education of the usual purchaser, the nature
and cost of the article, whether the article is bought for immediate consumption and also the conditions
under which it is usually purchased (181 SCRA 410, 418-419).

The Del Monte case involved catsup, a common household item which is bought off the store shelves
by housewives and house help who, if they are illiterate and cannot identify the product by name or
brand, would very likely identify it by mere recollection of its appearance. Since the competitor,
Sunshine Sauce Mfg. Industries, not only used recycled Del Monte bottles for its catsup (despite the
warning embossed on the bottles: Del Monte Corporation. Not to be refilled.) but also used labels
which were a colorable imitation of Del Montes label, we held that there was infringement of Del
Montes trademark and unfair competition by Sunshine.

Our ruling in Del Monte would not apply to beer which is not usually picked up from a store shelf but
ordered by brand by the beer drinker himself from the storekeeper or waiter in a pub or restaurant.

Moreover, SMCs brand or trademark: SAN MIGUEL PALE PILSEN is not infringed by ABIs mark:
BEER NA BEER or BEER PALE PILSEN. ABI makes its own bottle with a bulging neck to
differentiate it from SMCs bottle, and prints ABIs name in three (3) places on said bottle (front, back
and bottle cap) to prove that it has no intention to pass off its BEER as SAN MIGUEL.

There is no confusing similarity between the competing beers for the name of one is SAN MIGUEL
while the competitor is plain BEER and the points of dissimilarity between the two outnumber their
points of similarity.

Petitioner ABI has neither infringed SMCs trademark nor committed unfair competition with the latters
SAN MIGUEL PALE PILSEN product. While its BEER PALE PILSEN admittedly competes with the
latter in the open market, that competition is neither unfair nor fraudulent. Hence, we must deny SMCs
prayer to suppress it.

WHEREFORE, finding the petition for review meritorious, the same is hereby granted. The decision
and resolution of the Court of Appeals in CA-G.R. CV No. 28104 are hereby set aside and that of the
trial court is REINSTATED and AFFIRMED. Costs against the private respondent.

SO ORDERED.

Narvasa (C.J.), Bidin, Regalado, Romero, Nocon, Bellosillo, and Melo, JJ., concur.

Cruz, J., See dissent.

Feliciano, J., No part. One party represented by my former firm.

Padilla, J., No part, in view of substantial interest in SMC.

Davide, Jr., J., I join Justice Cruz in his dissent.

Quiason, J., No part.

CRUZ, J., dissenting:

The present ponencia stresses the specific similarities and differences of the two products to support
the conclusion that there is no infringement of trade marks or unfair competition. That test was rejected
in my own ponencia in Del Monte Corporation vs. Court of Appeals, 181 SCRA 410, concurred in by
Justices Narvasa, Gancayco, Grio-Aquino and Medialdea, where we declared:

While the Court does recognize these distinctions, it does not agree with the conclusion that there was
no infringement or unfair competition. It seems to us that the lower courts have been so preoccupied
with the details that they have not seen the total picture.

It has been correctly held that side-by-side comparison is not the final test of similarity. Such comparison
requires a careful scrutiny to determine in what points the labels of the products differ, as was done by
the trial judge. The ordinary buyer does not usually make such scrutiny nor does he usually have the
time to do so. The average shopper is usually in a hurry and does not inspect every product on the shelf
as if he were browsing in a library. Where the housewife has to return home as soon as possible to her
baby or the working woman has to make quick purchases during her off hours, she is apt to be confused
by similar labels even if they do have minute differences. The male shopper is worse as he usually does
not bother about such distinctions.
The question is not whether the two articles are distinguishable by their labels when set side by side
but whether the general confusion made by the article upon the eye of the casual purchaser who is
unsuspicious and off his guard, is such as to likely result in his confounding it with the original. As
observed in several cases, the general impression of the ordinary purchaser, buying under the normally
prevalent conditions in trade and giving the attention such purchasers usually give in buying that class
of goods, is the touchstone.

It has been held that in making purchases, the consumer must depend upon his recollection of the
appearance of the product which he intends to purchase. The buyer having in mind the mark/label of
the respondent must rely upon his memory of the petitioners mark. Unlike the judge who has ample
time to minutely examine the labels in question in the comfort of his sala, the ordinary shopper does not
enjoy the same opportunity.

A number of courts have held that to determine whether a trademark has been infringed, we must
consider the mark as a whole and not as dissected. If the buyer is deceived, it is attributable to the
marks as a totality, not usually to any part of it. The court therefore should be guided by its first
impression, for a buyer acts quickly and is governed by a casual glance, the value of which may be
dissipated as soon as the court assumes to analyze carefully the respective features of the mark.

It has also been held that it is not the function of the court in cases of infringement and unfair competition
to educate purchasers but rather to take their carelessness for granted, and to be ever conscious of the
fact that marks need not be identical. A confusing similarity will justify the intervention of equity. The
judge must also be aware of the fact that usually a defendant in cases of infringement does not normally
copy but makes only colorable changes. Well has it been said that the most successful form of copying
is to employ enough points of similarity to confuse the public with enough points of difference to confuse
the courts.

For the above reasons, and the other arguments stated in Del Monte, I dissent.

Petition granted.

Note. No exclusive right of use can be claimed if bottle design registered only in Supplemental
Register (Del Monte Corporation vs. Court of Appeals, 181 SCRA 410).

o0o

SOCIETE DES PRODUITS NESTL, S.A. and NESTL PHILIPPINES, INC., petitioners, vs.
COURT OF APPEALS and CFC CORPORATION, respondents.

G.R. No. 112012. April 4, 2001

Trademarks and Tradenames; Words and Phrases; Trademark, Defined. A trademark has been
generally defined as any word, name, symbol or device adopted and used by a manufacturer or
merchant to identify his goods and distinguish them from those manufactured and sold by others.

Same; Same; Tests to Determine Colorable Imitation; Dominancy Test, and Holistic Test, Explained;
Colorable imitation denotes such a close or ingenious imitation as to be calculated to deceive ordinary
persons, or such a resemblance to the original as to deceive an ordinary purchaser giving such attention
as a purchaser usually gives, as to cause him to purchase the one supposing it to be the other.
Colorable imitation denotes such a close or ingenious imitation as to be calculated to deceive ordinary
persons, or such a resemblance to the original as to deceive an ordinary purchaser giving such attention
as a purchaser usually gives, as to cause him to purchase the one supposing it to be the other. In
determining if colorable imitation exists, jurisprudence has developed two kinds of teststhe
Dominancy Test and the Holistic Test. The test of dominancy focuses on the similarity of the prevalent
features of the competing trademarks which might cause confusion or deception and thus constitute
infringement. On the other side of the spectrum, the holistic test mandates that the entirety of the marks
in question must be considered in determining confusing similarity.
Same; Same; Same; Same; In infringement or trademark cases in the Philippines, particularly in
ascertaining whether one trademark is confusingly similar to or is a colorable imitation of another, no
set rules can be deducedeach case must be decided on its own merits. The Court of Appeals
applied some judicial precedents which are not on all fours with this case. It must be emphasized that
in infringement or trademark cases in the Philippines, particularly in ascertaining whether one trademark
is confusingly similar to or is a colorable imitation of another, no set rules can be deduced. Each case
must be decided on its own merits. In Esso Standard, Inc. v. Court of Appeals, we ruled that the
likelihood of confusion is a relative concept; to be determined only according to the particular, and
sometimes peculiar, circumstances of each case. In trademark cases, even more than in any other
litigation, precedent must be studied in light of the facts of the particular case. The wisdom of the
likelihood of confusion test lies in its recognition that each trademark infringement case presents its own
unique set of facts. Indeed, the complexities attendant to an accurate assessment of likelihood of
confusion require that the entire panoply of elements constituting the relevant factual landscape be
comprehensively examined.

Same; Same; Same; Same; Totality Rule, Explained. In the same manner, the Court of Appeals
erred in applying the totality rule as defined in the cases of Bristol Myers v. Director of Patents; Mead
Johnson & Co. v. NVJ Van Dorf Ltd.; and American Cyanamid Co. v. Director of Patents. The totality
rule states that the test is not simply to take their words and compare the spelling and pronunciation of
said words. In determining whether two trademarks are confusingly similar, the two marks in their
entirety as they appear in the respective labels must be considered in relation to the goods to which
they are attached; the discerning eye of the observer must focus not only on the predominant words
but also on the other features appearing on both labels.

Same; Same; Same; Same; In view of the difficulty of applying jurisprudential precedents to trademark
cases due to the peculiarity of each case, judicial fora should not readily apply a certain test or standard
just because of seeming similarities. In the case at bar, other than the fact that both Nestles and
CFCs products are inexpensive and common household items, the similarity ends there. What is being
questioned here is the use by CFC Of the trademark MASTER. In view of the difficulty of applying
jurisprudential precedents to trademark cases due to the peculiarity of each case, judicial fora should
not readily apply a certain test or standard just because of seeming similarities. As this Court has
pointed above, there could be more telling differences than similarities as to make a jurisprudential
precedent inapplicable.

Same; Same; Same; Same; The application of the totality or holistic test is improper since the ordinary
purchaser would not be inclined to notice the specific features, similarities or dissimilarities, considering
that the product is an inexpensive and common household item.The Court of Appeals held that the
test to be applied should be the totality or holistic test reasoning, since what is of paramount
consideration is the ordinary purchaser who is, in general, undiscerningly rash in buying the more
common and less expensive household products like coffee, and is therefore less inclined to closely
examine specific details of similarities and dissimilarities between competing products. This Court
cannot agree with the above reasoning. If the ordinary purchaser is undiscerningly rash in buying such
common and inexpensive household products as instant coffee, and would therefore be less inclined
to closely examine specific details of similarities and dissimilarities between the two competing
products, then it would be less likely for the ordinary purchaser to notice that CFCs trademark FLAVOR
MASTER carries the colors orange and mocha while that of Nestles uses red and brown. The
application of the totality or holistic test is improper since the ordinary purchaser would not be inclined
to notice the specific features, similarities or dissimilarities, considering that the product is an
inexpensive and common household item.

Same; Same; Same; Same; The totality or holistic test only relies on visual comparison between two
trademarks whereas the dominancy test relies not only on the visual but also on the aural and
connotative comparisons and overall impressions between the two trademarks.Moreover, the totality
or holistic test is contrary to the elementary postulate of the law on trademarks and unfair competition
that confusing similarity is to be determined on the basis of visual, aural, connotative comparisons and
overall impressions engendered by the marks in controversy as they are encountered in the realities of
the marketplace. The totality or holistic test only relies on visual comparison between two trademarks
whereas the dominancy test relies not only on the visual but also on the aural and connotative
comparisons and overall impressions between the two trademarks.
Same; Same; Same; Same; Generic Terms, and Descriptive Terms, Explained; The word MASTER
is neither a generic nor a descriptive term, and as such, said term can not be invalidated as a trademark
and, therefore, may be legally protected. In addition, the word MASTER is neither a generic nor a
descriptive term. As such, said term can not be invalidated as a trademark and, therefore, may be
legally protected. Generic terms are those which constitute the common descriptive name of an article
or substance, or comprise the genus of which the particular product is a species, or are commonly
used as the name or description of a kind of goods, or imply reference to every member of a genus
and the exclusion of individuating characters, or refer to the basic nature of the wares or services
provided rather than to the more idiosyncratic characteristics of a particular product, and are not legally
protectable. On the other hand, a term is descriptive and therefore invalid as a trademark if, as
understood in its normal and natural sense, it forthwith conveys the characteristics, functions, qualities
or ingredients of a product to one who has never seen it and does not know what it is, or if it forthwith
conveys an immediate idea of the ingredients, qualities or characteristics of the goods, or if it clearly
denotes what goods or services are provided in such a way that the consumer does not have to exercise
powers of perception or imagination.

Same; Same; Same; Same; Suggestive Terms, Explained. Rather, the term MASTER is a
suggestive term brought about by the advertising scheme of Nestle. Suggestive terms are those which,
in the phraseology of one court, require imagination, thought and perception to reach a conclusion as
to the nature of the goods. Such terms, which subtly connote something about the product, are eligible
for protection in the absence of secondary meaning. While suggestive marks are capable of shedding
some light upon certain characteristics of the goods or services in dispute, they nevertheless involve
an element of incongruity, figurativeness, or imaginative effort on the part of the observer.

Same; Same; Same; Same; The term MASTER has acquired a certain connotation to mean the coffee
products MASTER ROAST and MASTER BLEND produced by Nestle. The term MASTER,
therefore, has acquired a certain connotation to mean the coffee products MASTER ROAST and
MASTER BLEND produced by Nestl. As such, the use by CFC of the term MASTER in the trademark
for its coffee product FLAVOR MASTER is likely to cause confusion or mistake or even to deceive the
ordinary purchasers.

PETITION for review on certiorari of a decision of the Court of Appeals.

The facts are stated in the opinion of the Court.

Tan, Manzano & Velez for petitioners.

Hilario A. Perez for private respondent.

YNARES-SANTIAGO, J.:

This is a petition for review assailing the Decision of the Court of Appeals in CA-G.R. SP No. 24101,
reversing and setting aside the decision of the Bureau of Patents, Trademarks and Technology Transfer
(BPTTT), which denied private respondents application for registration of the trademark, FLAVOR
MASTER.

On January 18, 1984, private respondent CFC Corporation filed with the BPTTT an application for the
registration of the trademark FLAVOR MASTER for instant coffee, under Serial No. 52994. The
application, as a matter of due course, was published in the July 18, 1988 issue of the BPTTTs Official
Gazette.

Petitioner Societe Des Produits Nestl, S.A., a Swiss company registered under Swiss laws and
domiciled in Switzerland, filed an unverified Notice of Opposition, claiming that the trademark of private
respondents product is confusingly similar to its trademarks for coffee and coffee extracts, to wit:
MASTER ROAST and MASTER BLEND.

Likewise, a verified Notice of Opposition was filed by Nestl Philippines, Inc., a Philippine corporation
and a licensee of Societe Des Produits Nestl S.A., against CFCs application for registration of the
trademark FLAVOR MASTER. Nestle claimed that the use, if any, by CFC of the trademark FLAVOR
MASTER and its registration would likely cause confusion in the trade; or deceive purchasers and would
falsely suggest to the purchasing public a connection in the business of Nestl, as the dominant word
present in the three (3) trademarks is MASTER; or that the goods of CFC might be mistaken as having
originated from the latter.

In answer to the two oppositions, CFC argued that its trademark, FLAVOR MASTER, is not confusingly
similar with the formers trademarks, MASTER ROAST and MASTER BLEND, alleging that, except for
the word MASTER (which cannot be exclusively appropriated by any person for being a descriptive or
generic name), the other words that are used respectively with said word in the three trademarks are
very different from each otherin meaning, spelling, pronunciation, and sound. CFC further argued
that its trademark, FLAVOR MASTER, is clearly very different from any of Nestls trademarks
MASTER ROAST and MASTER BLEND, especially when the marks are viewed in their entirety, by
considering their pictorial representations, color schemes and the letters of their respective labels.

In its Decision No. 90-47 dated December 27, 1990, the BPTTT denied CFCs application for
registration. CFC elevated the matter to the Court of Appeals, where it was docketed as CA-G.R. SP
No. 24101.

The Court of Appeals defined the issue thus: Does appellant CFCs trade dress bear a striking
resemblance with appellees trademarks as to create in the purchasing publics mind the mistaken
impression that both coffee products come from one and the same source?

As stated above, the Court of Appeals, in the assailed decision dated September 23, 1993, reversed
Decision No. 90-47 of the BPTTT and ordered the Director of Patents to approve CFCs application.
The Court of Appeals ruled:

Were we to take even a lackadaisical glance at the overall appearance of the contending marks, the
physical discrepancies between appellant CFCs and appellees respective logos are so ostensible that
the casual purchaser cannot likely mistake one for the other. Appellant CFCs label (Exhibit 4) is
predominantly a blend of dark and lighter shade of orange where the words FLAVOR MASTER,
FLAVOR appearing on top of MASTER, shaded in mocha with thin white inner and outer sidings per
letter and identically lettered except for the slightly protruding bottom curve of the letter S adjoining
the bottom tip of the letter A in the word MASTER, are printed across the top of a simmering red
coffee cup. Underneath FLAVOR MASTER appears Premium Instant Coffee printed in white, slim
and slanted letters. Appellees MASTER ROAST label (Exhibit 7), however, is almost double the
width of appellant CFCs. At the top is printed in brown color the word NESCAFE against a white
backdrop. Occupying the center is a square-shaped configuration shaded with dark brown and picturing
a heap of coffee beans, where the word MASTER is inscribed in the middle. MASTER in appellees
label is printed in taller capital letters, with the letter M further capitalized. The letters are shaded with
red and bounded with thin gold-colored inner and outer sidings. Just above the word MASTER is a
red window like portrait of what appears to be a coffee shrub clad in gold. Below the MASTER appears
the word ROAST impressed in smaller, white print. And further below are the inscriptions in white: A
selection of prime Arabica and Robusta coffee. With regard to appellees MASTER BLEND label
(Exhibit 6) of which only a xeroxed copy is submitted, the letters are bolder and taller as compared to
appellant CFCs and the word MASTER appears on top of the word BLEND and below it are the
words 100% pure instant coffee printed in small letters.

From the foregoing description, while the contending marks depict the same product, the glaring
dissimilarities in their presentation far outweigh and dispel any aspect of similitude. To borrow the words
of the Supreme Court in American Cyanamid Co. v. Director of Patents (76 SCRA 568), appellant CFCs
and appellees labels are entirely different in size, background, colors, contents and pictorial
arrangement; in short, the general appearances of the labels bearing the respective trademarks are so
distinct from each other that appellees cannot assert that the dominant features, if any, of its trademarks
were used or appropriated in appellant CFCs own. The distinctions are so well-defined so as to
foreclose any probability or likelihood of confusion or deception on the part of the normally intelligent
buyer when he or she encounters both coffee products at the grocery shelf. The answer therefore to
the query is a clear-cut NO.

Petitioners are now before this Court on the following assignment of errors:
1. RESPONDENT COURT GRAVELY ERRED IN REVERSING AND SETTING ASIDE THE
DECISION (NO. 90-47) OF THE DIRECTOR OF THE BUREAU OF PATENTS, TRADEMARKS
AND TECHNOLOGY TRANSFER (BPTTT) DATED DECEMBER 27, 1990.

2. RESPONDENT COURT ERRED IN FINDING THAT APPELLANT CFCS TRADE DRESS IS


BEYOND THE SCOPE OF THE PROSCRIPTION LAID DOWN BY JURISPRUDENCE AND
THE TRADEMARK LAW.

3. RESPONDENT COURT ERRED IN HOLDING THAT THE TOTALITY RULE, RATHER THAN
THE TEST OF DOMINANCY, APPLIES TO THE CASE.

4. RESPONDENT COURT ERRED IN INVOKING THE TOTALITY RULE APPLIED IN THE


CASES OF BRISTOL MYERS V. DIRECTOR OF PATENTS, ET AL. (17 SCRA 128), MEAD
JOHNSON & CO. V. NVJ VAN DORF LTD., (7 SCRA 768) AND AMERICAN CYANAMID CO.
V. DIRECTOR OF PATENTS (76 SCRA 568).

The petition is impressed with merit.

A trademark has been generally defined as any word, name, symbol or device adopted and used by a
manufacturer or merchant to identify his goods and distinguish them from those manufactured and sold
by others.

A manufacturers trademark is entitled to protection. As Mr. Justice Frankfurter observed in the case of
Mishawaka Mfg. Co. v. Kresge Co.:

The protection of trade-marks is the laws recognition of the psychological function of symbols. If it is
true that we live by symbols, it is no less true that we purchase goods by them. A trade-mark is a
merchandising short-cut which induces a purchaser to select what he wants, or what he has been led
to believe he wants. The owner of a mark exploits this human propensity by making every effort to
impregnate the atmosphere of the market with the drawing power of a congenial symbol. Whatever the
means employed, the aim is the sameto convey through the mark, in the minds of potential
customers, the desirability of the commodity upon which it appears. Once this is attained, the trade-
mark owner has something of value. If another poaches upon the commercial magnetism of the symbol
he has created, the owner can obtain legal redress.

Section 4 (d) of Republic Act No. 166 or the Trademark Law, as amended, which was in force at the
time, provides thus:

Registration of trade-marks, trade-names and service-marks on the principal register. There is


hereby established a register of trademarks, trade-names and service marks which shall be known as
the principal register. The owner of a 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

(d) Consists of or comprises a mark or trade-name which so resembles a mark or trade-name registered
in the Philippines or a mark or trade-name previously used in the Philippines by another and not
abandoned, as to be likely, when applied to or used in connection with the goods, business or services
of the applicant, to cause confusion or mistake or to deceive purchasers:
xxx xxx x x x (Emphasis supplied)

The law prescribes a more stringent standard in that there should not only be confusing similarity but
that it should not likely cause confusion or mistake or deceive purchasers.

Hence, the question in this case is whether there is a likelihood that the trademark FLAVOR MASTER
may cause confusion or mistake or may deceive purchasers that said product is the same or is
manufactured by the same company. In other words, the issue is whether the trademark FLAVOR
MASTER is a colorable imitation of the trademarks MASTER ROAST and MASTER BLEND.
Colorable imitation denotes such a close or ingenious imitation as to be calculated to deceive ordinary
persons, or such a resemblance to the original as to deceive an ordinary purchaser giving such attention
as a purchaser usually gives, as to cause him to purchase the one supposing it to be the other. In
determining if colorable imitation exists, jurisprudence has developed two kinds of teststhe
Dominancy Test and the Holistic Test. The test of dominancy focuses on the similarity of the prevalent
features of the competing trademarks which might cause confusion or deception and thus constitute
infringement. On the other side of the spectrum, the holistic test mandates that the entirety of the marks
in question must be considered in determining confusing similarity.

In the case at bar, the Court of Appeals held that:

The determination of whether two trademarks are indeed confusingly similar must be taken from the
viewpoint of the ordinary purchasers who are, in general, undiscerningly rash in buying the more
common and less expensive household products like coffee, and are therefore less inclined to closely
examine specific details of similarities and dissimilarities between competing products. The Supreme
Court in Del Monte Corporation v. CA, 181 SCRA 410, held that:

The question is not whether the two articles are distinguishable by their labels when set side by side
but whether the general confusion made by the article upon the eye of the casual purchaser who is
unsuspicious and off his guard, is such as to likely result in his confounding it with the original. As
observed in several cases, the general impression of the ordinary purchaser, buying under the normally
prevalent conditions in trade and giving the attention such purchasers usually give in buying that class
of goods, is the touchstone.

From this perspective, the test of similarity is to consider the two marks in their entirety, as they appear
in the respective labels, in relation, to the goods to which they are attached (Bristol Myers Company v.
Director of Patents, et al., 17 SCRA 128, citing Mead Johnson & Co. v. NVJ Van Dorp, Ltd., et al., 7
SCRA 768). The mark must be considered as a whole and not as dissected. If the buyer is deceived, it
is attributable to the marks as a totality, not usually to any part of it (Del Monte Corp. v. CA, supra), as
what appellees would want it to be when they essentially argue that much of the confusion springs from
appellant CFCs use of the word MASTER which appellees claim to be the dominant feature of their
own trademarks that captivates the prospective consumers. Be it further emphasized that the discerning
eye of the observer must focus not only on the predominant words but also on the other features
appearing in both labels in order that he may draw his conclusion whether one is confusingly similar to
the other (Mead Johnson & Co. v. NVJ Van Dorp, Ltd., supra).

The Court of Appeals applied some judicial precedents which are not on all fours with this case. It must
be emphasized that in infringement or trademark cases in the Philippines, particularly in ascertaining
whether one trademark is confusingly similar to or is a colorable imitation of another, no set rules can
be deduced. Each case must be decided on its own merits. In Esso Standard, Inc. v. Court of Appeals,
we ruled that the likelihood of confusion is a relative concept; to be determined only according to the
particular, and sometimes peculiar, circumstances of each case. In trademark cases, even more than
in any other litigation, precedent must be studied in light of the facts of the particular case. The wisdom
of the likelihood of confusion test lies in its recognition that each trademark infringement case presents
its own unique set of facts. Indeed, the complexities attendant to an accurate assessment of likelihood
of confusion require that the entire panoply of elements constituting the relevant factual landscape be
comprehensively examined.

The Court of Appeals application of the case of Del Monte Corporation v. Court of Appeals is, therefore,
misplaced. In Del Monte, the issue was about the alleged similarity of Del Montes logo with that of
Sunshine Sauce Manufacturing Industries. Both corporations market the catsup product which is an
inexpensive and common household item.

Since Del Monte alleged that Sunshines logo was confusingly similar to or was a colorable imitation of
the formers logo, there was a need to go into the details of the two logos as well as the shapes of the
labels or marks, the brands printed on the labels, the words or lettering on the labels or marks and the
shapes and colors of the labels or marks. The same criteria, however, cannot be applied in the instant
petition as the facts and circumstances herein are peculiarly different from those in the Del Monte case.
In the same manner, the Court of Appeals erred in applying the totality rule as defined in the cases of
Bristol Myers v. Director of Patents; Mead Johnson & Co. v. NVJ Van Dorf Ltd.; and American Cyanamid
Co. v. Director of Patents. The totality rule states that the test is not simply to take their words and
compare the spelling and pronunciation of said words. In determining whether two trademarks are
confusingly similar, the two marks in their entirety as they appear in the respective labels must be
considered in relation to tine goods to which they are attached; the discerning eye of the observer must
focus not only on the predominant words but also on the other features appearing on both labels.

As this Court has often declared, each case must be studied according to the peculiar circumstances
of each case. That is the reason why in trademark cases, jurisprudential precedents should be applied
only to a case if they are specifically in point.

In the above cases cited by the Court of Appeals to justify the application of the totality or holistic test
to this instant case, the factual circumstances are substantially different. In the Bristol

Myers case, this Court held that although both BIOFERIN and BUFFERIN are primarily used for the
relief of pains such as headaches and colds, and their names are practically the same in spelling and
pronunciation, both labels have strikingly different backgrounds and surroundings. In addition, one is
dispensable only upon doctors prescription, while the other may be purchased over-the-counter.

In the Mead Johnson case, the differences between ALACTA and ALASKA are glaring and striking to
the eye. Also, ALACTA refers to Pharmaceutical Preparations which Supply Nutritional Needs, falling
under Class 6 of the official classification of Medicines and Pharmaceutical Preparations to be used as
prescribed by physicians. On the other hand, ALASKA refers to Foods and Ingredients of Foods falling
under Class 47, and does not require medical prescription.

In the American Cyanamid case, the word SULMET is distinguishable from the word SULMETINE, as
the former is derived from a combination of the syllables SUL which is derived from sulfa and MET
from methyl, both of which are chemical compounds present in the article manufactured by the
contending parties. This Court held that the addition of the syllable INE in respondents label is
sufficient to distinguish respondents product or trademark from that of petitioner. Also, both products
are for medicinal veterinary use and the buyer will be more wary of the nature of the product he is
buying. In any case, both products are not identical as SULMETs label indicates that it is used in a
drinking water solution while that of SULMETINE indicates that they are tablets.

It cannot also be said that the products in the above cases can be bought off the shelf except, perhaps,
for ALASKA. The said products are not the usual common and inexpensive household items which
an undiscerningly rash buyer would unthinkingly buy.

In the case at bar, other than the fact that both Nestles and CFCs products are inexpensive and
common household items, the similarity ends there. What is being questioned here is the use by CFC
of the trademark MASTER. In view of the difficulty of applying jurisprudential precedents to trademark
cases due to the peculiarity of each case, judicial fora should not readily apply a certain test or standard
just because of seeming similarities. As this Court has pointed above, there could be more telling
differences than similarities as to make a jurisprudential precedent inapplicable.

Nestl points out that the dominancy test should have been applied to determine whether there is a
confusing similarity between CFCs FLAVOR MASTER and Nestls MASTER ROAST and MASTER
BLEND.

We agree.

As the Court of Appeals itself has stated, [t]he determination of whether two trademarks are indeed
confusingly similar must be taken from the viewpoint of the ordinary purchasers who are, in general,
undiscerningly rash in buying the more common and less expensive household products like coffee,
and are therefore less inclined to closely examine specific details of similarities and dissimilarities
between competing products.

The basis for the Court of Appeals application of the totality or holistic test is the ordinary purchaser
buying the product under normally prevalent conditions in trade and the attention such products
normally elicit from said ordinary purchaser. An ordinary purchaser or buyer does not usually make
such scrutiny nor does he usually have the time to do so. The average shopper is usually in a hurry and
does not inspect every product on the shelf as if he were browsing in a library.

The Court of Appeals held that the test to be applied should be the totality or holistic test reasoning,
since what is of paramount consideration is the ordinary purchaser who is, in general, undiscerningly
rash in buying the more common and less expensive household products like coffee, and is therefore
less inclined to closely examine specific details of similarities and dissimilarities between competing
products.

This Court cannot agree with the above reasoning. If the ordinary purchaser is undiscerningly rash in
buying such common and inexpensive household products as instant coffee, and would therefore be
less inclined to closely examine specific details of similarities and dissimilarities between the two
competing products, then it would be less likely for the ordinary purchaser to notice that CFCs
trademark FLAVOR MASTER carries the colors orange and mocha while that of Nestls uses red and
brown. The application of the totality or holistic test is improper since the ordinary purchaser would not
be inclined to notice the specific features, similarities or dissimilarities, considering that the product is
an inexpensive and common household item.

It must be emphasized that the products bearing the trademarks in question are inexpensive and
common household items bought off the shelf by undiscerningly rash purchasers. As such, if the
ordinary purchaser is undiscerningly rash, then he would not have the time nor the inclination to make
a keen and perceptive examination of the physical discrepancies in the trademarks of the products in
order to exercise his choice.

While this Court agrees with the Court of Appeals detailed enumeration of differences between the
respective trademarks of the two coffee products, this Court cannot agree that totality test is the one
applicable in this case. Rather, this Court believes that the dominancy test is more suitable to this case
in light of its peculiar factual milieu.

Moreover, the totality or holistic test is contrary to the elementary postulate of the law on trademarks
and unfair competition that confusing similarity is to be determined on the basis of visual, aural,
connotative comparisons and overall impressions engendered by the marks in controversy as they are
encountered in the realities of the marketplace. The totality or holistic test only relies on visual
comparison between two trademarks whereas the dominancy test relies not only on the visual but also
on the aural and connotative comparisons and overall impressions between the two trademarks.

For this reason, this Court agrees with the BPTTT when it applied the test of dominancy and held that:

From the evidence at hand, it is sufficiently established that the word MASTER is the dominant feature
of opposers mark. The word MASTER is printed across the middle portion of the label in bold letters
almost twice the size of the printed word ROAST. Further, the word MASTER has always been given
emphasis in the TV and radio commercials and other advertisements made in promoting the product.
This can be gleaned from the fact that Robert Jaworski and Atty. Ric Puno, Jr., the personalities
engaged to promote the product, are given the titles Master of the Game and Master of the Talk Show,
respectively. In due time, because of these advertising schemes the mind of the buying public had come
to learn to associate the word MASTER with the opposers goods.

x x x. It is the observation of this Office that much of the dominance which the word MASTER has
acquired through Opposers advertising schemes is carried over when the same is incorporated into
respondent-applicants trademark FLAVOR MASTER. Thus, when one looks at the label bearing the
trademark FLAVOR MASTER (Exh. 4) ones attention is easily attracted to the word MASTER, rather
than to the dissimilarities that exist. Therefore, the possibility of confusion as to the goods which bear
the competing marks or as to the origins thereof is not farfetched, x x x.

In addition, the word MASTER is neither a generic nor a descriptive term. As such, said term can not
be invalidated as a trademark and, therefore, may be legally protected. Generic terms are those which
constitute the common descriptive name of an article or substance, or comprise the genus of which
the particular product is a species, or are commonly used as the name or description of a kind of
goods, or imply reference to every member of a genus and the exclusion of individuating characters,
or refer to the basic nature of the wares or services provided rather than to the more idiosyncratic
characteristics of a particular product, and are not legally protectable. On the other hand, a term is
descriptive and therefore invalid as a trademark if, as understood in its normal and natural sense, it
forthwith conveys the characteristics, functions, qualities or ingredients of a product to one who has
never seen it and does not know what it is, or if it forthwith conveys an immediate idea of the
ingredients, qualities or characteristics of the goods, or if it clearly denotes what goods or services are
provided in such a way that the consumer does not have to exercise powers of perception or
imagination.

Rather, the term MASTER is a suggestive term brought about by the advertising scheme of Nestl.
Suggestive terms are those which, in the phraseology of one court, require imagination, thought and
perception to reach a conclusion as to the nature of the goods. Such terms, which subtly connote
something about the product, are eligible for protection in the absence of secondary meaning. While
suggestive marks are capable of shedding some light upon certain characteristics of the goods or
services in dispute, they nevertheless involve an element of incongruity, figurativeness, or
imaginative effort on the part of the observer.

This is evident from the advertising scheme adopted by Nestl in promoting its coffee products. In this
case, Nestl has, over time, promoted its products as coffee perfection worthy of masters like Robert
Jaworski and Ric Puno, Jr.

In associating its coffee products with the term MASTER and thereby impressing them with the
attributes of said term, Nestl advertised its products thus:

Robert Jaworski. Living Legend. A true hard court hero. Fast on his feet. Sure in every shot he makes.
A master strategist. In one word, unmatched.

MASTER ROAST. Equally unmatched. Rich and deeply satisfying. Made from a unique combination of
the best coffee beansArabica for superior taste and aroma, Robusta for strength and body. A
masterpiece only NESCAFE, the worlds coffee masters, can create.

MASTER ROAST. Coffee perfection worthy of masters like Robert Jaworski.

In the art of conversation, Ric Puno, Jr. is master. Witty. Well-informed. Confident.

In the art of coffee-making, nothing equals Master Roast, the coffee masterpiece from Nescafe, the
worlds coffee masters. A unique combination of the best coffee beansArabica for superior taste and
aroma, Robusta for strength and body. Truly distinctive and rich in flavor.

Master Roast. Coffee perfection worthy of masters like Ric Puno, Jr.

The term MASTER, therefore, has acquired a certain connotation to mean the coffee products
MASTER ROAST and MASTER BLEND produced by Nestle. As such, the use by CFC of the term
MASTER in the trademark for its coffee product FLAVOR MASTER is likely to cause confusion or
mistake or even to deceive the ordinary purchasers.

In closing, it may not be amiss to quote the case of American Chicle Co. v. Topps Chewing Gum, Inc.,
to wit:

Why it should have chosen a mark that had long been employed by [plaintiff] and had become known
to the trade instead of adopting some other means of identifying its goods is hard to see unless there
was a deliberate purpose to obtain some advantage from the trade that [plaintiff] had built up. Indeed,
it is generally true that, as soon as we see that a second comer in a market has, for no reason that he
can assign, plagiarized the make-up of an earlier comer, we need no more; . . . [W]e feel bound to
compel him to exercise his ingenuity in quarters further afield.

WHEREFORE, in view of the foregoing, the decision of the Court of Appeals in CA-G.R. SP No. 24101
is REVERSED and SET ASIDE and the decision of the Bureau of Patents, Trademarks and Technology
Transfer in Inter Partes Cases Nos. 3200 and 3202 is REINSTATED.
SO ORDERED.

Davide, Jr. (C.J., Chairman), Kapunan and Pardo, JJ., concur.

Puno, J., On official leave.

Assailed judgment reversed and set aside, that of the BPTT reinstated.

Notes. R.A. 166 describes what constitutes infringement. The law also provides that any person
whose trademark or trade name is infringed may recover damages in a civil action, and upon proper
showing may also be granted injunction. (Heirs of Crisanta Y. Gabriel-Almoradie vs. Court of Appeals,
229 SCRA 15 [1994])

Trademark refers to a word, name, symbol, emblem, sign or device or any combination thereof adopted
and used by a merchant to identify, and distinguish from others, his goods of commerce; Trademark is
basically an intellectual creation that is susceptible to ownership but the incorporeal right is distinct from
the property in the material object subject to it. (Distilleria Washington, Inc. vs. Court of Appeals, 263
SCRA 303 [1996])

o0o

246 CORPORATION, doing business under the name and style of ROLEX MUSIC LOUNGE,
petitioner
vs.
HON. REYNALDO B. DAWAY, in his capacity as Presiding Judge of Branch 90 of the Regional
Trial Court of Quezon City, MONTRES ROLEX S.A. and ROLEX CENTRE PHIL. LIMITED,
respondents.

G.R. No. 157216. November 20, 2003

Remedial Law; Civil Procedure; A grant of a preliminary hearing rests on the sound discretion of the
court. In Municipality of Bian Laguna v. Court of Appeals, decided under old Rules of Civil
Procedure, it was held that a preliminary hearing permitted under Rule 16, Section 5, is not mandatory
even when the same is prayed for. It rests largely on the sound discretion of the trial court. The use of
the word may in the aforequoted provision shows that such a hearing is not a matter of right
demandable from the trial court; it is not mandatory but discretionary. May is an auxiliary verb
indicating liberty, opportunity, permission and possibility. Such interpretation is specifically stated under
the 1997 Rules of Civil Procedure. Rule 16, Section 6, now provides that a grant of a preliminary hearing
rests on the sound discretion of the court.

PETITION for review on certiorari of the decision and resolution of the Court of Appeals.

The facts are stated in the opinion of the Court.

Galo Orlando L. Deang for petitioner.

Quasha, Ancheta Pea & Nolasco for private respondents.

YNARES-SANTIAGO, J.:

This is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure assailing
the November 28, 2002 Decision of the Court of Appeals in CA-G.R. SP No. 64660 which dismissed
the petition for certiorari filed by petitioner, as well as the Resolution dated February 13, 2003 denying
its motion for reconsideration.

The undisputed facts show that on November 26, 1998, respondents Montres Rolex S.A. and Rolex
Centre Phil., Limited, owners/proprietors of Rolex and Crown Device, filed against petitioner 246
Corporation the instant suit for trademark infringement and damages with prayer for the issuance of a
restraining order or writ of preliminary injunction before the Regional Trial Court of Quezon City, Branch
90. Respondents alleged that sometime in July 1996, petitioner adopted and, since then, has been
using without authority the mark Rolex in its business name Rolex Music Lounge as well as in its
newspaper advertisements asRolex Music Lounge, KTV. Disco & Party Club.

In its answer raising special affirmative defenses, petitioner argued that respondents have no cause of
action because no trademark infringement exist; that no confusion would arise from the use by petitioner
of the mark Rolex considering that its entertainment business is totally unrelated to the items catered
by respondents such as watches, clocks, bracelets and parts thereof. It also contended that the
complaint was not properly verified and certified against forum shopping considering that Atty. Alonzo
Ancheta, the counsel of record of respondents who signed the verification and certification, was not
authorized to represent respondents.

On July 21, 2000, petitioner filed a motion for preliminary hearing on its affirmative defenses.
Subsequently, on motion of petitioner, the trial court issued a subpoena ad testificandum requiring Atty.
Alonzo Ancheta to appear at the preliminary hearing. Respondents, in the meantime, filed a Comment
and Opposition to the motion for preliminary hearing and a motion to quash the subpoena ad
testificandum.

In an Order dated October 27, 2000, the trial court quashed the subpoena ad testificandum and denied
petitioners motion for preliminary hearing on affirmative defenses with motion to dismiss.

With the denial of the motion for reconsideration on March 16, 2001, petitioner filed a petition for
certiorari with the Court of Appeals contending that the trial court gravely abused its discretion in issuing
the October 27, 2000 and March 16, 2001 orders.

On November 28, 2002, the Court of Appeals dismissed the petition. The motion for reconsideration
filed by petitioner was denied. Hence, the instant petition anchored on the following grounds:

I
IN ISSUING THE ASSAILED DECISIONS, THE HONORABLE COURT OF APPEALS
PERFUNCTORILY BRUSHED ASIDE THE CONTROLLING PRECEDENTS LAID DOWN BY THIS
HONORABLE COURT IN ESSO STANDARD EASTERN, INC. VS. COURT OF APPEALS AND
UNITED CIGARETTE CORPORATION AND OTHER COMPANION CASES HOLDING THAT NO
TRADEMARK INFRINGEMENT CAN POSSIBLY OCCUR WHERE THE CONTENDING PARTIES
DEAL WITH GOODS AND SERVICES THAT ARE TOTALLY UNRELATED AND NON-COMPETING
WITH EACH OTHER.

II
IN ARBITRARILY AND CAPRICIOUSLY RULING THAT THE ISSUES RAISED IN PETITIONERS
CERTIORARI PETITION ARE QUESTIONS OF FACT. THE HONORABLE COURT OF APPEALS
VIOLATED NOT ONLY PETITIONERS SUBSTANTIVE DUE PROCESS RIGHTS BUT ALSO THE
WELL-SETTLED RULE THAT THE ALLEGATIONS OF THE COMPLAINT IS HYPOTHETICALLY
ADMITTED WHEN THE MOTION TO DISMISS IS GROUNDED UPON LACK OF CAUSE OF ACTION.
MOREOVER, INDEPENDENT OF THE HYPOTHETICALLY ADMITTED FACTS EMBODIED IN THE
COMPLAINT A QUO, THERE ARE SELF-EVIDENT FACTS AND IMPLIEDLY ADMITTED FACTS
CONTAINED IN PRIVATE RESPONDENTS PLEADINGS THAT WOULD CLEARLY AND
UNMISTAKABLY SHOW PRIVATE RESPONDENTS LACK OF CAUSE OF ACTION AGAINST
HEREIN PETITIONER.

III
THE HONORABLE COURT OF APPEALS VIOLATED PETITIONERS RIGHT TO SUBSTANTIVE
DUE PROCESS WHEN IT ARBITRARILY AND CAPRICIOUSLY RULED THAT WHAT WAS
SPECIFICALLY DENIED IN THE ASSAILED OCTOBER 20, 2000 ORDER IS PETITIONERS MOTION
FOR PRELIMINARY HEARING ON DEFENDANTS AFFIRMATIVE DEFENSES AND NOT
PETITIONERS MOTION TO DISMISS PER SE CONSIDERING THAT:

A. THERE IS ABSOLUTELY NOTHING IN THE ORDER DATED OCTOBER 20, 2000 OF


RESPONDENT JUDGE WHICH SUGGESTS THAT THE RESOLUTION OF PETITIONERS
MOTION TO DISMISS PER SE WAS HELD IN ABEYANCE BY THE RESPONDENT JUDGE.
HENCE THE SAID ORDER DATED OCTOBER 20, 2000 ALSO CONSTITUTES A DENIAL
ON THE MERITS OF PETITIONERS MOTION TO DISMISS PER SE AND NOT MERELY OF
PETITIONERS MOTION FOR PRELIMINARY HEARING THEREON.

B. PRIVATE RESPONDENTS COMMENT AND OPPOSITION DATED 11 AUGUST 2000,


WHICH WAS CITED AND SUSTAINED BY RESPONDENT JUDGE, CLEARLY TRAVERSED
THE MERITS OF THE GROUNDS FOR PETITIONERS MOTION TO DISMISS PER SE.
HENCE, THE SAID 20 OCTOBER 2000 ORDERS DENIAL OF PETITIONERS MOTION IS
NOT LIMITED TO THE MOTION FOR PRELIMINARY HEARING BUT ALSO CONSTITUTES
A DENIAL OF PETITIONERS MOTION TO DISMISS PER SE.

IV
IN ARBITRARILY AND CAPRICIOUSLY RULING THAT ATTY. ALONZO ANCHETA PROPERLY
VERIFIED AND CERTIFIED PRIVATE RESPONDENTS COMPLAINT A QUO. THE HONORABLE
COURT OF APPEALS VIOLATED NOT ONLY PETITIONERS SUBSTANTIVE DUE PROCESS
RIGHTS, BUT ALSO THE DOCTRINE OF SEPARATE CORPORATE PERSONALITY;
CONSIDERING THAT THE RECORDS OF THIS CASE IS (sic) COMPLETELY BEREFT AND DEVOID
OF ANY DULY EXECUTED SPECIAL POWER OF ATTORNEY, EMANATING FROM PRIVATE
RESPONDENTS, WHICH EXPLICITLY AND SPECIFICALLY AUTHORIZES ATTY. ALONZO
ANCHETA TO REPRESENT PRIVATE RESPONDENTS MONTRES ROLEX S.A. IN THE FILING OF
THE COMPLAINT A QUO. BY REASON THEREOF, PRIVATE RESPONDENTS COULD NOT BE
DEEMED TO HAVE VOLUNTARILY APPEARED BEFORE THE RESPONDENT JUDGE;
CONSEQUENTLY, THE TRIAL COURT COULD NOT HAVE VALIDLY ACQUIRED JURISDICTION
OVER THE PERSON OF PRIVATE RESPONDENTS.

V
IN ARBITRARILY AND CAPRICIOUSLY AFFIRMING RESPONDENT JUDGES QUASHAL OF THE
SUBPOENA DATED 14 AUGUST 2000 DIRECTED AGAINST ATTY. ALONZO ANCHETA, THE
HONORABLE COURT OF APPEALS VIOLATED NOT ONLY PETITIONERS SUBSTANTIVE DUE
PROCESS RIGHTS, BUT ALSO SECTION 9, RULE 132 AND SECTION 7, RULE 133 OF THE 1989
REVISED RULES ON EVIDENCE, AND THE RULING OF THIS HONORABLE COURT IN THE CASE
OF PEOPLE VS. RIVERA.

Simply put, the issues are as follows (1) whether the trial court denied not only petitioners motion
for preliminary hearing on its affirmative defenses but its motion to dismiss as well; (2) if the answer is
in the affirmative, whether or not the trial court gravely abused its discretion in denying said motions;
and (3) whether the trial court gravely abused its discretion in quashing the subpoena ad testificandum
issued against Atty. Ancheta.

Anent the first issue, we find that what was denied in the order dated October 27, 2000 was not only
the motion for preliminary hearing but the motion to dismiss as well. A reading of the dispositive portion
of said order shows that the trial court neither qualified its denial nor held in abeyance the ruling on
petitioners motion to dismiss thus

IN VIEW OF THE FOREGOING, the aforecited Motion To Quash Subpoena Ad Testificandum is


granted; and the aforecited Motion For Preliminary Hearing On Defendants Affirmative Defenses With
Motion To dismiss The Instant Complaint Based On Said Affirmative Defenses is denied. (Emphasis
supplied)

In issuing the assailed order, the trial court ruled on the merits of petitioners Motion to Dismiss vis--
vis respondents Comment and Opposition which clearly traversed the affirmative defenses raised by
petitioner, to wit:

After carefully going over the pleadings, this Court finds, on the first motion that the arguments raised
in the said motion and the reply filed in connection thereto appear to be meritorious; and on the second
motion, that the arguments raised in the comments and opposition and the rejoinder filed by the plaintiffs
likewise appear to be meritorious.

Moreover, it is presumed that all matters within an issue raised in a case were passed upon by the
court. In the absence of evidence to the contrary, the presumption is that the court a quo discharged its
task properly.
In Municipality of Bian Laguna v. Court of Appeals, decided under old Rules of Civil Procedure, it was
held that a preliminary hearing permitted under Rule 16, Section 5, is not mandatory even when the
same is prayed for. It rests largely on the sound discretion of the trial court, this

SEC. 5. Pleading grounds its affirmative defenses. Any of the grounds for dismissal provided for in
this Rule, except improper venue, may be pleaded as an affirmative defense, and a preliminary hearing
may be had thereon as if a motion to, dismiss had been filed. (Emphasis supplied)

The use of the word may in the aforequoted provision shows that such a hearing is not a matter of
right demandable from the trial court; it is not mandatory but discretionary. May is an auxiliary verb
indicating liberty, opportunity, permission and possibility. Such interpretation is specifically stated under
the 1997 Rules of Civil Procedure. Rule 16, Section 6, now provides that a grant of a preliminary hearing
rests on the sound discretion of the court, to wit

SEC. 6. Pleading grounds as affirmative defenses. If no motion to dismiss has been filed, any of the
grounds for dismissal provided for in this Rule may be pleaded as an affirmative defense in the answer
and, in the discretion of the court, a preliminary hearing may be had thereon as if a motion to dismiss
had been filed. (Emphasis supplied)

In the case at bar, the Court of Appeals did not err in finding that no abuse of discretion could be
ascribed to the trial courts denial of petitioners motion for preliminary hearing on its affirmative
defenses with motion to dismiss. The issue of whether or not a trademark infringement exists, is a
question of fact that could best be determined by the trial court.

Under the old Trademark Law where the goods for which the identical marks are used are unrelated,
there can be no likelihood of confusion and there is therefore no infringement in the use by the junior
user of the registered mark on the entirely different goods. This ruling, however, has been to some
extent, modified by Section 123.1(f) of the Intellectual Property Code (Republic Act No. 8293), which
took effect on January 1, 1998. The said section reads:

Sec. 123. Registrability. 123.1. A mark cannot be registered if it:

xxx xxx xxx

(f) Is identical with, or confusingly similar to, or constitutes a translation of a mark considered well-known
in accordance with the preceding paragraph, which is registered in the Philippines with respect to goods
or services which are not similar to those with respect to which registration is applied for: Provided, That
use of the mark in relation to those goods or services would indicate a connection between those goods
or services, and the owner of the registered mark: Provided, further, That the interest of the owner of
the registered mark are likely to be damaged by such use; (Emphasis supplied)

A junior user of a well-known mark on goods or services which are not similar to the goods or services,
and are therefore unrelated, to those specified in the certificate of registration of the well-known mark
is precluded from using the same on the entirely unrelated goods or services, subject to the following
requisites, to wit:

1. The mark is well-known internationally and in the Philippines. Under Rule 102 of the Rules and
Regulations on Trademarks, Service Marks, Trade Names and Marked or Stamped Containers,
in determining whether a mark is well known, the following criteria or any combination thereof
may be taken into account:

(a) the duration, extent and geographical area of any use of the mark, in particular, the
duration, extent and geographical area of any promotion of the mark, including
advertising or publicity and presentation, at fairs or exhibitions, of the goods and/or
services to which the mark applies;
(b) the market share in the Philippines and in other countries, of the goods and/or services
to which the mark applies;
(c) the degree of the inherent or acquired distinction of the mark;
(d) the quality-image or reputation acquired by the mark;
(e) the extent to which the mark has been registered in the world;
(f) the exclusivity of the registration attained by the mark in the world;
(g) the extent to which the mark has been used in the world;
(h) the exclusivity of use attained by the mark in the world;
(i) the commercial value attributed to the mark in the world;
(j) the record of successful protection of the rights in the mark;
(k) the outcome of litigations dealing with the issue of whether the mark is a well-known
mark; and
(l) the presence of absence of identical or similar marks validly registered for or used on
identical or similar goods or services and owned by persons other than the person
claiming that his mark is a well-known mark.

2. The use of the well-known mark on the entirely unrelated goods or services would indicate a
connection between such unrelated goods or services and those goods or services specified
in the certificate of registration in the well-known mark. This requirement refers to the likelihood
of confusion of origin or business or some business connection or relationship between the
registrant and the user of the mark.

3. The interests of the owner of the well-known mark are likely to be damaged. For instance, if the
registrant will be precluded from expanding its business to those unrelated good or services, or
if the interests of the registrant of the well-known mark will be damaged because of the inferior
quality of the good or services of the user.

Section 123.1(f) is clearly in point because the Music Lounge of petitioner is entirely unrelated to
respondents business involving watches, clocks, bracelets, etc. However, the Court cannot yet resolve
the merits of the present controversy considering that the requisites for the application of Section
123.1(f), which constitute the kernel issue at bar, clearly require determination facts of which need to
be resolved at the trial court. The existence or absence of these requisites should be addressed in a
full-blown hearing and not on a mere preliminary hearing. The respondent must be given ample
opportunity to prove its claim, and the petitioner to debunk the same.

The same is true with respect to the issue of whether Atty. Alonzo Ancheta was properly authorized to
sign the verification and certification against forum shopping in behalf of respondents. This could be
properly resolved during the trial together with the substantive issues raised by petitioner.

Considering that the trial court correctly denied petitioners motion for preliminary hearing on its
affirmative defenses with motion to dismiss, there exists no reason to compel Atty. Ancheta to testify.
Hence, no abuse of discretion was committed by the trial court in quashing the subpoena ad
testificandum issued against Atty. Ancheta.

Grave abuse of discretion implies such capricious and whimsical exercise of judgment as equivalent to
lack of jurisdiction, or, in other words, where the power is exercised in an arbitrary or despotic manner
by reason of passion or personal hostility, and it must be so patent and gross as to amount to an evasion
of positive duty or to a virtual refusal to perform the duty enjoined or to act at all in contemplation of law.
None of these was committed by the trial court; hence, the Court of Appeals correctly dismissed the
petition.

WHEREFORE, in view of all the foregoing, the petition for review on certiorari filed by petitioner is
DENIED. The November 28, 2002 Decision and the February 13, 2003 Resolution of the Court of
Appeals in CA-G.R. SP No. 64660 which dismissed the petition for certiorari filed by petitioner are
AFFIRMED.

SO ORDERED.

Davide, Jr. (C.J., Chairman), Panganiban, Carpio and Azcuna, JJ., concur.

Petition denied.
Note. The rules of procedure are not to be applied in a very rigid, technical sense; Rules and
procedure are used only to help secure substantial justice (Balagtas Multi-Purpose Cooperative, Inc.
vs. Court of Appeals, 314 SCRA 676 [1999])

o0o

SKECHERS, U.S.A., INC., petitioner


vs.
INTER PACIFIC INDUSTRIAL TRADING CORP., and/or INTER PACIFIC TRADING CORP. and/or
STRONG SPORTS GEAR CO., LTD., and/or STRONGSHOES WAREHOUSE and/or STRONG
FASHION SHOES TRADING and/or TAN TUAN HONG and/or VIOLETA T. MAGAYAGA and/or
JEFFREY R. MORALES and/or any of its other proprietor/s, directors, officers, employees
and/or occupants of its premises located at S-7, Ed & Joes Commercial Arcade, No. 153
Quirino Avenue, Paraaque City, respondents.

March 28, 2011. G.R. No. 164321.

TRENDWORKS INTERNATIONAL CORPORATION, petitioner-intervenor, vs. INTER PACIFIC


INDUSTRIAL TRADING CORP. and/or INTER PACIFIC TRADING CORP. and/or STRONG SPORTS
GEAR CO., LTD., and/or STRONGSHOES WAREHOUSE and/or STRONG FASHION SHOES
TRADING and/or TAN TUAN HONG and/or VIOLETA T. MAGAYAGA and/or JEFFREY R. MORALES
and/or any of its other proprietor/s, directors, officers, employees and/or occupants of its premises
located at S-7, Ed & Joes Commercial Arcade, No. 153 Quirino Avenue, Paraaque City, respondents.

Intellectual Property Code (R.A. 8293); Trademark Infringement; The essential element of infringement
under R.A. 8293 is that the infringing mark is likely to cause confusion. The essential element of
infringement under R.A. No. 8293 is that the infringing mark is likely to cause confusion. In determining
similarity and likelihood of confusion, jurisprudence has developed teststhe Dominancy Test and the
Holistic or Totality Test.

Same; Same; The Dominancy Test focuses on the similarity of the prevalent or dominant features of
the competing trademarks that might cause confusion, mistake, and deception in the mind of the
purchasing public. The Dominancy Test focuses on the similarity of the prevalent or dominant
features of the competing trademarks that might cause confusion, mistake, and deception in the mind
of the purchasing public. Duplication or imitation is not necessary; neither is it required that the mark
sought to be registered suggests an effort to imitate. Given more consideration are the aural and visual
impressions created by the marks on the buyers of goods, giving little weight to factors like prices,
quality, sales outlets, and market segments.

Same; Same; The Holistic or Totality Test necessitates a consideration of the entirety of the marks as
applied to the products, including the labels and packaging, in determining confusing similarity. The
Holistic or Totality Test necessitates a consideration of the entirety of the marks as applied to the
products, including the labels and packaging, in determining confusing similarity. The discerning eye of
the observer must focus not only on the predominant words, but also on the other features appearing
on both labels so that the observer may draw conclusion on whether one is confusingly similar to the
other.

Same; Trademarks; The registered trademark owner may use its mark on the same or similar products,
in different segments of the market, and at different price levels depending on variations of the products
for specific segments of the market. The registered trademark owner may use its mark on the same
or similar products, in different segments of the market, and at different price levels depending on
variations of the products for specific segments of the market. The purchasing public might be mistaken
in thinking that petitioner had ventured into a lower market segment such that it is not inconceivable for
the public to think that Strong or Strong Sport Trail might be associated or connected with petitioners
brand, which scenario is plausible especially since both petitioner and respondent manufacture rubber
shoes.

MOTIONS FOR RECONSIDERATION of a decision of the Supreme Court.


The facts are stated in the resolution of the Court.

Quisumbing, Torres for petitioner.

Poblador, Bautista & Reyes for petitioner-in-intervention.


Verzosa, Gutierrez, Nolasco, Montenegro & Associates for respondents.

RESOLUTION

PERALTA, J.:

For resolution are the twin Motions for Reconsideration1 filed by petitioner and petitioner-intervenor
from the Decision rendered in favor of respondents, dated November 30, 2006.

At the outset, a brief narration of the factual and procedural antecedents that transpired and led to the
filing of the motions is in order.

The present controversy arose when petitioner filed with Branch 24 of the Regional Trial Court (RTC)
of Manila an application for the issuance of search warrants against an outlet and warehouse operated
by respondents for infringement of trademark under Section 155, in relation to Section 170 of Republic
Act No. 8293, otherwise known as the Intellectual Property Code of the Philippines. In the course of its
business, petitioner has registered the trademark SKECHERS and the trademark S (within an oval
design) with the Intellectual Property Office (IPO).

Two search warrants were issued by the RTC and were served on the premises of respondents. As a
result of the raid, more than 6,000 pairs of shoes bearing the S logo were seized.

Later, respondents moved to quash the search warrants, arguing that there was no confusing similarity
between petitioners Skechers rubber shoes and its Strong rubber shoes.

On November 7, 2002, the RTC issued an Order quashing the search warrants and directing the NBI
to return the seized goods. The RTC agreed with respondents view that Skechers rubber shoes and
Strong rubber shoes have glaring differences such that an ordinary prudent purchaser would not likely
be misled or confused in purchasing the wrong article.

Aggrieved, petitioner filed a petition for certiorari with the Court of Appeals (CA) assailing the RTC
Order. On November 17, 2003, the CA issued a Decision affirming the ruling of the RTC.

Subsequently, petitioner filed the present petition before this Court which puts forth the following
assignment of errors:

A. WHETHER THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION IN


CONSIDERING MATTERS OF DEFENSE IN A CRIMINAL TRIAL FOR TRADEMARK
INFRINGEMENT IN PASSING UPON THE VALIDITY OF THE SEARCH WARRANT WHEN
IT SHOULD HAVE LIMITED ITSELF TO A DETERMINATION OF WHETHER THE TRIAL
COURT COMMITTED GRAVE ABUSE OF DISCRETION IN QUASHING THE SEARCH
WARRANTS.

B. WHETHER THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION IN


FINDING THAT RESPONDENTS ARE NOT GUILTY OF TRADEMARK INFRINGEMENT IN
THE CASE WHERE THE SOLE TRIABLE ISSUE IS THE EXISTENCE OF PROBABLE
CAUSE TO ISSUE A SEARCH WARRANT.

In the meantime, petitioner-intervenor filed a Petition-in-Intervention with this Court claiming to be the
sole licensed distributor of Skechers products here in the Philippines.

On November 30, 2006, this Court rendered a Decision dismissing the petition.

Both petitioner and petitioner-intervenor filed separate motions for reconsideration.


In petitioners motion for reconsideration, petitioner moved for a reconsideration of the earlier decision
on the following grounds:

(a) THIS HONORABLE COURT MUST RE-EXAMINE THE FACTS OF THIS CASE DUE TO THE
SIGNIFICANCE AND REPERCUSSIONS OF ITS DECISION.

(b) COMMERCIAL QUANTITIES OF THE SEIZED ITEMS WITH THE UNAUTHORIZED


REPRODUCTIONS OF THE S TRADEMARK OWNED BY PETITIONER WERE INTENDED
FOR DISTRIBUTION IN THE PHILIPPINE MARKET TO THE DETRIMENT OF
PETITIONERRETURNING THE GOODS TO RESPONDENTS WILL ADVERSELY AFFECT
THE GOODWILL AND REPUTATION OF PETITIONER.

(c) THE SEARCH WARRANT COURT AND THE COURT OF APPEALS BOTH ACTED WITH
GRAVE ABUSE OF DISCRETION.

(d) THE SEARCH WARRANT COURT DID NOT PROPERLY RE-EVALUATE THE EVIDENCE
PRESENTED DURING THE SEARCH WARRANT APPLICATION PROCEEDINGS.

(e) THE SOLID TRIANGLE CASE IS NOT APPLICABLE IN THIS CASE, AS IT IS BASED ON A
DIFFERENT FACTUAL MILIEU. PRELIMINARY FINDING OF GUILT (OR ABSENCE
THEREOF) MADE BY THE SEARCH WARRANT COURT AND THE COURT OF APPEALS
WAS IMPROPER.

(f) THE SEARCH WARRANT COURT OVERSTEPPED ITS DISCRETION. THE LAW IS CLEAR.
THE DOMINANCY TEST SHOULD BE USED.

(g) THE COURT OF APPEALS COMMITTED ERRORS OF JURISDICTION.

On the other hand, petitioner-intervenors motion for reconsideration raises the following errors for this
Courts consideration, to wit:

THE COURT OF APPEALS AND THE SEARCH WARRANT COURT ACTED CONTRARY TO LAW
AND JURISPRUDENCE IN ADOPTING THE ALREADY-REJECTED HOLISTIC TEST IN
DETERMINING THE ISSUE OF CONFUSING SIMILARITY;

THE COURT OF APPEALS AND THE SEARCH WARRANT COURT ACTED CONTRARY TO LAW IN
HOLDING THAT THERE IS NO PROBABLE CAUSE FOR TRADEMARK INFRINGEMENT; AND

THE COURT OF APPEALS SANCTIONED THE TRIAL COURTS DEPARTURE FROM THE USUAL
AND ACCEPTED COURSE OF JUDICIAL PROCEEDINGS WHEN IT UPHELD THE QUASHAL OF
THE SEARCH WARRANT ON THE BASIS SOLELY OF A FINDING THAT THERE IS NO CONFUSING
SIMILARITY.

A perusal of the motions submitted by petitioner and petitioner-intervenor would show that the primary
issue posed by them dwells on the issue of whether or not respondent is guilty of trademark
infringement.

After a thorough review of the arguments raised herein, this Court reconsiders its earlier decision.

The basic law on trademark, infringement, and unfair competition is Republic Act (R.A.) No. 8293.
Specifically, Section 155 of R.A. No. 8293 states:

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

155.1. Use in commerce any reproduction, counterfeit, copy, or colorable imitation of a registered
mark or the same container or a dominant feature thereof in connection with the sale, offering for sale,
distribution, advertising of any goods or services including other preparatory steps necessary to carry
out the sale of any goods or services on or in connection with which such use is likely to cause
confusion, or to cause mistake, or to deceive; or
155.2. Reproduce, counterfeit, copy or colorably imitate a registered mark or a dominant feature
thereof and apply such reproduction, counterfeit, copy or colorable imitation to labels, signs, prints,
packages, wrappers, receptacles or advertisements intended to be used in commerce upon or in
connection with the sale, offering for sale, distribution, or advertising of goods or services on or in
connection with which such use is likely to cause confusion, or to cause mistake, or to deceive, shall
be liable in a civil action for infringement by the registrant for the remedies hereinafter set forth:
Provided, That the infringement takes place at the moment any of the acts stated in Subsection 155.1
or this subsection are committed regardless of whether there is actual sale of goods or services using
the infringing material.

The essential element of infringement under R.A. No. 8293 is that the infringing mark is likely to cause
confusion. In determining similarity and likelihood of confusion, jurisprudence has developed teststhe
Dominancy Test and the Holistic or Totality Test. The Dominancy Test focuses on the similarity of the
prevalent or dominant features of the competing trademarks that might cause confusion, mistake, and
deception in the mind of the purchasing public. Duplication or imitation is not necessary; neither is it
required that the mark sought to be registered suggests an effort to imitate. Given more consideration
are the aural and visual impressions created by the marks on the buyers of goods, giving little weight
to factors like prices, quality, sales outlets, and market segments.

In contrast, the Holistic or Totality Test necessitates a consideration of the entirety of the marks as
applied to the products, including the labels and packaging, in determining confusing similarity. The
discerning eye of the observer must focus not only on the predominant words, but also on the other
features appearing on both labels so that the observer may draw conclusion on whether one is
confusingly similar to the other.

Relative to the question on confusion of marks and trade names, jurisprudence has noted two (2) types
of confusion, viz.: (1) confusion of goods (product confusion), where the ordinarily prudent purchaser
would be induced to purchase one product in the belief that he was purchasing the other; and (2)
confusion of business (source or origin confusion), where, although the goods of the parties are
different, the product, the mark of which registration is applied for by one party, is such as might
reasonably be assumed to originate with the registrant of an earlier product, and the public would then
be deceived either into that belief or into the belief that there is some connection between the two
parties, though inexistent.

Applying the Dominancy Test to the case at bar, this Court finds that the use of the stylized S by
respondent in its Strong rubber shoes infringes on the mark already registered by petitioner with the
IPO. While it is undisputed that petitioners stylized S is within an oval design, to this Courts mind, the
dominant feature of the trademark is the stylized S, as it is precisely the stylized S which catches the
eye of the purchaser. Thus, even if respondent did not use an oval design, the mere fact that it used
the same stylized S, the same being the dominant feature of petitioners trademark, already constitutes
infringement under the Dominancy Test.

This Court cannot agree with the observation of the CA that the use of the letter S could hardly be
considered as highly identifiable to the products of petitioner alone. The CA even supported its
conclusion by stating that the letter S has been used in so many existing trademarks, the most popular
of which is the trademark S enclosed by an inverted triangle, which the CA says is identifiable to
Superman. Such reasoning, however, misses the entire point, which is that respondent had used a
stylized S, which is the same stylized S which petitioner has a registered trademark for. The letter
S used in the Superman logo, on the other hand, has a block-like tip on the upper portion and a round
elongated tip on the lower portion. Accordingly, the comparison made by the CA of the letter S used
in the Superman trademark with petitioners stylized S is not appropriate to the case at bar.

Furthermore, respondent did not simply use the letter S, but it appears to this Court that based on the
font and the size of the lettering, the stylized S utilized by respondent is the very same stylized S
used by petitioner; a stylized S which is unique and distinguishes petitioners trademark. Indubitably,
the likelihood of confusion is present as purchasers will associate the respondents use of the stylized
S as having been authorized by petitioner or that respondents product is connected with petitioners
business.
Both the RTC and the CA applied the Holistic Test in ruling that respondent had not infringed petitioners
trademark. For its part, the RTC noted the following supposed dissimilarities between the shoes, to wit:

The mark S found in Strong Shoes is not enclosed in an oval design.

The word Strong is conspicuously placed at the backside and insoles.

The hang tags and labels attached to the shoes bears the word Strong for respondent and Skechers
U.S.A. for private complainant;

Strong shoes are modestly priced compared to the costs of Skechers Shoes.

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

Based on the foregoing, this Court is at a loss as to how the RTC and the CA, in applying the holistic
test, ruled that there was no colorable imitation, when it cannot be any more clear and apparent to this
Court that there is colorable imitation. The dissimilarities between the shoes are too trifling and frivolous
that it is indubitable that respondents products will cause confusion and mistake in the eyes of the
public. Respondents shoes may not be an exact replica of petitioners shoes, but the features and
overall design are so similar and alike that confusion is highly likely.

In Converse Rubber Corporation v. Jacinto Rubber & Plastic Co., Inc., this Court, in a case for unfair
competition, had opined that even if not all the details are identical, as long as the general appearance
of the two products are such that any ordinary purchaser would be deceived, the imitator should be
liable, to wit:

From said examination, We find the shoes manufactured by defendants to contain, as found by the
trial court, practically all the features of those of the plaintiff Converse Rubber Corporation and
manufactured, sold or marketed by plaintiff Edwardson Manufacturing Corporation, except for their
respective brands, of course. We fully agree with the trial court that the respective designs, shapes,
the colors of the ankle patches, the bands, the toe patch and the soles of the two products are exactly
the same ... (such that) at a distance of a few meters, it is impossible to distinguish Custombuilt from
Chuck Taylor. These elements are more than sufficient to serve as basis for a charge of unfair
competition. Even if not all the details just mentioned were identical, with the general appearances
alone of the two products, any ordinary, or even perhaps even a not too perceptive and discriminating
customer could be deceived, and, therefore, Custombuilt could easily be passed off for Chuck Taylor.
Jurisprudence supports the view that under such circumstances, the imitator must be held liable. x x x

Neither can the difference in price be a complete defense in trademark infringement. In McDonalds
Corporation v. L.C. Big Mak Burger. Inc., this Court held:

Modern law recognizes that the protection to which the owner of a trademark is entitled is not limited
to guarding his goods or business from actual market competition with identical or similar products of
the parties, but extends to all cases in which the use by a junior appropriator of a trade-mark or trade-
name is likely to lead to a confusion of source, as where prospective purchasers would be misled into
thinking that the complaining party has extended his business into the field (see 148 ALR 56 et seq; 53
Am. Jur. 576) or is in any way connected with the activities of the infringer; or when it forestalls the
normal potential expansion of his business (v. 148 ALR 77, 84; 52 Am. Jur. 576, 577). x x x

Indeed, the registered trademark owner may use its mark on the same or similar products, in different
segments of the market, and at different price levels depending on variations of the products for specific
segments of the market. The purchasing public might be mistaken in thinking that petitioner had
ventured into a lower market segment such that it is not inconceivable for the public to think that Strong
or Strong Sport Trail might be associated or connected with petitioners brand, which scenario is
plausible especially since both petitioner and respondent manufacture rubber shoes.

Withal, the protection of trademarks as intellectual property is intended not only to preserve the goodwill
and reputation of the business established on the goods bearing the mark through actual use over a
period of time, but also to safeguard the public as consumers against confusion on these goods.27
While respondents shoes contain some dissimilarities with petitioners shoes, this Court cannot close
its eye to the fact that for all intents and purpose, respondent had deliberately attempted to copy
petitioners mark and overall design and features of the shoes. Let it be remembered, that defendants
in cases of infringement do not normally copy but only make colorable changes.28 The most successful
form of copying is to employ enough points of similarity to confuse the public, with enough points of
difference to confuse the courts.

WHEREFORE, premises considered, the Motion for Reconsideration is GRANTED. The Decision dated
November 30, 2006 is RECONSIDERED and SET ASIDE.

SO ORDERED.

Carpio (Chairperson), Nachura, Abad and Mendoza, JJ., concur.

Motion for Reconsideration granted.

Note. The ownership of a trademark is acquired by its registration and its actual use by the
manufacturer or distributor of the goods made available to the purchasing public. (Berris Agricultural
Co., Inc. vs. Abyadang, 633 SCRA 196 [2010])

o0o

MCDONALDS CORPORATION and MCGEORGE FOOD INDUSTRIES, INC., petitioners


vs.
L.C. BIG MAK BURGER, INC., FRANCIS B. DY, EDNA A. DY, RENE B. DY, WILLIAM B. DY,
JESUS AYCARDO, ARACELI AYCARDO, and GRACE HUERTO, respondents.

G.R. No. 143993. August 18, 2004

Remedial Law; Appeals; A party intending to appeal from a judgment of the Court of Appeals may file
with the Supreme Court a petition for review under Section 1 of Rule 45 raising only questions of law;
Question of Law and Question of Fact Distinguished. A party intending to appeal from a judgment of
the Court of Appeals may file with this Court a petition for review under Section 1 of Rule 45 raising only
questions of law. A question of law exists when the doubt or difference arises on what the law is on a
certain state of facts. There is a question of fact when the doubt or difference arises on the truth or
falsity of the alleged facts.

Trademarks and Trade Names; Infringement; Elements to Establish Trademark Infringement. To


establish trademark infringement, the following elements must be shown: (1) the validity of plaintiffs
mark; (2) the plaintiffs ownership of the mark; and (3) the use of the mark or its colorable imitation by
the alleged infringer results in likelihood of confusion. Of these, it is the element of likelihood of
confusion that is the gravamen of trademark infringement.

Same; Same; A mark is valid if it is distinctive and thus not barred from registration under Section 4
of RA 166; Once registered, not only the marks validity but also the registrants ownership of the mark
is prima facie presumed. A mark is valid if it is distinctive and thus not barred from registration
under Section 4 of RA 166. However, once registered, not only the marks validity but also the
registrants ownership of the mark is prima facie presumed.

Same; Same; A mark which is not registered in the Principal Register and thus not distinctive has no
real protection. The Court also finds that petitioners have duly established McDonalds exclusive
ownership of the Big Mac mark. Although Topacio and the Isaiyas Group registered the Big Mac
mark ahead of McDonalds, Topacio, as petitioners disclosed, had already assigned his rights to
McDonalds. The Isaiyas Group, on the other hand, registered its trademark only in the Supplemental
Register. A mark which is not registered in the Principal Register, and thus not distinctive, has no real
protection. Indeed, we have held that registration in the Supplemental Register is not even a prima facie
evidence of the validity of the registrants exclusive right to use the mark on the goods specified in the
certificate.

Same; Same; Confusion of Goods and Confusion of Business Distinguished. Section 22 covers two
types of confusion arising from the use of similar or colorable imitation marks, namely, confusion of
goods (product confusion) and confusion of business (source or origin confusion). In Sterling Products
International, Incorporated v. Farbenfabriken Bayer Aktiengesellschaft, et al., the Court distinguished
these two types of confusion, thus: [Rudolf] Callman notes two types of confusion. The first is the
confusion of goods in which event the ordinarily prudent purchaser would be induced to purchase one
product in the belief that he was purchasing the other. x x x The other is the confusion of business:
Here though the goods of the parties are different, the defendants product is such as might reasonably
be assumed to originate with the plaintiff, and the public would then be deceived either into that belief
or into the belief that there is some connection between the plaintiff and defendant which, in fact, does
not exist.

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

Same; Same; Court rejected the holistic test in Societe Des Produits Nestl S.A. vs. Court of Appeals.
In the 2001 case of Societe Des Produits Nestl, S.A. v. Court of Appeals, the Court explicitly rejected
the holistic test in this wise: [T]he totality or holistic test is contrary to the elementary postulate of the
law on trademarks and unfair competition that confusing similarity is to be determined on the basis of
visual, aural, connotative comparisons and overall impressions engendered by the marks in controversy
as they are encountered in the realities of the marketplace.

Same; Same; While proof of actual confusion is the best evidence of infringement its absence is
inconsequential. Petitioners failure to present proof of actual confusion does not negate their claim
of trademark infringement. As noted in American Wire & Cable Co. v. Director of Patents, Section 22
requires the less stringent standard of likelihood of confusion only. While proof of actual confusion is
the best evidence of infringement, its absence is inconsequential.

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

Same; Same; Trademark infringement is a form of unfair competition; Trademark infringement


constitutes unfair competition when there is not merely likelihood of confusion but also actual or
probable deception on the public because of the general appearance of the goods. Unfair competition
is broader than trademark infringement and includes passing off goods with or without trademark
infringement. Trademark infringement is a form of unfair competition. Trademark infringement
constitutes unfair competition when there is not merely likelihood of confusion, but also actual or
probable deception on the public because of the general appearance of the goods. There can be
trademark infringement without unfair competition as when the infringer discloses on the labels
containing the mark that he manufactures the goods, thus preventing the public from being deceived
that the goods originate from the trademark owner.

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

PETITION for review on certiorari of the decision and resolution of the Court of Appeals.

The facts are stated in the opinion of the Court.

Abello, Concepcion, Regala and Cruz for petitioners.

Vicente M. Joyas for respondents.

CARPIO, J.:

The Case

This is a petition for review of the Decision dated 26 November 1999 of the Court of Appeals finding
respondent L.C. Big Mak Burger, Inc. not liable for trademark infringement and unfair competition and
ordering petitioners to pay respondents P1,900,000 in damages, and of its Resolution dated 11 July
2000 denying reconsideration. The Court of Appeals Decision reversed the 5 September 1994 Decision
of the Regional Trial Court of Makati, Branch 137, finding respondent L.C. Big Mak Burger, Inc. liable
for trademark infringement and unfair competition.

The Facts
Petitioner McDonalds Corporation (McDonalds) is a corporation organized under the laws of
Delaware, United States. McDonalds operates, by itself or through its franchisees, a global chain of
fast-food restaurants. McDonalds owns a family of marks including the Big Mac mark for its double-
decker hamburger sandwich. McDonalds registered this trademark with the United

States Trademark Registry on 16 October 1979. Based on this Home Registration, McDonalds applied
for the registration of the same mark in the Principal Register of the then Philippine Bureau of Patents,
Trademarks and Technology (PBPTT), now the Intellectual Property Office (IPO). Pending approval
of its application, McDonalds introduced its Big Mac hamburger sandwiches in the Philippine market
in September 1981. On 18 July 1985, the PBPTT allowed registration of the Big Mac mark in the
Principal Register based on its Home Registration in the United States.

Like its other marks, McDonalds displays the Big Mac mark in items and paraphernalia in its
restaurants, and in its outdoor and indoor signages. From 1982 to 1990, McDonalds spent P10.5 million
in advertisement for Big Mac hamburger sandwiches alone.

Petitioner McGeorge Food Industries (petitioner McGeorge), a domestic corporation, is McDonalds


Philippine franchisee.

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

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

Having received no reply from respondent Dy, petitioners on 6 June 1990 sued respondents in the
Regional Trial Court of Makati, Branch 137 (RTC), for trademark infringement and unfair competition.
In its Order of 11 July 1990, the RTC issued a temporary restraining order (TRO) against respondents
enjoining them from using the Big Mak mark in the operation of their business in the National Capital
Region. On 16 August 1990, the RTC issued a writ of preliminary injunction replacing the TRO.

In their Answer, respondents admitted that they have been using the name Big Mak Burger for their
fast-food business. Respondents claimed, however, that McDonalds does not have an exclusive right
to the Big Mac mark or to any other similar mark. Respondents point out that the Isaiyas Group of
Corporations (Isaiyas Group) registered the same mark for hamburger sandwiches with the PBPTT
on 31 March 1979. One Rodolfo Topacio (Topacio) similarly registered the same mark on 24 June
1983, prior to McDonalds registration on 18 July 1985. Alternatively, respondents claimed that they are
not liable for trademark infringement or for unfair competition, as the Big Mak mark they sought to
register does not constitute a colorable imitation of the Big Mac mark. Respondents asserted that they
did not fraudulently pass off their hamburger sandwiches as those of petitioners Big Mac hamburgers.
Respondents sought damages in their counterclaim.

In their Reply, petitioners denied respondents claim that McDonalds is not the exclusive owner of the
Big Mac mark. Petitioners asserted that while the Isaiyas Group and Topacio did register the Big
Mac mark ahead of McDonalds, the Isaiyas Group did so only in the Supplemental Register of the
PBPTT and such registration does not provide any protection. McDonalds disclosed that it had acquired
Topacios rights to his registration in a Deed of Assignment dated 18 May 1981.

The Trial Courts Ruling

On 5 September 1994, the RTC rendered judgment (RTC Decision) finding respondent corporation
liable for trademark infringement and unfair competition. However, the RTC dismissed the complaint
against private respondents and the counterclaim against petitioners for lack of merit and insufficiency
of evidence. The RTC held:

Undeniably, the mark B[ig] M[ac] is a registered trademark for plaintiff McDonalds, and as such, it is
entitled [to] protection against infringement.

xxxx

There exist some distinctions between the names B[ig] M[ac] and B[ig] M[ak] as appearing in the
respective signages, wrappers and containers of the food products of the parties. But infringement goes
beyond the physical features of the questioned name and the original name. There are still other factors
to be considered.

xxxx

Significantly, the contending parties are both in the business of fast-food chains and restaurants. An
average person who is hungry and wants to eat a hamburger sandwich may not be discriminating
enough to look for a McDonalds restaurant and buy a B[ig] M[ac] hamburger. Once he sees a stall
selling hamburger sandwich, in all likelihood, he will dip into his pocket and order a B[ig] M[ak]
hamburger sandwich. Plaintiff McDonalds fast-food chain has attained wide popularity and acceptance
by the consuming public so much so that its air-conditioned food outlets and restaurants will perhaps
not be mistaken by many to be the same as defendant corporations mobile snack vans located along
busy streets or highways. But the thing is that what is being sold by both contending parties is a food
itema hamburger sandwich which is for immediate consumption, so that a buyer may easily be
confused or deceived into thinking that the B[ig] M[ak] hamburger sandwich he bought is a food-
product of plaintiff McDonalds, or a subsidiary or allied outlet thereof. Surely, defendant corporation
has its own secret ingredients to make its hamburger sandwiches as palatable and as tasty as the other
brands in the market, considering the keen competition among mushrooming hamburger stands and
multinational fast-food chains and restaurants. Hence, the trademark B[ig] M[ac] has been infringed
by defendant corporation when it used the name B[ig] M[ak] in its signages, wrappers, and containers
in connection with its food business. x x x x

Did the same acts of defendants in using the name B[ig] M[ak] as a trademark or tradename in their
signages, or in causing the name B[ig] M[ak] to be printed on the wrappers and containers of their
food products also constitute an act of unfair competition under Section 29 of the Trademark Law?

The answer is in the affirmative. x x x x

The x x x provision of the law concerning unfair competition is broader and more inclusive than the law
concerning the infringement of trademark, which is of more limited range, but within its narrower range
recognizes a more exclusive right derived by the adoption and registration of the trademark by the
person whose goods or services are first associated therewith. x x x Notwithstanding the distinction
between an action for trademark infringement and an action for unfair competition, however, the law
extends substantially the same relief to the injured party for both cases. (See Sections 23 and 29 of
Republic Act No. 166)

Any conduct may be said to constitute unfair competition if the effect is to pass off on the public the
goods of one man as the goods of another. The choice of B[ig] M[ak] as tradename by defendant
corporation is not merely for sentimental reasons but was clearly made to take advantage of the
reputation, popularity and the established goodwill of plaintiff McDonalds. For, as stated in Section 29,
a person is guilty of unfair competition 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 likely influence purchasers to believe that the goods offered are those of a
manufacturer or dealer other than the actual manufacturer or dealer. Thus, plaintiffs have established
their valid cause of action against the defendants for trademark infringement and unfair competition and
for damages.

The dispositive portion of the RTC Decision provides:

WHEREFORE, judgment is rendered in favor of plaintiffs McDonalds Corporation and McGeorge Food
Industries, Inc. and against defendant L.C. Big Mak Burger, Inc., as follows:

1. The writ of preliminary injunction issued in this case on [16 August 1990] is made permanent;

2. Defendant L.C. Big Mak Burger, Inc. is ordered to pay plaintiffs actual damages in the amount
of P400,000.00, exemplary damages in the amount of P100,000.00, and attorneys fees and
expenses of litigation in the amount of P100,000.00;

3. The complaint against defendants Francis B. Dy, Edna A. Dy, Rene B. Dy, Wiliam B. Dy, Jesus
Aycardo, Araceli Aycardo and Grace Huerto, as well as all counter-claims, are dismissed for
lack of merit as well as for insufficiency of evidence.

Respondents appealed to the Court of Appeals.

The Ruling of the Court of Appeals

On 26 November 1999, the Court of Appeals rendered judgment (Court of Appeals Decision)
reversing the RTC Decision and ordering McDonalds to pay respondents P1,600,000 as actual and
compensatory damages and P300,000 as moral damages. The Court of Appeals held:

Plaintiffs-appellees in the instant case would like to impress on this Court that the use of defendants-
appellants of its corporate namethe whole L.C. B[ig] M[ak] B[urger], I[nc]. which appears on their
food packages, signages and advertisements is an infringement of their trademark B[ig] M[ac] which
they use to identify [their] double decker sandwich, sold in a Styrofoam box packaging material with the
McDonalds logo of umbrella M stamped thereon, together with the printed mark in red bl[o]ck capital
letters, the words being separated by a single space. Specifically, plaintiffs-appellees argue that
defendants-appellants use of their corporate name is a colorable imitation of their trademark Big Mac.
xxxx

To Our mind, however, this Court is fully convinced that no colorable imitation exists. As the definition
dictates, it is not sufficient that a similarity exists in both names, but that more importantly, the over-all
presentation, or in their essential, substantive and distinctive parts is such as would likely MISLEAD or
CONFUSE persons in the ordinary course of purchasing the genuine article. A careful comparison of
the way the trademark B[ig] M[ac] is being used by plaintiffs-appellees and corporate name L.C. Big
Mak Burger, Inc. by defendants-appellants, would readily reveal that no confusion could take place, or
that the ordinary purchasers would be misled by it. As pointed out by defendants-appellants, the
plaintiffs-appellees trademark is used to designate only one product, a double decker sandwich sold in
a Styrofoam box with the McDonalds logo. On the other hand, what the defendants-appellants
corporation is using is not a trademark for its food product but a business or corporate name. They use
the business name L.C. Big Mak Burger, Inc. in their restaurant business which serves diversified food
items such as siopao, noodles, pizza, and sandwiches such as hotdog, ham, fish burger and
hamburger. Secondly, defendants-appellants corporate or business name appearing in the food
packages and signages are written in silhouette red-orange letters with the b and m in upper case
letters. Above the words Big Mak are the uppercase letter L.C. Below the words Big Mak are the
words Burger, Inc. spelled out in upper case letters. Furthermore, said corporate or business name
appearing in such food packages and signages is always accompanied by the company mascot, a
young chubby boy named Maky who wears a red T-shirt with the upper case m appearing therein and
a blue lower garment. Finally, the defendants-appellants food packages are made of plastic material.

xxxx

x x x [I]t is readily apparent to the naked eye that there appears a vast difference in the appearance of
the product and the manner that the tradename Big Mak is being used and presented to the public.
As earlier noted, there are glaring dissimilarities between plaintiffs-appellees trademark and
defendants-appellants corporate name. Plaintiffs-appellees product carrying the trademark B[ig]
M[ac] is a double decker sandwich (depicted in the tray mat containing photographs of the various food
products xxx sold in a Styrofoam box with the McDonalds logo and trademark in red, bl[o]ck capital
letters printed thereon x x x at a price which is more expensive than the defendants-appellants
comparable food products. In order to buy a Big Mac, a customer needs to visit an air-conditioned
McDonalds restaurant usually located in a nearby commercial center, advertised and identified by its
logothe umbrella M, and its mascot Ronald McDonald. A typical McDonalds restaurant boasts
of a playground for kids, a second floor to accommodate additional customers, a drive-thru to allow
customers with cars to make orders without alighting from their vehicles, the interiors of the building are
well-lighted, distinctly decorated and painted with pastel colors x x x. In buying a B[ig] M[ac], it is
necessary to specify it by its trademark. Thus, a customer needs to look for a McDonalds and enter
it first before he can find a hamburger sandwich which carry the mark Big Mac. On the other hand,
defendants-appellants sell their goods through snack vans x x x x

Anent the allegation that defendants-appellants are guilty of unfair competition, we likewise find the
same untenable.

Unfair competition is defined as the employment of deception or any other means contrary to good
faith by which a person shall pass off the goods manufactured by him or in which he deals, or his
business, or service, for those of another who has already established good will for his similar good,
business or services, or any acts calculated to produce the same result (Sec. 29, Rep. Act No. 166, as
amended).
To constitute unfair competition therefore it must necessarily follow that there was malice and that the
entity concerned was in bad faith.

In the case at bar, We find no sufficient evidence adduced by plaintiffs-appellees that defendants-
appellants deliberately tried to pass off the goods manufactured by them for those of plaintiffs-appellees.
The mere suspected similarity in the sound of the defendants-appellants corporate name with the
plaintiffs-appellees trademark is not sufficient evidence to conclude unfair competition. Defendants-
appellants explained that the name M[ak] in their corporate name was derived from both the first
names of the mother and father of defendant Francis Dy, whose names are Maxima and Kimsoy. With
this explanation, it is up to the plaintiffs-appellees to prove bad faith on the part of defendants-
appellants. It is a settled rule that the law always presumes good faith such that any person who seeks
to be awarded damages due to acts of another has the burden of proving that the latter acted in bad
faith or with ill motive.

Petitioners sought reconsideration of the Court of Appeals Decision but the appellate court denied their
motion in its Resolution of 11 July 2000.

Hence, this petition for review.

Petitioners raise the following grounds for their petition:

I. THE COURT OF APPEALS ERRED IN FINDING THAT RESPONDENTS CORPORATE


NAME L.C. BIG MAK BURGER, INC. IS NOT A COLORABLE IMITATION OF THE
MCDONALDS TRADEMARK BIG MAC, SUCH COLORABLE IMITATION BEING AN
ELEMENT OF TRADEMARK INFRINGEMENT.

A. Respondents use the words Big Mak as trademark for their products and not
merely as their business or corporate name.

B. As a trademark, respondents Big Mak is undeniably and unquestionably similar to


petitioners Big Mac trademark based on the dominancy test and the idem sonans
test resulting inexorably in confusion on the part of the consuming public.

II. THE COURT OF APPEALS ERRED IN REFUSING TO CONSIDER THE INHERENT


SIMILARITY BETWEEN THE MARK BIG MAK AND THE WORD MARK BIG MAC AS
AN INDICATION OF RESPONDENTS INTENT TO DECEIVE OR DEFRAUD FOR
PURPOSES OF ESTABLISHING UNFAIR COMPETITION.

Petitioners pray that we set aside the Court of Appeals Decision and reinstate the RTC Decision.

In their Comment to the petition, respondents question the propriety of this petition as it allegedly raises
only questions of fact. On the merits, respondents contend that the Court of Appeals committed no
reversible error in finding them not liable for trademark infringement and unfair competition and in
ordering petitioners to pay damages.

The Issues

The issues are:

1. Procedurally, whether the questions raised in this petition are proper for a petition for review
under Rule 45.

2. On the merits, (a) whether respondents used the words Big Mak not only as part of the
corporate name L.C. Big Mak Burger, Inc. but also as a trademark for their hamburger
products, and (b) whether respondent corporation is liable for trademark infringement and unfair
competition.

The Courts Ruling

The petition has merit.

On Whether the Questions Raised in the Petition are Proper for a Petition for Review

A party intending to appeal from a judgment of the Court of Appeals may file with this Court a petition
for review under Section 1 of Rule 45 (Section 1) raising only questions of law. A question of law exists
when the doubt or difference arises on what the law is on a certain state of facts. There is a question of
fact when the doubt or difference arises on the truth or falsity of the alleged facts.

Here, petitioners raise questions of fact and law in assailing the Court of Appeals findings on
respondent corporations non-liability for trademark infringement and unfair competition. Ordinarily, the
Court can deny due course to such a petition. In view, however, of the contradictory findings of fact of
the RTC and Court of Appeals, the Court opts to accept the petition, this being one of the recognized
exceptions to Section 1. We took a similar course of action in Asia Brewery, Inc. v. Court of Appeals
which also involved a suit for trademark infringement and unfair competition in which the trial court and
the Court of Appeals arrived at conflicting findings.

On the Manner Respondents Used Big Mak in their Business

Petitioners contend that the Court of Appeals erred in ruling that the corporate name L.C. Big Mak
Burger, Inc. appears in the packaging for respondents hamburger products and not the words Big
Mak only.

The contention has merit.

The evidence presented during the hearings on petitioners motion for the issuance of a writ of
preliminary injunction shows that the plastic wrappings and plastic bags used by respondents for their
hamburger sandwiches bore the words Big Mak. The other descriptive words burger and 100% pure
beef were set in smaller type, along with the locations of branches. Respondents cash invoices simply
refer to their hamburger sandwiches as Big Mak. It is respondents snack vans that carry the words
L.C. Big Mak Burger, Inc.

It was only during the trial that respondents presented in evidence the plastic wrappers and bags for
their hamburger sandwiches relied on by the Court of Appeals. Respondents plastic wrappers and bags
were identical with those petitioners presented during the hearings for the injunctive writ except that the
letters L.C. and the words Burger, Inc. in respondents evidence were added above and below the
words Big Mak, respectively. Since petitioners complaint was based on facts existing before and
during the hearings on the injunctive writ, the facts established during those hearings are the proper
factual bases for the disposition of the issues raised in this petition.

On the Issue of Trademark Infringement

Section 22 (Section 22) of Republic Act No. 166, as amended (RA 166), the law applicable to this
case, defines trademark infringement as follows:

Infringement, what constitutes. Any person who [1] shall use, without the consent of the registrant,
any reproduction, counterfeit, copy or colorable imitation of any registered mark or trade-name in
connection with the sale, offering for sale, or advertising of any goods, business or services on or in
connection with which such use is likely to cause confusion or mistake or to deceive purchasers or
others as to the source or origin of such goods or services, or identity of such business; or [2] reproduce,
counterfeit, copy, or colorably imitate any such mark or trade-name and apply such reproduction,
counterfeit, copy, or colorable imitation to labels, signs, prints, packages, wrappers, receptacles or
advertisements intended to be used upon or in connection with such goods, business or services, shall
be liable to a civil action by the registrant for any or all of the remedies herein provided.

Petitioners base their cause of action under the first part of Section22, i.e. respondents allegedly used,
without petitioners consent, a colorable imitation of the Big Mac mark in advertising and selling
respondents hamburger sandwiches. This likely caused confusion in the mind of the purchasing public
on the source of the hamburgers or the identity of the business.

To establish trademark infringement, the following elements must be shown: (1) the validity of plaintiffs
mark; (2) the plaintiffs ownership of the mark; and (3) the use of the mark or its colorable imitation by
the alleged infringer results in likelihood of confusion. Of these, it is the element of likelihood of
confusion that is the gravamen of trademark infringement.

On the Validity of the Big Mac Mark and McDonalds Ownership of such Mark

A mark is valid if it is distinctive and thus not barred from registration under Section 4 of RA 166
(Section 4). However, once registered, not only the marks validity but also the registrants ownership
of the mark is prima facie presumed.
Respondents contend that of the two words in the Big Mac mark, it is only the word Mac that is valid
because the word Big is generic and descriptive (proscribed under Section 4[e]), and thus incapable
of exclusive appropriation.

The contention has no merit. The Big Mac mark, which should be treated in its entirety and not
dissected word for word, is neither generic nor descriptive. Generic marks are commonly used as the
name or description of a kind of goods, such as Lite for beer or Chocolate Fudge for chocolate soda
drink. Descriptive marks, on the other hand, convey the characteristics, functions, qualities or
ingredients of a product to one who has never seen it or does not know it exists, such as Arthriticare
for arthritis medication. On the contrary, Big Mac falls under the class of fanciful or arbitrary marks as
it bears no logical relation to the actual characteristics of the product it represents. As such, it is highly
distinctive and thus valid. Significantly, the trademark Little Debbie for snack cakes was found arbitrary
or fanciful.

The Court also finds that petitioners have duly established McDonalds exclusive ownership of the Big
Mac mark. Although Topacio and the Isaiyas Group registered the Big Mac mark ahead of
McDonalds, Topacio, as petitioners disclosed, had already assigned his rights to McDonalds. The
Isaiyas Group, on the other hand, registered its trademark only in the Supplemental Register. A mark
which is not registered in the Principal Register, and thus not distinctive, has no real protection. Indeed,
we have held that registration in the Supplemental Register is not even a prima facie evidence of the
validity of the registrants exclusive right to use the mark on the goods specified in the certificate.

On Types of Confusion

Section 22 covers two types of confusion arising from the use of similar or colorable imitation marks,
namely, confusion of goods (product confusion) and confusion of business (source or origin confusion).
In Sterling Products International, Incorporated v. Farbenfabriken Bayer Aktiengesellschaft, et al., the
Court distinguished these two types of confusion, thus:

[Rudolf] Callman notes two types of confusion. The first is the confusion of goods in which event the
ordinarily prudent purchaser would be induced to purchase one product in the belief that he was
purchasing the other. x x x The other is the confusion of business: Here though the goods of the
parties are different, the defendants product is such as might reasonably be assumed to originate with
the plaintiff, and the public would then be deceived either into that belief or into the belief that there is
some connection between the plaintiff and defendant which, in fact, does not exist.

Under Act No. 666, the first trademark law, infringement was limited to confusion of goods only, when
the infringing mark is used on goods of a similar kind. Thus, no relief was afforded to the party whose
registered mark or its colorable imitation is used on different although related goods. To remedy this
situation, Congress enacted RA 166 on 20 June 1947. In defining trademark infringement, Section 22
of RA 166 deleted the requirement in question and expanded its scope to include such use of the mark
or its colorable imitation that is likely to result in confusion on the source or origin of such goods or
services, or identity of such business. Thus, while there is confusion of goods when the products are
competing, confusion of business exists when the products are non-competing but related enough to
produce confusion of affiliation.

On Whether Confusion of Goods and Confusion of Business are Applicable

Petitioners claim that respondents use of the Big Mak mark on respondents hamburgers results in
confusion of goods, particularly with respect to petitioners hamburgers labeled Big Mac. Thus,
petitioners alleged in their complaint:

1.15. Defendants have unduly prejudiced and clearly infringed upon the property rights of plaintiffs in
the McDonalds Marks, particularly the mark B[ig] M[ac]. Defendants unauthorized acts are likely, and
calculated, to confuse, mislead or deceive the public into believing that the products and services
offered by defendant Big Mak Burger, and the business it is engaged in, are approved and sponsored
by, or affiliated with, plaintiffs. (Emphasis supplied)
Since respondents used the Big Mak mark on the same goods, i.e. hamburger sandwiches, that
petitioners Big Mac mark is used, trademark infringement through confusion of goods is a proper
issue in this case.

Petitioners also claim that respondents use of the Big Mak mark in the sale of hamburgers, the same
business that petitioners are engaged in, results in confusion of business. Petitioners alleged in their
complaint:
1.10. For some period of time, and without the consent of plaintiff McDonalds nor its
licensee/franchisee, plaintiff McGeorge, and in clear violation of plaintiffs exclusive right to use and/or
appropriate the McDonalds marks, defendant Big Mak Burger acting through individual defendants,
has been operating Big Mak Burger, a fast food restaurant business dealing in the sale of hamburger
and cheeseburger sandwiches, french fries and other food products, and has caused to be printed on
the wrapper of defendants food products and incorporated in its signages the name Big Mak Burger,
which is confusingly similar to and/or is a colorable imitation of the plaintiff McDonalds mark B[ig]
M[ac], x x x. Defendant Big Mak Burger has thus unjustly created the impression that its
business is approved and sponsored by, or affiliated with, plaintiffs. x x x x

2.2 As a consequence of the acts committed by defendants, which unduly prejudice and infringe upon
the property rights of plaintiffs McDonalds and McGeorge as the real owner and rightful proprietor, and
the licensee/franchisee, respectively, of the McDonalds marks, and which are likely to have caused
confusion or deceived the public as to the true source, sponsorship or affiliation of defendants
food products and restaurant business, plaintiffs have suffered and continue to suffer actual
damages in the form of injury to their business reputation and goodwill, and of the dilution of the
distinctive quality of the McDonalds marks, in particular, the mark B[ig] M[ac]. (Emphasis supplied)

Respondents admit that their business includes selling hamburger sandwiches, the same food product
that petitioners sell using the Big Mac mark. Thus, trademark infringement through confusion of
business is also a proper issue in this case.

Respondents assert that their Big Mak hamburgers cater mainly to the low-income group while
petitioners Big Mac hamburgers cater to the middle and upper income groups. Even if this is true, the
likelihood of confusion of business remains, since the low-income group might be led to believe that the
Big Mak hamburgers are the low-end hamburgers marketed by petitioners. After all, petitioners have
the exclusive right to use the Big Mac mark. On the other hand, respondents would benefit by
associating their low-end hamburgers, through the use of the Big Mak mark, with petitioners high-end
Big Mac hamburgers, leading to likelihood of confusion in the identity of business.

Respondents further claim that petitioners use the Big Mac mark only on petitioners double-decker
hamburgers, while respondents use the Big Mak mark on hamburgers and other products like siopao,
noodles and pizza. Respondents also point out that petitioners sell their Big Mac double-deckers in a
styrofoam box with the McDonalds logo and trademark in red, block letters at a price more expensive
than the hamburgers of respondents. In contrast, respondents sell their Big Mak hamburgers in plastic
wrappers and plastic bags. Respondents further point out that petitioners restaurants are air-
conditioned buildings with drive-thru service, compared to respondents mobile vans.

These and other factors respondents cite cannot negate the undisputed fact that respondents use their
Big Mak mark on hamburgers, the same food product that petitioners sell with the use of their
registered mark Big Mac. Whether a hamburger is single, double or triple-decker, and whether
wrapped in plastic or styrofoam, it remains the same hamburger food product. Even respondents use
of the Big Mak mark on non-hamburger food products cannot excuse their infringement of petitioners
registered mark, otherwise registered marks will lose their protection under the law.

The registered trademark owner may use his mark on the same or similar products, in different
segments of the market, and at different price levels depending on variations of the products for specific
segments of the market. The Court has recognized that the registered trademark owner enjoys
protection in product and market areas that are the normal potential expansion of his business. Thus,
the Court has declared:

Modern law recognizes that the protection to which the owner of a trademark is entitled is not limited to
guarding his goods or business from actual market competition with identical or similar products of the
parties, but extends to all cases in which the use by a junior appropriator of a trade-mark or trade-name
is likely to lead to a confusion of source, as where prospective purchasers would be misled into
thinking that the complaining party has extended his business into the field (see 148 ALR 56 et
seq.; 53 Am Jur. 576) or is in any way connected with the activities of the infringer; or when it forestalls
the normal potential expansion of his business (v. 148 ALR, 77, 84; 52 Am. Jur. 576, 577).
(Emphasis supplied)
On Whether Respondents Use of the Big Mak Mark Results in Likelihood of Confusion

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

The Court of Appeals, in finding that there is no likelihood of confusion that could arise in the use of
respondents Big Mak mark on hamburgers, relied on the holistic test. Thus, the Court of Appeals
ruled that it is not sufficient that a similarity exists in both name(s), but that more importantly, the overall
presentation, or in their essential, substantive and distinctive parts is such as would likely MISLEAD or
CONFUSE persons in the ordinary course of purchasing the genuine article. The holistic test considers
the two marks in their entirety, as they appear on the goods with their labels and packaging. It is not
enough to consider their words and compare the spelling and pronunciation of the words.

Respondents now vigorously argue that the Court of Appeals application of the holistic test to this case
is correct and in accord with prevailing jurisprudence.

This Court, however, has relied on the dominancy test rather than the holistic test. The dominancy test
considers the dominant features in the competing marks in determining whether they are confusingly
similar. Under the dominancy test, courts give greater weight to the similarity of the appearance of the
product arising from the adoption of the dominant features of the registered mark, disregarding minor
differences. Courts will consider more the aural and visual impressions created by the marks in the
public mind, giving little weight to factors like prices, quality, sales outlets and market segments.

Thus, in the 1954 case of Co Tiong Sa v. Director of Patents, the Court ruled:

x x x It has been consistently held that the question of infringement of a trademark is to be determined
by the test of dominancy. Similarity in size, form and color, while relevant, is not conclusive. If the
competing trademark contains the main or essential or dominant features of another, and confusion
and deception is likely to result, infringement takes place. Duplication or imitation is not necessary; nor
is it necessary that the infringing label should suggest an effort to imitate. (G. Heilman Brewing Co. vs.
Independent Brewing Co., 191 F., 489, 495, citing Eagle White Lead Co. vs. Pflugh [CC] 180 Fed. 579).
The question at issue in cases of infringement of trademarks is whether the use of the marks involved
would be likely to cause confusion or mistakes in the mind of the public or deceive purchasers. (Auburn
Rubber Corporation vs. Honover Rubber Co., 107 F. 2d 588; x x x) (Emphasis supplied.)

The Court reiterated the dominancy test in Lim Hoa v. Director of Patents, Phil. Nut Industry, Inc. v.
Standard Brands Inc., Converse Rubber Corporation v. Universal Rubber Products, Inc., and Asia
Brewery, Inc. v. Court of Appeals. In the 2001 case of Societe Des Produits Nestl, S.A. v. Court of
Appeals, the Court explicitly rejected the holistic test in this wise:

[T]he totality or holistic test is contrary to the elementary postulate of the law on trademarks and unfair
competition that confusing similarity is to be determined on the basis of visual, aural, connotative
comparisons and overall impressions engendered by the marks in controversy as they are encountered
in the realities of the marketplace. (Emphasis supplied)

The test of dominancy is now explicitly incorporated into law in Section 155.1 of the Intellectual Property
Code which defines infringement as the colorable imitation of a registered mark x x x or a dominant
feature thereof.

Applying the dominancy test, the Court finds that respondents use of the Big Mak mark results in
likelihood of confusion. First, Big Mak sounds exactly